I think it should be clear to the Minister by this time that of all his new tax proposals of this year, this one is causing, not only in this House but also outside amongst the general public, the greatest discontent. I think that I can say that this tax has no friend in this House with the exception of the hon. member for Maitland (Mr. Mushet). All members on both sides of the House declared themselves against this taxation and are unable to find some good word in its favour. But the only person who spoke in favour of it is the hon. member for Maitland, and on top of that he is representing a large Railway population. I think that they will shortly settle accounts with him about that.

He misrepresents them.

Yes, that is so. He misrepresents them.

Order.

The hon. member pretends to be a practical business man. The hon. member is indeed a practical business man and if there is someone in this House who knows the meaning of business principles, then it is the hon. member for Maitland. He can always speak sneerlingly about the academics of people possessing an academic knowledge only of trade and trade principles. But now we find the hon. member to be such a practical business man that he intends to allow an institution like the Railways, which we solemnly promised to run on business lines and according to business principles, to be controlled in such a manner, or rather to be treated in such a manner, that the Minister of Finance can use it as a taxation machine. I should like to ask the hon. member for Maitland whether it is strictly in terms of trade principles that an institution which is being run according to business principles, should be used as a taxation machine. I want to say this, that if we are to allow the hon. Minister of Finance to use the passengers of the Railways in order to tax them, what prevents him then in future to tax any other form of traffic or conveyance on the Railways? I shall be glad if the hon. member for Maitland could explain this to us. Here we allow that wedge to be driven in; here we allow the Railways to be used as a taxation machine, and if we are to submit on that point then nothing would prevent the Minister of Finance next year, when his financial difficulties would be even greater, also to impose taxations on other forms of traffic on the Railways. Mr. Speaker this is where we stop. We refuse that wedge to be driven home and to submit on that point. It is clear to this side of the House that this proposal of the Minister of Finance is contrary to the letter and spirit of the Constitution. I should just like to ask the Minister whether the time has come now in the Union of South Africa that we have broken our solemn promises to the country? I just want to know from the Minister whether we did not at the time when Union came into existence make a solemn promise to the inland of the Union that we would never tax the inland by way of the Railways? I should like to ask the Minister whether it is not the spirit of the letter of the Constitution that we are not going to allow the inland to be taxed by way of the Railways? This was one thing of which the Transvaal and the Free State were afraid of when Union came into existence and it is an honourable agreement which we made with them that we will never tax the inland by means of the Railways. But here we have the first step. We know that the financial circumstances of the Minister are going to be worse next year. His sources of income are being exhausted. He is looking about for other sources. If we give his a little finger this year, he will take the whole hand next year. No, we must definitely accept the principle that the inland is not to be taxed by way of the Railways. That is the basis on which we left the whole contract at the time when Union came into existence. It was an honourable agreement, and it disappoints me that the Minister of Finance who pretends to be the high priest of all that is right in South Africa; that he who belongs to an old Cape family with whom it has become a tradition solemnly to abide by all agreements whatever, to do a thing like this.

And what is now going to happen to the fibres of his being?

Yes, I wonder. What really is too much for me is this. Here we impose a tax on the sick people of the inland. If a man was to become ill in the country and the doctor was to order him to the coast, then the Minister comes along and makes that man pay extra for his fare enabling him to regain his health at the coast. We asked when we dealt with the Minister’s tax proposals, that he should show a little more sympathy towards the man with illness in the house. We asked him to grant a little alleviation by the deduction of medical and hospital expenses for income tax purposes. But what was the reply of the Minister? Here we have it: He is going to tax the inland patients even more. This tax is one on the health of the inland people. A case of illness arises in the country and the doctor prescribes a holiday at the coast. It may possibly be essential to save the life or health of the person concerned. The only sympathy which the Minister shows towards that person—and those people do not travel for pleasure, but because it is essential for them to do so—is to make his journey, no matter how essential, to the coast more expensive by means of this taxation. The impression which this tax proposal gives me is that the Railway Department was incompetent during the last holiday season to handle the holiday traffic, and now the Minister of Finance has to solve their problem for them in this manner. There was a hopeless lack of organisation on the part of the Railway Administration to arrange the traffic during the past holiday season. The Railways feel that they are not able to organise it properly in future, and now in this way that problem has to be solved. I feel disappointed in the Minister. He comes from the Cape, here, and he is aware of the honourable agreement with the inlands. He knows that this tax is the first step on the way towards the destruction of that solemn pledge. I feel disappointed about the management of the Railways. The South Africa Act provides—

These are the people who have to look after the interests of the Railways. I feel that this directorate, when it decided that the Minister may impose this taxation, sadly neglected its duty as a directorate of this great State enterprise. I feel disappointed in them about it and I am exceptionally disappointed in the hon. member for Maitland. I hope that his voters will deal with him. One of these days he will have to face them, and then he will have to give an account.

The trouble is that their tickets are less than 10s.

Yes, that is the position, and that is why the city members remain so quiet. But, after all, we have the principle that the Railways are being used as a taxation machine. And we cannot allow that principle to take effect in the country. We on this side of the House are prepared to fight the Bill in all its stages. We are not going to allow this infringement of our Constitution; we are not going to allow the honourable agreement with the inlands to be broken; we are not going to allow a taxation on sick people and on the health of the inland.

The Minister of Finance advances as a reason why he now uses the Railways in order to obtain revenue with which to wage the war, that the Railways are unable to cope with the existing traffic. The Minister of Railways tried everything to reduce the traffic. It did not help in any way, and now the Minister of Finance must assist to get a reduced traffic by imposing this taxation on the Railways. In other words the argument of the Minister is that he is not so much after the revenue but that he wants to assist the Minister of Railways to get the Railway traffic reduced. But now on the other hand we find that the Minister excludes all suburban traffic and in the second instance he also excludes all natives who are travelling on the Railways because the third class is excluded. Moreover he also excludes all military people travelling on the Railways. It becomes clear therefore to us that the Minister is trying to impose a tax on the country and farming community. They are the people who will have to pay this £500,000.

We have to pay for the war.

I have figures here to show that the biggest increase in traffic was really on suburban lines. If we are to compare the figure of December, 1942, with that of December of the previous year, we find that the traffic on suburban lines increased by 767,000. This exceeds by far the entire increase on the main lines and the country branch lines. There can be no doubt that the greatest increase in traffic was on the suburban lines and yet the Minister comes along and excludes that traffic. If it really was his intention to save the Railways from too many passengers why does he come along and exactly here where the traffic increased by hundreds of thousands he does not bring these people within the orbit of the taxation? No, he excludes the suburban passengers because they are the supporters of the Government. He knows quite well that if he had imposed the tax on them then there would have been immediate repercussions. But the Minister can easily impose a taxation on the country. His supporters are only too glad to vote for it. This tax is in conflict with the Constitution, as has already been clearly shown on this side of the House. It is an unfair and unjust tax and the Minister knows that it is a tax which discriminates between city and country. In other words the Minister wants to get £500,000 from the pockets of the farmer in the country for his war effort. The farmers in the country do not get additional petrol. I know according to what is happening in my electorate that it is exceptionally difficult for farmers to get additional petrol. The professional man in the city can easily obtain additional petrol. He goes to the office to get his permit and if we go there we can see that for one or other reason the professional man gets more petrol, but when the farmer wants a few gallons of petrol extra it is refused to him. I want to mention a few cases to the Minister of which I am aware. In one case a person had to make an essential journey. He was unable to get a seat and he had to stand on the balcony the whole night. He was unable to travel first class because he could not afford it. That is the type of person which the Minister is going to tax. It is those people who will have to bear this additional burden. I think that it is a most unreasonable attitude of the Minister. Besides I also want to show how the Minister meets the Mines whilst refusing to meet the country. There are more than 300,000 natives employed in the mines. They usually work for six months and then return to their homes. In a few cases they work for twelve months. There is also a very large traffic of natives from outside the Union going to the Mines. The gold mines have to pay their tickets. The Minister knows very well that if he was to impose this tax on the tickets of these natives that the gold mines would have kicked up a tremendous row. It is for that reason that we find that the third class passengers are excluded. Well, if it is the intention of the Minister to impose restrictions on passengers who are travelling, why does he not impose it on third class passengers? But no, he intentionally excludes them in order that the mines may benefit by it. If he had imposed the tax on them as well then it would have meant another few thousand pounds. He only compels the farmer to make that contribution towards the war effort, but he excludes the natives and he excludes the people in the cities, because he excludes the suburban traffic, with the result that it is the country which has to pay this £500,000. We know that there is an influx of natives to the cities today. We are being told that special trains come to Cape Town loaded with natives who are later unemployed. It is happening to such an extent that the Municipality has been asked to place restrictions on it. It happens in Johannesburg and other large cities and whilst the Minister is placing a restriction on traffic why does he not do so on those natives who are streaming to the cities and who are unable to get employment there and later become a burden. On the Cape Flats the position is very critical. We know that the natives are making huts there with bags, and remain there until they can obtain employment, and notwithstanding this special trains with natives are arriving. They are however specially excluded from this taxation, whilst the tax is being imposed on the farmers. If the Minister of Railways really intend to save rolling stock on the Railways why does he not start with the Minister himself. Why does he not start with the coaches used by the Ministers? We find that the trains are now being overcrowded. Six people are being placed in one compartment and service on the train is poor because there are not enough waiters and servants. But what is the position on the other side with the Ministers? During the past year Ministers no less than 36 times used passenger coaches for their exclusive use in order to travel to a particular place. These private carriages travelled 34,000 miles i.e. private carriages used by Ministers. When such a Minister travels from Pretoria to Bloemfontein for example, he uses the carriage for himself only.

How many people are then travelling in such a carriage?

Only the Minister and his servant. Is that a saving on rolling stock? If the Minister really intends to save rolling material and reduce traffic on the Railways why are special carriages being used during these times? I further asked, at the disposal of how many other persons these private carriages have been placed, and do you know what the reply was? In 49 cases carriages have been placed at the disposal of persons from outside the Union. A whole carriage has been placed at their disposal and they travelled 57,000 miles. It is people from outside the Union who received special carriages. If the Minister really means it why does he do these things? No, I do not think that the Minister should try to convince this House that he really does these things in order to reduce traffic when he allows these things. No, there is only one purpose with this tax. The Minister makes every possible plan in order to obtain funds for the war. He does not possess the courage and pluck to touch the people in the cities, that is why he puts his hands in the pockets of the farmers in the country in this manner. There are so few representatives of the farmers on this side, that he thinks that he can do without the farmers. I say that this tax is an intentional exploitation of the rural areas for the war effort of the Government.

I only want to say a few words. The other day I mentioned a few words to which the Minister of Finance did not have anything to say in his reply. It surprises me that we come here with a Bill which imposes a tax on Railways, and the Minister of Railways is not even present. It is a very strange thing that the Railways should be used to collect taxes and it is the Minister of Finance who handles the Bill in question. The Minister of Railways is an accomplice but he leaves everything to the Minister of Finance. I think that one day when the Ministers of Finance and Railways are no longer Ministers and they were to meet each other that they would always think and laugh about the joke which they cracked during this war when they told their followers that is not a tax which they imposed on the Railways, but only a tax on the persons who are using the Railways; and if we could imagine the meeting we could see the Minister of Finance telling the Minister of Railways: “Claude, but you really were clever to leave the handling of the Bill over to me because they now think that you have no responsibility in connection with it.”

The Minister of Railways has no responsibility in connection with it.

The Minister of Finance came along and told us that this Bill does not impose a tax on the Railways but only on the people who are using it. Now I should like to put this question to the Minister of Finance. Give me one example of a tax which can be imposed on the Railways of which we can say that it is a tax on Railways if this is not a tax? There are only two ways in which a tax can be imposed on Railways. The one is viz. a tax on the people using the Railways or are travelling on the Railways by an increase in the ticket and tariff rates and the other is by a decrease in the emoluments of the staff. This is exactly what is being done here by the Minister. Allow him to tell me which other kind of tax he can think of which is a tax on Railways. If it was not that it was such a sad position, the Minister’s attitude would really have been a joke. No, one day when the Minister of Finance and the Minister of Railways are old and are no longer Ministers they will have a good laugh about this joke which they tried to make. Then I should like to know from the Minister why he excluded the third class passengers. At an earlier occasion when I spoke about this Bill I asked the Minister the same question but the Minister kept quiet about it. It is especially the Afrikaans-speaking people who are using the second class. They are forced to travel by train. Somebody said here the other day that it is not so. It is just by coincidence that I have just received a letter which goes to prove the truth of what I have just said. I have a letter from a person who says that he is ill and that he is unable to travel by train. He does not possess the money to travel first class and the second class is so overcrowded that it is impossible for him to use it. He cannot obtain any petrol. The doctor gave him a certificate and he now asks me to see if I could assist him to obtain the petrol. If that person is going to travel second class he is going to be taxed by the Minister. We submitted a proposal that the second class should also be excluded, but the Minister refused it. We are going to move that amendment again because we feel that the people in the country are going to be severely hit by this taxation. We feel that we should at least extend the same privileges to the poorer white people as those which the coloureds and natives have. If the Minister does not want to do this then he must also include the third class. Then it will be fair, otherwise not. But there is something else which is strange. It is that our own people are being taxed but the soldiers of other countries are not taxed. The Minister told us that soldiers do not pay the extra 15 per cent. We see how many of the R.A.F. and other foreign soldiers travel by our trains. It is these people who fill up the trains the whole day. I do not know where they are travelling to. Frequently I noticed how the R.A.F. travelled to and fro. It surprised me and I often wondered if these people have a continual holiday. We are unable to ascertain their destination. They are now being exempted from the 15 per cent. but our own people in the country have to pay. As stated here by the hon. member for George (Mr. Werth) and the hon. member for Bloemfontein, District (Mr. Haywood) this is certainly the most unpopular taxation which has been passed here and that also applies to the manner in which it has been passed and levied. The members on the other side who spoke did not have the courage to say that they are in favour of the tax. Only the hon. member for Maitland (Mr. Mushet) did so. But I am going to predict that we will not see his face here again. I can tell him that the Railway staff resents this tax very much, they feel it very much that the Railway machine is now being used as a taxing machine and if I dare to make a prophecy — I do not predict anything about myself — then I am going to say that the Railway people of the Vasco electorate are going to take the tax and the behaviour of the hon. member so much to heart that he will not make his appearance here again. They know just as well as I do that this tax is being imposed in order to take money which will have the result that the Railway Administration will have less money, that something is taken from the Railways which belongs to the Railways, to use that money for war purposes. They have the same disapproval of this Bill as we have of it on this side and I think hon. members on the other side likewise. I hope that the Minister of Finance will realise that he is going the wrong way. The Minister of Railways runs away from the responsibilities thereof and he simply hands it over to the Minister of Finance. The Minister of Railways knows full well what he has already done in order to upset the staff. We know his history in connection with Spoorbond and we know his history in connection with secret letters, and we also know his history in connection with appointments. That is why he does not want to handle this Bill but leaves it over to the Minister of Finance to guide it through the House. If there is no hope of withdrawing this Bill then in any case I should like to urge the acceptance of an amendment to exclude second class passengers.

I want to protest here with other hon. members against this measure and I want to tell the Minister: We very clearly see what is behind this measure. Here is a specific measure with which to tax a specific class of people. Who does he select? To a great extent the people that he knows are against the war policy. The Minister is aware of the fact that the people in the country whom he intends to tax under this measure are generally totally opposed to the war. With the exceptions that he proposes he also wants to exclude the other people. He wants to force those who are against the war in order to subscribe in this manner and he wants to tax them specifically. The Minister excludes the people who are on military service. We know that the majority of the people who are on active service are really the supporters of the Government on the home front. Many of them are in this country. They do not fight up there. They must now be exempted but people in the country who are against the Government must be forced and are selected for this taxation. He selects those people in the country for taxation. First petrol and tyres were curtailed and the traffic in the country burdened. The people are compelled to make use of the trains. Petrol and tyres are being used for so-called essential services, for war purposes. Traffic is curtailed in this manner and people have to use the trains. Thereafter the Minister comes along and says: Now I have you and I am going to impose an extra tax on you, I am going to select you for the tax. This is a measure which the Minister and his supporters cannot defend. It is specifically intended against a certain section of the population, viz., those who are opposed to the war. So far the Minister sadly neglected to say why third class passengers have been exempted. The Minister naturally knows that under the existing conditions the coloured people are in favour of the war. They have never made so much money as in this war. They flourish today. They do not shed their blood, but they earn more than they have ever done before. On the other hand a war is now being waged against the farmers. They are excluded from the exemption, because the second class is not exempted. I want to ask the Minister if there was not always a fixed ratio between the tariffs of the various classes on the Railways. Were these based on a wrong principle? For years this basis existed. Because first class passengers have certain facilities they pay on a certain basis. The second class passengers probably have less privileges and pay on a lower scale, and the third class at an even smaller scale. This is the basis which has been fixed and existed tor years and years. Why does the Minister now come along and exclude the third class passengers from the increase? The coloureds in the army and also the third class coloureds are exempted from the tax. The Minister knows that generally they do not travel long distances, and those who have to travel long distances, are stuck into khaki and on that account exempted. But the farmers must be taxed. The Afrikaner nation must be stripped to the marrow and their money must be used for that war with which they do not want to have anything to do. Does the Minister intend to force the poor white Afrikaners to travel third class? Are they forced to travel amongst the natives and coloureds because they are unable to pay the extra few shillings?

The Minister does not care.

Is that what he intends with this measure? The Boer Nation is however too proud and will refuse to travel third class amongst the coloureds. In the past, especially so during the last few days we have noticed that the Minister acts as champion for the non-European races. He wants to allow them to infiltrate amongst the European communities. According to the press the Minister yesterday said at a meeting: “We are gradually progressing against the powers of racial and colour prejudice.” The Minister wants to do away with the coloured man and he says that they are making slow progress with it. Here he has a plan to promote it. He wants by means of this measure to hurt and destroy the South African people, tax them as heavily as possible. The farming population is shocked by this proposal of the Minister to every fibre of its being, to use the figurative language of the Minister, because it is discrimination and a method to compel the farming community to do away with the colour bar. This the Minister will not succeed with, but that stigma will remain attached to him that he tried to do it.

In this taxation proposal and others that have been before the House the Minister of Finance has shown clearly that he has not the least sympathy with his fellow-countrymen, with the Afrikaans-speaking section of the population. He is busy trying to hit the most established section of the population as hard as he can with his taxation proproposals, and the little chance they had to make a bit of progress in the economic sphere at this time he is smashing, and he wants to depress them to the level of his friends, the non-Europeans, for whom apparently he is ready to sacrifice everything. He has no longer the least sympathy with the farmers, but his sympathy goes out to the non-Europeans and he does not stop at sympathy but his actions, too, go in this direction. They must be favoured. I do not know whether the Minister has thought of the fact that the farmers on the platteland do not travel for pleasure, at least not as a rule. Often they must go to town on very serious matters. They must go to hospital. Motor-cars they cannot use, for they cannot get petrol and tyres. They cannot even get enough petrol for business purposes. Now they have to go and consult a specialist, or they must go to hospital for an operation, and the Minister taxes them then. Then you have the attorneys on the platteland who from time to time must travel to the towns in connection with their work. They have to travel more than other people. They have to go to the cities to have things cleared up. They cannot use cars because they have no petrol. The Minister will perhaps say that the attorneys are prosperous, but they do not work for charity, but to make a living, and if they have to incur extra costs then they recoup themselves from their clients. They cannot do otherwise and we do not take exception to it. Then there are your public bodies, municipalities, divisional councils, school boards and members of those bodies must from time to time travel to the big centres where the administrations are situated. They must travel to Pretoria just like the farmers’ associations which in the farmers’ interests must often travel to Pretoria to negotiate with Government Departments on things that they are unable to put right by correspondence. The platteland is affected in all these respects by this tax. The people in the cities, too, will not welcome this measure. If they need a holiday, people from the cities must often travel inland for a change of air. The Minister also does not take account of that. He does not concern himself over that poorer section of the population. He has in mind one great cause and that is to see the war through for the Empire. But his own people, the needs of his own kin do not count with him. They can simply be wronged, for this is an injustice to the people living inland. I should like to know whether the feeling of the Minister toward his own people has already been so dulled that he can no longer take them into consideration. When one talks then he sits there and probably thinks: “Talk if you will, I am the great Minister of Finance.” Perhaps he aspires toward greater things and wants to become leader of the nation. We as representatives of the platteland are of no account, he need not take notice of us. He is the big man in the cities and there his power lies. The platteland can simply be taxed. As one of the hon. members so rightly said the platteland must be penalised. Why must the people of foreign nations just because they are so-called Allies, or because we joined in their war, why must they have the privilege of travelling on our railways? The trains are so full that one cannot get accommodation. When you have booked a seat you often find that the seat has been taken. You find that the compartments are full, packed with such people as soldiers, the R.A.F., sailors and also with people from Johannesburg and such places who are going to the coast for a holiday. I do not want to push out the soldiers, but if you want to tax people, tax them all. Why should only one section be taxed? I want to ask the Minister what the position of his officials is going to be when they go on leave. Must they also pay the tax? It is an extremely unfair and unwarranted tax. The Minister comes along now and tells us that it is not a railway tax. He tells us that it is as little a railway tax as the tax on tobacco and spirits is a tax on the farmer. No, says the Minister, it is a tax on the consumers. That argument no longer carries weight. Naturally the Minister uses one of his own luxurious vehicles with a couple of servants when he travels. He does not realise what the position of the poor man on the platteland is. The Minister travels free on the railways, but he wants to tax the poor people on the platteland still further to prosecute the war. We protest most strongly against this unjustified tax, and we protest because it excludes the third-class. There are thousands of natives who travel in the third-class and who also traverse long distances. They come from the Eastern Province and the Transkei to Cape Town and they are exempted from the tax. But our Afrikaner population can simply go under. Then if one day the non-Europeans are on top, the Minister will be able to boast about, it and say to the students: “We have triumphed, there are no longer racial differences, no colour bar.” Then he will probably be satisfied.

I am not surprised that from the side of the Minister’s own supporters there should apparently be fear in connection with these proposals of his. Since this debate began this morning there is now for the first time a fair number of members present on the other side of the House. Most of the time there have been only seven or eight here. But what has struck me particularly is the fact that the Minister’s colleague, the Minister of Railways and Harbours, the man who is affected by this Bill, is not in his place. One would have expected him to be here to “watch his brief”. It is his Department that is affected by this Bill, not only as regards passengers, but also in respect of the principle involved in it. But the Minister of Railways is conspicuous by his absence, and we have the right to ask why he is not here. Is it because the Minister of Railways himself feels ashamed that he must permit a departure from the spirit, if not from the letter, of the Constitution? Perhaps the legal advisers tell the Minister that he is entitled to do this, but in any case he departs from the spirit of the Constitution by this proposal. Is it because the Minister of Railways realises this that he does not even want to reveal his realisation in the House of the important principle that is being discussed? Or is it that the Minister in his heart does not agree with this taxation proposal? In any event, he is not here and we have the right to draw our own conclusions. The one aspect of the matter that I want to mention particularly is that this tax is not only a departure from the spirit of the Constitution, but that a precedent Will be created here today, if the proposal is adopted, that can be followed by this and also by future Governments. Not only is it a precedent, but there is the danger that there may be a development of the principle when once it has been laid down. Today the Minister comes forward with a proposal to impose extra taxation on passengers’ tickets. Now, next year, if he is still in power and if he has again to grope about to find other sources of taxation to cover his war expenditure, he can come forward and impose an extra 10 per cent. or 20 per cent. on the tariff for the transport of goods. The Minister is perpetually groping about for new sources of revenue, and when once we have adopted this principle, what will prevent him from going further, because then the levy of an extra 20 per cent. on the tariff for the transport of goods will be quite in conformity with this principle. And thereafter we shall probably have the application of this principle to the bus services. Throughout these years the bus services have been developed throughout the country as feeders to the Railways. If the Minister wants to carry the precedent further, the next step will be to impose additional taxation on bus services, and it may even go so far subsequently that he will impose extra taxation on the crop of coffee or the meal which we enjoy. It is a dangerous precedent which the Minister of Finance is introducing. One of the professedly founded reasons which he has given in respect of this matter is that the trains are overcrowded. When the Minister spoke on the subject in his Budget speech he referred to the fact that his colleague, the Minister of Railways, found himself in difficulty in respect of overcrowded trains, and the Minister gave that as a supplementary reason for the introduction of this Bill. If the Minister of Railways and Harbours is really concerned about overcrowded trains, then there are other ways in which he can reduce train traffic; he can then take the necessary measures to ensure, for instance, that holiday passengers are eliminated, or at least that persons who travel for pleasure may travel only once or twice a year, as is being done in England today. But if this Bill is adopted the trains will continue to remain as full as now. I go home every week-end, and I returned last week, that is after the 1st April, and the train was as full as ever before.

The tax is not yet in operation. It comes into force on the 19th.

Then I want to say that even when it comes into force the trains will run just as full as they are running today. Who would travel? The same people who travel such a lot today, the rich people of Johannesburg who come to the coast, and then the soldiers. The rich people will not be affected by the new taxation. They are busy, as Gladstone once said during a previous war, “to make snug”. There are many people in South Africa who are making snug, and they fill the trains and come to Cape Town and Muizenberg. I observe these things when I travel in the trains, and I know it will make no difference to them. To the people who make big profits, it makes no difference if they have to pay 15 per cent. more. But to the people on the platteland, the small business man, the farmer, and others, it will make a decided difference. They will suffer under that 15 per cent. To the rich man it is a drop in the bucket. To the others it means a lot. And thus we come back to what has become a characteristic of the Minister’s taxation proposals in recent years, namely that it is particularly the ordinary man who is being taxed. The man who makes big profits is not bothered by that little tax. But the ordinary man, the small man, is being deprived of his convenience. Reference has been made to people who must come to the coast. On the other hand there are also people who live at the coast, who are obliged to go to the platteland. It is often as necessary for them to go away from the coast as it is for others to go to the coast. Many people have to get away from the sea to a drier climate. They are in difficulty They get all the additional taxation and levies to bear; they have to pay more on their letters, etc., and now we get the extra tax on them when they have to take an essential holiday. The people who are busy making money will travel further to Fish Hoek, Kalk Bay and Muizenberg. They will not be affected. Reference has been made to the attitude of the Railway employees towards this tax. The hon. member for Albert-Colesberg (Mr. Boltman) spoke about it. For that reason I say that the Minister of Railways ought to be here. He will yet have to explain why he was absent when this important Bill was discussed. I also represent a constituency in which there are many Railway workers, and they are extremely dissatisfied. I know that it will avail nothing to protest. The Minister has his majority, but we know that among his own people there behind him there are a large number who are dissatisfied with this tax. They are either not here today, or they sit dead quiet. Why do they not speak? They dare not, because they do not agree. I noticed this morning that while members on this side spoke there were signs of approval from the Minister’s own supporters. They agree with us, but they are muzzled. The Minister will yet pluck the bitter fruits of his action. He is establishing a dangerous precedent, that can easily be extended to other activities on the Railways. For that reason we, as the official Opposition, are taking advantage of this opportunity to lodge the strongest protest against this Bill.

It seems to me that the more the Minister’s coloured friends kick and shove him, the more he loves them, but they do not become fonder of him; they throw stones and damage property and show no love for him, but the few coloured friends who still love him are called Judases. Yet the Minister allows them to go scot free so far as this tax is concerned. The poor farmers have to pay. When I was a young lad the farming community went through a very difficult time and they could not always afford to travel second class, and in many cases had to travel third class, but since Union a change has come about and the Railway tariffs have been fixed, and better facilities have been created for people to travel. Now the Minister, who at that time was still too young to understand what a difficult time the farming population was undergoing, comes along and imposes a tax that will specially affect the farming community, because they travel over long distances from the interior to come to the cities and to their markets. The rich people will not feel this tax. I think the Minister makes a very big mistake with this tax. But that is not all. He comes every year with his barbed-wire taxes to prick and annoy people. The Minister has now come forward to tax the wine farmer for the umpteenth time. The wine farmers constitute one of the best sections of the population.

Order! The hon. member will have a further opportunity of discussing the excise taxation when the Bill is before the House.

Then I will revert to it later. But the Minister must not think that the people will forget. He is a son of this country but he is not acquainted with the platteland and does not know how the farming population suffered in the past and are suffering now. The Minister is imposing taxes that are exhausting the people, but the coloureds are exempted. The Minister taxes the farming population who are against the war, and this is one of the most unfair measures that has ever been brought forward.

It astonishes me to see the attitude of the hon. member for Maitland (Mr. Mushet) in connection with this measure. His activity in this respect shocks us. The old tactics of the English-speaking section in the past, when they wanted to oppress and trample upon the platteland Afrikaner, was to use an Afrikaner for the purpose, while they themselves remained a bit in the background. But here an English-speaking member has come forward to defend this most unfair measure actively. This measure discriminates unfairly against the platteland. As I have said, they generally use an Afrikaner to oppress Afrikaners, and if they do not use the Afrikaner then they use the Jew to do so. Why does the hon. member for Maitland not tell us about the steps he took in the suburb in which he used manufacturer to compel workers to attend his meetings; and then if they do not attend the meetings they are kicked out of employment.

Order! The hon. member may not say that. He must not be personal.

You know that it is not true.

I want to associate myself with the hon. member for George (Mr. Werth) who warned that the Minister is now busy tampering with the Constitution. It is a dangerous weapon that the Minister is now using. He is creating a precedent that will definitely have a reaction in the future. He knows that this measure will have repercussions in the future. We warn against it. He will not always remain Minister of Finance and he will certainly not sit where he is now sitting all his life, and we shall make use in the future of the example that he has set and of the measures he has imposed. I want to point out to the Minister that this measure boils down to the grossest exploitation of the Boer nation. When I speak of the “Boer nation”, then I think of the platteland on which the Boer nation lives. The platteland, because it is opposed to the war, must be exploited in every possible way to contribute to the war, to see the war through. We feel that the measure is aimed against the Boer nation, against the people who are not well-disposed towards the war policy of the Government. The urban passengers are conscientiously excluded from this tax. What does it mean? It is decidedly discrimination against the cities and the platteland, whichever way the Minister manipulates it. Another point is that this measure will throw extra work on the Railway staff. How many extra hands will be required to work out the percentage on every ticket? And there is already a shortage of Railway staff. Why impose this extra work on them? Why no increase in the price of Railway tickets? That would surely have been very simple, but the Minister of Railways does not want to increase the price of the Railway tickets. The Minister of Finance wants to tax only a certain class. Because no general increase of railway tickets is introduced everyone in the country will realise that the object is to affect a certain class of people, and not the country generally. The platteland must be affected in the first place. We know that the platteland farmers generally make use of second-class tickets. They do not travel first-class. They have to maintain their class, no matter how poor they may be. Their pride does not allow them to buy third-class tickets and to travel among the coloureds in the third-class. Consequently all the Europeans on the platteland travel second-class and not third-class. Even the people who have of necessity to go to hospital will be affected. While I was coming down from Namaqualand there were two patients on the train, a mother and her son, poverty-stricken people. They came down for treatment at the Groote Schuur Hospital. It is very difficult to get beds in the hospital and people often have to wait a long time. For that reason they came down to stay for a few weeks with relatives until they can undergo the operation or the treatment. They came down by train and are very poor. I do not know if they have a piece of bread to eat every day, but yet in their hearts they are too proud to travel in the third-class with the coloureds. They travel second-class. These are the people who are being affected, the poorest of the population. This is an unfair and unjust tax. The Minister wants to see the war through, and for that money is of course required. We want to be fair to the Minister. He needs money, and will need more next year and perhaps still more in five years, but to single out a certain class for the purpose is surely very unjust. We know that those who travel first-class are the moneyed people of the country, the money-makers, the great exploiters, the parasites of the country. They travel first-class and they do not feel that extra tax in any sense. The Minister can tax them several times over, but let him exclude the second-class traveller. Catch the rich man. We have no objection to that. But do not catch the poor people of the country and the middle class. They must travel second-class, and if the Minister exempts the third-class why not also the second-class?

I can give the Minister the assurance that this Bill will evoke protests throughout the country. It is in particular a tax which is going to hit the inland areas hard. There are people who now and then come to the seaside, and here we are virtually putting a direct tax on those who come from inland, possibly on the orders of their doctor, to the seaside. A large part of the population, the people who live at the coast and in the big towns, will not feel the weight of the tax so severely, but in our country with its expansiveness it is necessary that compensation should be granted to that portion of the population who live 100 miles or more, and in certain cases even 1,000 or 1,500 miles, from the coast. This tax is especially unpopular because under the pressure of war conditions, travelling facilities have also been restricted in other respects. The Minister must remember that petrol is rationed, that it is difficult to get tyres, and inhabitants of the platteland who now and then must come into contact with town or city, must now of necessity use the train. This measure is thus a direct tax on those who must travel of necessity. I want to acknowledge that there is a certain amount of justification for taxing those who merely use the train for luxury and who travel for pleasure. But then the Minister can effect other measures to do that. Furthermore, it surprises me that the Minister excludes third-class passengers. Why should third-class passengers be specially exempted? I cannot understand it. The coloureds and the natives are already favoured in many respects, and here the Minister comes again and excludes them in a manner that cannot be justified. Another thing that surprises me is the fact that under the exemptions in Clause 5 people are excluded whose travelling expenses are borne by other Governments. I take it that among these cases there are officials and servants of other Governments in our country. Must we now assume that such persons will have preference over our country’s own citizens? It seems to me to be a completely unfair discrimination. Then if the Minister wants to be consistent he cannot also exclude under Clause 3 people who want to buy season-tickets for less than £30. It shows that this measure rests on an unsound foundation. The Minister should take the whole matter into reconsideration. We protest most strongly against this measure.

The Minister’s complete lack of concern for the problems and questions of the platteland has earned for him the name of the Oxford-Afrikaner. We remember the time when the Minister stood up and told us how he protested with every fibre of his being against a tampering with the South Africa Act. We have heard this morning how the Constitution gave to the interior a certain measure of protection as regards exploitation in connection with railway tariffs. Now we find that the Minister takes a roundabout way, that the Minister who placed himself on a pedestal on the ground that he did not want tampering with the Constitution, is now precisely the person who proposes in the future to depart from the Constitution. He comes now and puts forward one of the most unreasonable Bills that we have ever had set before us. The Minister makes the excuse that it is to reduce traffic on the railways. If he thinks he will achieve that in this way he is making a great mistake. Then he proves thereby just what I said, viz., that he definitely does not know and understand the situation in the interior. Because in the interior people do not travel for pleasure. You will not get second-class passengers who simply make pleasure-trips to the coast. They travel for health or business reasons, but not for pleasure. But virtually at any station in the interior you See great crowds of coloureds making use of the train. But the Minister exempts them from the tax. The Minister wishes to reduce the use of the trains but he excludes the great mass of coloureds who travel third-class and who pack the trains. The farmers in the interior who make use of the trains use them to come into contact with their town or large centre, such as Johannesburg, for business purposes, or to get doctor’s advice. Take the case of illness on the platteland and compare the position on the platteland and in the towns. Where the city dwellers can call in the doctor and pay 10s. 6d., the man who has a case of illness on the farm, perhaps 40 miles or more from the nearest town, must summon the doctor at a cost of 15 guineas. He can only do it if it is really a very serious case, if it is a case of life or death. Then only can he let the doctor come out. If the doctor comes he may not have the necessary medicine, and again a motor-car must be sent to the town to fetch the medicine. Then the doctor may have laid down that the man must go to hospital. Just to decide whether or not the patient must go to hospital has already cost the farmer 15 guineas. The Minister does not consider these things. He proposes a tax that will mainly affect the interior. The man in a city is near the doctor and the hospital, but the man on the platteland must first have the doctor come to his farm and then travel by train to the hospital. This is the man whom the Minister wishes to tax still further. He has to use the train. I think the Minister should reconsider this matter. It is utterly unfair legislation. The people in the towns are exempted because tickets costing under 11s. are not taxed. Why not? The Minister knows that it is precisely in the urban areas that there is the most traffic. Why does the Minister only tax the platteland? Simply because the Minister’s supporters live mainly in the towns and he does not dare tax them. I do not know if I may say it, but it looks to me like a knavish kind of taxation.

The hon. member has said it now and he must withdraw it.

May I say then a sly manner of taxation?

I do not think that is much better.

Then I have not the words to condemn the Minister’s action. The fact remains that he is discriminating, that he is not treating everyone in the same way. The people that can’t pay the tax the Minister is now apparently pushing down to the third class. The Minister cannot defend it. Or would the Minister like to see the people on the platteland being abandoned to the mercy of circumstances? Must they simply be left in the lurch? The Minister is busy hitting the farmer on the platteland hard with one tax after another. They are not to be given a chance. I do not think the Minister realises the position of the poor people on the platteland. He thinks he must collect money for the war, and now he is going to tax the platteland more. I object to excluding the towns and particularly the coastal towns from the tax. I hope he will give a sign of reasonableness and justice and accept the amendment to exempt the second-class. If the Minister is willing to exempt the second-class with the third-class, then I presume that the first-class passenger is a man who has money and can pay. But as it is now it is extremely unfair. I hope he will meet the second-class passengers. It is especially the poor Afrikaner who travels there. I think the amendment is reasonable, and if the Minister does not want to withdraw the whole Bill let him at least accept the amendment to exempt second-class passengers as well. Otherwise he is going to hit the platteland very unfairly. They are already deprived of many privileges which the people in the towns have, and now the Minister cannot go from here and specifically tax the platteland still further.

It looks as though the Minister is persisting in his attitude on this taxation proposal, notwithstanding the fact that it is going to affect most the poor people on the platteland who have to make use of the Railways now and then, especially in the event of illness. Since, however, the Minister intends to persist, I want to make a few suggestions. If we cannot persuade him to drop this measure, I want to ask him to include under the exemption clause which exempts persons from the tax, invalids and persons who can show a doctor’s certificate saying that they have to go to the city for medical treatment. I think that if the Minister can insert that exemption it will reduce our objection to a great extent. If a man is ordered by his doctor to go to the city and he can show the stationmaster a certificate saying that it is absolutely essential for his health for him to go, then he ought to be exempted from the tax. Then I also feel that it is not fair to exclude the third-class passengers. They also share in war profits. They have greater earnings than before, and I consider that the coloured people should contribute their share. If the Minister now definitely wants a tax to be imposed on the second-class, let him consider making the third-class passengers pay a five per cent. tax, the second-class ten per cent. and the first-class 15 per cent. Then the Minister will remove a great part of our objection on the ground that he is discriminating. If he imposes taxation in this way, he will be taxing people according to their capacity. I oppose this measure in principle, but if it must go through let the Minister make this alteration. Just one other remark. When I read the Bill through I found in Clause 4 the word “plekbewys”. It is used for “ticket”. I have never heard of the word “plekbewys” in Afrikaans. The Afrikaans word is “reiskaartjie”. When the conductors say “kaartjies asseblief” will they in future now have to say “plekbewyse asseblief”? If “plekbewys” means anything, it is a certificate that accommodation has been reserved. I have never heard the word.

It is apparently the Law Adviser’s word. It is not a bad word.

But it is un-Afrikaans. One feels that it is a made-up word. I hope the Minister will take the few suggestions that I have made to heart, and that if he wants to continue with this Bill be will accept the amendments.

I also want to protest against the bill. I do not believe that anyone in this House who represents a platteland constituency can allow this Bill to go through without protest. It is very clear that the Minister is doing one of two things with this taxation. He wants either to benefit the State finances or to solve the transport problem of the Railways. I do not want to go into this, but if this taxation is being imposed with the express purpose of benefiting the State finances generally, then it is clear that this matter is diabolical. We know that the Constitution was drafted in such a way that a watch is kept against a tax on the Railways to enable the Treasury to derive benefit. If however the purpose is to find a solution for the transport problem of the Railways at this time, then one feels that the Railways themselves will be equal to doing so. I want to protest against this tax which is a class tax. The Minister draws a line between Europeans and non-Europeans, and he discriminates also between people who live in big cities and people who live inland. It is very clear that if you study the policy of the Railways in connection with the imposition of transport costs, then the Railways take the point of view that the longer the distance becomes, the greater is the decrease in the rate for the transport of passengers. The Minister of Finance is now introducing a principle for the Railways which will have just an opposite effect. The farther you travel, the higher the tax that you must pay. The Minister was one who in the past usually tried to adopt a reasonable attitude, and I appeal to him as such. We have often disagreed with the Minister, but still I believe that he always tried to be fair. As one who comes from inland, I now make an appeal to the Minister to relinquish this tax. Why should the inland areas be especially hard hit at this stage? We know how the transport facilities have decreased in this period and people are compelled to make use of the train. Even though these people now make use of the train to a lesser extent, this tax remains entirely or in the main a tax on the inland areas. The Minister virtually exempts the man in the big city from this tax, because the tax is imposed only over long distances. Why the discrimination against the inland areas? We already have very few facilities inland and now we also have to pay the special tax. Furthermore, it is class taxation because it expressly differentiates between European and non-European travellers. We realise that there are thousands of poor people in the country who are compelled to travel by train, and they have to travel second class. The additional tax means much to them and they will almost be compelled to travel third class. The white man who out of his poverty and need has to buy a ticket is taxed in this way, but the coloured man in the third class is exempted. If precautions were taken for the poor Europeans so that they could also travel in the lower class, we could understand the Minister’s also taxing the second class, but the position in our country is such that the European cannot travel third class. They all travel second class. In conclusion I want to agree with the hon. member for Gordonia (Mr. J. H. Conradie) that while we are opposed to the tax in principle, we want in any case to appeal to the Minister to take the advice of the hon. member for Gordonia into consideration.

This is now the fourth time that this matter has been discussed. It was discussed during the budget debate, it was discussed on the motion to go in the Committee of Ways and Means, it was again discussed on the specific motion in Committee of Ways and Means, and it has been discussed here again today. This motion has been emphatically approved by the House, and we cannot now depart from it. Where it was discussed here for the fourth time, we could hardly expect to get anything new.

What about the hon. member for Gordonia? (Mr. J. H. Conradie).

Yes, the hon. member has raised an objection to the word “plekbewys”. The other points he raised were not new.

I asked that the third class should be taxed by 5 per cent. and the second class by 10 per cent.

We have already decided on that. We cannot now go further than the decision.

What about persons who can show a doctor’s certificate?

We have already dealt with that argument. These are all old things, apart from a few personalities which, of course, are proof of the weakness of the Opposition’s case. I have therefore nothing to reply to at the moment. May I say in passing that in the Railway Act of 1916 the word “plaatsbewys” is used and apparently for that reason the word “plekbewys” is used here. The absence of the Minister of Railways and Harbours has been referred to. Where this matter is being discussed for the fourth time, we can hardly blame the Minister for not being present. But in any case the Minister of Railways has indicated clearly that he accepts and welcomes this Bill. I also want to point to a contradiction in the attitude of the Opposition. Hon. members have said how generally unpopular the Bill is, and how, with the exception of the hon. member for Maitland (Mr. Mushet), members on this side of the House are also opposed to this Bill. But then they say that the persons who are affected by this legislation are particularly the persons who are opposed to the war, the people on the platteland. Then why would hon. members on this side of the House be opposed to the measure? But I want to come to the general question, to the general principle of the tax. The hon. member for George (Mr. Werth) said that this Bill is in conflict with the letter and the spirit of the Constitution, and he also spoke about an honourable agreement that was made at the time of Union with the interior. He also put the matter on a personal basis by saying that I, as one who hails from Cape Town; am now breaking that solemn agreement with the interior. I represent a Transvaal constituency, and I am quite prepared to thresh out this question of a breach of agreement with the interior with my own electors in the Transvaal.

But you have ensured that they are exempted from the tax.

The hon. member is wrong; they are not on a suburban line, and they also have to travel to the coast. My own electors are just as far from the coast as any other electors in the interior, and I am quite prepared to thresh out this matter with them.

But they are near to a doctor and to a hospital.

The point now is that we have been told that there is a breach of the solemn agreement with the interior. If that is so, then my own constituency will have something to say about it. I shall leave it to them, and my hon. friend can also leave it to them.

There are just as many people who for business reasons have to travel from the coast to the interior as there are who have to travel from the interior to the coast.

Yes, I have already dealt with that point. There are just as many people who for business reasons have to travel from the coast to the interior as from the interior to the coast. But now what is actually incorporated in the Constitution? It states there that the railways must be administered on business principles. That is all there stands in the Constitution. Now, what is being done in this Bill? Are we now taxing the railways? No, we do not tax the railways; we tax the travellers on the railways. As soon as a person buys a ticket, then he is taxed on that ticket, with those exceptions I have mentioned. In this respect we can compare the tax with the tax on amusement tickets. We have a tax on amusements; it is not a tax on African Theatres or other such undertakings, but it is a tax on the persons who buy amusement tickets, and because this is done it cannot be said that those undertakings are not being run on business lines, because the taxes are collected by them. The fact that this tax will be collected by the railway administration does not affect the business principles in accordance with which that administration has to be controlled. The hon. member for Albert-Colesberg (Mr. Boltman) asked what would be a tax on the railways if this is not one. If the railways were not placed in the position in which they are placed by the Constitution, and if they were an ordinary company, then the railways would have had to pay the ordinary tax on companies, and then they would also probably have had to pay considerably in excess profits tax. But that tax is not being imposed. If such taxes had to be imposed on the railways then the railways would of course have had to change their policy so as to be able to pay those taxes. But the imposition of this tax will have no effect whatever on the policy of the railways. Then I come to the exclusion of the third class. That is a question I have already discussed on a previous occasion. The hon. member for Albert-Colesberg said that I remained silent on this point on the last occasion. Yes, I did not reply to it on the last occasion, but on two previous occasions I dealt with that aspect of the matter. I regret that my hon. friend did not accept my arguments, but he must excuse me if I do not reply to the same point ad nauseam. The reason is not that I want to obliterate all lines of demarcation, as the hon. member for Boshof (Mr. Serfontein) said. It is true that I spoke last night, and expressed my opposition to unjust discrimination motivated by colour prejudice. But I said equally clearly that I did not want to break down and obliterate race lines of division.

Did you mean the Indian question?

My hon. friend will hear more about that later. I also want to state clearly that the provision has not been inserted to assist the gold mines. It has been alleged here that the gold mines pay for the transport costs of their labour. That is only half a truth. The mines pay for one trip, and the native himself pays for one trip.

But the mines pay nevertheless.

Not for both trips. The railway tickets of the natives to the work and back from the work — of that 50 per cent is paid by the mines and 50 per cent by the native himself. This motion has nothing whatever to do with the interests of the mines. The object of the exemption that has already been approved by this House is to prevent this taxation pressing on the poorest section of the population.

And what about the poor Europeans?

It is the poorest class of the population who travel third class, and 99 per cent. of the people who travel third class travel because they have to travel. The poorest classes travel in the third class, and that is why this is done. The only other point is that of officials who go on leave. This taxation will not apply to railway officials who obtain a free ticket once a year, but it will apply to the public servants who receive concessions, and I see no reason why this tax should not be paid by public servants just as it is paid by the bank clerk or the shop clerk.

Motion put and the House divided:

Ayes—63:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowen, R. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Deane, W. A.

Derbyshire, J. G.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander. A.

Gilson, L. D.

Goldberg, A.

Hayward, G. N.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Long, B. K.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steyn, C. F.

Steytler, L. J.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van Coller, C. M.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—46:

Badenhorst, C. C. E.

Bekker, G.

Bekker, S.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Bremer, K.

Conradie, J. H.

Conroy, E. A.

De Wet, J. C.

Du Plessis, P. J.

Erasmus, F. C.

Fouché, J. J.

Fullard, G. J.

Geldenhuys, C. H.

Haywood, J. J.

Hugo, P. J.

Labuschagne, J. S.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Naudé, S. W.

Oost, H.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Swart, A. P.

Swart, C. R.

Van der Merwe, R. A. T.

Van Nierop, P. J.

Van Zyl, J. J. M.

Venter, J. A. P.

Verster, J. D. H.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jacob.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

Motion accordingly agreed to.

Bill read a second time; House to go into Committee on the Bill on 10th April.

I want to try for the third time—and I hope it will be the last time—to convince the Minister that he is acting wrongly in imposing this tax. I hope that it will not be necessary to protest again, because I hope that the Minister will not again take such a step to tax one section of the population in this way. I feel that an injustice has been done, and I feel that whatever may be said, and that even if I brought an angel from heaven to talk to the Minister, it would be of no avail. I just want to say that the Minister of Finance must understand that in the last few years the excise tax has been raised by 100 per cent. It was 10s. when we began with this Parliament. It was increased to 12s. 6d., then to 15s., and now to £1 5s. I do not know whether it is necessary for me to reply to the arguments of the Minister. He said that this tax is paid by the consumers; it is a voluntary tax, and the man need not pay it if he does not want to. In other words, he need not pay if he does not drink. I realise that the Minister is engaged in an effort to make our country a teetotaller’s country, but I want to tell him at the same time that if he thinks that he is going to succeed in that, he is very far wrong. People enjoy liquor, and even the poor people enjoy liquor because they need it for their health and well-being. Liquor is essential for many people today. The Minister will now say perhaps that bread is better than liquor. Perhaps it is better for him. For me again liquor is better than bread. I derive more benefit from it than I derive from bread, and I am not alone. There are other people who are in the same position, and consequently it seems to me that the Minister’s premise is quite wrong. Perhaps we could manage without our drink 25 years ago. Today the circumstances of life are such that a person needs a drink, and the older we become, the more we feel that we need it. I think it will do the Minister himself good if he will drink a little brandy. It will make him more human and conciliatory and will enable him to realise what the position is. I do not want now to talk about the various provisions of the Bill. I am not satisfied with them, but if I raise matters for discussion here now it will perhaps be bad for the trade. On one point the Minister and I are at one—there our aim is the same—he wants to sell liquor to obtain his excise. Although he does not want the people to drink, he still wants to sell as much liquor as possible to obtain the excise. I want only to mention a few figures in connection with the excise on brandy to compare the position more or less with the treatment which the gold mines receive from the Minister. When we talk of the tax on the gold mines, then there is always talk of the mines with a low grade of ore. We are referred to them, but we are not told at the same time that there are mines which pay out a dividend of 100 per cent. a year. I agree with those who say that there should be a different rate of taxation on a mine with a low grade of ore. But if a mine pays out a dividend of 100 per cent. or 140 per cent., it is not justifiable to make a concession to that mine because there are mines of a low grade of ore. In the case of such wealthy mines the State is entitled to take more. It is the State’s gold that is extracted by the mines. The State should have decided to extract it itself.

The hon. member may not discuss that matter now.

I do not want to dilate upon it; I do it only to make a comparison. I only want to say why I feel that the whole position is so unfair if we compare the taxation that is paid by the mines with the taxation that is paid on brandy, the product of the wine farmer. In connection with the gold mines we have the position that when those mines are worked out, only the holes in the ground remain, and those gold mining companies have nothing over for the country. We have seen what happened with the copper mines in Namaqualand. Perhaps I must refresh the Minister’s memory a little. During the last war when it paid them, they worked those copper mines. But when the price of copper fell after the war, they closed the mines again, and they did not even give the people a month’s notice to enable them to obtain work. The Provincial Administration had to go and fetch the labourers there and bring them here to the wine farmers to find a haven for them. The wine farmers gave those labourers work. When the gold mines on the Rand have worked out the gold, they will not even fill up the holes. That is the position. When the gold is extracted, and where nature has so arranged it that we perhaps have a bad climate, she has given us the gold to use of our country. We ought to use that money to improve the permanent assets of the country, and to encourage the people who are engaged in developing the permanent assets of the country. That is not being done today. Where the mines are paying dividends to an amount of £20 million, it is clear that the mining industry is a flourishing industry. When we talk about the dividends, however, we are referred to the mines with a low grade of ore. The Minister of Finance also refers us to that if we tell him that the mines should pay higher taxation. Why can they not pay the additional taxation? The Minister tells us that the yield is decreasing, It is happening because the mines with a low grade are working less. If it no longer pays them to work, they close the mines, because they work for their own pocket and not in the interests of the country. The permanent asset in the country is agriculture and it is the duty of the State to encourage the development of that permanent asset as far as possible. The Minister expects to obtain a sum of £2,400,000 from the excise on brandy. Let us examine what the position was last year, and then I think we shall realise that the Minister will receive much more than his estimate. In the previous year the estimate of the Minister was that he would receive £1,600,000 from this excise tax. In reality he received £2,200,000 because the consumption rose to such an extent. If he received that when the excise was increased to 15s., he will now receive much more than his estimate with this increase of 10s. I am of opinion that the Minister will receive £4,000,000 from it, but he was apparently ashamed to put that amount on the estimates. If the consumption continues to increase, and there is sufficient brandy, he will receive not £2,400,000, but approximately £4,000,000. That is the position, and how does this position compare now with the gold mines? For the wine from which this brandy is made the farmer receives £397,000, and the State receives a few millions. If we come to the gold mines, we find that the value of the gold is £114,000,000, and the Minister is this year receiving less in taxation. In normal tax during the year 1942-’43 he received £13,962,000 from the gold mines. Now he estimates to receive £12,000,000. That is all. There will be less revenue because the mines are going to work less. Well, I do not want to say much about this, but we know what goes on with this sort of thing. I think the Minister is cheated from time to time in all sorts of ways. Just as the Minister has been cheated by the speculators in fixed property, I feel that the same thing goes on in connection with this mining taxation. Last year the special contribution from the gold mines was £8,271,000. This year the Minister expects £7,400,000. That is again £1,000,000 less. In another respect we know that he wanted to increase the taxation by £900,000, but the sum total is that the Minister expects to receive £1,000,000 less on an asset worth £114,000,000. That is what he takes from that asset, while dividends are being paid out to an amount of £20,000,000. That is the position, while the Minister expects to receive a few million pounds from brandy. If the Minister needs money, he could have taken a little more from the mines, and he should not have taken that money from the wine farmers. If they receive 5 or 6 per cent. on their investment, they are satisfied. On the other hand we know that there are mines which make a profit of 100 per cent. on their capital, and the Minister could have taken a little of their abundance. That now is how the Minister treats an industry which has already existed for hundreds of years in our country and which sowed the seeds of civilisation in this country. The whole past of the Western Province is founded on the wine industry. It is the only thing that we began to export hundreds of years ago, and we exported just as much as we export now. It was the thing that kept the Western Province going. The people here lived on the wine industry, and it was a great asset for our country. It is an industry that the Minister ought to help, because it deserves the help of the Government, but instead of that the Government comes with still higher taxation. It is an industry which saw to the establishment of civilisation in our country. I want to remind the Minister that it was a meeting of wine farmers held here in Cape Town under the chairmanship of a former English governor that sent a petition to England to ask for responsible government for our country.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

When business was suspended, I was engaged in making a comparison between the money that is taken from the mines in the form of taxation and the amount that is expected from the excise on brandy and spirits. I also described what sort of community it is, and I explained why they count on the help of the Government. I just want to add that the wine farmers experienced very difficult times in the past. It is precisely because they experienced such difficulty that they built up these organisations which exist today. During all that time they never came to the Government for help. They never received anything from the Government, and that is why it is so strange to me that the Government is discriminating against this industry today. It discriminates against them not only with taxes, but also with its laws. I think it is justifiable to say in connection with this discrimination that it goes so far as to take away privileges with regard to the distilling of brandy among the wine farmers that it does not dare do against the peach farmers. You may distil if you have only a few leaguers, but you must have five leaguers of wine to distil brandy. I asked the Minister why he discriminates against the wine farmers. With regard to the peach farmers, there politics plays such a great rôle. The Minister wants the votes of those people in the Transvaal. If there is another reason, I am eager that the Minister should tell us what it is.

What is your attitude in connection with this five-leaguer distilling?

If the hon. member looks at Hansard he will see what I said. I said I am prepared to give assistance provided that the Minister does the same with the peach brandy and with prickly-pear brandy. But in the case of peach brandy politics play a great rôle in the matter.

It is a political matter with you people.

It does not behove that member to talk like that. I do not believe that he has any reason to talk of politics for he has already changed his politics so often. His conscience is worrying him. The wine farmers are discriminated against for political reasons. But even a worm will turn, and if the Minister persists with this discrimination, he knows what is going to happen.

The worm will turn.

I hope that the hon. Minister will make a statement in the House. I have been trying for years to improve the quality of brandy, and the improvement of brandy lies mainly in its maturity, and I have pleaded for years that rebate that they give on the rebate-brandy, of 1s. per gallon per year, which is now fixed at three years, should be extended. I have said that if that brandy is five years old, then it is so much better, and when it is ten years old, then it is at its best. I think the hon. Minister has agreed that what I said is right, but I hope he feels now that the time has come to grant this rebate. I am eager that he should tell us why he discriminates in this way between the wine farmers and the farmers who distil peach brandy. I am keen to know what his reason is, why he discriminates only against our people, and why he does not treat those people in the same way. The Minister knows of course that we shall vote against this law, because this side of the House considers that it is wrong. We could have understood it if the tax were raised by 2s. 6d. as in the past, but this proposed increase is far- reaching. The Minister says we must trust him. After his action, he must not take me amiss if I say that I can have no faith in him. I know that promises are not of much significance, but if he will just say that he will ensure that the wine farmers will be helped when they are in need, it will be a consolation. If he has the courage to say that, we shall be satisfied. Just to say simply that we must trust him and that he will do what he can does not satisfy us at all. Then I also want to ask the Minister to do away with the £400 which the wine farmers have to pay every year for the returns that they make. The former Minister of Finance promised me that they would do so. It is only a small amount, and the Minister can do away with it. The farmers do not get service for that £400. They give us every month a return of the consumption etc., and it is unnecessary to ask us to pay for it. I want the Minister to make a statement in this connection. I think his department is also in favour of its being done away with.

I want to associate myself with what the hon. member for Swellendam (Mr. S. E. Warren) has said. It seems as if the Minister has selected this industry for the imposition of exceptionally heavy taxes. I want to ask the Minister to make a comparison between this taxation that is imposed on the wine farmers and the taxation that is imposed on the gold mines. I want to point out to him that in Canada for example there is a tax of 15 per cent. on dividends which go out of the country. I mention this to show that the gold mining industry in this country is treated lightly and that the Minister has selected this industry, the wine industry, to impose heavy burden on the industry. The Minister is always prepared to impose a heavy tax on our wine and brandy in the country, but in the case of the gold mines the tax is only 7½ per cent. I want to identify myself with the remarks of the hon. member who has just spoken that the wine industry is treated as a Cinderella.

As a wine and tobacco farmer myself, and as one who represents wine and tobacco farmers, I feel that we cannot simply leave this matter alone, and I want to avail myself again of this opportunity to protest against this taxation that presses so unfairly on the community, particularly where it affects the wine and tobacco industries so heavily. So much has been said here — and I think that everything that can be said—in connection with the unfairness of this tax, that the Minister should be convinced by this time that this tax which he has imposed upon liquor must inevitably affect that product, and the production as such, heavily and detrimentally. It seems as if the Minister has simply decided to go through with this legislation of his. We want to assure him that the wine farmers do not look upon him as a friend. In this debate which has just been concluded he has revealed himself to us not only as no friend of the wine farmers, but also as no friend of the poor man. The Railway tax clearly proves this, but the Railway tax is only one instance. The tobacco industry has been taxed to a tremendous extent. The Minister knows that the people in that industry are mainly small farmers and poor farmers, people who live from hand to mouth, and both these proposals of the Minister affect them particularly detrimentally. Last year when he increased the tax on cigarettes and cigarette tobacco, the Minister estimated a revenue of £3,550,000. He made a low estimate because he wanted to be on the safe side, and actually he got £4,200,000. Now he estimates that he will receive £4,500,000.

That is on the existing basis, without the tax.

Did you make the calculation on the previous year’s taxes?

Yes. Then another £1,000,000 must be added.

On the estimate of £3,550,000 of last year, the Minister now estimates that he will receive £1,000,000 more. But my point is that the Minister estimated for £3,550,000 and actually he got £4,500,000; in other words, we must now expect that he will receive much more than £4,500,000. I think that where in the tobacco industry one has to do with an over-produced product which can be disposed of only as a result of this temporary increased consumption—for as soon as the war is over consumption will decrease tremendously, and one will again have a tremendous surplus—there the hon. Minister now comes and deprives the farmer of the opportunity to receive their rightful remuneration in the form of an increased price. I am glad that the Hon. the Minister has promised to give a rebate on dark pipe tobacco, but I want to say that if he does not do this it will be extremely unfair. Last year there was a big accumulated surplus of dark tobacco in the Union, but as a result of the fact that the Minister taxed cigarette tobacco and as a result of the increased consumption the dark tobacco had a better chance, and I agree that we have no surplus today. But if it is now going to be taxed as the Minister proposes, and no rebate is given, then one will find again that there will be a great surplus of dark pipe tobacco. These taxes must inevitably affect the farmer. Every year we tobacco farmers have a miniature war with the manufacturers. This tax does not affect the manufacturers. They simply increase their prices. If you ask for an increase of price then they hold this revolver to your head; they say: “If you want more, and the Government takes so much, then my prices must inevitably be such that it will not be in your interests for me to give you more, because it will simply create a surplus and it will mean that you will have to produce less.” I really hope that the Minister will come to his senses, if I may say so, and that he will show more sympathy towards these two industries—one can almost say basic industries—that offer a livelihood to a tremendously large number of farmers in our country.

I want to speak here not as a tobacco or wine farmer. I want to speak as a farmer who has to speak for all branches of farming, and I feel that if you kill one section of agriculture, then this affects also the other sections of agriculture. We must support one another in all directions. If the wine farmers must go under then it means that a large portion of the other sections must also go under. The wine farmer buys his mealies and his horses and other requirements from the other sections of the farming community. If the one section is killed then you tax the other sections of South Africa, including the tobacco farmer. I think that what is happening here almost amounts to a scandal. Just think, the wine farmer gets £630,000 for all his work and expenses, and the State comes along and imposes a tax of £3,800,000 on those people. The Government’s argument is that this is not a direct tax, but I say it is a direct tax, because if you increase the price of the product your purchasing power naturally diminishes. At the moment the Minister is in a fortunate position; but is he willing, if the purchasing power decreases, to repeal all those taxes? That is the point. We feel that now that he has imposed that tax he will not remove it again. It means that the wine farmer will have to go under, and then the other farmers will also go under. The tobacco farmer gets a little more than £1,000,000 for his tobacco. He has to pay heavy taxes, and here the Minister comes along and takes about £4,000,000 from those people. It means that from only two sections of agriculture the Minister takes about £8,000,000. We hear so often that the farmers do not pay taxes, but here we have only two branches of agriculture from which the Minister takes about £8,000,000. I do not think that ever before in the whole history of South Africa or in the whole history of the world has anything like this happened. I want to refer the Minister to what has happened in Australia. Australia once had a gold-mining industry, but the gold industry collapsed, and Australia went bankrupt. They did not see to their secondary industries; and after years they discovered that they could not exist unless they developed secondary industries as well as their primary production, and it was only after a proper system on these lines had been formulated that Australia was saved. The Minister will be in the same position one day; if he now destroys what he should build up for the future then I wonder what will become of South Africa. The Government must ensure the survival of agriculture. It is the backbone of South Africa. If we did not have an agricultural industry what would have become of the Government’s war effort? The Minister perpetually speaks about the war, and yet he wants to destroy the people who are working so hard to support the war effort. Were it not for the agricultural industry there would have been no war effort. I feel that the time has arrived for the Minister to prove his tangible sympathy for the farming community. It does not help for him merely to say that he is sympathetically disposed towards the farmer. We see that he does nothing for the farmers. All he does for them is to tax them.

[Inaudible.]

Here is an hon. member who speaks about wool, but if I look at him he strikes me as being a very poor cross-bred sheep. The Minister must look to the future. One hears to-day that the mining industry is a waning industry. If that is the case, what is he going to do to find another livelihood for those hundreds of thousands of people? He can do so only by developing the secondary industries. There should be proper development of factories in the country, with proper protection, and for that reason I feel that the Minister should think ahead before he imposes such taxes. He cannot expect us to welcome such a foolish step as the one which he now proposes.

I disagree with my hon. friend who has just spoken. He indicated that the Minister is not a good fellow. I say that he is a very fine fellow. He at least has in mind a reduction in the consumption of liquor, and for that reason he is taxing the wine industry so heavily. But it will not reduce the consumption. What we must do is to teach the people to drink decently; it is well known that where you handicap a man in doing something decently he goes to the extreme and does it indecently. Therefore I say that the Minister is making a mistake. Through these heavy taxes the price becomes so high that the wives and children of those people suffer under it. In the past it has always been the farmer who suffered when new excise duties were imposed. I remember from childhood that it was always the farmer who was the suffering party when a new excise tax was imposed. Here the Minister comes for the umpteenth time with an increase; he comes with a barbed-wire tax with which he wants to chastise the wine farmer. He whips the wine farmer with barbed wire. But I want to say to him that he will not get the wine farmer down. They are the best type of farmer in the country. The wine farmers in the Western Province are the people who have brought civilisation to this country, from the Cape to the Zambesi. If we consider the matter carefully then we shall discover that many of our Predikants are the sons of wine farmers; many of our judges and lawyers and doctors are the sons of wine farmers. Their parents were occupied with this awful product of the vine. Our wine farmers are our soberest people, because they are accustomed to liquor; and why should the Minister tax them so heavily? Evidently the Minister goes out from the assumption that he can simply go on taxing because the consumption does not decrease. But we have to do today with exceptional circumstances which have increased the consumption, not only in our country but throughout the world. There is a position of overpopulation in our country at the moment. Thousands and thousands of people have come here and in addition we have a position that there is plenty of money in circulation today. That has increased the consumption. But that position will change, and it will come to an end. The quantity of money in the country will become less but the Minister will not decrease this tax which he has imposed; it will remain. Is it not a sad state of affairs to think that the farmer gets about £300,000 for a product on which the Minister obtains about £4,000,000 in taxation? It is a terrible thing when we think of it. A typical example was brought to my attention here a few days ago. A man in my constituency informed me that he had produced 600 gallons of brandy and had brought a sample to Cape Town for investigation so that he may sell the brandy. The 600 gallons are equivalent to about 6 leaguers. He will get about £25 per leaguer for it. In other words, he gets about £125 for his crop, and then the Minister comes and takes £930 in taxation. It is a far-reaching scandal to think that the farmer has to work hard throughout the year and get only £125, for the Minister of Finance to impose a tax from which he will derive £930. The same applies to the tobacco tax.

But you must remember that the Minister is a prohibitionist.

I do not know if he is that. But I want to say to him again that he will never succeed in preventing people from drinking liquor. It is human nature that people do a thing for which they are punished, more than otherwise. I hope the Minister will change his mind. The same applies to the tobacco tax. He takes an enormous amount of money from the product of the tobacco farmer. The tobacco farmers are mainly small farmers. Why does the Minister tax them so heavily, and why does he not rather tax the gold mines? This is the first time I have heard of a Minister of Finance taxing a product so many times greater than its value, in the case of liquor. As I have indicated, he gets £930 on five leaguers of brandy, while the farmer who produces it gets only £125.

I just want to show that I am not quite as unyielding as I am sometimes described, and I want to say to the hon. member for Swellendam (Mr. S. E. Warren), therefore, that we do intend to extend a measure of alleviation as regards the rebate on brandy. The hon. member raised the matter here last year, and I undertook to go into it in the light of the investigation of a Committee which the Minister of Agriculture appointed 18 months ago. The matter was discussed with the Chairman of the Committee and with the Chairman of the Brandy Board, and as a result I have decided to propose that the period of three years, which is provided for at present, be extended. In other words, we shall not limit the rebate to only 3s. when the brandy has been held three years, but we propose to take powers so that where brandy is held for a longer period than three years we shall be able to announce in the Government Gazette that we are prepared to grant a higher rebate on that brandy, which would be subject to such conditions as we may prescribe. This will enable us to discuss the matter further with the Committee and with the Brandy Board, and to act in the light of that. I intend making such a proposal at the Committee stage, and I hope that my hon. friend will appreciate the concession.

But that is very vague; why do you not fix it now at a period of five years or ten years?

We shall discuss further particulars, but the principle will now be adopted that there will be an increased rebate on brandy that is kept for longer than three years. The object is, of course, to improve the quality. The hon. member for Swellendam has also raised the question of the £400 that the K.W.V. pays to the Excise Department. I shall go into the matter further. I can say nothing further now, except that I am prepared to consider the matter further. As regards wine, brandy and peach brandy, I just want to point out that in the Cape Province the agricultural distiller can obtain brandy from the K.W.V. I do not want to go into the question of the comparison with the gold mines again. I shall not deal with it more comprehensively now. I merely want to emphasise two points of difference. The first is that in the case of the mining industry, this industry, as a result of war circumstances, has become a waning industry. In the case of the wine and the tobacco industry, as proved by the figures which the hon. member for Riversdale (Mr. P. M. K. le Roux) quoted, these industries have expanded as a result of war circumstances. The second point is this, that so far as the gold mining industry is concerned, the taxation is borne by the industry itself. In the case of the wine industry, the taxation is borne by the consumer. It is all good and well to say that the farmer gets so much and the Government receives so much, but the Government does not receive the amount from the industry, but from the consumer. Moreover, as appeared clearly from the figures which the hon. member for Riversdale quoted, the increased taxation did not decrease the consumption last year, but notwithstanding the tax the consumption has increased by a greater quantity than we even expected.

Motion put and the House divided:

Ayes—58:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Bell, R. E,

Blackwell, L.

Botha, H. N. W.

Bowker, T. B.

Carinus, J. G.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Deane, W. A.

Derbyshire, J. G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gilson, L. D.

Goldberg, A.

Hayward, G. N.

Hemming, G. K.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lindhorst, B. H.

Long, B. K.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Raubenheimer, L. J.

Robertson, R. B.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Stallard, C. F.

Steytler, L. J.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van Coller, C. M.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Waterson, S. F.

Tellers: G. A. Friend and J. W. Higgerty.

Noes—34:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Conradie, J. H.

Du Plessis, P. J.

Erasmus, F. C.

Fouché, J. J.

Haywood, J. J.

Hugo, P. J.

Labuschagne, J. S.

Le Roux, P. M. K.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Olivier, P. J.

Schoeman, B. J.

Serfontein, J. J.

Strydom, G. H. F.

Strydom, J. G.

Swart, A. P.

Swart, C. R.

Van der Merwe, R. A. T.

Van Nierop, P. J.

Van Zyl, J. J. M.

Verster, J. D. H.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jan.

Tellers: J. F. T. Naudé and P. O. Sauer.

Motion accordingly agreed to.

Bill read a second time; House to go into Committee on the Bill on 10th April.

I move the amendment standing in my name—

The definition of “Union policy” in the Bill relates to the time of issue of the policy, and generally speaking that is quite adequate and satisfactory, but it makes no provision in the case of migration of the policy-holder. The definition ought to be wide enough to bring in a policy-holder who effects a policy in Southern Rhodesia, and moves into the Union and desires his policy to become a Union policy. There is also the other case of a man who takes out a Union policy and chooses to migrate to Rhodesia and become a citizen of that country. Then the policy should become a Rhodesian policy, because if it remains a Union policy you will have the complication that the asset is outside the Union. There is an anomaly in the Bill as it now stands that if a Union policy is altered at the request of the policy-holder so that the currency becomes Southern Rhodesian and the place of payment is in Southern Rhodesia, under this Bill the policy remains a Union liability. That is the reason for the amendment, which provides that if there is any such life policy and it has been made payable at any place outside the Union, the policy ceases to be a Union policy. On the other hand, if a man comes from somewhere else and settles in the Union, then any life policy which at his request had been made operative in the Union, should become a Union policy.

Mr. Chairman, perhaps I may at the outset express my appreciation of the assistance which hon. members have rendered by putting their amendments on the Order Paper. I asked last week that that should be done, and I am glad that the request has been given effect to, because it certainly facilitates the consideration of the Bill. Of course, if there are further amendments which are not on the Order Paper, it may be difficult to deal with them, and if they are not of a simple nature I may have to ask for them to stand over until the report stage, so that they may be properly considered. I feel that in the case of a Bill like this, we should not rush into amendments when we have not had time to see what they look like. I think it is appropriate to this amendment which affects the administration of insurance companies, that I should remove a misunderstanding which happens to have been caused by a remark which I made at an earlier stage when I said that it was sheer luck that in South Africa we had not had any serious incidents in regard to insurance companies. I certainly have no intention of reflecting on the administration of the insurance companies which we have in South Africa. All I meant to convey was that we have been lucky, in view of the fact that we have had so little control in the past, that companies of a different nature to those which we have did not come into operation in our country. In regard to this particular amendment of the hon. member for Cape Town, Castle (Mr. Alexander), I must say I do not regard the point of any very great importance, although apparently it is of some importance on administrative grounds to the insurance companies. I do not want to stand in the way of an attempt to smooth out administrative difficulties where they can be got over, and while I cannot accept the amendment moved by the hon. member in the form in which it has been moved, I am prepared to move something else which will have substantially the same effect. My objection to the hon. member’s amendment is that there is no condition attaching to such a transfer in terms of which the owner must agree to his policy ceasing to be regarded as a Union policy. I think in all cases before that is done, the owner himself must agree, because the owner of the policy, if he does agree, will no longer in fact have the cover which he would have while it remained a Union policy. I wish therefore to move the following amendment, which I trust the hon. member will accept, and in consideration of which he will withdraw his amendment. I would remind the Committee that “Union policy” means any policy which is issued anywhere on application made or presented at any place in the Union. I move—

I think that substantially meets the point.

I withdraw my amendment, sir.

With leave of the Committee, the amendment proposed by Mr. Alexander was withdrawn.

Amendment proposed by the Minister of Finance put and agreed to.

Clause, as amended, put and agreed to.

On Clause 2,

I beg to move—

The effect of this is to provide that the Registrar shall be a duly qualified actuary. I need not delay the House in arguing this. The effect of and the reasons for it are obvious. The principal officers of the companies are actuaries, and it does not seem right that the Registrar who is to be put in control of the companies, should not be an actuary himself. I am informed that “actuarism” if I may say so, is a highly technical branch of knowledge, and those who possess it would resent—I won’t say resent—but they would not like to be put under a Registrar who does not share this highly technical qualification.

I wish to support the hon. member for Cape Town, Gardens (Mr. Long) in his amendment, and in doing so to say that acutarial science is unquestionably a very highly developed science, and I feel that a Registrar lacking those qualifications would be somewhat at a disadvantage in administering the Bill. When one considers the Bill is giving the Registrar very considerable powers, it is essential that he should be a person who is highly qualified. I have no doubt such a person can be found at a suitable salary, and I hope the Minister will give careful consideration to this amendment.

Mr. Chairman, I would draw the Minister’s attention to Section 10, Sub-section (3) under which the companies are not allowed to employ anybody as an actuary unless he has certain qualifications which are set out. Surely you cannot expect the registrar with these enormous powers, sitting as a sort of dictator over actuaries, without having the qualification of an actuary himself. That position should not be allowed. Now, sir, under this clause I want to move the amendments standing in my name on page 466—

They are in a word, to give an appeal from the decision of the Registrar not to the Minister but to the Supreme Court. The Minister twitted me on a previous occasion with the fact that the Banking Act of last year contained a similar provision in regard to the Registrar of Banks. That is true, but the evidence given before the Select Committee and which I have had an opportunity of reading, says that that point was put to the witnesses, and I think they may have a very clear case for the position of Registrar of Banks. But the Registrar of Banks is very different from a Registrar appointed under this particular Bill. At any rate, the point was put to the witnesses, and they gave their reply, which I submit was logical. If you are going to have a man with such extraordinary wide powers as are given to the Registrar here, then I think an aggrieved person ought to have the right to go to the courts.

I think the Select Committee felt generally that it was desirable that the Registrar should be an actuary, until it was pointed out that actuaries commanded such colossal globular sums in the way of salaries, far beyond our capacity to pay. However, I have been told since by a very sound authority that I was entirely mistaken, that actuaries, as a matter of fact, do not command any very great salary, in fact they are comparatively cheap, if the figures that were given to me are correct. So the objection that the Select Committee seemed to entertain has been removed, so far as I am concerned, to a large extent. The amendment of the hon. member for Gardens (Mr. Long) says “shall be an actuary,” but I think it should be put in such a way that makes it clear that he should be a member of one of the recognised actuarial societies.

I trust that the hon. Minister of Finance will not accept this amendment. The reason is very simple. If we accept the amendment of the hon. member for Cape Town, Gardens (Mr. Long), it will mean simply that the Minister will not be empowered to appoint the most suitable person. There is a fairly limited number of actuaries in South Africa, and the Minister’s choice will be so limited that he will have to appoint a man just because he is an actuary, although he may perhaps possess no further qualification at all. In a case like this where exceptionally big responsibilities are placed on the official, it is essential that he should not only be actuarially qualified, but he must be a very reputable official, otherwise it will be a failure. I trust the Minister will not accept the amendment.

I can assure the hon. member for Cape Town, Gardens (Mr. Long) and the Committee that I would like very much to have in this post a duly qualified actuary, and I shall do my best to get such a person. But I do think it would be a mistake to lay that down as a sine qua non. I am not at all sure we shall be able at the scale of salary which the Public Service Commission will have to approve, to make a satisfactory appointment. If I can make a satisfactory appointment I shall do so, but I think we shall be binding ourselves much too rigidly if we make it essential that the person appointed to this post must be a duly qualified actuary. If he is, so much the better; if he is not, well don’t let us forget that we still have the Government actuary whose advice is always available in technical matters. I shall certainly do my best to obtain such a person, but I do not think I can accept an amendment which will bind the hands of myself and those who come after me in regard to the making of this appointment. With regard to the amendment of the hon. member for Cape Town, Castle, I believe that that matter was very fully considered by the Select Committee, which decided against accepting this amendment. I must say I am rather disappointed that the insurance companies should be pressing this particular point. I think I can say that the relations between the Treasury and the insurance companies have always been most cordial; there has been the most friendly consideration in regard to all matters, and the fact that this amendment is being pressed does rather argue a suspicion which I think is not justified by what has happened in the past. Now I do not think it is necessary to give this appeal to the court. The issues here are not legal but administrative, and can quite well be dealt with in an administrative way. Let it not be forgotten that the registrar will be working under the control of the Minister and the Minister is responsible to Parliament. I think that meets the point sufficiently, and in view of the nature of the issues which are likely to come up, I hope the Committee will prefer the provisions of the Bill to those which the hon. member desires to insert. I am sorry, therefore, that I shall not be able to accept either of the amendments proposed to this clause.

I wish to support the amendment moved by the hon. member for Cape Town, Gardens (Mr. Long). In the due and proper management of this Insurance Act, the appointment of an actuary is very necessary. We have only to consider other institutions or bodies on which actuarial experience has been considered necessary. Take the case of the Chamber of Mines. For some years they insisted upon their secretary being an actuary, and I do not suppose there is any man who has done more for the real progress of the mining industry than Mr. Gemmill, who was appointed because of his actuarial experience and knowledge. In that case, sir, his outlook and his grasp of all the essentials in regard to the many-sided appointment which he held enabled him to fulfil it in a most efficient manner. I think we ought to indicate to the public that our wishes that the control of insurance companies should be in very safe hands, and we should insist upon qualified people having that management and control.

I do not intend to call for a division on this. I have now the assurance of the Minister that if he can get a suitable person who is an actuary, he will appoint him. I am told on the best possible authority that there are numbers of people who are actuaries and who will be obtainable for this appointment. Having that assurance, I do not think we need take the matter any further. I withdraw, sir.

With leave of the Committee, the amendment proposed by Mr. Long was withdrawn.

Amendments proposed by Mr. Alexander put and negatived.

Clause, as printed, put and agreed to.

On Clause 3,

The Minister proposes in this clause to demand from any company that it must conform to certain requirements, namely that a company must pay a certain deposit to be enabled to conduct business in the country in future, and that the Registrar shall then be compelled to issue a certificate to such a business. Now I want to ask the Minister if he does not think that it is very unfair and very unjust towards thousands of inhabitants of the country who are today insured by certain companies which in the past did not do genuine business, but insured people, and now that the policies mature, or now that the time has come to pay out, now they simply say that they see no chance of paying out. They say that in the past they did not do good business, and therefore they do not pay out. The company perhaps did business in the country for 20 or 30 years, and now they see no chance of fulfilling their contract. I want to say that I view it as an example of the grossest exploitation that has ever taken place in the country where a company from overseas has misled our people to go and insure with them, and now that the time comes to pay, now they do not want to pay and they have all sorts of excuses. I cannot be led to believe that any business can remain standing for 20, 30 or 40 years without doing sufficient business to apportion a share of the profits which they have made to those persons whom they have insured. I have here before me the instance of a poor man who paid £645 to an insurance company in the country over a period of 20 years. It was an endowment policy, and it must now be paid out. Now the company is turning round and saying that it did not make the profits and that it therefore cannot pay out.

But it is compelled to pay out.

It is not compelled under the existing law. It comes down to this, that this company received £645 over a period of years from this person, and it has used that money without wanting to pay a penny interest on it. I therefore want to move the following amendment—

I think the purport of the amendment is quite clear. I therefore move the amendment that it may do business only on the condition that it can satisfy the Registrar that it did honest business in the past. We do not know how many people there may be, perhaps thousands, who are being exploited in this reprehensible manner, as in the case I have just mentioned.

I would like to support the amendment. I think it is very necessary that the businesses already in operation should be thoroughly investigated, that investigation should be instituted in connection with their activities. For that reason I support the amendment. There are various cases that can be mentioned. The case which the hon. member mentioned makes one a little sceptical towards the business that is being conducted. I want to draw attention to one case that will perhaps contribute towards causing the conviction to take root that it is necessary to institute an investigation. I want to mention another case of the South African Trade Union Insurance Co., Ltd. Among the stipulations in the policy of that insurance company there are provisions that are shocking. I do not know if the Minister is acquainted with this company. It is an insurance company that has been professedly established for members of trade unions. Members of trade unions may join provided they have been approved by the directorate of the company. A measure of pressure is exercised by the company on members of trade unions to join the insurance company. I have before me one of the policies of the company. The company has been established only a short while ago, in 1940 or 1941, but I think it will be well to draw the attention of the Minister to it, and thereby to emphasise the desirability of the amendment of the hon. member for Kuruman, so that policies of this nature must be approved before they are issued to the public. This policy I have here before me was issued to a person employed in the dynamite factory, Somerset Strand, who is apparently also a member of a trade union. Apart from the fact that this insurance company is exclusively sectional for members of trade unions we have here, for instance, the singular provision that where insurance companies of the reputation of the S.A. Mutual, Southern Life, S.A.N.L.A.M., and other acknowledged high-standing companies, have a profits restriction which policy-holders may benefit, there, in the policy of this company, it is provided that the disposal of the profits that may be distributed to policy-holders is left to the discretion of the directorate. It is a peculiar provision for an insurance company, but there are many more remarkable stipulations. There is another provision that states that the policy provides the right of participating in the profits of the society on bases that are determined from time to time by the directorate, as soon as the specified premiums are paid. Only then does the policy-holder share in the profits. A person who is insured for £500 now pays premiums all his life until he has paid £500. Then he shares in the profits. These are two peculiar provisions in the policy. A third singular provision is that the directorate may change arbitrarily the methods of benefits and contributions in accordance with the system and type of the insurance and according to the vocation of the insured. Then comes the last and most noteworthy provision that I want to mention. This provision is that the insured person is obliged, as soon as he feels sick or discovers any physical deficiencies or any weakness in respect of himself, to give notice of this. If a doctor, therefore, says to an insured man that he is not quite well he must immediately notify the insurance company. That in itself is peculiar enough. But then follows the provision that the assistance benefits under the policy may be changed or cancelled arbitrarily by written notice. The directorate may, by written notice, cancel the benefits which have been granted to the insured person under the policy at any time. We know that insurance companies can never, for instance, alter disability conditions. Where certain conditions have been granted to the policy-holder, those conditions cannot be changed. But here we have this peculiar policy in which the company may alter the benefits arbitrarily. In other words, a man who is insured in connection with his life remains quite insecure as regards the benefits he is going to enjoy. If such a thing is possible under our existing law, if an insurance company can get away with that, then it is high time that the amendment of the hon. member for Kuruman should be accepted, for even under the existing law I cannot imagine that a policy of this nature can be approved, because it conflicts with the recognised principles of insurance. We in South Africa have a reputation in the insurance sphere that compares well with that of any other country in the world. South Africa has built up a tradition in connection with insurance. The big insurance companies have an excellent name. For that reason it is essential that an investigation should be instituted into the way in which companies conduct their business, so that the high tradition may be maintained. [Time limit.]

The allegations that have been made here prove that it is high time, not that the amendment should be accepted, but that the Bill should be accepted. I regret that I cannot accept the amendment. As regards the specific case that has been raised here it is apparently a case of non-fulfilment of a contract. If this is so, it is naturally a case for the court. The case which has been raised by the hon. member for Kuruman (Mr. Olivier) does not raise the question whether the business is being conducted in an honest or dishonest way. It is a matter, to a certain extent, of objective wording, which cannot always be interpreted to the satisfaction of everyone. But what I want to say is that the acceptance of the amendment will place an impossible burden on the Registrar, because it will mean that before he can register any existing company, he will have to enquire into the business methods of the companies. It will take a great deal of time.

Put it this way that if a company in the past has not fulfilled its contracts, the cannot be registered.

The Bill provides for investigation by the Registrar after a company has been registered, I am referring to Clause 29. The Bill provides inter alia that where the Registrar has information which in his opinion necessitates an inquiry into the business of an insurance company, steps can be taken. This is the only procedure that can be followed. You must begin by registering existing businesses so that they can continue with their work, but afterwards if prima facie complaints are made then provision must be made for the Registrar to take action. I say again that it is not an argument for the acceptance of the amendment.

Can he revise the policies?

That is actually an argument for the acceptance of the Bill, which gives the necessary control to the Registrar.

As the hon. Minister says, the criticism which is made is one which justifies the passage of the Bill. I rise because the hon. member referred to a transaction of a certain company without mentioning its name. Then the hon. member for Moorreesburg (Mr. Erasmus) in supporting him, dealt with the Trade Union Assurance Society, and I rise because I do not want it to be inferred that this is a society which has done anything of an irresponsible nature.

He was referring to two entirely different things.

They are two entirely different matters.

I am willing to withdraw my amendment provided the Minister can give us the assurance that under Clause 29 the Registrar shall have the right of compelling those persons whom I have mentioned here to carry out their obligations.

The wording of Clause 29 is broad enough.

I am not an authority on these matters, but I am not quite certain that a person whose policy lapsed last year, and who was insured with a company such as the one I have mentioned, will not be exploited, and that this company which I have in mind, which has been doing business now for 20 or 30 years, will not simply shrug its shoulders in future and say: “Well, that policy was contracted before the operation of this Act, and consequently we are not going to pay you out.” We have to do here with a company that comes to make money here in this country without giving those people who helped it to make that money, a share of that money. If the Minister gives me the assurance that Clause 29 will compel this company to do its duty and to pay out these people, I shall withdraw my amendment; if not, I do not see my way clear to do it because there are thousands of Union nationals who are exploited by companies that come from overseas, not to do insurance business here, but simply to exploit the people of South Africa.

The hon. member for Moorreesburg (Mr. Erasmus) just now mentioned one particular company by name, and certain conditions attaching to that company, and he seemed to infer that those conditions were not quite right and above board. If I am correct in understanding him, he first of all said that the profits were declared by the directors and not by the company. I think that that is the practice which is usually adopted. I do not think there is ground for much criticism in that. I can see a representative of the South African Mutual, who is sitting on the other side, smiling at me. I think that is the policy adopted by them too. In the second place the hon. member referred to bonuses. The practice in this country is this, that where a person is engaged in a hazardous occupation it is customary to charge an extra premium. In this particular case, I think the hon. member will find, if he reads that pamphlet a little more carefully, that instead of an extra premium being charged, provision is there made that the bonus will be adjusted to compensate the company for the extra risk taken. The third point to which he referred was one of cancellation, and I gather from him that the company has the right to cancel the policy. I would advise him to read that pamphlet before him a little more carefully.

I am not quoting from a pamphlet; I am quoting from the actual policy.

The right of Cancellation is applicable only to a disability benefit. In the event of the insurer taking part in a hazardous occupation, the company will have the right to discontinue the disability clause for the future and adjust the premium accordingly.

The hon. member for Orange Grove (Mr. Bell) has apparently not followed what I have said in connection with the stipulation of what the directors can do. He knows that companies like the S.A. Mutual, S.A.N.L.A.M., and Southern Life lay down that their policy-holders will be entitled to the full profit. That is the stipulation Other companies again, like the Prudential, lay down that the policy-holders will be entitled to 90 per cent. of the profits, but in this company it is left to the decision of the directors to decide what portion of the profits will go to the policy-holder. That was the first point. The other point which he made was this. I have quoted from the policy itself, and it lays down that this policy gives the right to share in the profits of the company on a basis that is fixed from time to time, when the premium has been paid, etc. It means that the policy-holder cannot get any profits for almost his whole lifetime. The second point is in connection with the cancellation of the policy. If the hon. member will look at Clause 4 of the policy he will see that the directors obtain the right there to cancel the disability benefits at will.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On New Clause to follow Clause 4,

I have a new clause to propose after Clause 4. It appears on page 468 of the Afrikaans text of the Votes and Proceedings. The amendment almost speaks for itself. I propose there that we should insert a provision in this Bill in connection with re-insurance. It appears strange that in a consolidating Bill on insurance—where even in Clause 1 the definition is given that assurance in the Bill also includes re-insurance—that nothing is said about re-insurance. If you consolidate your insurance legislation, then you do not only expect that you will summarise and include all the previous acts, but you expect that you will include the whole insurance business in such a consolidating measure. For this reason you also call it a consolidating Bill. But to the surprise of everyone we are prepared to pass insurance measures without mentioning a word about re-insurance, which is an important part of our insurance business. I do not know what the reason for it is, but it appears strange that no mention is made of re-insurance. The Chairman of the Select Committee will perhaps be good enough to tell this House why the Select Committee did not give attention to this important aspect of insurance in South Africa. It does not appear to me that any attention has been given to re-insurance. In any case here is a consolidating Bill before us without one of the legs on which insurance rests. I am referring more particularly to fire insurance and accidents, because in the sphere of life assurance, re-insurance is not of great importance, because the policies are not big. Now I propose here that something at least should be said in the Bill about re-insurance and that is that we as far as possible will restrict re-insurance to South Africa. It is nothing new in the world. All countries are trying to get re-insurance in their own country so that they can retain their money in their own country. Ireland has done so and America as well as other countries. What I am proposing here is this, that before a company, especially as regards fire and accidents, before it re-insures, it must give preference to insurance in South Africa; in other words, that it must first go to the existing companies in South Africa to see whether it cannot get re-insurance there, and if it cannot get satisfaction there, it can go overseas for it. It is not known how much money goes out of the country as a result of re-insurance. The big companies in the country that are concerned with fire and accident insurance have for one reason or other had to go overseas for re-insurance. Apparently they could not get it in South Africa. But now we say that the time has come when we should try to keep our money in South Africa. I want to say again that the statistics are not known in respect of how much money goes overseas in connection with re-insurance. I would say that it amounts more or less to £500,000. In any case the statistics are not known. I do not know whether the hon. the Minister has any information about the matter.

Unfortunately not.

That makes the matter even more interesting, if the Minister has no information in connection with the amount of money which goes out of the country every year for re-insurance. There are various ways in which you can encourage re-insurance in your own country. Ireland in 1936 passed a Bill under which they established their own re-insurance companies. There are two methods which you can employ, and that is that the Government can assist the establishment of such a company by subsidising it or to underwrite or to guarantee it. I move—

1. 5. (1) Every registration certificate shall contain a provision prescribing that if the person authorised thereby to carry on insurance business intends, in full or in part, to re-insure a liability which he had accepted in terms of a Union policy, he shall give preference to Union insurers.
   1. (2) If such person fails to comply with such condition and he enters into an insurance contract with a nonunion insurer in respect of the said liability, the insurance contract shall be invalid.
   2. (3) If such person disregards such condition, the registrar may cancel such registration certificate.

It would appear to be a very attractive method for the Government to guarantee an insurance company just as the Government has done in respect of the Iron and Steel Industry. It would be very acceptable. But for this we naturally require extended legislation. I have seriously considered moving something in this direction, but I realised that it would practically mean that I would have to draft a new Bill if I want to include provisions that the Government can guarantee a re-insurance company. I would have preferred it. I have put the matter in another form, however, because I want to include an amendment in this Bill and that is that before a company re-insures overseas it must first go to a South African re-insurance company and it must satisfy the Government that it cannot get the necessary re-insurance, and then it can go overseas. If a company evades this provision, then the Registrar can cancel its certificate. I think that it is such a fair proposal that I hope the Minister will seriously consider accepting it.

The hon. member was not quite correct when he said that there was nothing in this Bill about re-insurance. In the definition about insurance business we lay down that it includes re-insurance.

I have said so.

There is nothing in the Bill that lays down that it must happen. Our difficulty in connection with this matter, according to what the hon. member has said, is that at the moment we have no data. Under this Bill we have great powers to ask for such data. This Bill will give us the power to ask for that data; we will get it and my intentions are to investigate the matter further in the light of that data. I cannot go so far to say that as far as possible no insurance should take place overseas. Apparently my hon. friend will also not go so far, because in the interest of safety it may be essential. But before I have more information my difficulty is to submit something in this legislation. My hon. friend will admit this. As regards his amendment, he will also admit that it is rather vague to say that a company must get preference to re-insurance in South Africa.

It must at least make an effort.

That indicates what my hon. friend has in view, but from the point of view of the interpretation of the law it will not be possible to give effect to his amendment. I give my hon. friend the assurance that we want to gather the necessary information and that we will act in the light of it. There will be a certain amount of re-insurance overseas, but as far as possible it will be encouraged inside South Africa. I think that there we are at one, but we cannot introduce legislation on this point before we have made use of this Bill to get the necessary information.

It appears to me that we both agree with my amendment.

But the amendment of the hon. member is vague. I hope that in view of the assurance I have given, he will not take this point any further.

Proposed new clause put and negatived.

On Clause 8,

On this clause I want to move the following amendment—

I think that this proposal speaks for itself. During the course of this Session I have repeatedly had proof of what is proposed in this article, i.e. that we accept a principle and then leave the regulations under that principle to civil servants. This amendment which I am proposing is connected with what we have said during the second reading about this point, i.e. that when a general power is given to draft regulations, then there ought to be a schedule to the Bill in which the proposed regulations are included. It is particularly important in connection with a Bill like this. If the principle is accepted, then we leave it to a civil servant to draft the regulations later. I am moving an amendment to this clause, but the amendment also applies to quite a number of other clauses in which the same provision appears, which gives the right to make regulations. I would like to discuss the principle of this clause and if the Minister will not accept it now, then we need not try to insert it in the other clauses. The Minister must understand that we are dealing here with a far-reaching measure and we must give the security to the companies that we at least know what regulations are going to be made under this clause. No one knows at the moment what the regulations are going to be and I think that the Minister will agree with me that it is a dangerous tendency that has been revealed in our legislation recently. I call it a dangerous tendency in our legislation, because we get it more and more in our legislation, that we accept a principle and then it is left to the Governor General or a civil servant to draft the regulations in detail. Those details as far as this clause is concerned—the Minister will admit this—are of the greatest importance. The company can perhaps draw up a form and it submits that form to the public, and then when the regulations are eventually drafted under this article, then it can easily happen that the business of that company lands in the greatest difficulty. The Minister should remember that we will not always have the civil servants we have now. The Minister will also not always be there and we do not know who will succeed him. Therefore it seems to me to be so inexplicable that the Minister should come here with a Bill in which the general principle is accepted and in which it is then stated that the details will be drawn up in regulations. The Minister also knows what the tendency is in our country. If the regulations are indicated in the schedule, then there is very much less chance that there will be an alteration in the regulation. It will be admitted that the position is that if the regulations are accepted by this House in a schedule, then the chances are very small that they will be altered, but when the regulations are drafted later by a civil servant, then it often happens that those regulations are altered and they are going to cause great inconvenience to businesses like these. The Minister will say that this is not his intention, but we must consider the fact that companies would like to have security, and I say that it is not in the best interests of legislation in South Africa to proceed more and more in that direction, that we should leave such regulations to be drawn up by civil servants. It is not proper legislation. If one looks at the Bills that have been adopted recently and the great scope that is left for regulations, then one really gets the idea that Parliament can just as well be abolished. What is more, the regulations are often very contentious, and of such a nature that they can never be adopted by this House. However well it may be intended, this House should not leave such matters in the hands of the Minister and of a civil servant, and by way of amendment I want to protest against this tendency to govern by regulations more and more. It appears as if the Minister has a war complex. I know that he will not take offence, because I mean it in the sense that he has become accustomed to rule the country by regulation. Every morning there are new regulations and the Minister must not give expression to that idea in our legislation. When the war is over we will still have this legislation. If the Minister cannot accept the amendment now he should consider this matter and he should see in future that where provision is made in a clause for regulations, those regulations are included in the schedule of the Bill.

The hon. member has raised a point which is of general interest, and I hope he will not mind my replying in English, because I want other hon. members to understand it. The hon. member has raised the question not only in relation to this but to subsequent clauses with regard to the power which is given to make regulations. The hon. member for Stamford Hill (Mr. Acutt) raised that at an earlier stage, and unfortunately I omitted to reply fully to him when I was dealing with the second reading debate. On the general issue I would like to make the point that it is extremely difficult to strike, in legislation of this kind, a fair balance between what you put in the Act and what you don’t put in. If you put everything in the Act, it becomes unduly swollen, but on the other hand I quite agree that one does not want to take too much power by way of regulation, and therefore one must attempt to arrive at a fair balance between those two points of view. I do not think we have gone too far in this Bill in the matter of taking powers of regulation. The Select Committee has watched that very carefully. Apart from that, the Select Committee had given to it an assurance which I want to repeat here, and I hope it will satisfy my hon. friend opposite. That is that in relation to these powers that we are taking to proceed by way of regulation, we do not, intend to make any regulation without having given the insurance companies concerned an opportunity of seeing them and expressing their feelings in regard to them. As I have already said, the regulations between the Treasury and the insurance companies in the past have always been cordial, based on mutual understanding, and they will be so under this Bill. I readily give an assurance that we shall not make regulations without, giving the companies concerned an opportunity of stating their position in regard thereto, and in the light of that assurance, I hope the hon. member will feel satisfied and not press his amendment.

I am gratified to hear the hon. Minister make that statement, because several witnesses took exception to the great powers which were placed in the hands of the Registrar. As the Minister has said, an undertaking was given and recorded in the proceedings of the Select Committee, and I am very gratified to know the Minister has repeated it and given the assurance that insurance companies will be consulted before new regulations are promulgated.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 9,

I would like the Minister to tell us why there is this proviso in the first paragraph of Sub-Section (1) of this clause, to the effect that any appointment of auditor is subject to the approval of the Registrar, who may confirm or reject, such appointment, or withdraw his approval. That seems to me to be introducing a dangerous principle to make the Registrar sole arbiter as to whom the company may employ as auditor. I think the profession of auditor is a very honourable profession, and to place the sole choice of an auditor in the hands of the Registrar will be creating a dangerous position which would be better avoided. I hope the Minister will tell us his reasons.

I tried to deal with this point in general terms during the second reading debate, and I pointed out that under the existing law the principle is the minimum of interference with the maximum of publicity. There is, therefore, very little power to control. I said that in the new law we wished to change that, and in the interests of policy-holders it is necessary to have more control. I then went on to say that in the light of legislation passed in other countries there were two ways of securing that greater measure of control, the one was by setting up what one may call the office of a superintendent of insurance, as you have in Canada and the United States, one who is employed pretty well to run the show for these companies, and the other is by allowing the work to be done by the societies’ own auditors and actuaries. But I said that if in fact these officials are to do the work for us, then we must have some power of supervision over them. This, therefore, represents a compromise, and I think if the hon. member looks at it in that way he will see that this proposal is not an unreasonable one, especially if it is remembered that there is always the power to appeal to the Minister. That must always be remembered in relation to all points of this kind. If we do not act on those lines you will have to go the whole hog and institute a very complete system of inspection and superintendence, which I really do not think would be desirable in the circumstances of our country.

Clause put and agreed to.

On Clause 10,

I have an amendment here—

It does seem as if the Select Committee has not sufficiently appreciated the difference between the position of an auditor and the position of the actuary. The two are really quite different, the auditor is an outside accountant, not a person who is an inside official of the concern, and he is not a full-time employee, whereas the actuary is, of course, a full-time employee.

Not necessarily.

I think the Minister will find on reference to the large insurance companies, that they have full-time actuaries, though this may not apply to some of the smaller ones. It does seem most unfair that the whole future of one particular man who happens to be an aactuary, an employee of the company, should be under the control of a Registrar. You may just as well say let the Registrar deal with the directors and the general manager of the company, and so on. That would be just as logical as allowing him to dictate who is or who is not to be the actuary. I do think this is a most drastic provision. In Section 2 as applying to the actuary. It might be perfectly all right with reference to a part-time auditor, but certainly very unjust in regard to a full-time actuary.

I move to add a new proviso at the end of Sub-Section 2—

I know that there is an appeal to the Minister from all decision given by the Registrar, but this entrenches the position of an actuary to a certain extent, and makes the Registrar report to the Minister the reasons for his decision. The position of an actuary is quite different from that of an auditor, and in giving an entirely untrammelled power to the Registrar to dismiss an actuary, is going too far. The Actuarial Society in this country is anxious, I understand, that there should be some safeguard, something which takes out of the power of the Registrar, who may not be an actuary, and who may not have had the experience and training of one, the power of terminating the appointment. The matter was dealt with before the Select Committee and evidence was offered on these lines. A witness said, on page 82,—

Those words have now been deleted.

If he reports his reasons the Minister can then decide, so that the actual decision would lie with the Minister.

Mr. Chairman, I do not think I can accept the amendment of the hon. member for Cape Town, Castle (Mr. Alexander) and I think I have given the reasons in speaking to the previous clause. I cannot see any substantial difference between the position of the actuary and the auditor in this regard. Both of them will have important statutory duties to perform, and I think in both cases there should be some measure of control. We cannot argue on the basis of all these people being full-time employees of the companies. I think in the majority of cases they will not be such. The hon. member is thinking of the larger company, and the cases where the actuary is not a full-time employee will, I think, certainly represent the majority of such cases. The hon. member for Pretoria, City (Mr. Davis) has moved what is really an alternative amendment. Well, I appreciate the spirit in which the hon. member has put it forward. I think he admits that legally his amendment is unnecessary, but I can see that from the point of view that he has taken, it has some value, and I shall not resist it if the hon. member, as a good lawyer, feels that it is desirable to paint the lily, and say the same thing over twice.

Amendment proposed by Mr. Alexander put and negatived and amendment proposed by Mr. Davis put and agreed to.

Clause, as amended, put and agreed to.

On Clause 11,

As regards Clause 11, as well as Clauses 14 and 15, I just want to say to the Minister again that the Minister has stated that, so far as the making of regulations are concerned, the assurance has been given in the Select Committee that the companies will be consulted, or rather that the regulations will be submitted to them, and the Minister has repeated it here and has again emphasised the friendly relations between him and the companies. But on that I want to say two things. The first is that the Minister will not always be here.

I am not speaking of myself, but of the Treasury, which is much more permanent than I am.

There is a second point, and it is that the companies are apparently not satisfied with the Minister’s assurance. For that reason they objected in the Select Committee, where the assurance was also given, and in so far as I can determine the companies today are not satisfied with the assurance, for they say that in the case of established companies one cannot leave an amendment of the form in which the profit and loss account must be kept arbitrarily to the Treasury. This is something that must be fixed, and we cannot leave it to the discretion of the Treasury. Now the Minister comes and says that if these regulations are incorporated in the law, it will make the law too globular. In the old days of the Cape Parliament hardly a law was adopted without the regulations being incorporated by means of schedules. Then the objection that the legislation might be too globular was never heard. Surely paper is not as scarce as all that. If the regulations can be drafted by the officials in another month, they can also be drafted now while the Bill is before Parliament. That seems to me to be a sound principle. It may be that the Treasury and the companies are on a friendly footing, but my information is that the companies are not satisfied with the position. They consider that such changes, which may be of great significance, must be incorporated in the Act. Such a change must be subject to the most careful enquiry, and we are the legislative body that must determine those provisions. It is no excuse to say that the Bill will then be too bulky.

Clause put and agreed to.

On Clause 12,

There is a point at the end of this clause which should be ventilated. This clause envisages that companies will render valuations every three years—that means that they will work on triennial valuations. That may be all right for the Union, but Sub-Clause 4 applies the same principle to non-Union companies. The nonunion companies may value annually or quinquennially. The Minister would be wise to consider that aspect. I want to draw his attention to this so that he may introduce an amendment. I have not prepared any amendment to propose at the moment, but I think the Minister might give the matter his attention.

I understand that this was considered by the Select Committee, but I shall give further consideration to it in the light of what the hon. member has said.

Clause put and agreed to.

I move the amendment standing in my name. The position is simply this, that new companies which have been registered since February, 1941, are placed in a somewhat difficult position if they are compared with old companies which have had the opportunity of building up reserves, and which can write up their establishment. I have in mind one particular company which does a lot of the trade union work. Now the position is that the establishment charges will have to be written off, in seven years. That means writing off money which would otherwise go to the benefit of policy-holders. The suggestion is to give these new companies a period of twelve years to write off their establishment charges, instead of the seven years provided for in the Bill. There is a provision made giving the Registrar the right to extend the period for the writing off of the establishment charges, but I think that under the circumstances it would be well for the Minister to accept this amendment so as to place the new companies on a footing of equality with old-established companies. I move—

I think the hon. member for Troyeville (Mr. Kentridge) and the company to which he has referred are unduly apprehensive in regard to this clause. In the first place, I would refer to the fact that we have before us the second schedule which provides for the calculation of liabilities. The basis laid down is admittedly a lenient one and most companies follow a more stringent basis today. Then under 15 (1) (i) we provide for the inclusion of an establishment account which in itself is a considerable concession. That establishment account will appear at the figure at which it was stated in the last balance sheet before the commencement of the Act. The company to which the hon. member has referred will, by the time this Act commences, already be three years old. The establishment account will be worked off in seven years—which the hon. member now wants to make 12 years. Under Section 66 we have provisions under which the Registrar may extend the period it need be. I do not anticipate for one moment that there will be any such difficulties, but if there are there is machinery to meet them. I am sorry, therefore, that I do not regard the amendment as necessary. At the same time, may I move the amendment standing in my name as printed on page 466 ? The amendment is purely a verbal one suggested by the Law Advisers in order to clarify an amendment made by the Select Committee. I move—

With regard to this Sub-Clause (i) and the three paragraphs I would add a plea to the Minister to give further consideration to this matter, because it is not only a question of the effect upon this company, which was mentioned by the hon. member for Troyeville (Mr. Kentridge). He has in mind the specific case of a company, which was formed recently and which now finds that in terms of the stringent provision of this Bill it will hardly be able to fulfil these terms. When the time comes to fulfil them a further lapse of time may enable it to do so; but there is another aspect, and I hope the Minister will give serious consideration to it. I wish to refer more particularly to sub-paragraph (iii) which provides for the insurer, which is not in existence at the date of this Act, that is a new company which may come into existence in the future. The company, to which the hon. member for Troyeville has referred, started under particularly favourable auspices. It is to all intents and purposes a mutual organisation established by Trades Unions and as such it has been able to secure its business on very favourable terms. It has had a unique pull over new business, which would not apply in many cases. In the ordinary way it would not be possible to make the early and rapid progress, which this particular company has made. And yet we find this company is in difficulty to comply with this clause. How much more difficult would it be for a new company to become established under this onerous condition? I want to ask the Minister seriously to consider making provision under this Bill for a longer period than seven years in respect of paragraph (i) and (ii), and under paragraph (iii) to make provision for a greater period than three years, and for a greater percentage than 30 per cent. of the capital. I feel this is one of the most important provisions in this Bill, because as it stands at present it is going to be practically impossible for any new company to enter into the insurance business.

Why do you say that?

I say that because of the experience which I have had and from the advice I have had from others, and unless some reasonable conditions are given to new companies it will be impossible for them ever to start. I admit that in Clause 66 the Registrar has certain powers to extend the periods, but the unsatisfactory position is this, that the person charged with administering the business of an insurance company is entirely in the hands of the Registrar as to whether he will extend the period or not, and it will therefore be better for the House to make provision for a longer and more practical term. The Minister has referred to the second schedule of this Bill. When we come to that schedule I want to show the Minister that the basis of valuation will make it impossible for a new company to start, that the schedule will close the door entirely, and that the provisions of that schedule coupled with the provision laid down in this clause in sub-paragraph (iii) will impede any new company from even starting. I think doing so is a mistake, and my contention is that we should hinder no new development because it will lead to the entrenchment of existing organisations and the growth of monopolies. If the position in England is viewed it will be found that many new companies have come into force in comparatively recent years. There companies—new companies are still coming into existence, and in a new country like South Africa it is doubly important and our duty not to place any unreasonable impediments in the way of the establishment of new companies. I feel that this is an important provision in this Bill, and I appeal to the Minister not to brush lightly aside the amendment moved by the hon. member for Troyeville, and I would also appeal to him to consider the point I have made in regard to sub-paragraph (iii), namely in respect of the period of three years and in respect of the percentage of the capital. I would suggest in respect of the period of three years that it should be lengthened to ten years and in respect of the 30 per cent. that it should be increased to 50 per cent.

I assure my hon. friend that the last thing the Select Committee or I would desire would be to stop new companies from coming into existence, and we have the most emphatic assurance from the Government Actuary that these conditions are not only reasonable but lenient. Having regard to the provision of Clause 66 I do not consider it necessary to go further than we have done.

I cannot alow it to pass at that. I do not want to introduce the personal element, but I do happen to have personal knowledge of this subject and I want to tell the Minister this, that I have discussed this matter with other actuaries and they confirm the one fact that the Bill as it stands makes it impossible for a new company to start. I have been at pains to ascertain that. I would submit this, I was not a member of the Select Committee and I was not present at its sittings, but we have the Chairman present here and he might tell us whether this matter was carefully gone into by the Select Committee, or whether the view of the Government Actuary was expected. I have to challenge the view of the Government Actuary, and I do so because of the views expressed to me by other actuaries. This Bill will make it practically impossible, if not entirely impossible for a new company to start.

Amendments proposed by the Minister of Finance put and agreed to and amendment proposed by Mr. Kentridge put and negatived.

Clause, as amended, put and agreed to.

On Clause 17,

I beg to move the amendment standing in my name—

The object of this amendment is not to interfere with the provision that the company must have 100 per cent. assets to cover its liabilities. It does not interfere with that. This amendment to be understood, must be read together with Clauses 18 and 19. Now, Clause 18 provides that after a certain period the company must invest its assets to the extent of 75 per cent. in Union securities and 25 per cent. can be in nonunion securities. So that makes up the 100 per cent. But under the provision of Clause 17 as it now stands the insurer must keep within the Union not only the 75 per cent. of Union assets, but also the 25 per cent. of non-Union assets. Now, the evidence before the Select Committee was quite clear, that to bring non-Union assets into the Union affects their value adversely. The Registrar, of course, is entitled, to call on the company to furnish him with a complete list of the assets. He has that control so the company must satisfy him that it has those assets. The only objection is that the company should be compelled to hold them in the Union. It would only be in an emergency that the 25 per cent. of non-Union assets would be realised, and they would be realised most easily in the market where they belong. To bring them here would handicap their realisation and would defeat the very object which the Minister has in view. Under my amendment the company still must have the additional 25 per cent. I am told that from a business and insurance point of view this is a perfectly sound amendment. The evidence on the point was given by Mr. Monkhouse on page 28 of the Select Committee’s report where he says this—

And then later on he says this—

The amendment only applies to that 25 per cent. which the law allows him to invest in non-Union securities.

I want to move the amendment standing in my name. I move—

1. (a) the non-Union assets have been deposited with the Union’s High Commissioner, or other approved person in the United Kingdom, Canada, Australia or New Zealand, and
2. (b) the Minister has satisfied himself that the measures adopted under paragraph (a) of this proviso afford adequate protection to Union policy-holders.

The first amendment is to delete the proviso as it now stands and to amplify it. The position briefly is that provision is made here that after six months from the commencement of the Act the insurer should keep within the Union assets covering his liability. But here provision is made that at the end of six months this is to happen—and then it says—

Now, there is no High Commissioner in Canada, New Zealand or Australia. Yet there are companies of renown which have done very well for South Africa with their headquarters in those Dominions—naturally, they have also done well for themselves, but they have been great assets to this country. I might mention the National Mutual of Australasia and the Colonial Mutual, and the Southern Life of Canada. They have no provision made for them because the Union does not happen to have a High Commissioner in Canada or Australia. My first amendment, therefore, is designed to put things on a footing of equality as far as these Dominions are concerned. The point was brought out in the evidence on pages 37 and 75. I am not going to read it all. It is pointed out there that as far as the Union High Commissioner in London was concerned it was all right. Apparently there was some difficulty about the question whether mere handing over to the High Commissioner would protect the policy-holder. But they are quite willing for the money to be handed over in cash. Now, Dr. Schoch, the Legal Adviser, was satisfied that the necessary protection to the policy-holder could be afforded. My first amendment provides that an insurer may deposit securities or cash with the High Commissioner or some other approved person. So the Government can approve of some person to receive these deposits in trust. Such assets could be taken over in trust. The amendment seems a very fair and necessary one, and then I have moved a further amendment — a further proviso which I submit is equally fair. The amendment provides for the rights of the policy-holders to be fully protected, and they are protected under my proviso. I have provided that after the expiration of the said period a registered insurer who immediately before the commencement of the Act was carrying on insurance business in the Union shall be exempt from the obligation to keep within the Union the proportion of non-Union assets permitted to be held in terms of Section 18 — subject to certain conditions. I say there that the Union assets have to be deposited with the Union High Commissioner or an approved person, and that the Minister has to be satisfied that the measures adopted afford adequate protection to Union policy-holders. It simply puts the three Dominions on the same footing as the United Kingdom. I hope the Minister will see that these three amendments are not destructive of the policy of the Bill. They carry out the intention of the Bill but they do not overlook Australia, New Zealand and Canada, which have companies operating in this country.

I hope the Committee will not be prepared to accept these amendments. This is the most important clause of the Bill and the provisions of this clause have had very prolonged and careful consideration in the first instance by the Treasury before the Bill was introduced. Many discussions, many consultations, took place, insurance companies were fully consulted, and in the second place the Select Committee dealt with the whole matter, and I understand gave careful consideration to proposals such as those put forward by the hon. member for Cape Town, Castle (Mr. Alexander). The essence of this clause is that for the protection of our own policy-holders we must have a fully covered position in South Africa. We do recognise the fact that there may be certain difficulties in the first instance and therefore we have met the possibility of difficulty by the provision that for the first five and a half years certain of these assets may be deposited with the Union High Commissioner in London. The hon. member for Pretoria, City (Mr. Davis) wants, to bring in the proportion of 75 per cent., and he tells us that that will not do away with the full cover position. He bases that on the terms of Section 19, but after all, Section 19 does not covered all registered insurers. I am very doubtful if his contention is even correct in so far as concerns the insurers who fall under Section 19. Certainly he will have to admit that Section 19 does not cover all registered insurers, it does not go as far as Section 17 does. I would be very loth indeed to see us departing from this fully covered position in the Union.

If we have a foreign security here can we realise it?

That depends; but in any case we have it here. It would be attachable here, but would not be attachable somewhere else. It is attachable while it is here, but not in Canada. We made this concession in regard to the first five and a half year period by allowing such securities or cash to be deposited with our High Commissioner in London. The hon. member wants to go further and allow such deposits to be made with other approved persons in the United Kingdom, Canada, Australia and New Zealand. Well, I am not prepared to take those risks. It might be logical to ask that, if there were a Union High Commissioner in Canada, Australia or New Zealand. We could allow deposits to, be made there, and I would not object to that. I am prepared, if he wishes it, to move an amendment, I am not prepared to go beyond our High Commissioners that we have or may be appointed. The hon. member desires a further proviso which means that even after the five and a half year period such securities may still be kept outside the Union. Well, Sir, I am certainly not prepared to agree to that. It is possible there may be unforeseen difficulties, the war may still be on in five and a half years. We have the provisions of Section 66 to deal with such unexpected contingencies, but I do not think we can go any further than that. So while I am prepared to move an amendment to insert the words—

I do not think I can take the matter any further, and I hope the hon. member will be satisfied. I move—

I am glad the Minister has shown that there is something in the amendment, but I must say with his usual skill he has given us the only reply, that the matter has been fully discussed. If the Government of the Union approves of a person of credit in Canada, Australia or New Zealand, surely they will not approve of a person who has not got the highest credentials, and who cannot give the fullest guarantee. If the hon. Minister can approve of a person there, why should he put these great Dominions in a different position from the United Kingdom? New Zealand has an insurance company here of very high standing, and here we have concerns of the very highest value belonging to Australia and Canada, and they are doing wonderful work, they have prospered themselves and a lot of Union citizens have prospered through them and been protected through them, and to say because the Government has not appointed a High Commissioner in those countries Union policy-holders cannot be placed in the same position as those holding policies in England, is one of the feeblest arguments I have ever listened to. It is not an argument and it is no answer. The Minister asks if I am satisfied, and I reply that “a man who complies against his will is of his own opinion still”, and I am not satisfied.

Would you like the amendment I have suggested?

Yes, I am glad, because it recognises the principle, at any rate, but I do say there is no reason why in the meantime a person approved of by the Union Government who provides security should not be accepted as well as the High Commissioner. But it is the Minister who is now in the position of a dictator, and we know that if he does not agree we shall not have it. I am glad, however, that he has given us this small crumb.

As one of the members of this Select Committee one fully appreciates the point of view put forward by the hon. member for Cape Town, Castle (Mr. Alexander). The Committee was very much concerned at the position which arises when there is no official representative in any of these countries to whom these securities can be handed. The hon. member suggests that we might have an approved person there. Well, that person would not be an official representative of our Government., he would have no diplomatic status, and it is very questionable whether he would have any value at all. The Select Committee tried to find a solution, and as a matter of fact discussed the very question raised by the amendment proposed by the Minister. I am glad the Minister has made that concession today, but I would like to say one realises the difficulty. We could find no solution which would meet the point raised by the hon. member.

Would they have to have legislation over there?

I think so.

Amendment proposed by the Minister of Finance put and agreed to and amendments proposed by Mr. Davis and Mr. Alexander put and negatived.

Clause, as amended, put and agreed to.

On Clause 18,

I have a small amendment. People who are experts at insurance tell me that these words, “which are secured by pledges of these policies,” are very restrictive put in that way. My amendment substitutes—

You exclude loans or premiums automatically advanced on the security of Union policies. That is a quite regular procedure in the insurance world, and this would provide for these loans advanced on the security of policies. Although they do not amount to the full value, they do amount to a loan on the policy. They are exactly the same as loans that are secured by pledges, but they are granted in terms of the conditions of the policy. I move—

I am advised that these policy loans to which the hon. member refers are in all probability covered by the clause as drafted, but the hon. member seems to be in some doubt in the matter, and I respect his legal opinion in the matter, and I am quite willing to put the matter beyond doubt. I think it can be done in rather a better way than he suggests, and I want to move as an amendment—

With leave of the Committee, the amendment proposed by Mr. Alexander was withdrawn.

Amendment proposed by the Minister of Finance put and agreed to.

Clause, as amended, put and agreed to.

On Clause 29,

I just want to ask, in connection with this clause, whether this clause meets the point which I raised under the previous clause. The Minister on that occasion told me that my objection was covered by Clause 29. I have read this clause carefully and I can see no concession in it. I would very much like the Minister to explain the position to me.

If the hon. member looks at Sub-Clause (1) (a), then he will see that if the Registrar has all the information and he, in his opinion, considers that an inquiry is necessary into the affairs of an insurance company, then he can take steps to have an inquiry made. That will cover the case he has mentioned.

But how will this protect a person in a case like I have mentioned?

The Registrar can cause an inquiry to be held and in this way prevent such a situation.

I want to draw the Minister’s attention to the policy from which I have read an extract, and I want to ask him what provision is made in this article that if a Registrar holds an inquiry and convinces himself that a policy is not proper, that it is not good business and that it is contrary to the spirit of the law, what protection does he contemplate under this article? It is no use merely holding an inquiry. Such a company publishes a policy and people insure themselves according to the policy of the company. Now the Minister says that inquiry should be made, but we would like to know what steps the Minister can take under this article to remedy the position. My argument was that an arrangement should be made so that when the Registrar is not satisfied with a policy which a company offers, he can step in and point it out so that the position can be restored and the public is not misled. Only in that way can we expect good business in South Africa and prevent the public from being given a wrong impression by certain companies. The one case which I have brought to the attention of the Minister can in fact be investigated under this clause, but we cannot leave it there. I cannot see where this clause gives the power to the Minister to intervene when a policy is quite wrong and probably gives the public a wrong impression, and to prevent people from being misled. It appears to me that the clause merely makes provision for investigation and if the Minister can show me where the matter can be remedied under this Bill, then I would be pleased. I have read through the clause, however, and I cannot lay my hand on anything which gives the Minister the power to do so.

The Minister has not the right to have a policy revised, but the Registrar has the right to conduct an inquiry and then to publish his findings. This will probably be sufficient to remedy the matter.

What kind of publicity will there be?

Under a later clause any person can examine the documents. I think that this gives sufficient protection. The fact that there is publicity is sufficient.

But you will surely not call that publicity.

I think that there is also a further clause under which the registration can be cancelled, but at the moment I am not able to say which clause it is. We will come to that clause later.

Clause put and agreed to.

On Clause 31,

There is a point in paragraph 6 I would like to mention referring to the application of judicial management as provided for in the Companies Act, which provides that the judicial manager shall issue a report within three months after assuming office and every three months thereafter. I think it would be a very onerous task for the judicial manager to issue a report every three months.

Why in the case of insurance?

Well, the accounts are complicated by actuarial valuations and it is questionable whether accounts rendered at such short and frequent intervals would be any advantage. That is one point. The next is that in the Judicial Management Section of the Act there is a provision that the judicial manager in order to carry on the business may borrow money and, in the event of him borrowing, such money will rank for preference in the order in which the liabilities are incurred. That condition would be very difficult to carry out in the case of an insurance company, in fact it would be impossible to carry out in any judicial management. I came up against that provision as a judicial manager on one occasion, and I then realised, and the lawyers, who were advising me, confirmed the same view, namely how impossible it is to work under such provision. These are both points, which I would ask the Minister to consider in the light of what I have said.

I am prepared to go into that point. I would like my hon. friend to go into that also and he might move an amendment himself. I suggest that he should discuss it with the Law Advisers.

Clause put and agreed to.

On Clause 35,

May I move an amendment to this clause. It is necessary as a consequential amendment to one which I moved in regard to the definition of Union policies. Because of that change it is necessary to change this clause and I move—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 38,

Mr. Chairman, may I move the amendment standing in my name on page 475 of the Votes and Proceedings—

I want to draw attention to the state of affairs in relation to the rights of men going on active service when the war broke out. Section 21 of the Insurance Act No. 37 of 1923 reads in these terms—

After the war had started an amendment was introduced which made it possible for a stipulation to be inserted which would serve to deprive the insured persons of the protection which the main Act gave them. And it is because the Minister in his present Act, in the Bill now before the House, seeks to make that stipulation permanent, seeks to make it part of the permanent law of the country, that I have moved to delete certain portions of this section. I wish to restore the law to the position in which it stood at the outbreak of war. In other words, I wish to reinstate the protection which the soldiers enjoyed when war broke out. If any stipulation were sought to be made which diminished the right of the persons insured that stipulation was declared to be illegal, and I wish to restore the law to that position. It is all the more necessary that this should be done because when we made the amendment, when the House amended the law in 1941, that amendment provided that any person killed outside the Union on active service, including members of the South African Navy, including men who had gone up North, including men killed in an aeroplane, including men belonging to the South African Air Force, should be brought under that stipulation. It was provided that anyone who served outside the borders of the Union was allowed to be contracted out of the terms laid down in this insurance policy, and in the event of the death of such a person, no claim could be made against the insurance company if death had occurred under those circumstances. We are now proposing to continue that. We are now proposing to continue that state of affairs after this House has passed the new oath which encourages our men, the manpower of this country, to go beyond the borders of the Union. We are asked by the Minister to legislate so as to perpetuate a state of affairs under which these men have no protection. They obey the wish of Parliament that they should sign the new oath, only to find that Parliament agrees to the passing of an Act which will perpetuate the amendment of 1941 under which a person killed on active service outside the Union has no claim. I consider this to be in the nature of an unpardonable action on the part of this House, and I move the deletion of the words mentioned in my amendment, and I propose to insert certain other words. My proposal is to make the first part of Section 38 retrospective. And then I move to omit Sub-Sections 2, 3, 4 and 5. The effect of those amendments will be to restore to those men who are defending their country the rights which they had at the outbreak of war. It is said by those who object to the amendment that this would bring insurance business to a standstill insofar as the soldiers are concerned. I submit that most of the insurable manpower of the country are at present on active service, and those who are not are not worth insuring. I hope this House will agree to the amendment because to my mind it would be almost a dishonourable thing for us solemnly to pass a vote in this House in favour of the new oath and then to engage ourselves in sabotaging the position to those who have taken that oath and gone to the front, because we are asked solemnly in this clause to agree that a person who is killed on active service outside the Union shall be considered to have no rights, that a person who is killed by an aeroplane, either in action or otherwise, or any person killed while engaged with our forces, shall be considered to have no rights. [Time limit.]

I want to move the amendment standing in my name, namely—

Section 38, as I understand it, deals with war risk covered by a life insurance policy, and when the Act of 1940 was passed the matter was fully investigated by the Government, and the Bill was an agreed measure, and the proviso made was that the insured people would receive compensation from the Government. The whole point which arose was whether the life of the insured person could be regarded as a genuine war risk or not. It was laid down that the insurer would no longer decide whether death was due to the war or was not due to the war. It was decided that the decision in that regard would be given by the Government, and if the Government decided that death was due to war service, then the compensation would come from the Government, but if the Government decided that it was not due to war service then the insurer came in and had to pay in accordance with the policy which the insured person had. But now a new criterion is introduced—the criterion being the amount of compensation. One cannot understand what that has to do with the matter. The whole question is whether death was due to war service, and the amount of compensation is irrelevant. Why now put in this limitation? I would refer the House to what Mr. Monkhouse said on pages 76 and 77 of the evidence. I don’t propose reading it now, but I think Mr. Monkhouse’s views there would make the position clear.

I just want to put a question to the Minister. I have been asked by the secretary of an organisation interested in soldiers who may be proceeding outside the Continent of Africa to put a definite question to the Minister. The question is this: Can the House have the assurance that the taking of the new oath to serve outside the Continent of Africa will not place soldiers in a worse position from a life insurance point of view than they were in while serving in Abyssinia and the Western Desert? It may be said that that is covered in the clause, but it is a lengthy clause and I would like the Minister to give a definite answer.

I think the answer to the hon. member for Roodepoort (Mr. Allen) is that these people will not be placed in a worse position, but I am asking the Law Advisers to check up on that. They will be in the same position. I am not giving a definite assurance on that yet.

What is your intention?

It was certainly not intended to place them in a worse position. Now the hon. member for Illovo (Mr. Marwick) has moved an amendment, the intention of which is to set aside what this House did in September, 1940. The House in September, 1940, laid down that—

Now, what did that mean? It meant that a company might insert a stipulation in a policy under which the insured who dies in war, as a result of war, and his dependants are compensated under our Pensions Act, the company shall not pay out on the policy but shall merely have to pay back the premiums received. I think the hon. member will agree that that was the effect of the legislation of 1940. It empowers the company to insert such a stipulation, but now I would draw attention to the fact that that law was passed in September, 1940. It was therefore passed after our men had gone up North, and in consequence of that fact. Now, why was the House persuaded to pass that legislation? Because the House accepted the position that if the companies could not insure people with that stipulation, then the companies would not accept ordinary business as far as military men were concerned, and the House believed that it was in the interest of the soldiers to allow such insurance to take place with that stipulation. That legislation was not passed in the interest of the companies primarily, but in the interest of the soldiers. I do not recall my hon. friend having contested that legislation at the time. He may correct me if I am wrong, but I do not recall anyone having raised that point. Possibly the hon. member for Hospital (Mr. Henderson) did. He did not quite understand the position, but I do not recall anyone contesting the view that this was in the interest of the soldiers.

We are now having the Military Pensions Board failing to look after the interests of the soldiers.

Yes, we are always told that. Now the amendment proposed by the hon. member has a twofold effect. It first of all says that a company will not be allowed to insert such a stipulation in future which would then place us where we were in September, 1940, namely that it would be difficult for a soldier to get cover, but in the second place the amendment cancels the provisions of the law of 1940 also for the past. If I understand it correctly he says in his amendment that the stipulation inserted with the consent of Parliament shall now be invalidated and that in spite of that stipulation which the companies were allowed to insert, the companies will now be expected to pay out. The hon. member used the word “dishonourable”. I do not want to use words as strong as that; but it would be unfair. Parliament enacts legislation believing it to be in the interests of the soldiers, and says: “You may insure soldiers subject to certain stipulations”, and then Parliament comes along two years after and says: “That stipulation is null and void.” Surely the hon. member does not want us to go as far as that. He may say we made a mistake in 1940. I do not agree that we made a mistake, but he cannot now take this action. We told the companies: “You can insert that stipulation.” They fixed their rates on the basis of that stipulation, and now my hon. friend says the stipulation is null and void. I therefore cannot accept the amendment. The hon. member for Cape Town, Castle (Mr. Alexander), has an amendment which tends in the other direction. The Bill as drafted by the Select Committee contains a clause that as far as non-Union Nationals are concerned this stipulation for the future shall not apply where an amount less than 60 per cent. of what is payable under the laws of the Union would be payable under the laws of the non-Union Government. The Select Committee accepted that position believing that we should take account of the differences, between our own war pensions provisions and the provisions of other countries, and I think on the whole the Select Committee was right in inserting that provision, and I therefore cannot accept the hon. member’s amendment.

I was on the Select Committee which dealt with this Bill and I questioned this Clause 38 because I could not understand it. It is worded in a very complicated manner, but one of the Legal Advisers to the Government told the Select Committee that this clause was designed to benefit the soldiers. I accepted that definition, but after hearing what the Minister has said it is certainly not to the advantage of the soldiers. It is reiterating a condition which was made in 1940 by this House, and I think that the whole country and members of Parliament are more enlightened now than they were in 1940 as regards the treatment of soldiers and should reconsider the construction of this clause. I think it should be constructed in such a way that the ordinary man can understand it. I hope the Minister will consider the whole matter and that in the event of a soldier’s policy being ineffective by reason of his signing on for service overseas, the Government will take up the position with the insurance companies, and I hope that the Government will agree to take over the insurance policy with a limit of £1,000. I hope the Minister will insert the necessary provisions so that if a soldier goes overseas and loses his life his dependants will not be the losers by reason of the soldier’s gallantry and by his signing on for overseas service. I hope the Minister will put the matter right at the report stage.

At 5.55 p.m. the Chairman stated that, in accordance with Sessional Orders adopted on the 28th January and 26th March, 1943, and Standing Order No. 26 (1), he would report progress and ask leave to sit again.

House Resumed:

The Chairman reported progress and asked leave to sit again; House to resume in Committee on 10th April.