I move as an unopposed motion—

I second.

Agreed to, and the Bill accordingly withdrawn.

By direction of Mr. Speaker,

The Work Colonies Bill [A.B. 41—’45] submitted by the Select Committee, was read a first time; second reading on 16th April.

At the adjournment last evening I was on the point of putting a question to the Minister of Finance with reference to the important inflation difficulty. I know that the Minister realises his own difficulties, and we do not want to hinder him in his task, but assist him with suggestions. I may not advocate legislation now, but I would, however, like to know whether he can inform the House what his intentions are in relation to the falling tendency of our currency, in order to combat that falling tendency. He certainly knows that it is not only we who from time to time have raised that aspect of the matter. I have here before me a statement by one of the Minister’s own friends in the gold mining industry, or who represents gold mining interests, who fixes the watering down of the purchasing power of our pound at a much higher figure than we do. Perhaps the Minister has also seen the circular letter drawn up by this well known figure in the country in which he fixes the depreciation of our pound at at least 40 per cent. It is particularly significant for the group with a fixed income. That fixed-income group does not consist entirely of officials who have the advantage of a sympathetic state, but many of them are people who have no one to call upon for assistance. They are employed by private persons, and they have to manage in these difficult times on a currency which has depreciated in value. For that reason I ask in the first instance that we should consider this problem with a view to the difficult position in which the fixed-income group finds itself. In addition there is the problem which is engaging the attention of the Minister, namely that production costs rise from time to time and as this happens, so the position becomes more and more complicated. That is the position today, and the Minister does not deny it. Only, he is confronted with the difficulty of finding the necessary remedies to rectify the position. It can be done; it is not impossible. The remedies lie in his hands, but they are difficult remedies. He is blamed by this friend of his to whom I have referred, that he has not levied sufficient taxes. He says that the Minister should levy more taxes. His argument is in the first place that the number of income tax payers is much too small and that it should be increased. He points out that in order to keep a check on the purchasing power which is being created by the Minister’s war expenditure, taxes should be levied proportionately, so that the money which the Minister expends comes back to him in the form of taxes. That is not our recommendation. It is the Minister’s own friend who recommends it. I would be the last person to advocate this remedy over the floor of the House. The second is to save more for later purposes. But I realise the Minister’s difficulty in that the nearer the end of the war approaches, the more difficult it will be for him to do this. There is another remedy in his hands and also in those of his colleagues. Inflation is, as is generally known, due to the fact that there is a surplus of purchasing power over and above the available goods and services. South Africa’s problem is to decrease the purchasing power—perhaps I should choose my words more carefully—to bring it into proportion with the goods and services which are available. It must be brought into line with the goods which are on the market and that is why we must go ahead as soon as possible with internal production. The outside world watches our country to obtain markets here as soon as possible. It will supplement the quantity of goods. But the Minister’s best remedy is to insist for his part on the increase of internal production, and as internal production progresses, and as the quantity of goods which are manufactured increases, as therefore there is an increase in the quantity of goods offered, to that extent the rising inflation of the currency will also fall. I just want to ask again whether the Minister of Finance can give us any idea of what he is considering to counteract this dangerous position. He expects, and to a certain extent he is right, that when the war is over the position will right itself. But that is an expectation which he cannot accept with certainty. As long as he is obliged to raise loans for expenditure which is not reproductive, so long will he be confronted with this problem, and with a view to the growing problem for all classes, I would like to know whether the Minister can give us any indication as to the measures which he intends taking.

A little while ago, and particularly yesterday, we were enveloped in an atmosphere of high finance in connection with this vote, and I would like this morning to come back to the hard and naked facts of everyday life. I want to accuse the Minister this morning that he has neglected his first and most important duty as Minister of Finance, namely that he should exercise effective control over the disbursement of the moneys voted by Parliament for the administration of the country. The Minister of Finance controls the Treasury. Into that Treasury we deposit yearly a very large sum of money. We are asked this year to deposit therein out of ordinary revenue alone over one hundred million pounds. Then the Minister possesses certain lending powers which are given to him. He also receives certain loan revenue, and I believe that I am not exaggerating when I say that this year an amount of approximately £180,000,000 is being deposited in the Treasury. It is no mean amount. It is a large amount and that money does not fall like manna from heaven. There are many people in the country who have to pay heavy taxes. They expect and this Parliament expects that the Minister will fulfil his obligation of keeping a watchful eye and ensuring that money is not wasted, that irregular payments do not occur, and that where they do occur and they are obliged by law to go to the Minister for special Treasury approval and for indemnity, that he will keep a firm hand and will not encourage the officials to waste money or to disburse money in an irregular manner. I have served the whole period of the war on the Select Committee on Public Accounts. At the beginning I was inclined to feel sorry for the Minister of Finance. I felt that he was confronted with a very big problem. The State machinery has grown enormously, and he was obliged to use people in responsible positions who had not enjoyed any public service training and who did not know how State money should be handled; and so irregularities took place, and I was often inclined to feel sorry for the Minister. But now things have come to light which have brought to the conclusion that there is a reprehensible weakness in Treasury control that the Treasury approve of irregular disbursements which ought not to be approved of, and that the Treasury encourages that spirit of extravagance and wastage of money in the Public Service, instead of combating it.

That cannot be.

I will quote a few examples this morning, and then the House can judge for itself. The first is in connection with an organisation or board which has already been much discussed in this House, namely the Deciduous Fruit Board. I do not want to discuss the doings of the Deciduous Fruit Board, for then the Chairman will call me to order. I do not want to rebuke the Minister of Agriculture today in this House, but I want to bring the Minister of Finance and the Treasury to task. The Deciduous Fruit Board receives large sums of money annually from Parliament, not only to finance its operations, but to cover the losses it has sustained. In order to cover its losses, the Minister of Finance has advanced an amount of £1,400,000, almost £1½ million, to this board. To finance the operations of the Deciduous Fruit Board the Minister of Finance has advanced big amounts from year to year—over £4 million—and on 31st October of last year there was £390,000 thereof in arrear or outstanding. There have also been long-term advances made available to the board. The position is that these moneys are advanced to the board on certain express conditions. The board possesses a certain measure of autonomy, and the only hold the Treasury has on it is that the board must approach the Treasury for money, and the Treasury says to the board: Good, we will give you the money, but on such and such conditions. The conditions are express and specific. This is the only hold the Treasury has on the board, namely that the money must be disbursed and expended according to certain express conditions. That board has received regularly for the past five years a sum of money, and one would have expected that the Treasury would have insisted upon those conditions being complied with. In 1943 the Government deemed it necessary to appoint a departmental commission of enquiry — the McDonald Commission as we call it. The McDonald Commission reported that from the start when the Treasury had advanced moneys, to the board, the board had failed to comply with one single condition which the Treasury had imposed. The McDonald Commission reported this in 1943; it commented strongly thereon and brought it i to the attention of the Treasury and the Department of Agriculture. What do we find? We find that thereafter the Treasury continued to place still more money at the disposal of the board and we find that at the end of December, last year, that is to say December, 1944, it was once again reported that the board was taking no heed of the conditions which the Treasury had imposed, but that it was using the money advanced by Parliament in the most irregular ways. An opportunity will present itself at a later stage of informing the House of the irregular ways in which the board disbursed the money. The McDonald Commission brought this to the attention of the Treasury. The Treasury was warned of what was happening. How is it possible that we discover in December of last year, again a year later, that the same thing is still going on? I would like to ask the Minister: Is he of intention that it should go on for ever? What is the use of imposing conditions if these conditions are not observed?

Where did the McDonald Commission say that the board had not complied with one single condition?

It appears in the report.

Which paragraph?

Unfortunately I have not the report with me, but I will look it up.

Have you not put it too strongly?

Since that time another report has been submitted by the Land Bank. The conditions imposed in regard to the money are not being complied with. Apparently the Treasury is satisfied. Is this Treasury control? These are not small amounts of money. They amount to millions of pounds. Can we say that this is a case of strong, effective control over the disbursement of money voted by Parliament? Can we retain confidence if this sort of thing occurs? [Time limit.]

I would just like to ask the Minister whether he has the opportunity of being properly informed by another department which is responsible for supervising the execution of the plan? I am referring to the same aspect which the hon. member for George (Mr. Werth) touched upon, namely the grants made to the Deciduous Fruit Board. I ‘asked a question and it is now evident that up to this time more or less £1,500,000 has been advanced to the board by way of subsidy. The hon. Minister cannot himself send an inspector to enquire into matters, but the question arises as to whether he is properly enlightened by his colleague as regards the disbursement of the money. I do not want to lodge a complaint now, for that would not be in order, but we would like to know that the money which is being advanced is properly disbursed.

I would like to continue. The second case I want to quote is in connection with the Department of Fortifications. I want to name a few typical examples to indicate the lack of effective Treasury control which exists, and that is the chief function of the Treasury. Fortifications have a form of contract under which they have executed certain works for the Department of Defence. It appeared that the Directorate of Fortifications was prepared to dissolve the contract at any time to the advantage of the contractor and to the detriment of the Government. The Auditor-General reported to us that there was scarcely any possible manner of departing from this contract to the advantage of the contractor and to the detriment of the Government which had not been perpetrated by the Directorate of Fortifications. I will just quote one instance. As early as 1942 the Auditor-General warned the director that he was breaking the contract and that he could only do so with the approval of the Treasury. He reported this in 1942. The matter remained there; much correspondence was exchanged but the matter practically remained there. In 1944 the Department of Defence resolved that they should take action in this matter, and presumably instructions were issued that the contract should not be broken any further.

Instructions from whom?

To the Accountant in the Directorate of Fortifications.

Who sent them out—Defence?

We were first under the impression that it was Defence, but later we discovered that it was the head of the office of the D.G.S. in Cape Town. The head of the D.G.S. in Cape Town found that they could not leave the matter there, and he then issued instructions to the staff that the contract should not be broken any further on that point, and we were told that from May, 1944, there was no further infringement of the contract in this respect. Eventually the case camp before the Treasury; and what do we find? We find that Treasury decided not only to approve of all the irregularities before May, 1944, but even to authorise all the payments to the contractors which had been held back since May, for the Accountant considered it to be in conflict with the contract, and the Auditor-General then issued a warning. I must honestly say that when that matter came to our notice, I felt that it was something which we ought not to remain silent over. The Auditor-General issued a warning as far back as 1942; the official who received the warning took no heed of it. He went on; eventually someone in the Department of Defence said: “No, we should really pay attention to what the Auditor-General says, and he issued instructions to the effect that the payments should not again be authorised. We were given the assurance that from May, 1944, such payments were not made again. Eventually, the matter came before the Treasury, and the Treasury approved not only everything which had happened before May, 1944, but has now authorised the payment of money which was held back by the Department of Defence, as well as further payments. Now it has been laid down that only from the 1st April, 1945, no further payments may be made on that basis. Everything before this is approved and Defence must now repay to the contractors the money which they have held back for a year. I must honestly say that to me it is inexplicable that Treasury should adopt this attitude. This is the second example, and now I want to bring a third instance to the attention of the House; it is contained in the report of the Auditor-General of last year. It is in paragraph 8.

Is it in the war expenditure account?

I will just read—

And the principles are that the Chief Paymaster now has the right to exempt. To the Chief Paymaster of the Union Defence Forces is extended the power of exemption. Supposing the paymaster has during the war period paid too much to a dependant of a soldier. The only person who can exempt under our constitution is the Treasury. Here the Treasury extends the power of exemption to the Chief Paymaster in cases where he has made a mistake. The Chief Paymaster makes the mistakes; he overpays. The following overpayment is discussed here, mistakes made when collecting or granting allowances. The Chief Paymaster makes the mistake. In the past, under the constitution, the Treasury alone was empowered to authorise write-offs; only the Treasury could authorise write-offs. But here the Treasury comes along and empowers the Chief Paymaster the man who has made the error, with the right of exemption. It is no mean amount. We are told by the Auditor-General that the amount is £194,000. I would like to ask the Minister this question: Does he think that this lends to effective Treasury control if he lets the power of exemption, the right of approving exemptions, out of his hands and extends it to the officials who make the mistakes? Secondly, I would like to ask the Minister this question: Has the Treasury the power to transfer its authority to another official? What is the constitutional position there? Has the Minister the right to do it? That is No. 1, and in the second place supposing he has the right, is it desirable, is it in the interest of the State that he should transfer the power, which in the past has been solely exercised by the Treasury, to the head of the department who is the one who has made those mistakes? I must say these are the things which have made one feel recently that all is not as it should be in the Treasury. I do not know whether ever in the past we have had such weak Treasury control. [Time limit.]

I should like to know this from the Minister. During the last Session when the Select Committee on Public Accounts dealt with the expenditure incurred by the officer in command of Fortifications is was represented to us that certain coastal defences were carried out at the instance of the British Government, and that they should have paid for them, but the condition was that they should have paid if a proper certified account was furnished by our Government, an account certified by the Auditor-General as correct. Until April, 1943, I believe, the Auditor-General simply said that he could not audit the books because proper books had not been kept. Thus I take it that he was not in a position to certify the account, because he did not know what had been expended. Now I should like to know this from the Minister: I understand that the amount that was expended and that we should have refunded from the British Government runs to millions of pounds. What has happened in connection with that account? Has a present been made of it?

I considered it my duty to broach this matter because if there was a time in the war period when people said: “Yes, this is war time, you must expect these things to happen”; and when they were, disposed to shut their eyes, then I want to tell the Minister that that period has passed; the public are today very critical. The Minister must not tell us that these were new conditions, that the country was not prepared for them. The things I have mentioned are things that are happening now, and there is no excuse for them, and no excuse can be found for them. I notice that the last item on his estimate is (G) “Miscellaneous expenses—Treasury-Control er of Finance, Union Defence Forces.” Will the Minister tell us who this man is? His salary cannot be £100 for the year. Is his salary paid out of the war expenses account, and is this just a nominal amount that has been set down here?

I explained it yesterday, but I shall do so again.

Will the Minister tell us what the man’s work is? Why do we not observe in connection with defence expenditure the influence of such a person as the Treasury-Controller? I only want to put the question to the Minister. The Minister has now a Treasury-Controller. Can I mention a case to the Minister? We know that on the outbreak of war we commandeered a number of boats—40 of them. We know that the rate of hire agreed on was simply scandalous. For boats that were 12, 15 and 16 years old and the original price of which was not more than £4,400 in the one case, for those boats there was paid a daily hire of £15. Does the Minister know what this works out at for a year? It amounts to £5,475 for a year. The original cost price of that boat was £4,400 and it was it is believed, 16 years old when the boat was leased. The Auditor-General informs us that the hire that was paid for that boat was an amount of £9,944. That represents the hire of something over two years. Was there a Treasury-Controller then? Was he then consulted in connection with a transaction of this character? Did this carry his approval? Then the matter came before the Select Committee on Public Accounts, and we found that the hire of £15 a day that was paid was absolutely exorbitant and we demanded that the rate should be reduced. What did we find? With the greatest alacrity they agreed to that, and where the hire was £15 a day in one case it was reduced to £2 13s. a day. In another case it was brought down from £15 to £3 3s. Was there then a Treasury-Controller to keep an eye on this sort of thing and to prevent the taxpayer’s money being wasted in this manner? The mere fact of the Select Committee on Public Accounts mentioning the matter had the result of our saving £100,000 a year. How does it help us to have a Treasury-Controller who does nothing? May I give you another example, and then I would like to ask the Minister what the Treasury-Controller is doing. We bought tyres; tyres for our military lorries and motor cars were made by four companies in South Africa. We first paid them 10 per cent. profit on a cost-plus basis. Then it was found that the scale of profit was too high, and it was altered in this way. In respect of overseas supplies it remained at 10 per cent. and in connection with local supplies it was reduced to 8⅓ per cent. But this was more than was allowed most of the other people who worked for Defence. As far back as 1942 the accountant reported that the profit on tyres provided to the Defence Department was too high, and he asked that immediate steps should be taken to negotiate with the motor tyre companies for a reduction. It was in 1942 that he made that report. Nothing was done in the matter until it came before the Select Committee on Public Accounts. As the result of our interesting ourselves in this and the publicity that we gave to the matter the scale of profit has now been reduced to 7½ per cent. The yearly saving is £50,000. What I want to ask is this. If the Minister has a Treasury-Controller within the Union Defence Force, what is he doing; why is this sort of thing happening?

Where is the Minister?

There is supposed to be a Defence Authorities Committee. What these people are doing I do not know. It is only when the matter comes before the Select Committee on Public Accounts, when we take the matter into our hands, that it is found that improper and exorbitant profits are being made; we ask that they should be reduced and apparently there is no difficulty in that being done. In many instances money has even been refunded. But what is the Treasury-Controller doing here on the Minister’s vote? One feels inclined to move for the deletion of the vote. It appears to me the man is not earning his money, and now there is another important matter that we must mention, and it is this— and the Minister must tell me how he is going to escape from the difficulty. We have done much work in South Africa for the British Government, and unfortunately we made use of the Directorate of Fortifications and Coastal Defences. We carried out many important works for the British Government along the coast under supervision of that directorate. Now the Auditor-General comes and reports to the Select Committee on Public Accounts that the books of the Directorate prior to May, 1943, are in such a state that it is quite impossible to make head or tail of them.

Just such a position as the Government itself is in.

He does not know whether it is feasible to evolve order out of the muddle. He does not know whether it is worth the trouble to attempt to go into it all to see whether anything can be made out of it. He was at one time inclined to recommend that we should simply draw a veil over it, but it is not our money that is being spent. It is the British Government’s money and the British Government has to pay us. But the contract is that the British Government will only pay us on a certificate issued by the Auditor-General. It is only when the Auditor-General certifies the account that the British Government will pay, and now I want to ask the Minister: Supposing the Auditor-General cannot certify these accounts as a result of, this muddle what happens then? What does he propose; how are we going to recover the money from the British Government?

In connection with the question that the hon. member for George (Mr. Werth) has mentioned here regarding the Treasury-Controller of Finance, may I ask the Minister in the event of such an appointment being in existence as the hon. member presumed, whether he thinks that the sum of £100 is adequate for an official such as the Treasury-Controller of Finance, and what sort of control can be exercised if only £100 is spent when hundreds of millions of pounds are involved in the matter. We know very well that there is waste on a great scale in the Defence Department, and we on this side of the House who have all this time been against the war have stated repeatedly in the past that seeing we now are in the war, let us see to it in heaven’s name that money should not be wasted on the scale it is being wasted today. We cannot help but feel that the Treasury does not exercise the control that is required over expenditure in the Defence Department. On the contrary, it would appear that the Treasury has virtually no control over that expenditure in the Defence Department, and the Department of Finance with its trained staff, with the experience that staff has acquired and with the ability they have revealed in the past should exercise greater supervision over defence expenditure. We feel this is extremely important even though we are at a late stage of the war, that the Minister should take into consideration the necessity of giving much greater control to the Treasury over defence expenditure.

Allow me first of all to say a word or two in connection with a matter that was broached yesterday afternoon, the question of gold sales in India. In regard to this the general position is as I explained it last year, namely that we had entered into an agreement for the duration of the war to sell all our gold to the Bank of England at a fixed figure. Some 18 months ago, however, the British Government began to sell gold in India at a price above par in order to finance their military expenditure, and then we brought up the matter that seeing that gold was being sold at a profit should we not also participate in the profit to the extent of our purchase of goods from India. It was not possible for us to send our gold to India.

Why not?

In the first place we mentioned the matter in another way, whether it would be possible for us to sell gold direct to India in respect of our imports from India. The Indian Government was not disposed to allow this. They only allowed gold to be sold there for military purposes and we then arranged with the British Government that we should receive a proportion of the profit made on the sale or gold in India in so far as our imports from India were concerned. The agreement was made. A few months ago, however, the British Government advised us that they could not sell any more gold to India, and it was then arranged that the business should be concluded by the sale of gold in respect of our requirements in India up to a certain amount which would then bring us in £2,000,000. But the position remains the same. We sell our gold to the Bank of England. Even if we were free to sell gold elsewhere the Government of India will not allow us to sell it in India.

Why not?

The Government of India made that decision.

But that is the British Government.

The Britisn Government has, of course, considerable influence on the Government of India but in connection with this matter the Government of India took its own decision, and for that reason the British Government then met us in another way. The fact remains, however, that we entered into an agreement that binds us to sell our gold to the Bank of England until the end of the war, and it will eventually be much more to our advantage to abide by that agreement rather than to break it now. The hon. member for Ceres (Dr. Stals) again brought up the question of inflation. The rise in prices that exist today is, as he rightly stated, the result of there being On the one hand a great amount of money in circulation, and on the other hand there being a reduction in the quantity of goods that are available for sale. Our policy has always been in the first place to withdraw money from circulation. We have tried to do that by taxation, by encouraging saving and by encouraging the repayment of debts. These are means that have operated in that direction. Eventually we expect, of course, that there will be a reduction in the amount of money, not because a specific policy of, deflation is being followed but because we shall not have to borrow more money for non-productive purposes. On the other side there is the factor of the quantity of goods that are available. As far as this is concerned we are trying to control the position to a certain degree by price control methods, and I believe that the policy that we have followed in this connection has been responsible for a considerable contribution towards the arrest of price increases, eventually a solution will no doubt also be found by a greater quantity of goods being made available.

Or by increased production.

Partially also by a revival in the import of goods which at present cannot come into the country, partially too by an increase of local production. It has, of course, been always the policy of the Government to encourage local production both in the spheres of agriculture and industry and our policy will continue along those lines. Sooner or later as the Governor of the Reserve Bank has foreshadowed, we may expect that in any event the rise in prices will be stopped, and that the wheel will begin to turn in the other direction and that the danger of inflation will be warded off. The hon. member tor George has made a general charge against the Government in connection with our control of expenditure. He has rightly pointed out that the national expenditure in the past few years has not only doubled but it has actually tripled. It is self-evident that when this occurs it is not easy to make your methods of control function as effectively as was the case when the expenditure was considerably smaller. It is also obvious that when a country is waging war it cannot be avoided that money should be expended that later will appear to have been spent unnecessarily. As you will see, when you are carrying on a war you have to adopt precautionary measures and you have to exercise foresight in reference to all sorts of contingencies. Some of these contingencies never materialise, but if you have not taken those precautionary measures you would lay yourself open to strong criticism. Consequently it is clear that in the later stages of the war it will appear that here and there money is being unnecessarily expended. Events however could have taken a different turn and if money was not expended on those precautionary measures, the Government would have been liable to serious criticism. Now what is really the system of Treasury control that we follow? The Treasury has not an official of its own in every department. That is self-evident. So there are responsible accounting officers in every department. The Treasury is there to authorise the rendering available of funds. In the first place the responsible accounting officers of the various departments must see to it that the money is properly expended. Then there is the Auditor-General, who naturally functions in the name of the Treasury but who does not fall directly under the Treasury. The Treasury has not an official in every department. The person who, in the first place, must see to it that the money is properly expended is the responsible accounting officer of the specific department. Then a report is made by the Auditor-General. Subsequently the matter comes before the Select Committee on Public Accounts, but even then the responsible accounting officer has the right to present his case. What the Auditor-General states there in his report is not necessarily the final verdict in the matter. Otherwise it would not be necessary to appoint a Select. Committee on Public Accounts. The Select Committee gives the responsible accounting officer concerned an opportunity to present his case. It also hears the evidence of the Auditor-General and of the Secretary for Finance, where this is necessary, and finally after they have heard all the evidence they present their report to the House with all the evidence that they had at its disposal. For this reason it is desirable that the House should not formulate a final opinion in connection with the matter that is still pending before the Select Committee on Public Accounts, before the House has itself all the evidence at its disposal. The hon. member made a general charge of laxity against the Treasury, and he spoke of the squandering of money and irregular payments. Of course money is being wasted. I have frequently explained that there is expenditure which may now be regarded as unnecessary, but which two years ago was unavoidable. There have also been irregular disbursements. This always happens, even in time of peace, departments make mistakes. The fact that a department makes a mistake is not the fault of the Treasury but of the department. It is happening all the time, but I want to say this, I believe that when we come to the end of the war, if we give due consideration to the circumstances with which we have had to contend and the large amounts which we have had to disburse, we shall rather appreciate the financial control of the Government than pass criticism on it. I think that as far as financial control is concerned we emerge very well from the war. It is very easy to mention a point here and there, but if you regard the matter in its true perspective and against the right background, I believe we come very well out of it, and I believe I can also say that the hon. member for George believes that much bigger things have happened than have really happened.

We do not know what has, happened; that is just our difficulty.

Let us now turn to the specific point that he has mentioned. He has referred to the Deciduous Fruit Board. Of course, this is something which departmentally falls under the Department of Agriculture. In the first place we had an arrangement under which we were responsible for shortages; this was very unsatisfactory. On that account the Government appointed the McDonald Commission, and as a result of the recommendation of the McDonald Commission the whole system was altered. What we are doing now is to make available a globular amount. It is not in the first place the responsibility of the Treasury to keep an eye on the expenditure of the money. That is the responsibility of the Department of Agriculture. The Treasury is only concerned with the matter in so far as in the first place the Treasury asks Parliament to make funds available, and in the second place the Treasury comes into the matter when the Auditor-General brings to its notice whether the money is being improperly utilised. The money is made available, but there is a report from the Auditor-General to the Select Committee on Public Accounts. I do not know what the finding of the Select Committee will be on the report. I shall be glad to know what their finding is. It will be of considerable value to us, but I do not think that at this stage we can attach any blame to the Treasury in connection with the matter. The Treasury pays out a fixed amount and that is what concerns us as far as the matter has progressed at the moment. Now we come to the over-payments to personnel of the Defence Department. A reference has been made to that by the Auditor-General in his report on the War Expenses Account. I have on previous occasions said something about this. It is perfectly clear that it is impossible for the Treasury with its limited staff to go into all these cases, 17,000 cases, all involving very small amounts. We can simply not go into these, it is impossible. The mistakes were not made by the chief paymaster, but by the paymasters of the various units. Ultimately the mistakes are discovered by the chief paymaster. Sometimes errors have arisen in respect of troops in the field. Sudden changes take place in their rank.

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

When business was suspended I was dealing with what the hon. member for George had said in connection with the over-payments oh the accounts of full-time volunteers to which the Auditor-General referred in paragraph 8 of his annual report, and he pointed out there that we are dealing here with more than 17,000 accounts averaging an amount of £11 per account. It is obvious that the Treasury has not the power to control every account direct. Moreover, although we could have done it, it would have cost more than we would have got in return. I do not think that there can be any question about it that an exceptional procedure must be laid down by the Treasury to dispose of this matter. That is also admitted by the Auditor-General. The real question that arose between the Auditor-General and the Treasury was whether it was necessary to obtain special authorisation of Parliament in regard to the treatment of these overpayments. I stated on a previous occasion that I am quite prepared to accept the findings of the Select Committee on Public Accounts as far as this is concerned. The matter is now before that Select Committee. The committee has, I believe, had a full opportunity to obtain evidence from the Auditor-General and from the Secretary for Finance, and I think we shall have to let it rest at that until we know what the evidence was and what the findings of the Select Committee are. In any case as far as the main point is concerned it must be clear to all that it would be absolutely impossible for the Treasury to go into those 17,000 accounts. Then the hon. member referred to a matter in connection with fortifications; He did not put it very explicitly, but I gathered that it related to brushes and brooms.

Yes.

Then I can only assume that my hon. friend referred to certain evidence that was laid before the Select Committee on Public Accounts yesterday. Well, I am not in a position to say what evidence that was. I was not present, and the chairman probably will not allow me to refer to that evidence. So far as I can judge, so far as I know anything about the case I want to say that my hon. friend has put the matter in a rather incomplete way. In any case, it is only fair to ask again that no judgment should be formed before the matter has been dealt with by the relevant committee and the full facts are made available. To do anything else would I believe be unfair towards the Treasury, and especially towards the official Who is concerned in it, namely the Secretary for Finance, who is a very diligent, capable: and devoted official. In all fairness I must ask that judgment should be suspended on this matter until the evidence as a whole is available to all, and until the Select Committee on Public Accounts has reported. In any case I am not able to reply on this point, and you Mr. Chairman, will obviously not allow me to do so, even if I had the information that was furnished to the Select Committee. Then my hon. friend referred to the hire of certain boats. In that connection I only want to say this, that the hire of the boats was reduced as the result of the pressure that was exercised in the first place by the Treasury. They had been occupied on this matter for a long time before it was dealt with by the Select Committee on Public Accounts. We appreciate the assistance of the committee but my hon. friend must also be prepared to give credit to us that we tackled the question in the first instance. A further question that he broached was also mentioned by the hon. member for Swellendam (Mr. S. E. Warren), namely the question of the recovery of our claims on the British Government in connection with fortifications. Apparently they believe that we are confronted with difficulties in this connection, No, I think not. The difficulties of which the Auditor-General complained was that he could not link up the expenditure in this connection with authorities. It is a matter that affects all of us, but I do not think that there will be any difficulty in auditing the expenditure in respect of this special work. I do not think that there will be any difficulty in recovering the disbursements from the British Government, and I have not the slightest doubt that we shall recover those amounts that are due to us to the full. May I say here that we have experienced no difficulty with the British Government in connection with the honouring of our claims. It often happens that they pay advances to us before the amount of the claim is finally determined. It will continue along those lines in the future. At the moment there are considerable amounts that the British Government has to receive from us. I think that we probably owe them more at the moment than they owe us. The position in this connection is quite sound, and I do not anticipate any difficulty as far as this point is concerned. Then finally, I want to return to the point that I dealt with yesterday, and that has again been mentioned by the hon. member for George and by the hon. member for Gezina (Dr. Swanepoel). It is in connection with the provision we are making on the estimates for the Treasury-Controller of Finance Union Defence Force. I have already explained that the Treasury only exercises its control along certain channels, and that we are not appointing a controller as far as the Treasury is concerned in connection with the various departments. Nor are we doing that in connection with Defence. But when we sent troops to Kenya and later to Egypt it was difficult to make provision in the north for the necessary Treasury authorisation for the expenditure that had to be incurred there. We then sent Brig. Williamson first to Nairobi and later to Cairo with the designation of Treasury-Controller of Finance, which perhaps was not a very good designation, really to represent the Treasury there in connection with the granting of authorities for expenditure. We placed in the first instance an amount of £2,000 a year on the estimates. Later the position was entirely changed, and it was decided to adjust our expenditure in connection with troops in the north by way of a globular amount payable to the British Government. It was no longer necessary to grant special authorisation. Brig. Williamson then returned, and although he is still in the Treasury and available for all sorts of services, we have with an eye to contingencies retained this amount of £100, which is a minimal amount, on the estimates. This means that if it is necessary to do anything similar we can utilise this provision for it, but the real work of the Controller of Finance has fallen away as a result of the agreement that was made with the British Government. The procedure we are now following in connection with defence expenditure is precisely the same as was followed in connection with other expenditure, except that the Treasury works through the Authorities Committee. I think that my hon. friend will see that the designation of Treasury-Controller of Finance does not altogether reflect the position as it was really intended.

Just a brief word or two in reply to the Minister’s statement. The Minister has endeavoured to present the Treasury case in the best light, but there are certain things that the finest words in the world cannot explain away and I want to assert here that the weak action of the Treasury in connection with some moneys made available to the Deciduous Fruit Board, and more particularly the two points I have mentioned, namely, the fact that the Treasury approved something that the Auditor-General has been sounding a warning against in the last three years, that these are things that cannot be explained away. The criticism I have to offer regarding the Minister is this, that it cannot be denied that the Deciduous Fruit Board has not complied with the conditions under which the Land Bank and the Department of Agriculture and the Treasury advanced certain moneys to it. That cannot be argued. The Minister interrupted me and asked whether I was not putting the matter too strongly.

You said “all the conditions” That was putting it too strongly;

The conditions of outstanding importance have not been complied with, and this has now been going on for five years.

But we have changed our system.

Until the 31st December, 1944, it had not been altered. The Treasury ought have said to the Deciduous Fruit Board: You will not receive another penny unless you comply with the conditions under which the money is advanced to you. Then a stop would have been put to the wangling of the Deciduous Fruit Board, and this board would give better service in every respect, to the public of South Africa as well. But because they have been allowed to wangle things and the Treasury and Agriculture were prepared to allow it and to gloss it over if necessary, there has been a continuance of the waste that has caused so much dissatisfaction in the country. In connection with the other things that I have mentioned, namely, the two matters that are now under discussion by the Select Committee on Public Accounts, I am prepared not to say another word in connection with that, but I should then like to ask the Minister to give an undertaking in respect of the matter I reported regarding the paint brushes, one of the ugliest things that have come to light since the beginning of the war, that when the Select Committee brings, out its report and it has been placed on the Table, he will give an undertaking that this House will have ample opportunity to discuss it. We shall endeavour to draw up the report as soon as possible.

I gave that promise earlier.

Then I am prepared provisionally to leave it there. I only want to say this. I have on another occasion stated that during the war years there has been a spirit of extravagance in South Africa such as never previously existed and that a return to sound economy in South Africa will only be possible if this spendthrift spirit is squashed. That is essential. I have mentioned these things this morning in the House to give publicity to the irregularities in the service and to assist the Minister in killing this spirit of wastefulness and extravagance. Unless we kill it we shall not be in a position to return to a sound economy in South Africa.

I want to say a word in regard to the policy of the Department in respect of moneys paid to the various departments of the Treasury which it is subsequently found, either by a decision of the courts or by some other means, was a payment which the Treasury was never entitled to receive. I see the Minister anxiously scanning the list to see if I am not on the wrong vote. But this touches a variety of different departments. It may well be that it is particularly the case with inland revenue, but the problem arises in many departments—customs, income tax, inland revenue and a variety of others.

That is all.

That may be all, but that is at least three.

That is only two.

Two. I ask the Minister to consider whether the Department cannot depart from a rigid adherence to the law on the subject. The law, of course, is quite plain, that if you make a payment and you misinterpret the law you are without relief when it is subsequently discovered you are not liable for the payment. It is only when there is mistake of fact that you have a legal claim. But that surely means that the Department is adopting something one might fairly suggest is not a very moral attitude towards the taxpayer. It is taking advantage of a rigid application of the law. Of course, where these payments are made through the hands of an expert, the attorney, the accountant, or even businessmen, the usual precaution is taken and the money is paid under protest, and in these circumstances it can be recovered. I have in mind the layman who is not aware of the necessity of ensuring that that safeguard is taken, who makes the payment without stipulation and who subsequently learns that the law never required him to make it. The attitude of the Department today is that there are no circumstances which will justify a repayment, …

What department is the hon. member referring to?

I ana referring to the practice of a number of departments falling under the Treasury.

Can the hon. member tell me which department he is referring to?

Inland revenue, customs, and I am not for the moment ….

For these two departments there are specific votes.

I am aware of that. My difficulty is if I deal with one or the other I shall not be dealing with the broad principle.

I regret the hon. member will have to confine himself to these departments when it comes to those votes.

In those circumstances I propose to resume my seat.

I do not want to take up much time, but I should like to put to the Minister an important question in connection with the Custodian of Enemy Property. Since the last war international law has been greatly modified. You will recall the observations made by Lord Keynes in his work on this matter. Bearing in mind the continual amendments of international law the question arises whether the Minister, as the spokesman of the Government, gave thought at this stage to any alteration in reference to the disposal of enemy property. As I understand it, the position in the past was that enemy property was in the first place utilised to compensate for damage sustained by your own citizens, and thereafter private citizens who were enemy subjects could exercise their claims. Is the position still the same?

Naturally, but the question as a whole will have to be considered on the termination of the war.

In regard to the matter of enemy property we learned recently from the newspapers that the Minister had a return made of the property of all Germans in South-West Africa. Will the Minister be so good as to give us information on what the object of that is? Are the persons in South-West Africa regarded as enemies, like the Germans in Germany? What is the position in connection with the property of these persons? The second question that I wish to put, more in a general way, is the question of inflation. The Minister has stated that in the past he has used every effort to counteract inflation. The Minister has, for instance, imposed heavy taxes with a view to off-setting inflation. The other day the Minister stated in the House that the price of land has risen about 30 per cent. since the beginning of the war, while commodities have apparently risen more than the price of land. In other words, there is a measure of inflation in the country which is greater in many instances than it is in relation to land. Why then does the Minister specially single out land and impose a heavy tax on land transactions in cases where the land has been purchased after the commencement of the war? The Minister has apparently got his knife into people who speculate in land. If that is the case, well and good, but this taxation is so unfair ….

The hon. member may not discuss taxation now.

I should like to point out that attempts to combat inflation have not been successful. The Minister asserts that his taxation operates against inflation, but land which is subject to that taxation represents only a small proportion of the land that comes into the market, and consequently this was not such a great success. I think only about 10 per cent., a small percentage, of the land is subject to the tax and consequently it can only exercise a limited influence in combating inflation. I want to make an earnest appeal to the Minister to reconsider the matter. There has been talk of local production, of increasing it, and it has been stated that when this occurs it will counteract inflation, but I would like to refer the Minister to Irvin Fisher’s work in connection with the inflation problem of the previous war. He and Cassel and others have conclusively proved that the shortage of goods contributes in only a very small measure to inflation, but that the big problem is the increase of the amount of money in circulation. I should like the Minister to take that into consideration, and he should realise that the question can only be solved by turning off the tap of war expenditure and not by greater production.

I was wondering whether the Minister could make a statement on the question of the revision of the dominion preference in respect of goods purchased overseas. Why does the Minister look at me like that?

I am trying to Catch the point.

What are we going to do after the war in regard to the preference given to Empire goods? We want to buy British, we want to keep on buying British, and to keep on again buying British. We want to buy as much stuff from Great Britain in South Africa as possible.

Order, order. I would suggest to the hon. member he raises that under the Minister of Economic Development.

I suggest, Mr. Chairman, I may not be here, and I am raising it under an item on page 29 of the Treasury Vote, in which it says—

That item only refers to the Tender Board.

I am referring to the Tender Board now. That is the very point I want to get at. The Americans are here selling cloth, as well as people from Brazil and from the Argentine. I want to pin the country down to buying cloth in Britain, and it has to be done through the Tender Board.

I am sorry, I have already ruled the hon. member cannot discuss the matter under this vote.

I thought I would get away with it.

Vote put and agreed to.

On Vote No. 7—“Public Debt”, £11,702,500,

I have before me two estimates of expenditure, one for the year just prior to the war and the other for the year under discussion. The one gives us the position of our public debt before we entered the war and the other the position now that we have had 5½ years of war. I think it is of importance that I should give the House a few figures that arise from this. According to the estimates of expenditure for the year ended March, 1939, our public debt on the 31st March, 1938, was £259,000,000.

Why do you take the year 1937-’38 and not 1938-’39?

I am taking it as it is here in the estimates. In contrast we find that our national debt on the 31st March, 1945, had soared to £533,000,000. Now we know that there is still money in the sinking fund. If we put aside for a moment money in the sinking fund then we find that from 1938 to 1945 our national debt has mounted from £259,000,000 to £533,000,000, which is to say that in a period of five years our national debt has more than doubled.

You are referring to a period of seven years, from 1938 to 1945.

In this period our national debt grew by an amount that is larger than the debt South Africa incurred during the rest of its history. In the period from 1st April, 1938 to the 1st April, 1945 the national debt grew by an amount larger than the total debt that South Africa incurred during the rest of its history; that is to say the war has cost us more than all the wars previously waged in South Africa and overseas, and all the development works that we have carried out in South Africa to open up the country. The Minister shakes his head, but there are the figures. During the rest of our history up to the 31st March, 1938, our accumulated debt was £259,000,000 and in this period of seven years we have increased the debt by £274,000,000. In the war we have got up to our necks in debt and our debt is larger than the debt that was required for all the development and reconstruction work ever undertaken in South Africa. That only shows what this war cost South Africa. That is just what has been borrowed. Now I come to the interest. On the 31st March, 1939, that is to say for the year ended 31st March, 1939, provision was made in the estimates for £4,600,000 in respect of interest on the State debt, and in the estnmates that we are now discussing provision is made for £10,500,000 for interest, which is to say that our burden of interest has also more than doubled. I note that the amount for redemption has not increased much in the estimates. It was £848,000 in 1938 and this year it is £1,003,000; the amount has not increased much. In his reply on the Budget debate the Minister stated that he did not believe in a sinking fund.

No.

That is the impression that the Minister gave, and I think it is a dangerous thing for a Minister to say. We know that of the £274,000,000 debt that we contracted in the last seven years about £200,000,000 is absolutely dead debt. This is not money that we have invested in the creation of new and permanent assets, but dead non-interest-bearing debt. If you contract debts in order to create new and permanent assets that will develop the country, the Minister can say that we get interest on it, and that consequently it is not necessary to make provision for redemption, but for the greatest part we here have to deal with a dead debt that does not yield interest, and it is a dangerous standpoint for the Minister of Finance to take up—that he does not really believe in a sinking fund. If that is his attitude why does he not delete the whole vote “Sinking Fund”. With further reference to this I should like to put a question to the Minister regarding our external debt. I see it stands now at £18,000,000, and there is one item of £3,287,000 which represents a 5 per cent. loan. That is very high interest and the loan is redeemable in 1945—’47. The State will be able to redeem the loan during those years. Does the Minister intend to do so.

We are going to do so.

Then I should like to know something in connection with Union Loan Certificates that appear under “Temporary Debt”. The estimated amount of the debt is given here as £7,000. Will the Minister explain to us what this £7,000 really means? We know that it is not the amount that we owe in respect of Union Loan Certificates—that amount is over £30,000,000; how does the Minister arrive at the amount of £7,000. We know that the money from the Union Loan Certificates is in the hands of the Public Debt Commissioners, and they lend that to the Government, but how does the Minister come by the amount of £7,000? Now I want to touch on another point, and that is the amount of our temporary debt. The Secretary for Finance furnished me with certain figures in connection with our temporary debt. From the figures that I have given it appears that in the post office there is an amount of over £60,000,000 and as far as Union Loan Certificates are concerned the amount invested is more than £30,000,000, so altogether there is £100,000,000. Then there are Treasury bills and these were in circulation on the 31st March, 1945, to an amount of £28,000,000. Then as the Minister has himself indicated, there are certain short-term loans, one that falls due in 1946, one in 1947 and one in 1949 also, a total amount of about £30,000,000. If we take the four, Union Loan Certificates, Post Office Savings Bank, Treasury bills and the short-term loans that fall due in 1946, 1947 and 1949 then the amount of the temporary debt that the Government can be asked to repay at any moment, is an amount of £160,000,000. This is an amount that the Minister can be asked to pay at any time. I think we must accept that most people who have put money in the Post Office Savings Bank are people who will want it later on, that is to say as soon as the war is over they will want cash to buy things. People have a buying craze; they have not been able to buy in the war years, and now they have saved up and tucked away little sums, and when the war is over they will be in a position to buy. The Minister must expect an immediate and heavy demand on the post office, and very probably there will be heavy withdrawals of Union Loan Certificates, while at the same time there are the Treasury bills and the short-term loans that fall due. [Time limit.]

Mr. Chairman, in his Budget speech this year, the Minister of Finance told us that the total of the national debt…

Order. Might I remind the hon. member that he cannot refer to the Budget debate in this Committee.

The figure of the national debt is somewhere around £532,000,000 at present. That is to say, it is probably very considerably in excess of the national income of this country; it is reasonable to suggest that it has now reached saturation point; and that measures, other than orthodox measures, will be necessary to obtain funds, over and above the revenue from taxation. I want to refer to the war debt by way of illustration. At the end of March, 1944 the war debt, as given by the Minister in answer to my question in February last, was just £250,000,000. It is therefore about half the national debt. Now, this is important: the securities for this war debt at that date, March 1944, were held approximately as follows: Insurance companies £25,000,000; building societies £8,000,000; commercial banks £50,000,000; the Public Debt Commissioners, £109,000,000; the general public £40,000,000; and mining houses and pension funds other lesser amounts. This means that this country relies almost entirely on institutions, which use the people’s savings, for the financing of the war. These savings are collected at a profit; and then handed over for Government use, at another profit. In other words, to a great extent, the war is being financed today by the savings of the people. Now, that is a véry important factor in regard to the future need the country may have for loans for reconstruction purposes. We must ask ourselves this: Will the insurance companies, notwithstanding then statutory reserves, with liabilities today amounting to about £100,000,000, 25 per cent. of which is invested in war loans, be prepared, with more profitable outlets, to invest in Government stock so freely after the war? Secondly, will the building societies, with the heavy demands to be made on them for post-war housing, release funds over and above their statutory reserves to be invested in Government stocks paying 3 per cent. to 4 per cent.? Will the Commercial banks, in view of the peace needs, be prepared—and I quote the Minister’s words, “to finance the proper expansion’ of commerce and industry,” and at the same time be prepared to buy big blocks of Government stock? Will the Public Debt Commissioners—and I would stress this point—be able to go much beyond their present commitments with the trust monies and the people’s savings entrusted to their care, over and above their present commitments? They were holding in March, 1944, £260,000,000 in trust, mainly the savings of the people. Nearly half of that was devoted to the war. Approximately one-third of that amount represented Post Office Savings and Union Loan Certificates, all of which are practically redeemable on demand. Will these institutions, will the general public, be prepared to hand over their savings to the Government in the present conditions of inflation—temporary though it may be in the view of the hon. the Minister—will they be prepared to do that with the value of our money gradually falling? Inflation, as we have it today, does serious damage to the country’s credit. It is endangering the savings of the people, the savings of the men on service, the savings of people who have made big sacrifices for the war. We are risking putting the people’s savings into pawn, only to repay them at a value very much lower than the original value? In my view these considerations press upon us the need to adopt a public debt policy very different from our policy up to the present. Then there is the significant factor of interest. The gross interest payable for the national debt of this country is £16,000,000. That, if we exclude the war expenditure, is 16 per cent. of the expenditure of this country. Let us measure it against our principal social services. We are paying, or propose to pay £12,800,000 to the Provinces for health and for education and other services; another £2,500,000 for native education. The servicing of the national debt is therefore in excess of these payments for social services. I believe that since Union we have paid £300,000,000 at least in interest on the public debt of this country. I think hon. members will agree that the national debt burden is now reaching a stage when, from now onwards, it will become a very heavy and dangerous brake on the development of social services in this country. Now, the same problem is worrying other countries. How do they react? England has obtained something like £1,100,000,000 from the commercial banks in return for Treasury deposit receipts on which something like ¾ per cent. interest is paid to the banks. New Zealand has nationalised the Reserve Bank; and is at present engaged in buying out the biggest commercial bank in the country, the Bank of New Zealand, in order to provide the State with a large part of its funds for development. In that country the Government, in pursuance of its monetary policy, has been able to guarantee the farmers during the first three years of the peace fixed prices for their output. Australia has semi-nationalised its banks today in order to give the Government a prior claim on the deposit balances. In the United States the Post-war Development Corporation, a Government institution, has recommended the extension of Government-created purchasing power, and has gone so far as to recommend to the Government the possibility of creating non-interest bearing Treasury bills. I believe that the United States’ plan should be adopted in this country. The Minister of Finance at the end of last month owed the Reserve Bank some £28,000,000 ….

What?

£28,000,000.

To the Reserve Bank?

That is the amount in the vote.

No.

I want to suggest to the Minister that he should continue his policy of getting short-term funds through the Reserve Bank.

What debt are you quoting?

I am quoting figures in the Minister’s vote that at the end of this month the amount which will be due to the Reserve Bank on the floating debt on Treasury bills will be in the neighbourhood of £28,000,000. It is in the vote we are considering.

I think you are wrong. It is not the Reserve Bank.

The position of the Reserve Bank is so strong that it should be used for the purpose of financing our peace-time development; and I trust that the appeal I now make to the Minister of Finance to forego the orthodox method of financing the development of the country in favour of using, on the basis of the people’s productivity, the Reserve Bank of this country, will be accepted.

I should like to put a few questions in connection with interest on housing loans. I shall be glad to know from the Minister of Finance whether these loans are still being effected through the building societies, and to what extent recourse is being had to these loans at the present time.

It does not fall under this vote.

I am bringing it up in connection with the interest that is paid under this vote. I am asking whether those loans are still being granted and whether the ordinary citizen can get a loan through the building societies to build a house. My second question is to what extent use is being made of housing loans for building. The third is, and I should be glad if the Minister of the Interior will also give his attention to this, to what extent co-ordination exists between these two departments, especially in regard to according people who want to build houses these necessary facilities. It seems to us rather queer ….

I understand that the hon. member now wants to discuss housing.

I have put these three questions.

The hon. member may put the questions shortly, but he may not enlarge on them.

The fourth point is whether co-ordination exists between the Department of the Interior and the Treasury to put people in a position to make use of these loans. I should be very glad if the Minister of Finance can give us information on this point. Then I learn today from the hon. member for George (Mr. Werth) that he is very concerned about the paying off of our war debt. I think I understood him aright. It is very interesting to hear these complaints from the hon. member. Those friends on the benches opposite have a past, and they are doing their utmost to live down that past. It is something pretty big they have to live down, but they are making a great effort to do this. When they rise in their places in the year 1945 they are very anxious to forget their statements of a year ago, and I hope that the Minister of Finance will take those statements into consideration when he replies to this debate. I have one such statement before me—

Who used those words?

It was one of the frontbenchers on the other side, the hon. member for Beaufort West (Mr. Louw) at Fraser burg on 20th August, 1942. I should like to know from the hon. member for George whether he considers that only the Government supporters should pay, or whether their side should also be asked to pay. Let me ask further if in relation to the development since 1939 he is yet prepared to declare to the country that South Africa made a mistake when it entered the war.

Of course.

The hon. member has not shifted his ground since 1939.

I do not think that the hon. member can enlarge on that matter now.

I am quite prepared to accept your ruling Mr. Chairman, but I have been trying to show that the hon. member for George has thrown up a smokescreen on this question of this national debt, especially in regard to war debt. It sometimes occurs that we, as the Prime Minister did the other day, get a direct answer from the Opposition which enables us to know where we stand. It is so easy to twist words here. I hope that the hon. member for George will give us an unequivocal statement. I leave it to him to put his case.

I hope the hon. Minister of Finance will detect the difference in the attitude of the hon. member for George (Mr. Werth) and myself in regard to short term funds. In reply to that may I intimate to the Minister that all the money in the banks belongs to the taxpayers of South Africa.

Not to the taxpayers but to the people.

Yes, that is so. I should like to put a question to him in reference to the amount of Treasury bills. I understood from the Minister that they have discontinued the issue of Treasury bills. I notice that a considerable amount is still outstanding, though it is smaller than in the previous year. May we be informed whether those Treasury bills are held in South Africa, and by what institutions they are held? We know that commercial banks, insurance companies, building societies, etc. all need short term investments. I should further like to ask the Minister whether he adheres to his attitude that the Treasury has no intention of issuing further Treasury bills. I do not want to go into the figures now, but the position is that there is £270,000,000 lying in the Reserve Bank earning no interest. It is all savings of the great public outside, and a large amount of it are savings of the small man. In these days when much money has to be borrowed the Minister can make a choice between shortterm loans and long-term loans, and the question is what eventually will be the best. Short-term loans are naturally much cheaper than long-term loans. I do not share the objection made by the hon. member for George that South Africa will dry up.

Not absolutely dry up, but there are limits.

There I agree. The Minister will not be so indifferent as to keep on and have any amount of short-term loans. He can, however, so date the short-term loans that his argument that he has used in that connection will, to a great extent, fall away. They can be so dated that they will not all be repayable simultaneously. We know that the commercial banks have liquid cover for 20 per cent. of their liabilities, and not only that, they hold it in cash. It is cash falling due in three months or six months or an even shorter period. I should like to know whether the Minister will not modify his attitude in respect of short-term money to which exceptional advantages are attached, such as a cheaper rate of interest. Then I want to put a further question in reference to the amount for exchange on remittances. Provision is made here for £140,000 compared with £48,000 for the previous year. But if we turn to page 30 (on the left-hand side) we will see that the amount that we owe overseas is less than in the previous year. It is £575,000 compared with £694,000 in the previous year. Against this reduced amount we find now that the amount for exchange is three times as much as the amount in the previous year. On the face of it, it appears absurd. I must assume that there are other funds involved by the State, and not only these amounts that are required for interest. Apparently more money has to be sent overseas for adjustments. Perhaps it is in connection with the redemption of loans we spoke about this morning, and we should like to have the information from the Minister.

I should like to develop my point a little further before the Minister replies.

I am the intermediary; I shall have regard to both.

What I fear is that the Minister will be obliged again after the war to borrow sums of money in connection, with demobilisation and things of that sort.

Also in connection with housing.

Yes, that is another thing. Suppose that the Minister during the same period when he has to borrow big sums of money in South Africa is suddenly asked to repay some £70 or £80 millions of this temporary debt.

But that is of course improbable.

I only want to say this to the Minister, that of all the forms of temporary debt I have most belief in Union Loan Cert ficates. The man who invests money in that will want to hold on to the certificates for a while. What I do not agree with the present policy of the Minister is that he is continually making Union Loan Certificates less attractive as if he wishes to discourage people from investing in Union Loan Certificates. This is the form of short-term investment that I think most highly of. I do not think that people with money in he Post Office Savings Bank will keep their money there long.

Yet they are doing so.

I imagine that the day the war is over the people will begin to buy, and money will circulate all over the country. Everyone is ready to buy a new motor car, a new wireless, a new refrigerator, new electrical goods and all sorts of things. That money is going to be put into circulation.

And they are also ready to build houses.

That money is at any rate invested in South Africa, but I say this for myself, I am waiting to buy a new motor car; all my electrical fittings are useless; and all that money will be going out of the country.

Impose more taxation.

No, that will be no use. The Minister should not endeavour to make Union Loan Certificates less attractive. These are temporary loans with a fair degree of permanence. The Minister has now extended the period from six years to seven. He should rather encourage the people to invest their money in Union Loan Certificates. The man who invests his money in them will do so for seven years, because the seventh year is the most attractive. The man who invests in these Union Loan Certificates hopes to leave them there for at least seven years, and I think the Minister is making a mistake in making them unattractive.

As regards this question of the loan policy, I adopt the position between that of the hon. member for George (Mr. Werth) and the hon. member for Ceres (Dr. Stals). It is perhaps a safe position as long as I do not have to sit opposite amongst them. There is quite a lot to be said on both sides about this matter. On the one hand there is much to be said for what the hon. member for George indicated here, namely that there is a degree of danger in short-term loan funds which may be called in after the war. I am really not afraid that it will happen on the scale he evidently visualises. On the other hand it is of course to a certain extent to our interest and to the interest of the country to provide facilities for the investment of short-term money. It is much cheaper for us. But if we were to have taken all the money we could get at shortterm, we would probably have landed in trouble, as the hon. member for George prophesied here. We followed a conservative policy in that regard and only issued shortterm loans up to a certain point. We could have obtained much more money on shortterms. I was afraid of it. We could have obtained much more money from Treasury bills than we really hold, but we followed a conservative policy with an eye to those possible dangers pointed out by the hon. member for George. Our limitation of it was twofold. In the first place we limited the amount we obtained by way of shortterm loans—when I now speak about shortterm loans, I refer to Treasury bills. As I have already stated, we did not last year issue any further short-term loans. As regards Treasury bills, it was not our policy, as the hon. member for Ceres perhaps wrongly understood, not to issue any Treasury bills. But in the case of Treasury bills we limited the amount which we were prepared to renew. In other words, if a bank has Treasury bills for a certain period, and that period elapses, and the bank asks us again to invest the money With us instead of taking back the wholé amount, we take only 75 per cent. That was our policy and it is still our policy. The object is, of course, to limit the amount outstanding in the form of Treasury bills. That is also indicated by the fact that there is a decrease in the estimate, namely of £3,000,000. We do work in that direction. The hon. member for Ceres also asked by whom these Treasury bills are being held. They are all in the country. None of them are held overseas. It is internal debt. It is being held by financial institutions like banks, but it is also held by the Public Debt Commissioners, who have a fair proportion of their investments in Treasury bills. It is also used by the Provinces for temporary investments, and also for other similar investments. I think that is the reply to his question. But as regards the investment in Treasury bills by the banks and other financial institutions, our policy is to limit the amount which we are prepared to accept. As regards investments in Treasury bills by banks and financial institutions, it is still our policy to limit the amount. Another method adopted by us to counteract that danger, to which the hon. member for George referred, is to spread out the due dates as much as possible. The hon. member for George spoke about a large amount which could suddenly be called up. He took all the items together, the short-term loans, the Union Loan Certificates, the Post Office Savings Bank and the Treasury bills; he said that they could be called up at any time. But that is not the case. Those amounts were carefully spread over a series of years, and one of the reasons why we did not last year write out short-term loans was that the due date would have arrived in a year in which we would have had other fairly heavy obligations by way of repayment of debt. Therefore, my hon. friend can accept that we in fact are thoroughly aware of the considerations to which he referred. But I do not think that the position ought to cause as much anxiety as my hon. friend thinks. I think the steps that have been taken by us have limited the possible difficulties with which we may be faced. The hon. member for George also referred to the increase in the national debt. He took the year 1937-’38. He really wanted to arrive at the figure of what the war cost us by way of the increase of our debt. But then one should not take that date. In that case, I think the correct date to take is the end of the year 1939-’40. Although the war began in September, 1939, in that year we had not yet devoted any money from loan funds to the war. Therefore, to draw a proper comparison we should really begin with the date 31st March, 1940, when the national debt was £291,000,000—call it £290,000,000. The figure which is indicated here for 31st March of this year is £533,000,000, but as I have already indicated in my Budget Speech, about £3,000,000 thereof is the balance we have available for the repayment of debt in the new financial year. Thus, the actual amount of our national debt can be placed at a figure of, say, £530,000,000. It therefore means that the increase in the national debt during the five years was £240,000,000. My hon. friend made that statement here, and I think he will admit that he went a little further than the facts. He said that the war is costing us more than all the wars and all the work of development we did up to 31st March, 1938. He of course referred to loan funds devoted to the war. What he forgot, however, is that the debt we contracted— let us take his date—for the former wars and for the development work done up to 31st March, 1938, was not £260,000,000. It was much more, because large debts were paid off before that time. Therefore the debt contracted for the previous wars and for development work up to 31st March, 1938, was much more than £260,000,000 at that date, and appreciably more than £290,000,000 at the date I mentioned. But then we must also not forget this ….

That is not the cost of the war; that is from loan funds.

That is what my hon. friend referred to. Of course, other amounts should be added, but we are speaking about expenditure from loan funds. The other point of which we should not lose sight is that the increase in our debt over the last five years is not only due to the war. We have been continuing all the time with ordinary loan services. All the time we have continued building railways and harbours installing telephones, the provision of loans to the Provinces, etc. In my Budget Speech I mentioned the figure in connection with the year which has just ended, namely £16,000,000 capital assets. Apart from the war we also increased the capital assets by approximately £70,000,000 over the period of five years. Therefore my hon. friend will see that he ought really to take that fact also into account when he makes this kind of comparison. I will not enter into that question further. As regards the sinking fund I just want to explain this. I did not say that under no circumstances do I believe in a sinking fund, but what I said is this: I doubt the value of a sinking fund in the case of a country which has to borrow money to find the money for that sinking fund. If over the last five years we were to have paid an extra million pounds per annum into the sinking fund, it would simply have meant that we would have had to borrow one million pounds every year. That is not sound, and it is in that sense that I said I do not believe in a sinking fund. As regards our external debt as my hon. friend stated, the figure is £18.000,000, but during this year we will pay off an appreciable amount of that, especially the amount to which he referred, a sum of just over £3 000,000 still remaining of the 5 per cent. loan. The affect of that repayment and also of the fact that we have £3,000.000 to £4 000,000 of sinking funds for our external debt, will practically be the following, namely that within a few months we will owe overseas a nett amount of £11,000.000. That is of course an appreciable decrease in the amount which we owed overseas in the years to which my hon. friends refer. He also put a question in connection with Union Loan Certificates, and he said that the amount mentioned here is appreciably less than the amount which we really owe. That is quite correct, but the position is this. We have already made several issues of Union Loan Certificates. We are now making the seventh issue. The first and second issues of Union Loan Certificates were Treasury issues. It fell directly under the control of the Treasury. Later issues and also existing issues are made by the Post Office. What appears here under Union Loan Certificates is only the direct obligation of the Treasury in connection with certificates, that is to say in connection with Treasury issues. The other certificates are issued by the Post Office and invested by the Post Office with the Public Debt Commissioners, who in turn invest it with us in our usual loans. Therefore of the other amounts standing here as loans there are certain portions which we owe to the Public Debt Commissioners who in turn owe it for Union Loan Certificates.

They only receive 3 per cent. from you and they must pay more.

Yes, I come now to the other point mentioned by my hon. friend. The position is that at the moment the Public Debt Commissioners receive only 3 per cent. from us for new investments. That is the reason why I took the step to which my hon. friend referred. He regretted it and so do I but we could not do otherwise. The former series of Union Loan Certificates was issued on that basis; it was done with the object of encouraging thrift. It was issued on the basis that the person who holds his certificate for the full period of six years receives 4 per cent. interest. The Public Debt Commissioners could only earn 3 per cent. of that money, and therefore the Treasury had to give a guarantee. As my hon. friend knows, there are various people, fortunately not a very large number, who do not let their certificates run for the full period, and on those people the Post Office, shall we say, makes a profit on the basis of 3 per cent., but finally it is clear that on the 4 per cent. basis we would suffer a loss and Treasury would have to cover that money. We therefore during the last few years made provision under this Vote for an interest reserve to meet that obligation when we have to find the money. But the matter grew to such an extent that we felt that we could not continue like that, that we could not let the eventual loss increase further, and for that reason we were forced to issue a new series at a rate of interest which works out to 3¾ per cent. Also, we must not forget that these certificates are free of tax. Therefore, to the person who pays income tax, especially to people who have a fairly large income on which they have to pay, it is a very attractive investment. 4 per cent. per annum and no income tax. Thus there has to be a limit and I think my hon. friend will agree with me that however much we regretted it that we could not encourage savings to the same degree, we had no other alternative than to reduce the rate of interest.

It is not attractive for the small investor.

It is not so attractive to the small investor as to the large investor, but I want to know where even the small investor today can find a safe investment which will give him 3¾ per cent. compound interest. One cannot differentiate. Of course we limit the amount to which any person may invest in certificates to a thousand, but one cannot differentiate further between one group and the other. The hon. member for Ceres (Dr. Stals) raised a question in connection with the rate of exchange on remittances. Here we have to do, of course, not only with the rate of interest on remittances for paying of interest overseas; we are also not dealing with the rates of exchange of remittances for paying debt overseas, although we shall pay an appreciable amount this year, but we are also dealing with the rate of exchange on remittances which the Government will have to effect for other purposes also. Mv hon. friend knows that we pay £1,000,000 per month overseas in connection with our war accounts, and the amount we provided for this year was quite insufficient in view of the remittances which take place, and for that reason we have to make a greater provision for the year which has now started. I think I have already dealt with those points. The hon. member for Johannesburg (West) (Mr. Tighy)—he is not here now, but in any case I just wanted to tell him that I have nothing to do with the policy in connection with loans for housing and the application of the Additional Housing Act. That is a matter for my colleague, the hon. Minister of Welfare and Demobilisation. I only collect the rents on State loans issued for that purpose.

†The hon. member for Durban (Berea) (Mr. Sullivan) sounded a warning note, and although I do not go with him all the way in what he said, I am glad that he sounded that note. Indeed, I have sounded that note before myself. It is not going to be as easy for us in the years ahead of us to obtain subscription to government loans as it has been during the war. I have made that point on several occasions. A good deal of money which is immobilised today, will be required after the war for the replenishment of stocks. Other people will want to invest their money in other ways, and it is on that account that I sounded a cautious note in my Budget, and rather than maintain the fifty-fifty basis in respect of war expenditure, reduced the amount to be found on loan account and kept on a higher basis the amount to be found from revenue account. So that I am entirely with my hon. friend when he suggests that we shall not be able to expect as large amounts by way of subscriptions to loans in the post-war years as we have hitherto been receiving. But I am not going as far as he does when he said that our national debt is in excess of our national income and that saturation point has been reached. I do not think it is in excess of our national income, although it is nearing the figure of our national income, and I do not know that that would represent saturation point, because there are other countries where the national debt is perhaps two and a half times the national income. But the figure has gone up considerably. It must not be forgotten that a much larger proportion of our national debt is remunerative, is interest producing—for instance our railway debt—than in the case of some of these other countries where the proportion of national debt to national income is far larger than it is in this country. The hon. gentleman has referred to various expedients adopted in other countries. As I have said previously I have been loth to increase the amount of our short-term borrowing. I believe that there is a danger in short-term borrowing, and as I have already enlarged on that point, I do not need to repeat what I said then. As far as the Reserve Bank is concerned, I think my hon. friend must have been looking at the wrong figure when he said that we owed the Reserve Bank £28,000,000 at the end of last month.

I was referring to the Treasury Bill figure.

That is not held by the Reserve Bank.

Does the Reserve Bank finance the Government?

Yes. The Reserve Bank has been lending us quite a good deal by way of Treasury bills during the year which has recently come to an end. I think at one stage we had outstanding something like £11,000,000 or £12,000,000 with the Reserve Bank, but all this was cleared off before the end of the financial year.

Did the commercial banks take up this?

I have already explained to the hon. member for Ceres (Dr. Stals) that that amount of Treasury bills is held in quite a considerable number of hands. There are the commercial banks’ holdings which have been steadily reduced for a period of years; there are the holdings of various financial institutions which we have also been reducing for a period of years; there are the holdings of the Public Debts Commissioners; there are the holdings of the provinces and so I might go on. But only a part of this is held by the commercial banks, and that amount has been reduced recently in terms of our policy not to have too much in the way of short term borrowing.

Will the Minister tell the House how he views the British system of Treasury deposits for a period of three or four years?

That would simply have meant an increased amount of short-term borrowing, and we have on hand quite as much short-term money as we felt it safe to carry by Treasury bills of ¾per cent. and ¼ per cent. on the one side and by short-term loans of 2¼ per cent. and 2 per cent. on the other side. As far as the Reserve Bank is concerned, that is our reserve; we have been using it as our reserve. No doubt we shall have to go on using it as a reserve and we may have to use it as a reserve to a greater extent than we have hitherto done.

The hon. member for George (Mr. Werth) referred here to the increase in our national debt. If we take the period from 1910 to 1945, and we compare the period from 1910 to, say, 1939, with the period after that, then we cannot but feel anxious about the enourmous increase in our national debt in the last few years. In 1910 that figure stood at approximately £116,000,000. In 1924 the period when we had a decent Nationalist Government coming into power, we owed £208,000,000, but during the period from 1924 to 1933 that debt increased to £272,000,000. Now the hon. the Minister tells us that the debt before this war should be taken at approximately £290,000,000, and that it now stands at about £530,000,000. But the matter about which we feel most anxious is the question Just referred to by the hon. Minister, although the Minister gave us no idea which he might have in his mind for the solution of it, and that is the matter of unproductive debt. The unproductive debt which existed in 1924 when the Nationalist Pact Government took over, had also been appreciably increased because of the previous war of 1914 to 1918. But that Government did everything in its power to repay this unproductive debt, and now this unproductive debt has increased at a speed quite unknown in this country, because this increase from £290,000,000 to £530,000,000, even allowing for the other figures mentioned by the Minister, is practically all non-productive debt. The question is: What is the Minister’s aim; what does he intend to do? Has ne any plans? Has he any schemes? Has he any purpose? What method will he adopt to reduce this enormous debt? We know that a large percentage of our debt today is still productive debt, and we are thankful for that. But unless the Minister evolves some definite scheme, the country’s credit cannot but suffer heavily through it in the future. We know that especially in view of the policy which this Government preaches so often, namely the policy of the industrialisation of South Africa, this young country needs enormous sums of money. I regret that I cannot associate myself with the simple method suggested by the hon. member for Durban (Berea) (Mr. Sullivan). It is a little too unorthodox, and we simply must work out some solid scheme or other to reduce our debt, and such a scheme was entered into at the time by the Nationalist Government with the result, according to Dr. De Kock, that the decrease in the national unproductive debt in the first five years after the National Party had come into power, was round about £24,000,000, and he said here—

At the time a redemption fund was instituted by the Nationalist Party, and the Minister says he does not believe in these schemes, because he has to borrow money to put into the fund. But we cannot just leave the matter unattended to merely because the Minister does not believe in it, because during the war we shall have to borrow money to pay into the redemption fund, and therefore I should like the Minister to explain to the House whether he has any scheme in mind by means of which he will reduce this large unproductive debt of the Union.

I just want to draw the Minister’s attention to a few points. The first is this: Special advances to farmers, which appears under this vote. There is a motion on the Order Paper, but that motion will not again be dealt with. There will be no opportunity for that motion to be dealt with again, and for that reason I consider that I should be permitted to receive the information from the Minister.

The hon. member should raise it under Vote No. 15, under State Advances.

Does it not fall within this vote?

Only in so far as it is part of our debt. It is part of our collections which are mentioned here, but the Department which administers it is State Advances.

The second point I wish to raise is in connection with relief loans. An amount appears here as a relief loan.

Under what heading?

At the bottom of the page.

We are not now discussing a special vote. We are only discussing the interest for which provision has to be made in relation to the national debt.

Under which vote can I then discuss it?

Also under State Advances.

Good, then I will wait until we come to State Advances.

Vote put and agreed to.

On Vote No. 8.—“Pensions”, £9,750,000.

I rise now because the Chairman yesterday ruled in connection with a certain question which I wanted to raise regarding a circular which was issued last year, namely that the European officials, when they address a letter to a nonEuropean, native or coloured ….

No, only coloureds; it has no reference to natives.

Does it not apply to natives?

No, only to coloureds.

In the past when officials wrote letters or addressed someone who is not a European, they generally called that person by his name. Now the Minister says: You may not call those people by their names any longer—Jaftha or whatever it may be. In future when you speak to those people ….

No, it only applies to letters.

“In future when you write to those people, you must address them as Mr. or Mrs.:” At the time when that instruction was issued, 23 officials left the service. I wish to say that I appreciate it very much, in view of the fact that we always try to maintain a European standard in South Africa, that those people felt that the instruction issued by the Minister was something completely new, something really insulting to a European, which has never before happened in the whole history of South Africa, from the time of its discovery until now. I say for that reason I object to the action of the Minister, and I hope that circumstances will persuade the Minister to recall that instruction issued by him. I think it is not just that those European officials should address nonEuropeans as instructed by the Minister.

I should like to bring a few small matters to the notice of the hon. the Minister. I have a letter before me emanating from the Pensions Office in Pretoria. I shall just read the letter to the Minister. It was written to one Jooste in Frankfort. The letter reads as follows—

This person had already drawn the “Oudstryders” pension. Let us accept for a moment that premature “Oudstryders” pension will only be awarded to veterans who are physically not capable of performing heavy work. Then we have the position that this person was overpaid by an amount of £26 17s. 5d. They now hold back his pension. The man is out of work. How will he repay the £26 17s. 5d.? But I wish to bring something else to the Minister’s notice. We discovered that there are differences between the medical decisions. One has the case of a veteran who appears before the Medical Board which fixes the percentage of incapacity perhaps lower than it was estimated by the district surgeon. I know of such cases. For example, I know of two cases, far removed from each other, who came to Pretoria, and I enquired how the Medical Board was composed, and both told me that it was only one Jewish doctor who examined them there.

Were those cases of veterans?

Yes. The local district surgeon fixed on a certain percentage of incapacity, but the other doctor, the Jewish doctor, fixed a lower percentage. We should like the Minister seriously to take these cases into favourable consideration. There is only a small group of these people still living, and they are today living in difficult times, under difficult circumstances. Some of them still have dependants, and if the qualification is such that, for example, these people receive less the moment they do an isolated job of work, as in the case where this man did casual jobs and was then overpaid, one feels that this is particularly onerous to the veterans. When they discovered that he still did casual work his pension was withheld with the result that he was overpaid £26 17s. 5d. How will he repay it? He is out of work and receives no more old age pension. I want to ask the Minister in his reply to set the minds of these people at rest and to promise that he will again investigate the position of these veterans. Those old men often still have the courage and the spirit to take off their coats arid do a job of work in order to earn something, in spite of the fact that they are maimed. In this manner they set an example to thousands of young men who are afraid of taking off their coats and who regard work as something which a native should do. I know a veteran with a maimed leg. He is a mason and must take a pillow along with him in order to let his maimed leg rest while he works, but he still works. However, as soon as he does that, his pension is withheld. I want to ask the Minister to increase the pension. I just want to ask the Minister to consider it. If they earn small additional amounts it should not count against them. I want to ask the Minister— these questions are put to us—whether the natives drawing old age pensions are treated in the same manner, whether their pensions are also reduced when they earn additional money.

Yes.

I am glad to hear that, but in view of the facts I have mentioned, I want to ask the Minister on behalf of the people who sacrificed everything for the freedom of their nation, those men who were shot to pieces and are maimed, and who are now old and have not long to live—almost every day some of them pass away—I want to ask the Minister to enable them during the few years they are still alive to keep body and soul together and to make the pension such that they can live.

I would like to ask the Minister when the House might expect the report of the Committee set up to enquire into the operation of war pensions. That Committee was set up in the recess, and it was set up because there was a sense of urgency about many of the hard cases that have arisen due to the operation of the War Pensions Act. A good many cases have accumulated since last Session. I understand that the Committee was appointed last June and it is now April, and I think the House and the country is entitled to some information as to when this Committee will report if it has not already done so. I would remind the Minister there is a series of cases of a very pressing nature indeed which this Committee was particularly supposed to enquire into. I mean the class of case relating to the widows and dependants of men killed in the Union either while on leave, or what has been held not to be on military service. There is a large number of these people who feel that some pension is due to them, and I do know that all the soldiers’ organisations have been pressing the Minister to grant some concession to these people, either by way of amending the Act, or in some other form. I know that the Special Grants Board has not been particularly liberal in many of these cases, and the matter has become pressing. I would be grateful if the Minister would give us some information. While I am on this matter of war pensions, I would like to draw the Minister’s attention to a certain form of hardship which is almost inevitably involved. Take the case of a man discharged today and who applies for a pension. It takes some time before the Pensions Department looks into his case and grants him that pension, and meanwhile a period of anything from three to six months can elapse before the pension is granted. Meanwhile in certain circumstances the person involved has no means of livelihood and he cannot get a job. Is there no means of either arranging that his pension will be ascertained before he is discharged from the army, or alternatively some means provided for speeding up the action of the board, so that he may not necessarily be altogether destitute. More than one case has come to my knowledge in which actually pay has been paid by the army to somebody who has been discharged, because otherwise he would not have got a pension for three months, and consequently would have been destitute. I would be glad if the Minister would give us same information on the two points I have mentioned.

I should like to pause for a few moments at H, Old Age Pensions, and U, Pensions for War Veterans. I should like to ask the Minister why, after the amendment of Articles 6 (ii) of the Old Age Pensions Act, where the means of children is no longer taken into consideration in estimating old age pensions, the Minister is so terribly strict in connection with awarding old age pensions. I want to quote a few cases here. Then the Minister will know what I mean. I myself wrote to the Minister in connection with the case of Mr. and Mrs. van der Merwe. It is no longer necessary to take into account the ability of the children to contribute, and here the Minister has a case where Mr. and Mrs. van der Merwe did not earn a living. The attitude adopted by the Minister is that their property is such that it does not justify the granting of a pension. In the meantime the Minister knows, as I informed him, that the property owned by Van der Merwe is mortgaged for more, practically, than it is worth, and the income he had did not even cover his expenses in connection with it. As the Minister knows, the tragedy is that old Mr. van der Merwe was completely incapacitated. He could do nothing. It is no longer necessary for the Minister to consider the position of Mr. van der Merwe, because he died last week, but the widow still survives. Her brain has been affected. They have nothing to live on. I visited them personally although it is not in pay constituency, but in spite of my pleas the point of view is that the property they possess prevents an old age pension being granted to them. The Minister knows that it is in the nature of the old Boers to have something which they can regard as their own. In this case the mortgage is greater than the value of the property, but still it prevents these people from obtaining a pension. Why is the Minister so terribly strict? No wonder there is a decrease of £125,000 in the Old Age Pensions Vote.

It is because pensions for natives, which last year appeared in this vote, have been transferred to another vote.

Then there is another case which I want to bring to the Minister’s notice, another case of old people who have a bitter struggle and in connection with whom the department is so narrow-minded. Also in regard to this case I was in communication with the Minister. It is a case of a man who was in the mines. He worked hard and saved and acquired a small plot outside Johannesburg in order to try to earn an independent existence there. I wrote to the Minister informing him that the harvest of these people was destroyed in the first year—he cultivates flowers—and in the second year the hail again destroyed everything. They sit on the little place and have no income on which to live. A pension was refused them. Will the Minister not take the whole position into reconsideration? It is very difficult to explain these things to the old people. There are these old people who devoted all their powers during their lives to the State, and they ought to receive a decent little pension. There is still another matter. That is the case of two old people who drew old age pensions, but could not manage on it. The Minister knows how difficult the times are and how dear everything is. He obtains a little work and earns a few pounds. His pension is stopped and he has to repay a sum of money. The result was that the old man had to give up his work and again applied for an old age pension. He said that he would rather try to live on the old age pension than to earn a few shillings. I think that is terribly hard, and where the income is so small that it can hardly keep body and soul together, the Minister should be a little more conciliatory. I then come to the “Oudstryders” pension. There we find a position which I cannot understand either. The old age pension is separate from the “Oudstryders” pension, but nevertheless the old age pension is taken into consideration when an “Oudstryders” pension is considered. The person can receive one or the other, but not both. I now wish to remind the Minister of the 5s. which was promised to the fighting burghers by Act 5 of 1900. We know what the result of the Boer War was and that no legal claims exist today, but those old men fought for the freedom of South Africa, and today cannot receive the few shillings to which they are entitled. How would the Minister feel if in years to come there should be another Government which ignored the pension laws of today and committed injustices towards the men who fought? I think the honour of the Government is in jeopardy as regards the “Oudstryder”, and I want to direct an urgent appeal to the Minister to investigate whether the “Oudstryders” pension cannot be awarded separately from the old age pension. The “Oudstryders” pension should be awarded without taking into consideration the old age pension. I hope that the Minister will consider this seriously. The means test must disappear in all cases.

It is to be expected that on an occasion such as this the difficulties and shortcomings in connection with pensions will be brought to the Minister’s attention. One can quote numerous individual cases where people suffer, as has already been done by the hon. member for Westdene (Mr. Mentz), but principles are involved in the matter and I should like for a moment to concentrate on that aspect of the matter. The first point I wish to touch upon is that also mentioned by the hon. member for Jeppes (Mrs. Bertha Solomon); it is that old thorn in the flesh, namely soldiers who die or are killed while they are on service within the boundaries of the Union. They signed the declaration to join the army and are soldiers in the true sense of the word, whether they serve within or without the boundaries. They perform services. There are two aspects which should be taken into consideration. The first is that the man is not the master of his own life, and the second is that he has no power to say where he wants to serve. Another point in this connection is the medical condition of the man. We had cases of men accepted for military service, probably in medical category A. or B., but the man contracts a disease and dies, and it is then said that his death is not in direct connection with his military service. We know how difficult it is for any medical man for example in the early stages of development to diagnose cancer of the stomach or of the liver. It is surprisingly difficult to ascertain, and even in the development process it is difficult to diagnose. I think the medical world will confirm that the condition of people who suffer from cancer of the stomach definitely deteriorates when they are on active service, and eat food which does not agree with them. We know that when a man is at home he can choose the food he wishes to eat, and can leave food which does not agree with him, but if he is on active service he has no choice and must eat what is put before him. This afternoon I want to praise the work done by the Appeal Board. It does wonderful work for the soldiers, but I think we all know how difficult it is for professional people to argue with each other, especially in the medical world. I really want to express the hope that that point should be rectified. I am astonished that it has not been settled yet. We all were under the impression last year, as the hon. member for Jeppes stated, that the problem would be solved. After that the Minister appointed a Commission of Enquiry to investigate the administration of the Pension Acts. I hope that we will hear this afternoon when the report will be available, if it has not yet been handed in. I may in passing say that that is a conspicuous example of a case where the good intentions of this House are perhaps shipwrecked when it comes to a question of administration. We pass an Act, and it is practically just a skeleton of which the flesh must be added by the Administration, and if the Administration is not sympathetic, all our plans are wrecked. We hope that the hon. the Minister will give us information. I should like to refer to the second point, in connection with pensions for “Oudstryders” and old-age pensions, namely the means test. As long as we have a means test, it will cause a tremendous amount of difficulty in cases such as referred to by the hon. member for Westdene (Mr. Mentz). We all come across many cases where people have a property from which they derive practically not benefit. In many cases they derive no use or benefit from it, or the bond is so high that they can get no benefit from it. In such a case it cannot be regarded as a consideration in the test. The sooner the country evolves a general pension scheme for everybody, to which everyone contributes pro rata and receives a pro rata benefit, the better it will be for the country. The position of pensions today is unsatisfactory. I think the hon. Minister feels that public opinion is fairly unanimous that these inconsistencies should be deleted. Take two persons, A. and B. A. probably had remunerative employment in life but he was a waster. He spent his time on the racecourses or in the bars, and when he reaches the age limit he has no means of existence and the State must look after him. B. saved and even contributed to A.’s pension. When the time arrives when he reaches the age limit, he can receive nothing. From a social point of view I think we all feel the injustice thereof and the defects in our social organisation which must be eliminated. I do not want to anticipate legislation, but we know that mention has been made of social security measures which will be initiated during this Session, and from the preliminary reports it seems that the position of unequal treatment as regards citizens and citizenesses will again arise. It seems to me that in this country there are two categories under which one must fall to be able to live well, namely one must be very rich—then one can look after oneself—or one must be very poor, in which case the State looks after one. I think we must evolve a method by means of which there can be a better organisation so that all strata of society are protected. The hon. member for Frankfort (Col. Döhne) raised the point of performing light work. That is also a tender point, and I do not think that the department should be too strict on that point. There are many people who are independent by nature. They do not want to live with their children but want to try to provide for themselves, and many of the old people still feel strong enough to do little jobs of work. I want to mention one example. On the Johannesburg market, which is under Government supervision, we have a service where a number of people of over 60 sort potatoes. It is a light work. I think they receive 6s. per day which has now been increased a little. It is work of a light nature and it is a pleasure for those men to perform that work. It occupies their time. But nevertheless they lose their pension if they do that work. [Time limit.]

I should just like to bring to the Minister’s notice the manner in which pensions are paid out to pensioners. In almost all cases the pensionaries are people who have no means of conveyance and who must be assisted by other people every month to fetch the payment. A certain day of the month is fixed for the payment, generally approximately the 26th. There are various places where dozens of people who are to be mid cannot find decent seating accommodation in the Post Office, and they must stand and wait for their pension. Is it not possible to send these people a cheque or a money order? Then they can go to the town at any time to draw their pension. The day of payment may be a cold day, with rain and there is no proper place where they can wait and get shelter. It may mean a little extra work, but on the other hand it will spread the work of the Post Office, which now has to perform on one day, over the month. Pensionaries can then come to town when they have, an opportunity and draw the pension. There are many cases where these people cannot appoint anyone in the town to draw their pension for them, and they are practically forced to hire an old car or something to, take them to town to receive the pension. They are old people, poor people, and I hope that the Minister will consider making things easier for them.

I want to congratulate the Minister for increasing the vote under Item B, Assistance to Needy Civil Pensioners, from £15,000 to £35,000, but I want to ask the Minister whether it is not possible to assist those pensioners who are in receipt of a pension of less than £300 per annum. I understand that a cost of living allowance is granted to civil pensioners up to, but not exceeding £200. I have heard so many appeals made in this House on behalf of needy farmers, to wipe out their debts, and on behalf of other sections of the community, but I do feel that when one bears in mind that the pensioners, due to previous governments not paying their servants decent salaries, are in receipt of a mere pittance today, it is up to this Government to try to meet the position by righting the wrongs committed by previous governments. The Government at present allows a cost of living allowance to pensioners who are in receipt of a pension of not more than £200 p.a. but I would ask the Minister to seriously consider extending this allowance by including pensioners in receipt of a pension up to but not exceeding £300 per annum. I know of many very deserving cases where the pensioners have got married late in life and still have minor children to look after, and when one takes into account the high cost of living, of rents, food and clothing, I do feel that the Minister would be doing a very gracious thing if he could see his way clear to include pensioners in receipt of not more than £300 per annum.

I should like first to tell the Minister of Finance this, that the majority of letters received by members of Parliament about pension matters amounts to this, that the people do not know why they receive £3, £2 10s. or £2 13s. 4d. If one goes to the magistrate he shrugs his shoulders; and if one writes to the Commissioner of Pensions, one receives no reply unless one is a member of Parliament. If one does receive a reply, it is to the effect that that pension has been awarded as the pension to which the person is entitled after thorough and proper consideration. That tells these people nothing. They would like to know why their neighbour receives £3 and they perhaps only £2 10s. The old people say to us: If we are entitled to 10s. more, why do we not receive it; why do we not receive as much as our neighbour? If that matter can be rectified, the life of a member of Parliament will be prolonged in his constituency. I think I must have written dozens of letters about this matter, to which I received the reply I indicated above. Then I should like to know from the Minister what he proposes doing in connection with increasing the “Oudstryders” pensions. He told us last year that he would meet the Executive of the “Oudstryders” Association. He can now tell us whether that happened and whether anything eventuated. In all our meetings we told people that they could expect something more in the way of “Oudstryders” pensions, because that is the promise made by the Minister. I should like to associate myself with what the hon. member for Graaff-Reinet (Mr. G. P. Steyn) said here about the payment of pensions, especially “Oudstryders” pensions. Many of these people have been wounded and crippled, and it is painful to see them standing there for hours. We have referred to this matter so often that we are becoming tired of it, and we would like to ask the Minister again in any case to meet these people. For the rest I should like to ascertain from the Minister what he can tell us in connection with the increase of the old age pensions. In this White Paper about social security something is said about the matter, and I should like to know whether it will come later and whether we can now learn what it will be.

I want to make an appeal to the Minister to keep the “Oudstryders” rather more in mind. Last year I spoke on this, and I thought that it would be no more than right if all the “Oudstryders” got pensions. I want now to exclude the class of man in which I myself fall. I want to ask the Minister to pay pensions to all “Oudstyders” who do not pay income tax. Some of the “Oudstryders” are disappointed. The Minister knows that I have sent letters to him from “Oudstryders” who are receiving only 3s. more than they used to receive. That is very meagre.

The hon. member cannot now advocate an increase, because that would require legislation.

I ask that the “Oudstryders” should receive more pensions and better pensions. That class of man is finding things very difficult. I ask the Minister to see to this, that the “Oudstryders” receive better pensions than they are getting now.

I should like to bring a general matter in connection with pensions to the Minister’s notice, and not to mention specific cases. I should like to ask the Minister whether he instructed the Commissioner of Pensions to decrease the pensions. Just recently there has undoubtedly been a larger number of letters written to members of Parliament to the effect that, pensions have suddenly been decreased. People who received £3 are now receiving perhaps £2 10s. or £2. If the Minister gave no instructions that this should happen, I should like to ask him to devote his attention to this sudden decrease. The money paid to these people is being pinched off, although some of them are entitrely dependent on those pensions. Then I should like to raise another matter, and I hope that it will not be regarded from a political aspect. Generally, when we raise something which in the past was used in politics, we are at once accused that we do so for the sake of political propaganda. If one goes to the Post Offices in country towns on certain days when pensions are paid out—I do not wish to speak here about the Post Offices, but only about the Post Offices so far as they are the agents of the Minister to pay out pensions—one finds large numbers of coloureds in those Post Offices receiving their pensions. I have already spoken to the personnel in certain of these Post Offices, and they have a terribly difficult time. The public finds it impossible to remain in such a Post Office on warm days for longer than a few minutes. But these poor clerks must stand there for hours paying out the pensions. The war has taught us many things. We know that separate rooms have been arranged in connection with the issue of petrol coupons or for the provision of the necessary information in connection therewith. We should like to know from the Minister whether he, in view of the warm climate we have in South Africa, and in view of the unpleasantness caused to Europeans in the Post Office, will not provide a separate room where the pensions of coloured can be paid out. I do not wish to touch here on the whole question of the colour problem. I base my plea on this occasion on the question of convenience, and I wish to ask the Minister whether he will not make other provision for the payment of pensions to coloureds for the sake of the public and of the personnel in the Post Offices. The hon. member for Wolmaransstad (Gen. Kemp) raised a matter here which sounded very strange to our Afrikaans-speaking poulation, strange that the Minister should do something like that. We feel very deeply on that point. When I still had a practice I also sent accounts to coloureds whom I had attended, but I did not put Mr. or Mrs. on the envelopes, and there was never any complaint about it. The coloured people never complained about it. I regret that the Minister, without there having beep any agitation, went so far as to give instructions to his officials that when they direct letters to coloureds and Asiatics they should use the appellation Mr. and Mrs. There were people in the Department who felt that they could not agree with that, and we know that the Minister went so far as to force those people to resign from the service because they would not do so. I think that the Minister should consider the desirability of taking those people back into the service. When the Minister was a little boy he did not call the coloured girl who looked after him “Miss”. I do not want to enter into what happened in his later life to change him. We on this side still have the feeling we had in our infancy, and where those people in the cvil service felt that they could not agree with the Minister’s instruction, I think that the Minister should reinstate them in the service. We feel that the coloured man is a coloured man and the European is a European. They do not stand on the same footing and the Minister must take that into consideration here in South Africa.

There is one item in this vote to which I want to draw the Minister’s attention, and that is the vote for the artificial limb factory in Johannesburg. The vote, in the aggregate, I see, is increased by something in the vicinity of £2,000, but one important item in this vote is the amount which is paid to the artificial limb makers themselves. Last year there was a much larger vote for that than is provided for this year, and the point I wish to make with the hon. the Minister is this: Just at this time there is a far larger demand for artificial limbs than ever before in the history of this country. I take an interest in that factory and when I see the large number of artificial limbs provided, I am surprised to see that the amount paid to the workers themselves is decreased. Why that is so I do not know, because there are more artificial limb makers now than ever before, and I am sorry to see that the vote for that particular section of the factory is reduced instead of increased. I do not know whether there is any possibility of remedying that now, but if one sees the excellent work done and the large amount of work done in that factory, it is very pleasing for everyone to see what is being done. The factory itself deserves great credit and praise for the very efficient and necessary work they are doing, and I want to say this, that I am pleased to put up the case, as far as possible, for an increased vote, and if it is not possible to remedy the matter on this occasion, I hope that the Minister will give it serious attention when the next estimates are framed, because many people come back from the war who will need artificial limbs and the demand will be greater than ever before.

I should like to associate myself with what the hon. member for Mossel Bay (Dr. van Nierop) said here about the circular issued by the Minister of Finance, to the effect that coloureds and Asiatics should be addressed as Mr. and Mrs. It had as result that Afrikaner boys and girls refused to address coloureds and Asiatics as Mr. and Mrs. As a result of that they were dismissed from the service. I should now like to know from the Minister whether he thinks that if coloureds and Asiatics are addressed as Mr. and Mrs. it will raise their status, and whether he goes out from the standpoint that raising their status means, on the other hand, that the status of Europeans is lowered in this case. We in the Transvaal have learnt since childhood that a coloured is a coloured and an Asiatic is a coolie, and we refuse to address those people as Mr. and Mrs. The Minister is busy putting them on an equal footing with Europeans in doing that. I want to assure the Minister that when that incident took place in Pretoria, it caused a lot of discussion all over the country, not only amongst coloureds and Asiatics but even amongst the natives. They got the idea that if coloureds and Asiatics are addressed like that, they stand on an equal footing and expect that they also should be addressed as Mr. and Mrs. by Europeans. I want to urge the Minister to withdraw that circular and that the people who were dismissed should be reinstated in the service. If the Minister does that he will be doing a great service to those people, just as he did the country a dis-service when he issued the circular. I now want to come back to the pensions. People do not know where they are in connection with pensions and we, as members of Parliament, also do not know where we are. People come to us to explain their position. It is clear that they have no means of existence and, no income, and then they tell us that they applied but can receive no pension. We go to the magistrate to make enquiries, and he tells us that the reply was that no pensions can be awarded to them. There is a certain Boer War veteran, Mr. Botha, in my constituency. He has two erven in the town but no further source of income and no pension is paid to him. A little more than three months ago he lost his leg. He has no income at all but because he has those two erven he cannot receive a pension. We should like to know from the Minister whether we must take it that the idea is that these people must sell their small properties, and on whom should they then be dependent? On the one erf the man has his house and on the other erf he cultivated a small garden. In the condition in which he is now he cannot cultivate the garden. He has no source of income, and if such people do not receive support from the State, they must gradually go under. The children of this person are married and have gone away. They cannot look after him. It is the duty of the State to look after those people, so that they do not die of hunger. Then we have the case of widows. She probably has an erf and a house but no source of income, and a pension is refused to her. When I visited one of them she asked me whether she should sell the house, or what she should do. She pointed out that she has nowhere to go if she sells the house and she cannot sit in the street under the bare sky. There should be an amendment so that in such cases—I do not talk about cases where people have a source of income—but in cases such as I have mentioned, where the people probably have only a house and no other source of income, the Minister can help them and award them a pension. If that is not done, those people will go down; they then have to mortgage the building and later on they are perhaps unable to pay the interest and they lose everything. What will happen to those people? One finds widows and widowers who have no income but only have a house to live in. It is the duty of the State to look after them and to see that those people receive a pension so that they can at least live. Then there is another case of an “Oudstryder” who had a small income because he went round doing small jobs for the public. He applied for an “Oudstryders” pension, but because he had an income of £35 a year it was refused to him. That is one of the greatest scandals. This man had too much self-respect and was too proud to apply for a pension during all the years when he could earn something. Now that he feels he cannot work any more and applies for a pension, it is refused to him because he has an income of £35. I want to urge upon the Minister that where an “Oudstryder” can do something to contribute towards his maintenance, where by doing little jobs he can have a small additional income, his pension should not be reduced as a result. At the moment we find that as soon as it is discovered that the veteran has a small income, his pension is taken from him. Why must we make parasites of these people, so that they are entirely dependent on the State? We should appreciate it that they do something of their own accord. The cost of living has today risen to high heaven, and these people cannot keep body and soul together if they do not try to earn something additional. They are obliged to perform small jobs, and I say that the State ought to encourage them to earn something in addition to their pensions, so that they can live a better life. We must encourage them in this manner better to be able to provide for themselves and for their families.

Perhaps it is just as well that I should now reply to the points raised up to here. In the first place the hon. member for Wolmaransstad (Gen. Kemp) raised the question, and other hon. members followed him in connection with it, of the officials of the Pensions Department who were dismissed from the service as a result of the instructions given with regard to the sending of letters to coloureds and Asiatics. I state very clearly that it was coloureds, because it has often been represented outside that it applied to natives. Even yesterday the hon. member for Lichtenburg (Mr. Ludick) referred in this connection to natives. I say quite clearly that it had nothing to do with natives. They do not enter into the activities of this department. Old age pensions to natives are not paid by this department.

But how are letters addressed to them?

This department has no correspondence with natives. If it does happen, the same will be done as is done by the Department of Native Affairs. That department does not address them as Mr. or Mrs. But that does not apply in the case of this department. Here we are dealing with coloureds and Asiatics. What those people objected to was the instruction to them that they should use the appellation Mr. and Mrs. when addressing envelopes to coloureds and Asiatics. There was no question about it that these people should be mentioned by name in personal conversations. That does not arise.

Were they not obliged to address coloureds and Asiatics as Mr. or Mrs. in conservations?

No, it only had reference with the addresses on envelopes of correspondence sent to coloureds and Asiatics. They refused to describe those people as Mr. and Mrs. on the envelopes. It is a practice which has been followed for years in other departments, for example, the Department of the Interior. When I was the Minister of the Interior, when I took over that department, it was the practice to address coloureds and Asiatics in that manner on envelopes addressed to them. That was also the practice before my time. When the matter was raised in connection with the Pensions Department, I could not see why we could refuse also to do it in the Pensions Department, seeing that it had already been the practice for so many years in the Department of the Interior. For that reason I felt that I could not do otherwise than to enforce the instruction.

†Now, the hon. member for Jeppes (Mrs. Bertha Solomon) asked some questions in regard to war pensions. As hon. members are aware, we last year appointed a Departmental Comimttee to investigate the administration of the War Pensions Acts, and the terms of reference were so framed that they are, of course, quite free to recommend changes in the Acts also. I had hoped that the report of the Committee would be available already, but I am told that the Committee will still be busy with it for a few months. I do not think that the delay is due to any lack of energy on the part of the Committee. I was in touch with the chairman of the Committee earlier on in the year, and he then still hoped that by making a great effort he would be able to let me have the report early in April, but apparently that has not been possible. The hon. member also referred to the question of speeding up pension payments in the case of men discharged from the army. As I understand the policy of the Defence Department, which is really the department concerned, it is this, that no-one is discharged from the army without a pension if he is qualified therefor unless he has employment to go to. I believe that is the general policy. There may have been exceptions to that, but that will be a matter rather for Defence than for my department. If there are such exceptions I shall be glad to bring them to the notice of the department concerned.

†*The hon. member for Johannesburg (West) (Mr. Tighy) raised various questions in connection with the Military Pensions Act. This is a matter, however, which we shall have to consider when the report of the committee is in our hands. The committee went in those questions, and I first want to see what the committee recommends in that connection. The other aspect of the matter is, of course, in connection with old age and “Oudstryders’ ” pensions to which various hon. members, including the hon. member for Johannesburg (West) referred. It will certainly not be expected of me to go into individual cases. Indeed, it is quite impossible to go into individual cases on the floor of the House. In some cases I know nothing about the matter, and in other cases the names were not even mentioned here. I am prepared to go into individual cases if hon. members will approach me in writing, and if they are not satisfied with my written reply, I am prepared to discuss such cases with them personally.

And, moreover, you cannot go beyond the Act.

No, I am coming to that.

But you can improve the Act.

In that connection the hon. member for Mossel Bay (Dr. Van Nierop) and other hon. members referred to the impression which apparently got abroad that more stringent control is being exercised in connection with the award of pensions I know nothing about. No instructions to that effect were issued. The hon. member for Westdene (Mr. Mentz) was apparently misled by the figures appearing on the vote as a whole. He says there is a reduction of £175,000 in the case of old age pensions. But apart from natives, there is an increase of approximately £300,000.

I brought to your notice cases of reduction in connection with which I communicated with you.

Those are individual cases. But it cannot be said that it is the policy to be more strict than in the past. The hon. member for Christiana (Mr. Brink) complained about the fact that the same amount was not being paid to everyone and that that led to dissatisfaction. That I can well understand, but that is the result of the provisions of the Act. The Act lays down a means test.

Amend the Act.

I am coming to that. The Commissioner has to take the circumstances into account.

But the circumstances are not mentioned, and the people do not know what they are.

It is difficult to give the pensioner a copy m every case showing how the pension was calculated.

But surely there are general rules which apply?

Yes, and which lay down the procedure to be adopted by the Commissioner, but the real difficulty is the means test. Last year we gave some relief in connection with the means test, namely the relief in connection with children as well as a certain amount of relief in connection with fixed property. In the Government’s memorandum concerning social security we went into the whole matter more fully and considered the possibility of altogether abolishing the means test. The original Social Security Committee as well as the Planning Council could not recommend the total abolition of the means test, but the Select Committee which sat last year made a recommendation in that direction. When we went into the recommendation, however, it appeared that the cost resulting from the abolition of the means test as a whole would be very much greater than the Select Committee visualised, and the Government was forced to the conclusion that the Planning Council and the original Social Security Committee were right in expressing the view that we ought to retain the means test. If it is abolished, it will considerably hamper any further steps we may take in connection with social security. In the same memorandum, however the Government indicates that it proposes to bring about an improvement with regard to the means test, and I now come to the question which was put by the hon. member for Frankfort (Col. Döhne). This applies to both “Oudstryders” and old age pensioners. The Government explained that various social security measures could not be made applicable until such time as we had made further progress in connection with our first task, namely the termination of the war, as well as the introduction of our demobilisation plans. But we said that as far as the future was concerned, we would bring about this change and improvement.

After the war?

Yes, not this year. Perhaps legislation will still be introduced this year, but it will not come into operation immediately. What we are changing is that the amount of income which is allowed, including the pension, is being increased from £72 to £90, an increase of £18. We undertook to do that.

That does not help us much.

That is as far as we can go, and that is what we laid down. The hon. member for Westdene (Mr. Mentz) advocates that an “Oudstryder” should be able to draw not only the “Oudstryder” pension but also the old age pension. That is something which the Act does not allow. The Act regards the “Oudstryders” pension as an ante-dated old age pension, and in view of that it is not possible. One and the same person cannot receive both. Now I come to the method of payment. The hon. member for Graaff-Reinet (Mr. G. P. Steyn), supported by the hon. member for Mossel Bay (Dr. van Nierop), raised this matter. It was also raised here last year and I devoted a good deal of attention to this matter and went into it carefully with the Commissioner of Pensions. It appeared, however, that in the present circumstances, in view of administrative difficulties, it would not be possible to introduce such a change.

Could it not be facilitated by allowing someone else on the platteland to fetch the pension?

I am prepared to go further into the question of payment by means of cheques as soon as circumstances become a little more favourable as far as the administration of the department is concerned. I realise that a good deal can be said in favour of it, but under the existing circumstances it is not possible to give effect to that suggestion. The hon. member for Mossel Bay raised another point, but it really falls under the Minister of Posts, to whose notice I shall bring it.

†The hon. member for Pretoria West (Mr. Hopf) has asked a question in regard to the allowance provided for in this vote for civil pensioners. He enquired whether it would be possible to raise the present limit above £200. I think I ought to point out here that while all representations in regard to this particular matter are constantly made to me the person mainly concerned is not the Minister of Finance but the Minister of Transport. The policy we have followed has been a joint policy for Treasury and Railways, and the number of people concerned and the amount of money involved are far greater as the Railway Administration is affected than as far as we are affected. So it would be quite wrong for me to give any assurance on a matter like this without prior discussion with the Minister of Transport.

Are you in sympathy?

I am prepared to discuss the point with my colleague. Then the hon. member for Lang-laagte (Mr. Bawden) is disturbed at the reduction in the amount for artificial limbmakers. There is no reduction. The hon. member has not taken account of the provision that is made lower down for an additional post. As far as the previous posts are concerned, when a person filling one goes off he may be replaced by something at the bottom of the scale which means a small reduction, but that has been much more than covered by the increased expenditure in connection with the new post.

I should like to know from the Minister what procedure is to be followed where a person applies for an “Oudstryders” pension or an old age pension, when a certain amount is granted to him and he feels that his pension ought to be bigger?

He can appeal to the Minister. He can ask that his case be submitted to the Minister.

Then I want to make an appeal to the hon. Minister to make the means test more elastic. The Minister said a moment ago that the limit of the means test will now be increased to £90. One may have a case such as the case mentioned by the hon. member for Wakkerstroom (Mr. J. G. W. van Niekerk) where an old widow owns a house valued at a certain amount; she has no children with whom she can live, with the result that she has to live in her own house. But she has no income and as a result of the application of the means test, she cannot get a pension. There is a case in my constituency of an old man who is anxious to get an old age pension. He has a piece of land, but it is comparatively small Two of his sons, who also have children, live on the same farm. They are poor. They manage to eke out a meagre living on the small farm, not even sufficient to enable them to support themselves and their families. The old father and mother are still alive, and they have practically no income, but because they own this piece of land they are not eligible for the old age pension. It is easy to say that the father should drive his two sons off the farm to seek employment elsewhere, but his attitude is that even if he has to starve, he cannot find it in his heart to put his two children off the farm, and that he would prefer to go hungry. If the sons are driven away, the State will be saddled with these two families. For that reason I plead that the means test be made more elastic. Where an old couple own a house and their children live with them, but they derive some income from the house and the farm, the authorities are justified under the Act in withholding the pension from them, but if they have no other place to live and they have no income, I think they are unfairly treated, in comparison with other people who do get pensions. The only alternative would appear to be for this man to sell out completely and to distribute the money, so that he can get a pension in that way.

Once again I want to avail myself of the opportunity to congratulate the Minister on the manner in which he gives his attention to cases which are brought to his notice in his office. I find that the Minister is one of the outstanding Ministers when it comes to giving his attention to every case which is brought to his notice. But I want to come back again to the point which I made in previous years. I suppose the Minister knows what I am going to ask. If the Minister will promise to reply to it, I need to even put the question.

I think I already know what the point is, but unless you state it; tit will not appear in Hansard.

It is the same point that I brought to his notice last year and during the past few years, namely the difference in the amount which is paid to in the form of old age pensions in the big areas and in the small towns and on the platteland. One of the greatest problems with which we have to contend in this country today, is the shortage of housing. We know that the effect of the present old age pension scales is to drive the old people to the big cities because they get a higher allowance in the cities. The result is that they flock to the cities. We have the Old Age Pension Act which lays down a certain scale, but we went further and laid down three different bases, namely for the big cities, for the towns and for the platteland, and I again want to draw the attention of the Minister to the fact that these differential scales have an undesirable effect. We are driving the old people to the big cities where rentals are very high, much higher than in the small towns and on the platteland. Why do we not rather attract the old people away from the big cities to the smaller places where they have an opportunity of living quietly on the same old age allowance which they would have got in the cities? I particularly emphasise that because the “Oudstryders” emphasise that there should be no difference in the pension whether they live in smaller places or on farms. They ought to get the same pension there as they would have got if they had lived in Pretoria or Johannesburg. I know that not all hon. members have agreed on this point, but I make the point because I strongly feel that it is unfair to grant a higher pension in the cities. It is not in the interest of the country. Take military pensions, for example. There we do not get a differential scale for the town and the platteland. Why should that be the case in connection with old age pensions? When a person gets a military pension, he gets the same amount whether he lives in Pretoria or in Bultfontein. I simply cannot understand why there should be differentiation in the case of these old people. It does not apply to my pension; it does not apply to miliitary pensions; nor does it apply to the pensions drawn by civil servants. Why are these people singled out for this differential treatment? It does not apply to Hansie van Rensburg. He can live in a de luxe flat in the city; he gets the same pension, in the same way as all other pensioners, except the old people. Surely this pension is small enough; why cannot these people have the free choice to live where they want to live? I am not blaming the Minister, because he is only building on the foundation which was laid by previous legislators, but I wish I could forcibly vent my feelings against the Parliament which was responsible for this injustice. We must practise, right and justice, and if we practise this differentiation we do not deserve to be in this House for a single day. What I said a moment ago also applies to “Oudstryders”. When the Minister deals with this point this year, I should like to compare these two things. The “Oudstryders” and the old people are specially singled out and in their case a different scale operates when they live on the platteland. I think that is an injustice which should be eliminated. Then there is another point in connection with which I want to ask the Minister’s attention, and that is the question of special grants in connection with miliitary pensions. The Minister, I think, promised last year as well as during previous years that he would see whether it was not possible to bring about some change and to introduce something of a permanent nature, just as in the case of pensions. The matter of special grants is something which was called into being for persons who are not old enough to receive old age pensions. They will make every effort to earn something extra, but as soon as they do and they get some sort of income, the special grant is altogether taken away or reduced. I do not want to suggest that the special grants were introduced in the first instance on an unfair basis, I know of many cases where I think it was reasonable, but the Minister has promised on previous occasions to see whether he could not convert the special grants into permanent awards? If the person is fortunate enough to earn something for perhaps a month, the special allowance is immediately affected. I should like the Minister to explain this year what progress he has made in this connection. I ask this because we continually get letters from people who have been receiving special grants which have now been taken away all of a sudden. We are still at war, and even today we find that the special grant which was paid to certain people is now beilng taken away. We can picture what will happen two or three years after the conclusion of the war. There will then be even fewer cases of special grants. I want to ask the Minister seriously to consider whether he cannot convert it into something of a permanent nature. Once again I would urge the Minister to amend the Pension Act.

The hon. member may not advocate an amendment of the legislation.

Then I want to ask the Minister to do it next year.

I approach this matter from a different angle to my hon. friend the member for Krugersdorp (Mr. van den Berg). What I am going to say I placed before the Minister last year. He said he would look into it; of course he is very busy. I think that the time has arrived when we have to pay old age pensioners on the platte-land at a higher rate than the pensioners in the towns. My reason is this. Under the manner in which we are now paying old age pensions we are attracting these people to the cities and the towns, where they cannot make a living. If you look round in the big cities, in the poorer quarters where the lower income people are living, you will find these pensioners are living in a good deal of distress. They are mostly Afrikaansspeaking people who should not have been brought into the towns. If the position were reversed you would find that these people would leave places like Johannesburg, Cape Town and Durban and live in the countryside, and it is a commonplace that it is much cheaper to live in the countryside than in the cities. They should be living in places like Parys, Ladybrand, Swellendam, or any of these nice little places.

Or in Johannesburg.

No, not Johannesburg. My hon. friend has a bone-head. The pensioners must not live in Johannesburg. I have tried to get it into his head that a man cannot live there, but with his pension he can live in a small town, and live well; and if we can get him to live on a farm it would be better still. An old age pensioner drawing £5 a month can come out on that if he lives on a farm; with a few fowls and a cow he can come out. But if he lives in a big place like Johannesburg he simply starves.

Are they likely to welcome him?

I think so; it has happened in other countries. Would not you, if you were an old age pensioner, rather than walk up and down the terrible concrete pavements of Johannesburg, live in a pretty town like Paarl, where you can live cheaper? That will be better for the whole country. These old people should be spending their declining years in peaceful surroundings rather than in places like Johannesburg. In Scotland they sent people out amongst the old age pensioners who said to them: Let us shepherd you into the countryside where it is easier for you to live, and you will have a better life. When you get to a certain age it is better to live in peace and quietness than in a city. It is a very big question, but the Minister will be surprised what good he will do to our people if he carries out this idea. Most of these people who are affected have been brought up in these small villages. Economic pressure has sent them to the big cities, and there they remain, and because they are in the bigger centres and getting a certain amount of money they are afraid of losing the extra money. But let them go back to where they were born. Even my hon. friend here who cannot quite see the point yet, if he thinks it out for two or three months will realise that it is better for a man to live in the countryside at £5 a month than to live in a town at £5 a month.

What happens to a man who augments his pension?

He loses it.

Do you know that?

He does not lose it.

Of course he loses it. But do you mean to say a person cannot augment his pension in a little town? How do you think he will augment it in Johannesburg, in a hard, cold, cynical city like Johannesburg? He has not got a hope. In Johannesburg he never has a hope. The first thing they ask him is “What is your age?” Then “Have you been in gaol?” No, his place is in the country amongst the people of the platteland, where they are used to helping each other and where they will help old people. The Afrikaans-speaking people are good to their folk. Take them away from the concrete of the cities, from the great machine that is Johannesburg. The Minister, I know, wants to help the old people and he will find this is one of the best policies that has been adumbrated to this House.

There are just a few matters which I want to bring to the notice of the Minister, and the first is a very serious matter, namely the tremendous scope which the recoveries of pension awards have assumed. One really cannot help getting the impression that there is a campaign on the part of the department to recover pensions which have been paid. I asked what amount had to be refunded, but unfortunately it was not possible to give that amount. The fact is, however, that we would be astounded at the enormous amount which is recovered from the old people in this way. Take the case of one home. An old man has received a pension of £3 during the past few years. He now receives a letter informing him that he has to repay £180 in respect of overpayments on his pension. His wife got £2 10s. and she was notified that she had to repay £74. Her pension was reduced to 10s. per month. The pension of her husband was also reduced, and today they have to live on £1 per month. This is not an exceptional case; there are numerous cases of this nature. Take the case of an old woman in the eighties. She is notified that she was. Overpaid and that she has to repay £48. She got a pension of only 10s. per month, and this 10s. was also taken away; in other words, for all the department cares she can succumb to hunger. Fortunately in her case the official was good enough to grant her a cost of living allowance, but this question has assumed tremendous proportions. In one block of houses in my constituency six pensioners out of eight were notified that they had to repay a certain amount which had been overpaid to them, and they are practically starving. There is the case of the Department of Defence where overpayments were also made, but those were written off. The over-payments in the case of those old people are not written off, however. Many of these old people are now firmly convinced that these moneys are being recovered from them in order to pay pensions to the natives. That feeling is growing. I should like the Minister to give his serious attention to this matter. It makes things absolutely impossible for us. Then I just want to say a few words in connection with the means test. We have often raised it in this House, but this matter lends itself to the lowering of the morals of those people. It promotes dishonesty; it promotes indolence. Take one case in my constituency. An old man gets a pension of £1 5s. per month. He resoles shoes and in that way he earns 17s. 6d. to £1 5s. per month, but he dare not do so, because if he earns £1 5s. his old age pension is taken from him. How is this man expected to live? Then there is the question of the cost of living allowances to civil servants who are now in receipt of pensions, cost of living allowances to retired civil servants who draw pensions. They are not paid a cost of living allowance. Those people rendered good services to the State in trying times. Today they are drawing a pension. The value of the money has declined; the cost of living has gone up tremendously: all the other people are being paid a cost of living allowance, but those retired officials do not get it, with the result that they cannot make ends meet. I should like to ask the Minister whether it is not possible to grant a cost of living allowance to these retired officials as well and, if it is at all possible, to introduce it with retrospective effect, so as to cover the period of the war. This is a great injustice which is being done to those people who rendered good services to the State in difficult times, and who were drawing small salaries at that time. This is a very important matter, and I shall be very glad if the Minister will give his attention to it.

Some hon. members of the Opposition have tried to score a political point this afternoon at the expense of the hon. Minister of Finance on this popular “your obedient servant” matter. We all recollect the fuss and the public demonstration that they made in Pretoria at the time. The Minister has replied from the Department’s point of view, but I think it is a matter which should not be allowed to pass unchallenged. I think the Opposition will have to be very careful of the exploitation of the coloured question, because their association in the past in connection with the coloured question has been very bad. They lost the Election in 1938. I want to ask them whether they still recollect the picture showing a black man with a white woman and a coloured child in the same room, a picture which they sent throughout the country? No, Sir, we on this side of the House will not allow them to get away with these political scores. I have just been reading some letters, which I find very interesting. Here I have a letter dated the 19 th September, 1934. It is addressed to Mr. T. Assham, 76, Van der Leur Street, Cape Town. This letter, reads as follows—

Mrs. Steenkamp is not one of my constituents, and is seeking cheap publicity which she evidently needs badly. I don’t think her challenge merits any reply. My constituency is more solidly anti-Fusion than ever, and will not be stampeded by irresponsible and hysterical outbursts.

Yours sincerely, D. F. Malan.

And he does not even blush.

What cheap pamphlet are you reading from?

A paper that you would like very much to own. When I hear the Opposition members speaking I cannot imagine them becoming obedient servants to coloured people. May I read the following letter—

My sincere thanks in anticipation for this assurance.

That, I believe, is the hon. member for Frankfort (Col. Döhne). I ask you, Sir, in view of all these facts, in view of this placard that I have in my possession, are hon. members of the Opposition genuine; can the country believe them; can the girls in Pretoria who resigned at the time take any notice of them? If they did take notice of them, I think they were foolish.

I want to give the hon. Minister the assurance that I am not speaking in reference to what has just been said by the previous speaker. I want to ask the Minister for his sympathetic consideration of the case of the number of girls who were dismissed in Pretoria as a result of the measure adopted there. I have amongst my papers a letter in which I am informed that a black list containing the names of the girls concerned, as drawn up—sixteen or more—and that they cannot be engaged again in any department of the civil service.

The Minister of the Interior denied it the other day. He gave that assurance.

I do not want to cast any doubt on the Minister’s word. I was in Pretoria for two weeks and I personally spoke to the person who wrote this letter to me. He is one of the leading citizens of Pretoria and he would not treat this matter lightly, and although I do not doubt the word of the Minister, I shall be glad if the Minister will give his attention to this matter. The Minister and I had the advantage of being educated according to English stadards. I have every respect for the customs which the British people have accepted as a standard for themselves. The British people have this great advantage, which is our handicap, that they are a homogeneous nation. As a result of their constitution there was never any doubt in regard to what they regarded as correct, and not only correct, but as friendly and even polite. South Africa has its own problems. Our problems have been such that those customs which are considered proper amongst the British people, have not become popular with us. The Minister will be able to testify from his experience that the relationship between European and nonEuropean in the past was not based on the form of address, and nevertheless that relationship was very sound. The relationship between European and non-European has only been clouded in the immediate past, but in the distant past the relationship between European and non-European in this country was praiseworthy. The relationship between farmers’ families and non-Europeans on the farm was extremely sound, and it was not dependent on the mode of address. Since we are faced with the problem of the maintenance of our civilisation, the main tenance of separateness, the Minister must realise that a large section of the Afrikaans public does not view the position in the same light as he does, and perhaps some of us on this side as well, and since the Minister’s action has led to counter-action, he as someone who would like to see mutual peace amongst the races in South Africa, will understand that this action on his part has had an unfortunate aftermath. I do not want to dictate to the Minister what he ought to do. But in view of the very strong feeling which has been aroused and the antipathy which has come into existence against him personally as a result of this step, I think it is right that he should verify not only that there is no such thing as a black list, but he should ensure that provision is made to re-employ these people at some suitable time in the future. I do not know what their economic position is, but I take it that if they took up temporary employment, economic conditions forced them to do so, and if they resigned from the service as a result of what they regarded as right in the circumstances, then I regard the punishment which they are now undergoing as out of all proportion to the punishment which the offence would have merited. I should like the Minister to see whether in practice, effect is not being given to this black list in some other way.

I just wanted to reply to what has just been said by the hon. member for Johannesburg (West) (Mr. Tighy) who has run away now. And I expected him to run away. There are just two points that I want to put to him, not to his face because he has run away, but immediately behind his back. He exhibited a placard in which it is indicated that Europeans and non-Europeans live together as one family. But the hon. member is quite satisfied to have Europeans and nonEuropeans living together; he is quite satisfied to allow that state of affairs to continue in this country, because up to the present he has not objected to these mixed residential areas. I want to put this to the hon. member for Johannesburg (West) and also the Acting Prime Minister: would they agree if we moved that mixed marriages be prohibited? No, they would not agree. They want that living-together of Europeans and nonEuropeans to continue, and they are the people who dare to talk about the picture which was painted there. I think it is a disgrace. I say it is a disgrace for that member to raise this matter since he knows that he is a member of a Party which approves of that type of thing. Then he referred to a certain letter which was written to a certain Joseph Moses by the hon. member for Frankfort (Col. Döhne). The hon. member gets up here and he has the audacity to make a song about the fact that the hon. member for Frankfort wrote such a letter. He does not want anyone to write to a coloured person and ask him whether he is a member of the United Party. He objects to that but he does not object to the fact that there are coloured persons belonging to his party. He does not object to that. I, too, could read to the House a letter by the hon. member for Cape Town (Castle) (Mr. Alexander) in which he spoke with pride of the fact that coloured persons were members of that party. I say that if the hon. member for Johannesburg (West) objects to the fact that a member of this side writes a letter to a coloured person, he should practise what he preaches and say that his party is going to exclude all coloured persons from membership. I challenge the Acting Prime Minister to give me a reply to this question: If we were to come forward with a motion asking that coloured people should vote separately for their representatives, separate from the Europeans, would they vote for such a motion? No, they would oppose it. And they are the people who are continually talking about this question, who object to the fact that a letter is written to a coloured person. I think if the hon. member who looks as he does, has ever put all four his feet into his own grave, he has done so in this case, and I think it will become hon. members on the other side to tell him not to make such a faux pas in the future.

Why did you run away a moment ago?

Now, I just want to deal with the question of those girls who were instructed to address non-Europeans as “Mr.” Unfortunately I was out of the House. I was on a Select Committee. But when we dealt with this matter on the occasion of a previous vote, I understood that that instruction had been issued and since the instruction was issued that they were to address non-Europeans as “Mr.”, I say quite frankly that that is in conflict with the traditions of the Afrikaner nation and against the principles of our people. It is something which has never happened in South Africa. It is something foreign which has been introduced from overseas.

It has always happened in other departments.

I am prepared to say that if it happened in other departments, then it has always been wrong, and then the time has arrived for the Minister to put a stop to it. I ask hon. members on the other side to get up and to say that it is right. Would the hon. member for Johannesburg (West) be stupid enough to say that this is also right? It is his party that issued those instructions. They have advocated it; they say it is right. We stand or fall by this decision; is it right or is it wrong? The attitude of this side is that it is wrong. If it was the practice in other departments in the past, then it was also wrong. I say it is in conflict with our national traditions and our national principles, and we dare not tolerate it any longer. The result of this instruction is that those poor unfortunate girls who were officials were faced with a choice between their bread and their traditions, and I want to say to their credit that those who resigned from the service chose their national traditions and life principles at the expense of their bread. We want to tell the Minister that when he does that type of thing, he hurts the Afrikaner nation to its very soul. He can do those things, but the longer he does them and the longer he permits that state of affairs, the longer it will remain—and it will always remain —an open wound in the soul of the Afrikaner nation which is opposed to that type of thing. Then I want to say a few words in connection with the question of pensions. I have pleaded in this House for a number of years that those pensions should be provided on such a basis, especially as far as the “Oudstryders” are concerned, that they will feel that something is being done for them on the eve of their lives in recognition of the services they rendered to the State. The Minister will remember that last year we were faced with this unfortunate position in connection with the addition of the £6, that arose in cases where the person was penalised because he converted his pension from an old age pension into an “Oudstryders’ ” pension. Last year the Minister made this concession, namely, that he would see to it that in such cases the “Oudstryder” did not get less than he would have got if his pension had remained merely an old age pension. It was accepted in principle that the “Oudstryder” would get his pension on the basis of the old age pension plus one-third. There are many cases where these people do not get the addition of one-third under that arrangement. The “Oudstryder” merely gets the assurance that he will not get less. I want to ask the Minister whether he will not consider that point and see to it that this £6 extra which was given to all old age pensioners last year, will also be given to “Oudstryders”, and that they will get an extra one-third. Then I want to associate myself strongly with the plea that was made here that the hon. Minister should review the question of the means test. Where the old person undertakes light work of his own volition in order to contribute something to his own maintenance, his pension is immediately affected. That state of affairs places him in an impossible position. He may still be able to do light work in order to provide for his daily needs, but as soon as he undertakes extra work and earns something extra, he is penalised and the amount he earns is deducted from his pension. I think when it is determined whether or not a person ought to get an old age pension, it is decided on the basis of his possessions, but when he gets a pension and he earns something extra he is penalised. I want to ask the Minister to give his attention to this matter and to see whether he cannot make provision in these cases. This is a state of affairs which places the people in an impossible position. We are allowing these people more and more to drift into a state which can be described as a state bordering on life and death, a state where they have too little to live on and where they get too much to die. That position must be improved and I want to ask the Minister to see what he can do. Then I also want to say that last year I specifically brought to the notice of the Minister the case of a person from whom a refund was claimed because he did not give timeous notice of the death of one of his grandfathers. These people often have to choose between their bread and making a refund or between their bed and making a refund. Last year I mentioned a special case here. In that case the Minister realised that it was an impossible case. I also want to associate myself with the statement of the hon. member for Wonderboom (Mr. Nel) that those recoveries, when overpayments are made to these people in good faith, should not be claimed from these people in such big instalments. Those repayments often come as such a great blow to the old people that many of them wish they had never received a pension. We know that those people do not like to incur debt. They live on this meagre pension until the end of their days. Now all of a sudden they are notified that the State has made an overpayment of so much, and they are called upon to repay in instalments. That leaves an unpleasant memory in the soul of those people, and I want to ask the Minister to give his particular attention to this matter.

I think the House should be very clear in dealing with this question, since exception has been taken by certain hon. members to the instruction issued in the Pensions Department that officials, in addressing non-Europeans, must address them as Mr. or Mrs., as the case may be, and use the words “Your obedient servant”.

May I just explain? It was just a question of addressing them as Mr. or Mrs. on the envelopes. The question of using the words “Your obedient servant” did not arise at all. The question was whether coloureds and Asiatics should be addressed as Mr. or Mrs. on the envelopes.

I would like to ask how any human being is expected to address another human being. What objection can there be to addressing a coloured person as Mr. or Mrs? Surely there can be no objection. Let us be reasonable in these things. How do you expect to address a coloured person. Surely no matter what the colour of a person’s skin may be, he is entitled to that respect that you would give to every human being and I am really sorry that there are people in South Africa who refuse to address coloureds and Asiatics as Mr. or Mrs. Some months ago we read in the newspapers that a number of officials had resigned from the Pensions Department in Pretoria because they were required to put the words “Your obedient servant” in letters addressed to non-Europeans. Let me say that there is a growing tendency in South Africa on the part of civil servants—fortunately they belong to the minority—to treat the public, their employers, as though they do not realise that they are servants of the public, and if I had my way, I would make the civil servants repeat every morning when they go to their offices: “I am a servant of the public”. They seem to have forgotten that in many instances and the wonderful public service we have had for so many years, is being ruined by individuals who will not realise that they are servants of the public, and it is time they were made to realise it. I hope that my Nationalist friends will not carry this matter any further. The coloureds and Asiatics are ratepayers, they are human beings. What do we think they are? What are we coming to in this country? Do we think that the coloured people in South Africa are animals? They are human beings and no one loses anything by being respectful to a coloured or native person, or anyone who has a coloured skin. Even our own servants we treat with the utmost respect, and I hope we have heard the last of this. I am sorry to differ from my hon. friends. I have no colour prejudice; I have never had and I never will have. I say again that the nonEuropeans in South Africa lack so many things; let us treat them as human beings, if we are to set an example to the nonEuropean community in South Africa; let us at least be respectful to them. I would like to deal with just another little matter in connection with the Pensions Department.

What about the fire brigade?

We will be able to deal with that on another occasion, and very successfully too. I would like to draw the attention of the Minister to the position in the Pensions Department. That Department is labouring under great difficulties today, and I want to ask the Minister whether it is not possible to get more assistance for them. The officials in the Pensions Department are grossly overworked. I have been in the House a number of years, and I have never had any fault to find with the Pensions Department. To my mind it is one of the most efficient departments of State. The officials are grossly overworked. There is a considerable amount of delay in dealing with pensions, both military and old age. It is not the fault of the officials of the Department. We have already lost two very efficient members of the Pensions Department, and to my mind that is due to the fact that they were overworked. I would like to draw the attention of the Minister to the matter that does affect a large number of people in South Africa, in connection with military pensions. I have a particular case in mind. A lady lost one son in the war and she just received a notice that she is entitled to £13 per annum pension for the loss of her son. Now, if I had my way, I would word it to the effect that she had lost a son, and as a token payment, to enable a file to be opened for her in Pretoria, to allow her case to be further investigated on some future occasion, if necessary, she is being granted £13 per annum. But what happens? People say: “My son is a volunteer.” Let us not forget that. Let not the Minister forget it. These men are all volunteers and must be treated differently from conscripts. These men went freely and voluntarily and the least we can do is to make it perfectly clear to their dependants that they have nothing to worry about in the future and will be looked after. But what happens? They merely get a note stating baldly that they are entitled to £13 pension per annum, and in many cases they are not aware that that is merely a token payment I feel that something more should be done to enable these people who have sacrificed their husbands and their sons to realise that the State is prepared to look after them, and it should be done in quite a different manner. It sounds ridiculous for a man to say: “I have sacrificed my son and what do I get? £13 per annum.” They are all under the impression that they cannot get any more than that. A nice little letter from the Pensions Department saying that the pension may be reconsidered and that the State will stand by them and look after them as far as possible, I feel certain, would do away with a lot of the dissatisfaction which exists today. All these bitter feelings could be obviated by a little more tact. That is what we should endeavour to bring home to all our Government departments, that they are dealing with their masters when they deal with the general public outside. They ought to realise that a little more and treat the public differently. [Time limit.]

I do not propose to return to the points with which I dealt when I addressed the Committee earlier. I just want to say this in reference to the temporary officials of the Pensions Department who left the service, and especially with regard to the questions which were put by the hon. member for Ceres (Dr. Stals). He spoke of a black list. A question was put to the Minister of the Interior in that regard. Unfortunately I have not got the reply here, but I think it was quite clear from the reply that there is no such black list. The question related to the civil service as a whole, and it is fitting therefore that the Minister of the Interior replied to it. He went on to say that if those people again applied for employment in the civil service, there was nothing to prevent their application from being considered. My hon. friend can accept that assurance. I have not got the exact wording of the reply here, but those are the contents of it. I have said that I do not propose to go into the points with which I have already dealt. To a large extent the speeches have again dealt with the question of the means test. That is part of the law, and the question of earning extra income must therefore be dealt with in terms of the provisions of the Act. While the means test exists, extra earnings must be taken into account. As long as the Act provides that where persons failed to notify the Department of additional income, and where they received more than they should have received as a result of that omission, it is the duty of the Department to try to recover these amounts in as sympathetic a manner as possible. The means test is a question of legislation, and I referred to the consideration which has been given to it already and to the decision of the Government to increase the limit of the means test, but in the light of the recommendations of various bodies, it will not be removed altogether.

But cannot you eliminate the differentiation between the city and the platteland?

I shall come to that later. May I first deal with the second point which the hon. member raised, namely the possibility of making the special grants permanent? It is difficult to go into that matter at this stage, pending the report of the commission which is examining the whole question of military pensions. That commission will submit its report in regard to the special allowance and in regard to the amendments to the Act which it may deem necessary. Now I come to the questions which the hon. member raised, namely the differentiation between the big cities, the smaller towns and the platteland areas. Well, there we have the position that this matter had been dealt with by various bodies. The original Social Security Committee recom mended the continuance of that differentiation; the Planning Council recommended its continuance and even the Select Committee of this House based its recommendation on the continuance of the differentiation.

But surely this House has more brains than those people.

My hon. friend is a member of this House, but he is not the whole House. The position at the moment is that all those bodies investigated the matter and they decided that the differentiation should continue.

But what knowledge have they got of the platteland and of the towns?

If they did not have any knowledge, we would not have appointed them. There is a difference between these pensions and military pensions. Military pensions are granted by way of compensation, and they have nothing to do therefore, with the place of abode of the person. Civil pensions of officials are granted as a result of a contract and as a result of legislation, and it has nothing to do with the place of abode of the person, but old age pensions and “Oudstryders” pensions are based on the indigence of the person, and those bodies all felt, rightly or wrongly, that in the bigger cities the need was greater than on the platteland because the cost of living in the cities is higher. Rightly or wrongly, those were the findings of those bodies.

†The hon. member for Hospital (Mr. Barlow) who is not here now, took the same line and suggested that if we level up the pensions to the level of the urban rate, it might be an inducement to people to live in the country. I doubt that very much. People choose their places of abode because of other considerations. In the first place all these old people mostly decide to live where their children are living, and I doubt very much Whether as the result of such levelling up one would find many of them changing their homes from town to the country.

I do not want to detain this House and the passing of this vote, but there is one small matter which I still want to raise. I had hoped that other members would raise it, and it would not have been necessary for me then to take part in the debate. Before I proceed, I want to say that I welcome the announcement that the limit of the means test will be increased from £72 to £90, but that is altogether inadequate. I hope the Minister will go into the matter more fully and that he will at least double it. The point I want to raise is the application of the means test. It does not affect a change in the law. We have the means test at present, but in assessing the means, I cannot understsand on what ground the rule is based that the cost of living allowance which the person gets must be added to his ordinary income when his means are calculated.

I am considering that point at the moment.

I am very glad to hear it, and since that is the position I shall not go into the matter further. I hope provision will be made that it is not to be taken into account.

I just want to break a lance for the officials of the Pensions Department. There we have a department which is really overworked and the question of a proper expansion is one which deserves the serious attention of the Minister. These officials come into contact with our old people and I can testify to the fact that they are very courteous. But bearing in mind the amount of work they have to perform, it is almost impossible for them to carry out their duties. I think the Minister ought to give his serious attention to this matter.

I shall do so.

There is just one more question. I am given to understand that the pensioners of the Education Department of the Free State do not receive a cost of living allowance. Is the Minister in a position to go into that?

No, it is purely a provincial matter.

When you pay their allowance, could you not raise this question with them?

No, I cannot.

I believe they are the only pensioners who do not get a cost of living allowance.

This is a provincial matter in regard to which the province must decide for itself.

I should like to draw the attention of the Minister of Finance to the fact that the police hand out forms for the completion by the people when they apply for old age pensions. I want to emphasise that those people become frightened when the police approach them. They have not got the means of transport to go into town to the magistrate. There are Justices of the Peace in every area and these people trust them, and I want to ask that when these old people are approached to complete the form, it should be done by the Justice of the Peace and not by the police. May I just tell the Minister that I recently discussed with the Commissioner of Pensions the case of an elderly woman who has no food, but after filling in a form, it appeared that she had an income of £200. There are other people on this farm who produce a certain amount of crops and she filled in a form in such a way that the impression was created that the entire income was hers. The land belongs to the Government, and she has no income. These people are afraid when the police approach them, and she consequently gave an incomplete return. I ask with all due respect that our Justices of the Peace who live in the same area should do this work. Then there is one more question. When ex-soldiers become ill and they cannot go to Pretoria or Johannesburg, the district surgeon gives them a letter to go to the nearest private hospital in the district.

It does not fall under this vote.

I just want to point out that those people are put to inconvenience. They go to such a private hospital, and then the Pensions Board refuses to come to their assistance. I just want to ask that attention be given to this matter. Then there is this one other small point. I refer to the position of retired civil servants. They can be assisted when they find themselves in necessitous circumstances. But some of those people are shy to reveal their position. They are the only people in South Africa who are not getting a cost of living allowance. I think those retired civil servants should also get a cost of living allowance. There are many of them who do not need it, but there are others who do.

Vote put and agreed to.

On Vote No. 9.—“Provincial Administration”, £12,814,980,

I would like to move that the grant to Natal on this vote be reduced.

This amended vote is really being put in terms of to the new arrangements which I announced in my Budget speech. It must still be confirmed by legisation which will be submitted to the House in the near future. In these circumstances, I do not think it is desirable that the House should discuss this vote until such time as the legislation has been introduced, because these calculations were made in terms of the provisions of an Act which has not yet been passed. I think the House will admit that that is the correct procedure, and in the circumstances I want to move that this vote stand over until the other votes have been disposed of. I move—

On Vote No. 10,—“Miscellaneous Services”, £40,050,

I should like to have some information from the Minister in regard to the amount of £7,750 which is being paid in the form of a subsidy. I assume it is being paid to the Union Castle Company.

Yes.

To my mind this is too big a subsidy for the voyage between Durban and Cape Town. Will it not pay us better to convey the post with our own trains and aeroplanes?

The position, in terms of the existing contract which will expire in the near future, is that we are compelled to pay as part of the compensation to the company a certain amount in consequence of the extension of the route pf the postal boats from Cape Town to Durban.

When does the contract expire?

Next year. That part of the contract will not be renewed. The amount which is being paid is subject to the number of postal boats actually completing the voyage. In the last few years it has happened very seldom that one of the postal boats sailed from Cape Town to Durban. Last year we did not pay this amount because the postal boats did not undertake that voyage. We must make provision, however, for the contingency that the postal boat will undertake the voyage this year. Under the contract we are obliged to pay the subsidy, and we must make provision for it.

I should like to know from the Minister what these secret services are in respect of which a couple of hundred pounds are being asked. If it is in connection with the police, why does it not come under the Police Vote?

My hon. friend ought to be able to reply to that.

I have no experience of it. It may be that secret agents have followed me, but I have not been afraid of them because I have not committed any crime.

I said my hon. friend himself could reply to this question, because what is being done here, is being done on the recommendation of the Public Accounts Select Committee of which I think he is a member. This provision was previously made under the Police and Native Affairs Votes. The Select Committee on Public Accounts—apparently he was not present—recommended that provision should not be made on those votes, but on the “Miscellaneous Services” Vote under the Treasury.

I want to return once again to this question of £7,750 for the conveyance of post from Cape Town to Durban. Practically no ships are operating today.

When these ships do not operate, we do not pay. Last year we did not pay anything.

But this amount is still on the estimates.

Yes, because the service may be resumed again.

We have aeroplanes which are again starting this service, and our post can be conveyed by plane.

At the moment we are under a contract, but it lapses next year.

I notice that there were negotiations last week in connection with the renewal of the contract.

That part of the contract will not be renewed.

In that case I shall not go into it any further. Then there are a few other questions which I want to put to the Minister. Here we have the item “Incidental Expenses”, an item which does not appear on the other votes. It is necessary for the Minister to tell us what these incidental expenses are which appear on the estimates every time. This House which decides national affairs ought to know that. Then just a word or two in connection with commissions. I notice that an amount of £25,000 is being asked for commissions. It would almost seem that this Government can be called a Government of Commissions. Commissions sit, and the unfortunate position is that these commissions make recommendations and it very seldom happens that their recommendations are carried out. I think the Government ought to take into consideration the cost of commissions. Then I come to the £300 for secret services. What secret services can be undertaken with such a small amount? We have our detectives and our police. If they cannot make the necessary investigations, it is wrong to put such a small amount on this vote. What can be done with £300? It looks like child’s play to me. Let us augment the detective force instead of putting such a small amount on this vote.

As far as the secret services which appear on this vote are concerned, this is a matter which was investigated by the Select Committee on Public Accounts. The committee was satisfied that it was necessary to make this provision. It has always been shown on the Police Vote and the Native Affairs Vote.

Has it ever been spent?

Yes, 1 think so. The Select Committee on Public Accounts felt that the provision ought to be made, and that that provision should be made on this vote. As far as commissions are concerned, there are two commissions functioning at the moment. One is a very important commission, namely the Public Service Enquiry Commission under the chairmanship of Mr. Justice Centlivres. I do not think anyone would want to hamper the work of that commission. It is a big commission which will probably cost £12,000 during the* year. Then there is another commission in connection with irrigation finance, and we must also keep available a certain amount for other commissions which may be appointed. Even the Opposition suggested the other day that a commission be appointed in connection with native education. As far as additional expenses are concerned, it has always appeared necessary to make provision on this vote for unforeseen contingencies. The most important item for which provision is being made on this vote, is for the entertainment of important guests, perhaps Governors of neighbouring territories who visit us and who have to be entertained properly. We can only make provision in this way, and it is with a view to this and similar matters that this item appears on this vote.

In connection with the commission which was appointed to investigate the position relating to the abuse of liquor in the Western Province, I understood that the report has been drawn up, and I should just like to hear when this report win be made available to us?

The Minister of Justice will have to reply to that. I am informed that the report was signed about a fortnight ago. This matter has been disposed of and it is not necessary to vote further money in that connection.

I should like to raise a point in connection with commissions. Has the Minister of Finance read the recommendation in the report of the Kakamas Commission in connection with costs?

It does not fall under this vote.

Does this vote not cover the expenses of that commission?

No, it was dealt with under the previous year’s estimates. That commission has completed its task. If recommendations are made regarding additional costs in connection with that commission, special provision will have to be made for it.

Will that be done in the Omnibus Bill?

The Kakamas Commission has concluded its deliberations. We are now making provision for the following year.

But such a recommendation was made.

It is a recommendation to the Minister of Lands. It is a matter which rests with him.

Vote put and agreed to.

On Vote No. 11—“High Commissioner in London”, £155,000,

I hope the Minister will allow me to refer to the report which we received this morning in connection with one of the sons of South Africa who was lost to his fatherland overseas. South Africa has lost one of its sons who served the country to the best of his ability. The circumstances of his death came as a shock to all of us, in view of the important work he has been doing recently, and which he was expected to do in the near future. I have the authority of my party to speak here. Everyone who knew him in this country regarded him as a sincere, enlightened person, imbued with a great sense of duty. I hope there will be an opportunity for more than one of us to express our appreciation of his services and to convey our condolences to his wife and relatives.

I should like to associate myself with what the hon. member for Ceres (Dr. Stals) has said in regard to the death of Dr. Gie. There has been no opportunity to refer to it earlier in the day, and indeed, it is not a matter which falls within the scope of this vote, but I am sure that you, Mr. Chairman, will allow us to refer to it. I have already availed myself of the Press to express my appreciation of the excellent services which Dr. Gie rendered to the State, in the first place, as historian when he was a Professor at the University of Stellenbosch where he was held in high esteem, and later as Secretary for Education. In that capacity he served under the hon. member for Piketberg (Dr. Malan) and later under me as Minister of Education. He was an outstanding official who revealed great devotion to duty and displayed great capabilities. Thereafter he became one of the first members of our diplomatic service overseas, and he rendered outstanding services first in Berlin and later in Stockholm. Moreover he was an extremely popular person who provided us with valuable reports. It was quite fitting that we should have appointed him to the important post in Washington. Unfortunately he occupied that post for just little more than a year, but even in that time, through his action and his capabilities, he kept the name of South Africa high, which contributed a great deal in acquiring for himself a place of high esteem and in increasing the prestige of South Africa. We deeply regret his death and on behalf of the Government I want to avail myself of this opportunity to convey our sincere condolences to his wife and his relatives.

I just want to ask the Minister for an explanation in connection with the big difference in the amount of salaries, wages and allowances, an increase of £12,000.

Yes, the increase is primarily due to three factors. In the first place it is due to temporary assistance. The work in this department has increased tremendously and we had to make provision for additional temporary staff. An important item which I have already mentioned, is that there is legislation in connection with the payment of income tax by our officials overseas. As a result of that we had to make provision for an additional amount. In addition to that the necessary provision had to be made for war expenditure allowances and war allowances.

Vote put and agreed to.

Vote No. 12, “Inland Revenue”, £375,000, put.

The MINISTER OF FINANCE moved—

Agreed to.

House Resumed:

The CHAIRMAN reported progress and asked leave to sit again; House to resume in Committee on 11th April.