I move—

Mr. Speaker, this Bill falls quite naturally into two parts. The first part is to give effect to an important agreement entered into by the Union Government with the United Kingdom Government and other Dominion Governments for the future disposal of wool clips and of the accumulated stock of wool. The other part sets up a statutory wool board, a matter which has long been pressed for by wool growers of this country. I proceed to deal with the first part of this Bill, namely, the giving effect of the recommendations of the conference which took place in London from April to May of last year. Before the Government agreed to accept the findings and recommendations of this conference, we decided to follow the path of consultation, full and complete consultation with the interests most vitally affected, and the first step I took was to call the Wool Council together and to place the proposals fully before them. They accepted these proposals unanimously, and thereafter the second step was taken of calling in the executive committee of the National Woolgrowers’ Association and they likewise accepted the scheme fully, and approved entirely of the recommendations of the conference. Thereafter the matter was placed much more widely before the country. I issued a Press statement on 30th August last year explaining the main features of the scheme, and subsequently I went to open the congress of the National Woolgrowers’ Association at Bloemfontein, and there again I dealt fully with the main features of this agreement. For the rest of the conference at Bloemfontein Dr. Neveling, the Secretary for Agriculture, who was the leader of the delegation to London, stayed behind, and he also dealt exhaustively with the whole position. There also the recommendations of the conference were fully and completely and unanimously approved of. I think I could therefore say that the wool farmers of this country are unanimously behind this new wool agreement, to which we seek to give effect in this Bill, and I can only trust that hon. members of this House will show an equal measure of approval of the step now proposed by the Government. I do not think it necessary to go into the reasons which led to the accumulation of wool stocks during the war years, nor need I stress the necessity for arriving at an understanding regarding the disposal of this surplus in conjunction with current clips. I would, however, like to give the House the position as it obtained at the end of last season. The accumulated surplus then amounted to 3,245 million lbs. of wool, or slightly over 10 million bales, which is equal to two years production of the three Dominions together. That alone will indicate to the House that if wool prices were not to fall to uneconomic levels the four Governments had to put their heads together, and arrive at an agreement in connection with the disposal not only of the huge surplus but of current clips as they became available from season to season, and at the conference to which I have already referred as having taken place in April and May of last year in London, they considered the problem. Their report was published as a blue book and has been in the hands of hon. members and it has been before the public now for some time. I therefore propose to deal only with the main features of the report, which we seek to embody in this Bill. The position was that under the present Wool Agreement which, as far as this country is concerned, operated from. 1940, wool was sold to the British Government at a fixed schedule of prices, each producer’s wool being individually appraised to establish its type and yield. The British Government, in turn, sold its wool at a fixed issue price. That system which our farmers became accustomed to in the war years undoubtedly has its advantages, and there have been wool producers who have indicated they would welcome a continuance of this price system in the post-war years. It will therefore be clear that the method of disposal of wool was the first and most important matter with which the conference had to deal, and they went very thoroughly and fully into this position. After doing so and examining all the aspects and all the alternative methods of disposal they came to the conclusion that the system of open auction, the auction system, was the most suitable to recommend in this case, particularly bearing in mind the many individual qualities that wool has and the particular fancies and likes of buyers. It was felt that that system would be most in the interests of both producers and consumers. Once they decided that the auction system should be returned to, it was quite obvious that with this huge accumulated stock of two seasons’ clips—which is equal to about two years full consumption of Dominion wool—it would be necessary to have some measure of price protection; you have to protect sellers on the auction market if you want to prevent prices falling to quite an uneconomic level. This price protection is one of the most important features of the whole arrangement. The conference therefore decided that a joint organisation should be set up to maintain a reserve price for wool, being a buyer of new wool and also a seller of old wool, at not less than the reserve price to be fixed. The question of the disposal of the accumulated stocks over a period of years in conjunction with current clips is however one that depends on the increased consumption of wool. The conference went carefully into this question. They considered the prospects of consumption in the post-war era and they came to the conclusion that in the first two years of the post-war era consumption would be limited by the world capacity of manufacturing machinery, and they also came to the conclusion that a reasonable estimate would be an increase thereafter of some 20 per cent. over pre-war consumption. On that basis hon. members will see that it will take some twelve years approximately to work off the present surplus of Dominion wools. The relative proportions of old wool and new wool which will have to be disposed of from year to year can, of course, only be decided in the light of the circumstances then prevailing. The scheme proposed by the conference envisages all new wool to be offered by auction, and such portion of the new clip buyers are not prepared to purchase at the fixed price will be taken up by the new organisation. If all the wool, however, fetches a price at or above the new price level none of the clips will be purchased by the joint organisation. It is only when the price falls below or does not equal the reserve, that this organisation will itself be a buyer of portions of the new clip at the reserve price. The conference agreed to recommend the setting up of the joint disposals organisation for the purpose of buying and selling wool on behalf of the United Kingdom Government and the Dominion Governments concerned. The main functions of the joint organisation are set out in the conference document which forms a schedule to the Bill, and I do not propose to detain the House in repeating this now. As will be apparent to hon. members, the scheme embodies two very important principles; in the first place there is an open market to which everyone will be free to come and buy our wool; and, secondly, there is a reserve, a minimum price. I think hon. members will agree with me, as the producers themselves who are vitally concerned wete quick to recognise, these two principles make the scheme an attractive and indeed a very acceptable one. This is the more so as the reserve price is to be determined by the governments themselves, which will undoubtedly make for greater stability. The financial basis of the scheme occupied the major part of the deliberations of the conference in London, and it was ultimately settled on the basis of a full financial partnership between the United Kingdom Government and each of the Dminions. The Dominions are to take up 50 per cent. in the capital of the existing stocks of wool; that is, after depreciating it, they take up 50 per cent. of the capital represented in the stock pile, and they have to contribute that capital in equal instalments over four years free of interest. The United Kingdom Government on its part will finance 50 per cent. of all new wool which is to be taken up. The operating expenses of the joint organisation — which will not include interest — are to be borne as to one-half by the industry by means of a levy on all new wool sold, and as to one-half by the organisation itself out of proceeds. The ultimate balance, profit or loss, will be shared equally by the United Kingdom and each of the Dominions concerned. Let me say a word about the South African wool in the stock pile which is held by the United Kingdom Government. As at 30th June last year South African wool in that stock pile amounted to 645,000,000 lb., valued at £36,500,000, and represents 2½ clips in weight. Fortunately the various types were well distributed and the stock pile was then still fairly representative of the Union’s clip. The United Kingdom has written down or depreciated the stock by £4.48 million. I have indicated we take up 50 per cent. of the capital of the stock and we take it up on the basis of the depreciated stock that is to the extent of the depreciation, £4.48 million. The depreciation was done on the basis of a penny per lb. on the better quality wool and 50 per cent. on the poorer quality, on the average about l-5th of the total. In addition to that the United Kingdom Government has agreed to write off the 5 per cent. by which the Union prices have been reduced to bring them into line with the Australian prices. I do not have to go into that again. That point I have made quite clear from time to time, that our own delegation went fully into this matter and came to the conclusion that our wool prices were too high in relation to Australian wool prices, and therefore we had necessarily to take the step of dropping it by 5 per cent. We get the benefit also by getting a writing down of our stock pile by that 5 per cent. as well. The total depreciation therefore amounts to £6.3 million, and in that figure the £21 million in the divisible profits account is also utilised. The position, therefore, is that the total capital of which the Union will have to provide one half will be £30.2 million, and the Union’s half will therefore be £15.1 million. This capital payment is to be made over a period of four years, without interest, but since old wool will have to be sold during this period and half of all the new wool we take up is being paid for by the United Kingdom in terms of the partnership agreement, it will be appreciated by hon. members that not the whole of this £15.1 million will have to be paid in. Money will be coming in over the four years as well as going out, and, as nearly as it could, it is estimated that the net amount the Union Government will have to contribute will be about £10¼ million. I think that in itself is a very substantial step that the Government is taking, namely, being prepared to make an outlay of £10.25 million for the sake of bringing about stability and orderly marketing for our main agricultural product, namely, wool. It is quite true that the Government hopes and expects to get this money back, but it is taking a certain amount of risk in making this outlay. I now come, Mr. Speaker, to the contributory charge which producers will have to pay to meet the operating charges of the scheme, and which will be borne equally between the industry and the Joint Organisation. Interest does not form part of the operating expenses of the Joint Organisation. You will appreciate that on the amount of money the Union Government has to advance, £10¼ million, interest will of course have to be paid, and that will have to be provided for. Further, a reserve should be built up against possible future losses. The producers have shown they fully appreciate that this price stabilisation scheme is to their benefit, and they accept therefore that the general taxpayer should not be called upon to pay this amount, but they themselves should be prepared to pay for this scheme which brings them stability and a reasonable price level. There is one fortunate aspect about this charge which the producers will have to pay, and that is the existence of a margin between the producers’ price and the issue price that the scheme has operated on up till now. That difference amounts to 13 per cent., or just over 1½d. per pound. That amount can be utilised for the purpose of a levy without at present affecting producers’ prices in any way whatever. Depending upon the future trend of wool prices, which naturally will have to be in relation to general commodity prices, that margin will act as a cushion in regard to the reduction of prices, and it is only when the selling prices have to be reduced by the full extent or a considerable part of this margin, that it will be necessary for any levy to come out of the producers’ prices. There is also this observation I want to make, namely, if this margin of just over 1½d. a lb. can remain intact for a few years, we will be able to build up a fund which will make it unnecessary—should it be necessary to have a levy later—for that levy to be anything greater than somewhere about ½d. per lb. I want to repeat the assurance I have already given to the wool producers, and that is that the Government does not intend to make any money at all out of the wool growers. It has guaranteed all the losses, but if any profits shall accrue ultimately, such profit shall, subject to the approval of Parliament, be made available to the wool industry. That is set out in Clause 14 of the Bill. Before I leave the financial provisions of the Bill, I would like to draw attention to Clause 13, which provides for a Treasury guarantee to the Reserve Bank. The whole scheme is to be financed through the Reserve Bank, which is considered not only the most convenient form, but also the most appropriate to the business organisation which is to be established to deal with our wool. I now come, Mr. Speaker, to the setting up of the organisation itself, the constitution and functions of J.O., which it is proposed shall be set up, are set out in the appendix to the conference document which appears in the schedule to the Bill. The Organisation takes the legal form of a private company with an active subsidiary in each dominion. The principal company will have a nominal share capital of eight shares held by the four Governments, and the directors will consist of an independent chairman, who will be appointed jointly by the four Governments; four directors appointed by the United Kingdom Government, two by the Government of Australia, one by the Government of New Zealand, and one by the Union of South* Africa. That representation is based again on the basis of the financial partnership between the United Kingdom and the Dominions. That Government has a 50 per cent. interest with each of the Dominions separately, and, in order to give an equality of representation on the directorate, it has to have the number of directors I have already indicated. The legal documents for the establishment of the J.O. in London, the parent company, are now almost complete, almost in final form. There has been a certain amount of consultation, as hon. members can well understand, and they have now reached a stage very near finality, and I hope the principal company will be registered shortly. Hon. members will note from the Bill, as far as our own local organisation is concerned, it is proposed to appoint six directors, out of whom three will represent our producers. The producers will have an equality of representation on the board of the local J.O. Here again as far as this Bill is concerned I have followed the same path of full consultation, as fully as I could, with the interests vitally concerned. I made a copy of this Bill available to the executive of the National Wool Growers’ Association and they have expressed their views to me. They have indicated to me quite openly that they would have preferred to have had three directors out of the panel of six which the Bill provides for; they wish to have three of the six appointed by themselves. I had a discussion with a deputation from the executive of the association and after discussion they agreed to the provision as it now stands, namely, that I undertake to appoint two out of the panel of six to be submitted by the National Wool Growers’ Association, and that the third producers’ representative is to be appointed after consultation with the National Wool Growers’ Association.

Why then should there be another one?

There are very good reasons for that, but I do not propose to go into that now. I want to tell the House notwithstanding that agreement the chairman of the National Wool Growers’ Association saw me a few days ago, and after further discussion between us I indicated my willingness to reduce the panel for the producers’ representatives from six to four, so that I am now undertaking to appoint two producers’ representatives out of a panel of four and to place the nomination substantially on the same basis in that regard as it is in Australia. That indeed was the point Mr. Moolman, the chairman of the National Wool Growers’ Association, made to me. I agreed that was a reasonable point, and therefore indicated I would be prepared to accept that suggestion, and an appropriate amendment will be moved by me in the Committee stage to bring the Bill substantially into line with the provision of the Australian Act. I am sure that this House will appreciate that the organisation which we are setting up here is to be entrusted with the most important task of marketing our chief agricultural product, and it will handle not only many million pounds of wool but also millions of pounds of money, and for that reason it should be clear to everybody that we ought to get together on the directorate men with outstanding qualities, men with experience and ability and with integrity of character. That, Sir, is my aim in getting together as far as I have a part in it the directorate of this organisation. My aim is to get men of that type, and I am glad to be able to inform the House that as far as the appointment under clause 5 (1) (c) of the Bill is concerned I have succeeded in securing the services of Mr. J. Postmus, the ex-Governor of the Reserve Bank. The other names will be announced in due course. But I am sure we shall finally get first-class men for the purpose of directing the policy and the affairs of this organisation. So much, Sir, for the first and main part of the Bill. I now wish to say a few words about the second part, and that is the establishment of the statutory Wool Board. Hon. members who take an interest in wool will know that the Wool Council we have had up to now is a purely advisory body, and for a long time now wool growers have pressed for a statutory wool board with legal powers, and schemes were submitted from time to time with that object. One of the schemes submitted under the Marketing Act was declared ultra vires because it contained no marketing power. That scheme was put up before I took over the portfolio. After I took over, the second scheme was submitted which evoked a large amount of objection, the National Wool Growers’ Association, it appeared, being on the one side and, on the other, an unorganised section which came to be known as the Protest Committee. They were strenuously opposed to the second scheme. Their opposition was based mainly on the fear that the wide powers of the Marketing Act would be brought into effect as far as wool was concerned without adequate consultation. I do not want to go into the question now as to how far the fear was well founded, but the fact remains the wool growers themselves were split on this vital question. But the main point that interested me in not going forward with a statutory wool board at that stage was that the whole of the post-war picture had not emerged. We had this conference in London about to take place and it was clear to me we ought to wait until the post-war picture emerged much more clearly before we started exerting our influence to create a local statutory wool board. I therefore again got into touch with the National Wool Growers’ Association and made all my views about the matter plain to them. Now that picture has emerged, and we know what the whole set-up is, we know we are going to have a Joint Organisation, with a local organisaiton here, and that body is going to deal with the surplus wool, with the old stocks and the current clips. Therefore, I could see no reason why heed should not be given to the request of the Wool Growers’ Association to have such a board. I may say that the Protest Committee indicated to me they would not mind this wool board provided it was under a special Act, not a scheme under the Marketing Act. They said: Let us have a special Act for wool and bring in wool under that Act. I think it is fair to claim now that both sections should welcome the step under this Bill, to have this wool board set up under a special Act, as is being done here. This proposed wool board will, of course, have no marketing powers. The marketing powers are exercised by the J.O. You cannot have duplication of two bodies doing the same thing. But the powers of this new board are limited to the field of production of wool. They will deal with the promotion of research and the conduct of propaganda for the increased consumption of wool. As its powers are related only to the field of production, it therefore becomes unnecessary to have any interest represented on that board other than producers, so the board will consist of producer representatives and, of course, an official from the Department of Agriculture. The funds of the board will be obtained by means of a levy which is provided for in the Bill. The clause concerned provides that this portion of the levy shall not exceed three-twentieths of a penny per pound of wool, or 3s. 9d. a bale. That is the maximum the levy can reach as far as the statutory wool board is concerned. I would like, Sir, to indicate in conclusion that this Bill creates reasonable price stability on a long-term basis, and sets up an orderly system of marketing, and these are features which are in line with the Government’s general policy in regard to agriculture in the post-war era. If this Bill is passed it will be the first big legislative step translating into actual practice the Government’s policy which was announced in the White Paper laid on the Table of the House last week.

I am really very disappointed at the manner in which the Minister submitted this very important matter to the House. One can see that the Minister knows very little about this subject. That is why he tried to cover everything instead of giving us all the facts. I want to remind the Minister that a short while ago we on this side put certain questions to him as to why certain types of wool were frozen now that the scheme is already in operation. We also asked whether this was the beginning of the open market or not. We still await a reply to that question. The Minister tried to answer my question by making me appear ridiculous. All the Minister succeeded in doing was to evince his own lack of knowledge. There are a few points which are of paramount interest to the wool farmers in connection with this scheme, the first being the question of the open market. In the second place, there is the question of representation on the Council, where the wool farmers want to have the majority. We told the Minister at once that without assurance on those two points, the wool farmers could not approve of any scheme. This whole scheme is one which does not emanate from the wool farmers. It is the Government’s scheme. To start with, the Minister ignored the wool farmers. He sent a delegation to England, accompanied by one wool farmer in an advisory capacity. The National Wool Growers’ Association consists of 27,000 members. In addition to that, there is now another group. I believe it is called the Protest Group. They are the rebels amongst the wool farmers. The Minister also sent one of them to London.

I did not say that.

You told me that and my word is as good as yours. This is a Government scheme. The delegates then returned from England and submitted the scheme to us. I just want to mention a few points in respect of which the Minister was not clear and in respect of which he did not give a clear exposition. He stated that upon the return of the delegation he consulted the Wool Council. Why? This is not the wool farmers’ scheme. For political reasons he consulted the Wool Council in order to get their support. I was one of those who told him that this was the Government’s baby and not the baby of the wool farmers, and that he ought to hold his own baby. I refused to agree to the scheme unless the Minister and the Secretary for Agriculture undertook to recognise the National Woolgrowers as the mouthpiece of the wool farmers. Let the Minister say whether that is so or not.

I shall reply to that.

The Minister must tell us whether the National Woolgrowers’ Association is the mouthpiece of the wool farmers. That is the question to which the Minister should reply. I stated that I would only agree on condition that the Minister convened a meeting of the National Woolgrowers’ Association and submitted this scheme to them. That was done and they were therefore recognised as the mouthpiece of the wool farmers. That is what happened as far as the negotiations are concerned. The National Woolgrowers’ Association then adopted the attitude that they wanted to have a majority on the Council. The Association met and stated that they would support the scheme on certain conditions. The first condition was that the wool farmers themselves would pay a levy. The Minister himself stated that the public should not be asked to pay but that the wool farmers should pay a levy and at the same time build up a reserve fund. That is the reason why the condition was imposed that the National Woolgrowers’ Association must have a majority on the Council. That is the only proposal which has been accepted by the National Woolgrower’s Association up to the present. No other proposal has been accepted, and I want to ask the Minister to obtain the co-operation of the farmers in this respect; to go back to the Woolgrowers’ Association and to give them a majority on the Council, and not to do anything which will take away the rights of these people, because he may be certain that there will be objections if that happens. If the Minister wants this co-operation, let the Council consist of seven or five members, but give the National Woolgrowers’ Association a majority. Furthermore, we ask that this Council be appointed without any interference from the Department or the Minister, that when the woolgrowers nominate three or four persons, their choice will not be subject to alteration. Why should the Minister make any alteration in a matter on which we are agreed? Why must the woolgrowers, the best organised body in South Africa, propose a panel of four? At first he said six, now he says four. The Minister appoints three members and then he tells the woolgrowers that they can nominate a panel of four, two of whom will be elected by him. It seems to me that the whole idea is to deprive the farmers of every vestige of power and to place it in the hands of the Department and the Minister. They are to be allowed to make any arrangement they please. The freedom of the individual taxpayer disappears. The individual has no say in the matter; the Minister decides. It would have strengthened the Minister’s position considerably if he had given the woolgrowers control, but he has not done so. He now states that he himself is going to nominate one other wool farmer in consultation with the wool farmers. Who are they? The woolgrowers have not intimated to the Minister that they accept his plan in connection with these appointments. The wool farmers will have no say in the matter. If the Government wants to adopt that course, let it appoint all the members and let it hold the baby. We tried to co-operate, we did everything in our power to co-operate. I hope the Minister is not going to be stubborn and refuse to make concessions. If the necessary co-operation does not exist there is only one man who is responsible, and that is the Minister, because of the attitude he adopted. Now I want to revert to the past for a moment to the beginning of this wool scheme. The Minister went back to 1940. In 1939-’40 we proposed that there should be an open market plus the British scheme. That brought in £12,000,000 for the wool farmers. The following year the British Government held a revolver at our heads and informed us that Britain wanted to buy the whole clip, that if we did not sell the whole clip to her, she would retire from the market. Our plea was that if the British Government did that, the Union Government should keep the wool and give us an open market. That was our proposal at the time. They then came along and said: “We are giving you the same scheme as the scheme we gave to Australia”. We did not get the guarantee of 10.75d. that was given under the Australian scheme. Some of the people in the department—I do not want to say all of them—are theorists without any practical experience, and they are the people who worked out the type basis scheme. We stated that as things were we would not be able to maintain the basis of 10.75d. Moreover we lost under that arrangement. For two successive years the wool farmers lost £600,000 and £500,000 respectively, because the scheme which they introduced was not the same as the Australian scheme. Who was responsible? We on this side pointed out that we were not getting 10.75d. Eventually the British Government admitted that. The other side of the House did not admit it but the British Government did. The Prime Minister then went to Cairo. He took our advice and co-operated with the wool farmers in Australia. Our representatives in Cairo were obliged to use the same arguments that we on this side used, and they obtained an improvement of 15 per cent. plus 5 per cent. The British Government admitted that we were not getting the same as Australia, and there is no doubt that it was as a result of the advice of this side that that change was brought about. I remember that at the time when I put up a plea for higher prices many members on the other side stated that I ought to be ashamed to ask the British taxpayer to pay more for our wool. But the Australian farmer did not consider sentiment. There should be no sentiment in business. The Australian farmer looked after his own interests, and with the assistance of Australia and this side of the House we got the increased price, but the other side of the House never asked for it. At that time we also warned against a monopoly. We had an excellent example of a monopoly during the war. We entered into a scheme with the British Government to the effect that one-half of the profits made on wool which is sold outside the British Commonwealth would come to us, but we were not going to get any portion of the profit made within the Commonwealth. What happened? The British Government sold wool to America at a much higher price than we were paid. In some cases the price was twice as high as the price we got. But England delivered wool to her own factories at 10.75d. and the whole object was simply to create a monopoly for England after the war or during the war; to get the raw materials so as to be able to put manufactured articles on the market at a time when other countries were unable to do so. We sounded a note of warning because we felt that the only reasonable course was to have an open market. That scheme gave us a profit of £2,250,000. That means that a profit; of £4,500,000 was made by the British Wool Commission on wool sold outside the Commonwealth under the British scheme. The wool which was exported from this country weighed 315,000,000 lb. On that a profit of £4,500,000 was made. When one takes the weight of the wool that was sold through the British Wool Commission one finds that it works out at between 11,000,000,000 lb. and 12,000,000,000 lb., and converting that into profit one finds that we in South Africa lost something like £16,000,000. In addition to that, we gave Great Britain a monopoly. While this scheme was in the hands of England, she tried every possible means to starve the markets of Europe. There were certain parts of the world to which we could have sent our wool during the war as well as after the war. After the war there was a very big demand for wool in Greece. They wanted wool because the Greek factories had not been damaged, and Greece manufactures 80 per cent. of her own clothing. The British Government stated that there was a shortage. Just imagine that. There was an accumulation of 11,000,000 bales, but Greece was told that there was a shortage. Eventually they gave Greece 500 bales of wool for all her factories. But that is not all. In recent years there has been a very great demand for wool in Italy. 90 per cent. of the factories in Italy were not damaged. Italy buys something like 600,000 bales of wool every year. The Italian wool factories begged for a small quantity of wool. They were told that there was not a surplus but a shortage of wool. While there was an accumulation of 11,000,000 bales of wool they were told that there was a shortage. What happened then? Italy had to do something for herself and she proceeded to form a sort of organisation and to divide the small quantity of available wool, and today the price of type 64 wool is no less than 600 lire per kilogram, or 13s. per lb. in grease. The object of the whole scheme therefore was to give England a monopoly and to enable England to recover and to conquer markets, while wool was withheld from Italy which provides the Balkan countries, and from Greece which also processes wool on a considerable scale. Britain was and is still building up a monopoly. Our wool farmers then had to decide what we were going to do. We had no alternative but to accept this agreement in principle. But I want to make it clear that this agreement was not brought into being as a result of the efforts of the Union Government; it is the work of a handful of producers, a number of farmers, who were firmly in favour of an open market. The whole scheme nearly failed, but it is due to a number of Australian farmers and a few farmers in South Africa that it was brought into being. They realised the danger of a monopoly, and in this way the scheme came into being, and it was decided to buy back from the British Government one half of the wool so as to be able to get an open market. England is in need of money today, and if it had not been for that fact and the further fact that she needed this £90 million or £80 million, England would never have agreed. England needed this money, and was therefore forced to accept this scheme. But the scheme was based on free trade. It was based on an open market—an open market with a minimum basis. I do not agree with the fixing of a minimum price for our wool. I shall tell you why. It was argued that the Australian wool was lighter than our wool, and that New Zealand’s wool was also lighter, and that our clean yield was less than theirs. The first scheme was based on the type basis; the new scheme is based on the clean yield. It was then argued that the price to be paid to South Africa should be 5d. lower. But I am afraid that our representatives forgot to advance one important argument, namely, that in South Africa we grow 97 per cent. fine quality wool, i.e., merino, and only 3 per cent. cross-wool, while Australia grows 77 per cent. merino and 23 per cent. crosswool, and New Zealand 97 per cent. crosswool and only 3 per cent. fine wool. One cannot therefore make a comparison of this kind. But it was then agreed that there would be a reduction of 5 per cent. in the price of South African wool. What did the Government do, however? The Government had to deal with the British Wool Commission, and it allowed that body to reduce the price of our wool by 5 per cent., but whereas 5 per cent. was being deducted from the selling price, the Government failed to see that the selling price remained at the price which obtained during the war period. The wool farmers are getting less. America wants to buy as much as she can. America immediately placed an order to buy 80,000 bales of wool. Spain came along and bought as fast as she could; Sweden bought. They were prepared to pay this price for wool. The buyers told me that 10 per cent. or 15 per cent., or even 20 per cent., did not make much difference to them. Why did the Union Government allow the British Wool Commission to reduce the price? Why should the farmers of South Africa hand over 2½ per cent. of their money to the British Wool Commission as profit? Why this negligence? It is due to the fact that the people who dealt with it did not understand their work. But that is not all. The Government, together with the British Wool Commission, allowed certain types of wool to be frozen as far as America, Spain and Sweden were concerned. Is that an open market? Is it to be wondered that the people are distrustful? From the very start we have no control; the wool farmers have no control over their own product. Why were these types frozen? It created suspicion. One cannot get away from the fact that the British Wool Commission was buying up some of the accumulated wool —the better qualities—and as a result of the freezing of certain types there was no open market. That caused a shock not only to the wool farmers, but also to foreign buyers. I was approached by wool buyers from America and other countries, and I was asked whether we called this an open market. I had no alternative but to go to Pretoria and tell the Minister about it. When I arrived there, I found that neither the Minister nor his Department knew what was happening. That is what causes misgivings amongst the wool farmers. We then insisted on appointing the Joint Council without delay, so that a stop could be put to this sort of thing. Two days ago I received a’ letter in which I was informed that at last a stop has been put to the freezing of certain types. If we had not spoken, if we had not protested, that would still have been the position today. I have before me a document which indicates what the true state of affairs is. There is much less wool in South Africa today than we are told. What has happened from the time the wool was frozen up to the present? I ask the Minister to give us some explanation. How many bales of wool have been bought by the British Wool Commission for their own people from the time the types were frozen up to the present? He ought to know. It is our wool and our money. We must have an explanation. Take East London, for example. There are still 300,000 bales which have not yet been sold, and that includes stock pile wool, 114,000 bales of new wool and a little karakul wool. What has happened in the meantime to the wool which accumulated there? We want to know whether the British Wool Commission, in withholding the wool so that they themselves could buy it, did not commit a crime towards the wool farmers not only in South Africa but throughout the world. That is not an open market. I hope the Minister will tell us what happened. Now we come to the appointment of the Council. That is an important matter when we consider whether or not we can support the scheme. Will the farmers have any say on the Council? Is it going to be a political council? The least the Minister could have done for the wool farmers was to see that they had a majority. The Minister cannot say that the executive committee of the National Woolgrowers’ Association is satisfied with the Minister’s plan. But I want to refer to something else which happened during the war and which caused the people to distrust schemes of this kind. During the war the British Wool Commission did not buy our skins. There were three firms which had a monopoly of the skins, and they bought these skins for a mere song. At the time the wool farmers begged the Government to introduce a measure of control over the skins. That was not done. But do you know what happened? The speculators came along—I could give their names—and bought the skins and sent them to certain farmers, and those farmers sheared the skins and sold the wool to the British Wool Commission. That type of thing does not breed confidence. Originally when the Minister introduced the scheme he stated that this was a scheme for the farmers. He promulgated regulations to prevent speculation in wool. Within two months the regulation to prevent speculation in the sale of wool was withdrawn. That gave us a shock. Why should the speculators intervene? Why should wool be sold in this way to the British Wool Commission? When this type of thing is done one becomes distrustful. We feel that in the circumstances we cannot turn down the principle of the agreement which was entered into in London, because we are bound and we have no alternative. That is not the question today. But we ask the Minister to listen to an organised body such as the National Woolgrowers’ which has made a name for South Africa throughout the world. The Minister must not push them aside and take the advice of a handful of people who are not favourably disposed towards the National Woolgrowers. If the Minister listens to the organised wool farmers there will be no difficulties. But in every case so far he has not heeded the advice of the farmer; he has ignored the farmer’s advice. The price which we are getting today is, of course, better than we would have got under the British scheme. Our wool farmers also made mistakes. We did not know what would become of our wool after the war, and we suggested that Britain should take our wool for a certain period after the war. Unfortunately we did not say at what price. The British Wool Commission was trying to reduce the price of our wool to 10.75d. That would have meant an enormous loss to us. The price of wool, comparatively speaking, is lower today than that of any other primary product. The wool index is something like 120. The wool farmers are getting the minimum for their product today although their expenses have risen enormously. The Minister must not forget that before the war we got 8.2d., but that was based on a £ which was worth 15s. Today we are getting 12d., but the £ is hardly worth 8s. 6d. The purchasing power of our money is no more than that today. Our expenses have increased enormously. The wool farmers are today abandoning wool farming and switching to cross breeds and meat production. The wool industry is languishing. Whereas we had an average of 240,000 bales or sheared 240,000,000 lbs. of wool, our clip has fallen to 200,000,000 lbs. There is a great demand for fine wool, but we are afraid that the price we are getting today is not sufficient and that there will be speculation in our wool. The appointment of the Council in England is, in my opinion, the wrong procedure. On the main Council South Africa has one representative, New Zealand one, Australia two and England four representatives. Who is going to be the chairman? It will probably not be an impartial chairman. England will have the final say and will, of course, look after her own interests first. She will starve the factories of other countries—of Germany and France and Italy —so as to prevent them from getting wool and conquering the markets. In this way South Africa’s market will be restricted and eventually by means of this monopoly England will reduce the price of our wool to a lower level.

The English wool farmers are getting more.

The English wool farmer rejected this scheme from the very start because he did not get enough under this scheme. And what has become of the profit that we were to get on wool sold outside the Commonwealth? I have always said that we would not get anything. What is the position at present? This sum of £2,250,000 has been thrown in with the war supplies. It is not even enough to compensate for the depreciation in wool. The depreciation is more than £3,000,000 but the same wool is still being sold on the basis on which it was sold during the war. Why are we now called upon to pay more than 1d. per lb. in respect of depreciation? The old wool is being sold on the old basis and we are called upon to pay for depreciation. The old wool is selling very rapidly. In that respect we did bad business. We got nothing out of this £2,250,000. Now we find that there is no depreciation and that the old wool is being sold at the same price. In other words, we gave this money away. These are my main objections to this scheme. Our accusation against the Government is that it has broken its word to the wool farmers of South Africa and of the world from the very beginning and that it allowed the British Wool Commission to prevent an open market. It affected America particularly. During the war America bought more than 300,000,000 lbs. of wool. America is now getting a slap in the face. America is being driven out of the market. We protest most strongly against that. If America or any other country wants to buy in this country they should be given an opportunity to buy our wool on an equal footing. There is another thing to which we object, and that is that the entire credit is to be arranged through the Bank’ of England. Why cannot the purchasers buy direct from South Africa and make arrangements through our own banks to buy here? I recently went to Port Elizabeth and there I met a number of buyers. They wanted to buy wool for £1,000,000 but everything has to go through the British Wool Commission. They control the whole matter. Other countries are not allowed to join the organisation and to buy in our markets. The whole object is to retain a monopoly and people are being driven away from our markets. Wool growers today are not as they were 20 years ago. We read and see things and think and when such things are done, we lose our faith, and I feel that is one of those mistakes that the Government has already, before this scheme has been properly put into operation, allowed to be made. We asked the Minister to tell us whether he gave Mr. Ginnes — I will call him by his name—the right to freeze those types, in order that America could not obtain that type of wool. I want to know from the Minister whether the Union Government gave him the right to do that? If not, then he has acted ultra vires, and then they have damaged the scheme thereby. I hope the Minister will give us an explanation on those lines. We feel that an international body should be convened such as we have heard of in the Atlantic Charter. We heard that wars were still being fought because raw materials were not distributed evenly. We ask that all those people who are concerned with wool should be united in this scheme in order to ensure that the one or the other country is not neglected, or that the one or the other country does not have a monopoly, but that our wool shall be used in all parts of the world and in that manner we shall be able to meet the competition of synthetic wool. But if we are going to create a monopoly for certain countries our scheme will be a complete failure. I now want to say a few words about the statutory powers of the Wool Board. We laugh when we think of these so-called statutory powers for the Wool Board. Why does any fear exist for these people? I want to know from the Minister what powers we have today in addition to the powers we had when we were an advisory body. We have merely been allowed to raise a levy on our own people. We have only been allowed to tax ourselves and to look after ourselves, but what has he done? He has not given the Wool Board the right to dispose of their funds as they like. The Mealie Control Board has the right to spend their money as they wish, but we wool growers, the best organisation in the country, are treated like a lot of school children. They say to us: All right, we will give you the right to collect money, but the Secretary for Agriculture will have control over the money. Are we a lot of school children that the Secretary for Agriculture should have control over our money? We are tired of this sort of departmental interference in our affairs. We are tired of this business of the Department continually meddling in our affairs. It is our money. It is not the Minister’s money, neither is it the money of the Secretary for Agriculture. It is the wool growers’ money. In heaven’s name, give those people the right to spend the money as they think best. We are getting tired of this sort of bureaucracy in which our wool growers have no say. Here we find a so-called board. Two of the members are appointed by the unorganised farmers. Who are the unorganised farmers? To whom must they be responsible? Usually they are Government supporters, who will speak just as the Government wants them to speak, and the Government will put those people on the Board to say “Yes” to everything they do. The wool growers feel that we can do without these unorganised farmers on the Boards, that we are quite capable of running our own business, and I hope that the Minister will appoint people to this Board who represent all the wool growers, that they will handle the money of the wool growers, that they will be able to do their work without interference from the Department and the Minister, that they will be able to do what they think is the best for their interests. But we are still concerned with this question of management bodies. Here we have another Board of Management where the Minister and his Department are again interfering, just as in the past. The wool growers put their case; the Minister comes along and does something else. The Minister has said here that he explained the matter to the National Wool Growers’ Association, but in the past he has always fled from the wool growers. Two or three times the wool growers invited him to attend their congresses. Once the Minister sent me to explain his scheme to the wool growers. He said to me: Tell them that if they adopt this scheme, I will give them legislative power. A number of people behind the scenes, of course, objected to this, and he had to withdraw his words after he had made a fool of me by sending me to the wool growers. We want an honest Minister. We do not want a Minister who stabs wool growers in the back. When he called me out here and gave me his word, I thought that I was dealing with a Minister of Agriculture upon whom the wool growers could rely. I did not think that I was dealing with that type of man. I took him at his word, and I took the Secretary for Agriculture at his word. The wool growers adopted the scheme unanimously, and the Minister did not have the courage to put the scheme through. Now he comes along with a feeble scheme which is worthless. We have nothing to do with the marketing of wool; we can only use the wool funds to pay the National Wool Secretariat, to make propaganda and to do research work, but even there the Minister has left us hopelessly in the lurch. Australia realised what wool was worth to her. The Australian Government gave the wool growers of Australia a subsidy on the £ for £ basis, and the Australian wool growers raised a levy on themselves for £300,000 and the Australian Government gave them another £300,000, because it realises that wool is the life-blood of Australia. What has been done in this country? Not a penny is given to the wool growers. I would like the Minister to tell me where anything is given. [Time limit extended.] I shall be brief. The Minister and his Department have in the past always put a spoke in our wheels as far as our own research work was concerned. In any other country in the world, research work is done by the State. In this country, research is done with the wool growers’ own money. At Onderstepoort we paid thousands and thousands of pounds for buildings. We spent money to have young men trained, and now the Government comes along and tells us: Out of this levy which you pay, you must please give me £5,000 per annum in order that this research work may be done. Is that the action of a Government who has any sympathy with the wool growers? It surely is the action of a Government who has no sympathy with the wool growers. I ask the Minister now to see to it that this £5,000 for which the wool growers had to work hard—the wool growers have lost thousands of sheep—will be paid by the Union Government, and not by way of a levy imposed on the wool growers. It is the duty of the Government. We went further. At Grootfontein we erected a beautiful laboratory because we felt that it was not enough to work on theory alone. One must also do practical work, and at Grootfontein the wool growers erected a laboratory which cost them £17,000. We felt that there was too much theory, that the research with regard to wool could be done at Onderstepoort, but that animal husbandry, together with experiments, had to be done in the area where the practical sheep farmer lives, and we now ask the Minister not to be so stingy as not to give us proper apparatus and proper staff at Grootfontein. Let us help them. Now we ask the Minister please to allow us to use even the money which we collect, and not to have to give a portion thereof to the Government. We ask the Government to help us in the same way as the Australian Government is helping the Australian wool growers. During the drought some farmers lost hundreds and thousands of sheep. Farmers who had a few thousand sheep today have only a few hundred left. Do not let the wool grower have to carry all these burdens. It is also the duty of the Government to look after these people who have done so much to build up this country. The amount invested in sheep farming in South Africa is £160,000,000, and what revenue do the wool growers derive from this large capital investment? Their income from wool amounts to a mere £12,000,000. No person will tell me that this is a profitable return on such a huge capital investment. We ask the Government to bear the wool growers in mind. Consult practical people. The practical people are the people who will give you the right advice. Listen to the farmers. I would not say that all the officials in the Department are theorists only, but there are many farmers who could help them, and if the Minister would associate himself more with the practical farmer, his whole position would be made much easier for him.

On this red-letter day for the wool farmers of South Africa, which will go down in history as the day on which the wool growers received their Magna Charta, the hon. member for Cradock (Mr. G. F. H. Bekker) comes along with a tirade such as we have seldom heard in this House, and it is especially intended to belittle the hon. Minister of Agriculture and, I even go further, to insult him. It is not the first time today that we have heard this tirade, but ever since the Minister of Agriculture has taken over the portfolio and tried to do everything in his power for the good of the country. Hon. members on the opposite side have tried to belittle him and to kick him out. But in spite of all this, he has emerged from these attacks covered with glory and he has proved that he is a Minister of Agriculture who is in every respect worthy of having control over our industry. The Minister has proved, although he is not a sheep farmer himself, that he is very well informed. This Bill which is being introduced here today by the Minister and which is being opposed by the hon. member for Cradock, this Bill, I say, will go down in history as the Magna Charta of the wool grower. The hon. member for Cradock took exception to the appointment of the Board of Directors. I can understand that very well. Our Treasury is responsible for maintaining this scheme and for the financial side of the matter, and for that reason I feel that the Minister is quite justified in taking this step to appoint the directors by means of a panel introduced by the wool farmers from which he can make his selection. If we look into the Wool Council and see how the executive of the National Woolgrowers’ Association and even the executives of the various unions, for instance the Cape Province Union, have been constituted, there is reason for the people in South Africa to be concerned over the constitution of these bodies. Some years ago when the hon. member for Cradock was chairman of the Woolgrowers’ Association of the Cape Province, secret meetings were held in Port Elizabeth to make sure that he would be elected as chairman the next day. Even in the district of Cradock, where there is one wool growers’ association, they saw to it that six branches and twelve farmers were sent as delegates. That is sufficient proof of the manner in which he arranged this matter. It has been alleged here that the wool growers lost £600,000 per annum because we were paid too little for our wool. The hon. member over there was in favour of our wool being sold to Japan and, in addition, that it should have been given to them on credit.

England also sold it to Japan.

England bought for cash. I would like to know from the Opposition what would have happened to the wool growers in South Africa if their spiritual allies, the Japanese and the Germans, had won the war.

America would have bought our wool.

The hon. member over there would not have been in the position then nor in this House to receive an extension of time when he makes a speech here. He says it is nothing. Is it then nothing that the wool growers of South Africa are today prospering as they have never prospered before? That is the proof. If a sheep farm comes on the market today the price is twice as much as before the war. As a result of what? As a result of the excellent prices we have received for our wool from Britain, the country which they would have liked to have suffered defeat and even to have been exterminated. The hon. member for Cradock spoke in an insulting manner of the wool farmers of twenty years ago.

He says that the wool growers of today are able to read.

I think he can take many of those farmers of twenty years ago as an example; farmers who, under much more difficult circumstances than exist today, paved the way for the wool growers of South Africa. Instead of talking disparagingly of them, he should be grateful to those farmers. He referred to the unorganised wool growers. How many wool growers are organised and how many are not organised? He talks such a lot about the excellent organisation of the wool growers. Let me tell the hon. member that there are many wool growers in South Africa who do not belong to wool growers’ organisations, farmers who are an example to others and whom we can respect.

Are you also one of them?

I belong to the organised wool growers, but I am not blind to the mistakes of the organisation, and when it is necessary I oppose them as I opposed them when they wanted legislative power for the wool council which I regarded as not being capable of passing legislation in respect of the products of the wool grower in South Africa. I state emphatically that by misleading them they managed to get 5,300 wool growers to vote in favour of the granting of legislative power. 1,800 wool growers voted against the proposal. They told the wool growers that they should vote for it because it did not mean very much. They told the wool growers: You need not be afraid to give us these powers; we will come back to you when we want to make a change. A protest committee which was formed obtained legal opinion, and it appeared that once legislative power had been granted to them, they could pass any legislation. But did they inform the wool growers to that effect? No, they proceeded. But I say that notwithstanding the fact that they did everything in their power to get all the wool growers on their side, they could only get 5,300 farmers to support their standpoint. As I have said, today is a red-letter day in the history of the wool growers of South Africa, because now the wool grower gets what many of us on this side of the House have long been pleading for. Did the hon. member for Cradock, who is one of the heads of the Wool Growers’ Association in this country, make any effort to get the wool growers to believe that it is in our interests not to isolate ourselves but to co-operate with Australia and New Zealand, the great wool-producing countries, and if necessary, even with other wool-producing countries in the world. It is only in that manner that, in difficult times, we will be able to cope with depressions and similar difficulties with which the farmer is faced. Now we are assured of a steady existence. We are assured of a steady market for a very long time I hope. I would like to say this, that it is in* everybody’s interests that a consistent price should be assured to the wool growers, because otherwise it would mean that with the good prices obtained today for out meat—once again under the able guidance of our Minister of Agriculture —a large number of our wool growers would change over to breeding sheep for the meat market, that is to say, they will go in for the Afrikaner type and cross-breeds. That is why I say that it is in the interests of the country that a steady price should be assured for our wool. I would just like for a moment to return to the point about the legislative power given to the Wool Council of South Africa which the hon. members on the opposite side asked for; because as I have said, we would have been at the mercy of farmers who were not able to make a success of their own business.

I have never yet heard such a poor speech.

What preceded this legislation? After September, 1939, we had an open market and an agreement was made with England that everything which was not taken up in the open market, would be taken up by Britain at a minimum price and this resulted in England having to take a poor quality wool and a poor type of wool, wool which would become very poor in quality and value. Subsequently Britain said that she was prepared to buy our wool at a fixed price, determined according to type, for the duration of the war and for one year thereafter. It was at that time, as I have said, that the hon. member for Cradock advocated that we should sell our wool to Japan and even on credit. I would like to know how that hon. member who is looking so prosperous now, would have looked if we had sold our wool to Japan on those conditions. At a later date our price was revised and we received 20 per cent. more for our wool than we were receiving at that stage. Once more they shouted from the housetops that the improved price had been granted at the insistence of the Opposition.

You opposed it.

That is the type of statement we get from that hon. member, statements which are not supported by the facts. Our Government has always been alert as regards the position of the wool growers of South Africa and they never failed to do what had to be done. I would just like to mention a few points which appear in the Wool Bill itself and that is in connection with our levy. The Board would be empowered to raise a levy of three-twentieths of a penny for local purposes. That works out at 3s. 9d. for a bale of wool. I must honestly say that the wool growers of South Africa will not be satisfied with that.

That is the maximum.

Thank you. Then we would like to know what the other costs in connection with this scheme are. There are rumours that it will amount to approximately one and a half pennies per lb. I would just like to tell the Minister that as our warehouses have now been completed and as the apparatus has been installed, I think that this charge of one and a half pennies is far too high and I hope that it is not true that that is the figure contemplated. And then I would like to ask whether it would not be possible not to deduct it from the price of the farmer, but to add it to the price paid by the buyer. In practice it may not make a very big difference but it would in any case give more satisfaction. Then just a few words about the funds. The funds under the control of the Secretary for Agriculture are deposited at the Reserve Bank. I would like to know what rate would have to be paid for overdrafts and whether interest will be paid on money held as a credit balance. These are questions which the wool growers would like to have answered. I would also like to know whether any interest will be payable on the reserve funds. I am convinced that the accumulation of wool which exists and which it is expected will be disposed of within ten years, will be absorbed by the market within five years and I expect that this scheme will work very smoothly and that it will not present much difficulty. Then there is section 17 which is divided into paragraphs (a), (b) and (c), which provides that wool can be withheld, that farmers can be prohibited from sending their wool to the market. I must say, candidly, that there are farmers who are most perturbed about this section about the withholding from and the sending of wool to the markets. In the past the farmer sent his wool to the market selected by him and if it means that in terms of this section, together with its sub-sections, it is made possible for the wool growers to be told where they have to send their wool, then I must candidly say that it will meet with much opposition and I hope that at the Committee stage the Minister will amend this section in such a way that the wool grower will retain the right and the choice to send his wool to the market he prefers. With these few words I would like to thank the Hon. the Minister and the Department of Agriculture and the Government for all the work they have done in connection with this matter and I want to give the Minister the assurance that the large majority of the wool growers of South Africa are solidly behind him in carrying out the terms of this Bill; and I honestly think that many wool growers would not only have been disappointed but would have been ashamed by the speech made by the hon. member for Cradock.

This scheme was described by the last speaker as the Magna Charta of the wool grower, and he hailed this as the red letter day on which it was introduced here. When we think of a Magna Charta we have in mind something permanent. He admits that this scheme will remain in existence only so long as there is old wool and so long as the J.O., the Joint Organisation, is in existence, and we on this side hope that the accumulated wool will be disposed of in the near future and that we will be rid of that Joint Organisation. At the same time, I am of the opinion that the hon. member for Port Elizabeth (District) (Mr. Hayward) introduced a somewhat unfortunate spirit into the debate when he made such a violent attack on the hon. member for Cradock (Mr. G. F. H. Bekker); and I would just like to tell him that, notwithstanding that attack, we still regard the hon. member for Cradock as one of the authorities on the wool question today.

Shame!

Is the Minister not of that opinion?

I would rather reply in person to what you said.

After all, when a delegation had to go to London to discuss the matter, the hon. member for Cradock was one of the persons who enjoyed the confidence in general of the wool growers, and I think it was one of the greatest disappointments to the wool growers when they heard that he was not going.

They did not elect him in the first instance.

They elected me. You kicked me out. The Wool Board elected me.

We would rather leave it to the hon. Minister and the hon. member for Cradock to fight that out. But I would still say I have confidence in the hon. member for Cradock as regards the wool position, and I think he is in a strong position to defend our wool growers, and I am not at all sure that our wool position is not in need of improvement under this Bill. We hope that is not the case; but in view of what has happend in the past, we are inclined to be somewhat anxious.

Then move that the Bill be withdrawn.

We have never asked for the Bill to be withdrawn, but we insist on the right to criticise this Bill here. If that right were to be denied us, I am afraid we will land up in an impossible position. It is not worthy of my hon. friend to suggest to me that I should move that the Bill be withdrawn. We do not want the Bill to be withdrawn; but when the wool scheme was announced in this House we uttered a warning and criticism, and we want to do that in regard to this Bill, too. I want to join the hon. member for Cradock (Mr. G. F. H. Bekker) in emphasising that the Minister should endeavour to obtain the co-operation of the wool growers.

That I have.

If the Minister has that, he at least has the prospect of making a success of it. If he lacks that co-operation, I am afraid this scheme will be a failure.

It will be easy to obtain that co-operation if you would only assist.

Now I want to bring the Minister in for a little bit of criticism. It is today exactly eight days since this Bill came into our hands. It is becoming the practice of Ministers to introduce legislation of the utmost importance at the very last moment and to ask us to deal with those Bills forthwith.

The whole scheme was announced long ago.

That is where my criticism comes in. We have hardly had this Bill in our hands for eight days, and already we are being asked to deal with it. I think it was in September when the Minister announced his scheme to the Wool Congress at Bloemfontein. The details of the Bill could not be given in the announcement, but the Minister should have had all the details of the Bill at that time. Long before then the delegation had returned from London, and they must have reported to him. He must have had the draft of the Bill at the time, but he produced the Bill a week later only. This Blue Book which contains the report on the Wool Conference in London appeared on 13th January—not quite two months ago.

Surely that is long enough.

We farmers take a long time to study, and we do so slowly. The Blue Book was published in January. The Minister must have had the draft Bill at the time; but at the very last moment the Bill was submitted to us, and we have to deal with it straight away. That is expecting rather too much. If a young man would take the advice of an old man, it is this: Let him see to it that this does not happen in future, and that measures such as these are placed in our hands in good time to allow us to study them. In dealing with a Bill such as this Wool Bill, we should not only consider the Bill, but we should also enquire into its precedents and assess its possible effects. It is extremely difficult for us to do all these things when a Bill is placed into our hands at such a late date. The Minister announced the scheme in September. I read that in the newspaper. I had to rely on a newspaper report. The report of the Wool Conference in London appeared in January, and now we have to deal with this Bill. I consider it very unfortunate that we received the same treatment when the original agreement was concluded. It was announced by the Minister’s predecessor in a speech on the wireless that he was proceeding with such a scheme. It took a long time before it was in the hands of the farmers and before they knew exactly what it was going to be. The Bill provides that wool grown between September, 1939, and subsequent years—it does not say until when —will be purchased by the British Wool Commission. The present wool contract with Great Britain came into operation in 1940. I have the contract in front of me. It was signed by Mr. Attlee and Mr. Waterson in February, 1942, only two years later. There was a certain set-back on the market; matters were unsettled until the difficulty was finally disposed of and the project got under way. We did not know from day to day where we stood. It was a very unfortunate position. I am afraid we still do not know exactly where we stand. In the agreement provision is made for a division of the profits. Separate accounts had to be kept by the Government of the United Kingdom of all profits and losses on the sale of wool; accounts had to be kept for wool-sales outside the United Kingdom, excluding wool washed in South Africa, etc. We are still being kept in the dark and I would like to put the Minister a direct question: Has any return been received from the British Government advising us what has become of the wool; has any return been received in respect of wool sold outside the United. Kingdom and of the price realised? In the agreement it clearly says that separate accounts have to be kept. I have the agreement here if the Minister has not got it in front of him. I think the least they owed him was to submit a return of the wool sales and of the prices realised. I think we have every right to expect that. It is our duty to go into the matter thoroughly. We have the right to criticise, and if we are of the opinion that there is any danger we should point it out. Perhaps they are not real dangers and merely fictitious dangers but we have every right to point them out to the Minister. The Minister should accept that in the spirit in which it is being done and not in a quarrelsome spirit but in a spirit which will help him to make a success of the agreement and of the Bill. Of course we find that where a contract has been entered into with the British Government and where wool was accumulated in our country, we have to shoulder a certain responsibility. Perhaps that is causing us some anxiety. We know what the position was after the first world war. The market collapsed and we hope that this agreement and this Bill will prevent that. We still remember what the position was at that time. We had to seek assistance from other countries to take our wool in exchange for goods. We had to enter into bartering agreements. Will this agreement safeguard us against that? We hope it will have that effect, but will it? Will we be able to count on the British Government to stand by us if matters go wrong? We are now assuming liability in regard to wool accumulated in our country and for which we are not responsible. We have entered into an honourable agreement with England to purchase the wool from us. Has England done her utmost best to secure a market for that wool or has she failed to do so? However it may be, she is responsible for the accumulation of wool in our country and we are now being asked, although we are the sellers, to be responsible for an article which we have already sold. If there are any losses we have to share in those losses. It is not right in principle. When a producer has sold his product we cannot expect him to be responsible when there is an accumulation of those articles and a loss is sustained in consequence. During that period we had no say in the matter of the sale of our wool. As I said, we disposed of our wool under the agreement. We had to sell it to the British Government. The British Government did not dispose of it, and now we are expected to help carry the responsibility. As the hon. member for Cradock rightly observed, the Joint Organisation was established to dispose of the wool. It is concerned solely with the disposal of the wool. That is where our criticism comes in—have we enough say in that organisation to look after our interests and to see that our interests are properly safeguarded, especially where we have to assume this responsibility which does not belong to us? We would like to know what quantity of wool has been disposed of to, say, America; we want to know whether there has been any demand for our wool. The hon. member for Cradock has pointed out that Italy and Greece wanted to buy our wool and they said we did not have the wool. To whom did they sell? Did Spain buy from them; at what price and what was the nature of the transactions? We want to know about all these matters so that we can know whether we can have confidence in this new organisation. I know it is essential to have everything above board in order to avoid suspicion at a later date. We are establishing a joint organisation and are vesting certain powers in it. It can buy and sell movable property. We practically empower it to trade in this country. What are the things they are going to buy and sell? We are putting this question to the Minister and we will be very glad if the Minister would reply. We want to co-operate; but let these matters be brought completely in order so that we can feel quite free to co-operate. What proof is there that this sales system might not exist for four or five years only? We would like to know how long the system can continue and at what rate they expect this business to proceed. Then we come to the Wool Board. What are the powers of the Wool Board? It also has the right to buy and sell movable and immovable property. Is there no danger of overlapping? They both have the right to buy and sell movable and immovable property. Where it is going to end? Are they not going to be burdened with certain assets which may be necessary today but which may in time to come become superfluous? The hon. member for Cradock protested against the composition of the Joint Organisation. I trust the Minister will use his influence in the interests of our wool growers and if need be sacrifice other interests for the sake of our own. In conclusion just this: An attempt has been made to establish a wool factory in South Africa. I want to emphasise that we should at least see that out interests are also promoted in that respect. In Australia at least 350,000 bales of wool were used for manufacturing purposes before the war. During the war they did not neglect their interests and the amount increased—500,000 bales were used for manufactures in Australia. There seems to be a notion in this country that we should look after the interests of overseas countries instead of looking after our own. We can use much more of our wool for manufacturing purposes in our own country if only we want to. We are manufacturing a few blankets and that is as far as we get. Let the Minister at least take the wool growers into his confidence and keep them advised of all the developments which are taking place.

Mr. Speaker, I do not wish to follow on the lines adopted by the hon. member for Cradock (Mr. G. F. H. Bekker). I was of opinion that we came here to make the best of the future rather than to fling across the floor of the House recriminations and accusations going back to as many years as one can remember. I feel it my duty, in the first instance, to express my gratitude and appreciation to the Minister in introducing this Bill which is designed to bring about an orderly system of marketing. It is also designed to lift from the market an accumulation of wool which, if not controlled, would bring chaos into the wool market. It goes further than that. It is actually to establish a market for South Africa on a fixed type basis and a fixed price basis. If South Africa can look forward to that kind of market for its present clips and have an orderly marketing of that accumulation of wool I say the farmers of this country have the right to expect a fairly prosperous time in the future. Having said that I want to offer a few observations, and to ask the Minister whether he will allow me at the Committee stage to move certain amendments to some of these clauses which to my mind will be designed to effect an improvement. My first point might be regarded as criticism. Clause 5 (c) of the Bill dealing with the local board of directors states—

That is the National Woolgrowers’ Association. I take it the Minister intends to appoint one man to the board who will represent unorganised farming. I think the day has long gone by when we should encourage farmers to remain unorganised. So much better work can be done and so much more orderly marketing can be carried out under organised farming, and I think the day has gone by when the Minister should, as he is by this appointment on the board, give encouragement to unorganised agriculture. I now come to Clause 6, and there again at a later stage I should like the Minister to accept a minor amendment. It states that the chairman of the directorate shall hold office during the < Governor’s pleasure, and other directors shall hold office for three years and—

All I want the Minister to do is to reappoint a director after he has been nominated by the organisation. Then a question arises out of Clause 9, and I should like to have some information. The Minister desires to establish this board, and he gives the chief executive power to a member of the board, and then he has decided to appoint one of the directors as a managing director who shall be the chief executive officer. I cannot reconcile the two. He may have special ideas in his own mind, but I should like to know why he considers it necessary to appoint a managing director. Then I want to come to Clause 17 (a). It is stated that the directorate may regulate the supplies of wool to auctions—

That may be interpreted in many ways when one takes into consideration the sparse shedding that is available, the number of bales that might be shorn on any one farm, disease, damage by blow fly and so forth, and I do not think it wise that this should be embodied in the Bill unless some explanation is given. Besides, I think it would not be healthy to apply a clause like this. It might cause a certain amount of irritation and I can assure the Minister it will be resented if translated in a way it might be possibly put into force. In Clause 27, dealing with the nomination of wool producers’ representatives on the South African Wool Board, provision is made for the appointment of two members representing unorganised producers. Having expressed myself on that principle already I do not intend to repeat the argument. Then, Sir, I come to Clause 29 in which the Minister makes these various appointments, and the wording used is, I think, far too slack, and I do not think it meets the case. I should like to move an amendment there at a later date; the words I object to are “other suitable persons.” I shall deal with these amendments at the right time. As I said in my opening remarks, one regrets a controversy should have been started over what to my mind is an extremely useful piece of legislation designed for the betterment of the whole industry. In conclusion I wish to thank the Minister for his efforts and I wish him every luck in bringing this measure to a successful conclusion.

The hon. member for Port Elizabeth (District) (Mr. Hayward) gave us the assurance that wool farmers at this juncture are flourishing wonderfully. T personally feel that the wool farmers are reasonably well off, but it is very strange to learn from the hon. member that they are in such a remarkably flourishing state. The index figures show that the price of wool only increased twenty points. It went up from 100 to 120. Those are hard facts, so where does the story come from that the wool farmers are so exceptionally prosperous. The same hon. member also stated that if the wool farmers were left to the tender mercies of the hon. member for Cradock (Mr. G. F. H. Bekker) and those who think like him, he wondered what would become of them. That is an uncalled for remark, and we cannot let it pass. I would merely say here that this side of the House objects in the first place to the monopoly created in the wool world. This side has objected to South Africa’s prices being fixed on a lower level than Australia’s. We therefore agitated there should be an increase in the price after the contract was entered into because production costs had risen. On every occasion we were very strongly opposed by the other side of the House. On some occasions it became so bad that we on this side of the House really began to feel that we were money-grubbing because we were pleading for an increase in the wool price. Eventually a five per cent. increase in the price was obtained. But what became of the profits spoken of and of which our farmers would receive half? We have to protest because after the contract was entered into with Great Britain it was stated in the clearest manner that half the profit that should have been made on our wool that was sold outside the United Kingdom would come to the wool farmers in South Africa. The contract ran for a couple of years and then it appeared that on the commercial side it would not measure up to the expectations the United Kingdom had anticipated. From the report it is clear that they did not buy the wool because they wished to assist the wool farmers as such, but they bought the wool purely from a business standpoint, purely and simply because they believed they needed the wool for their private businesses and the war effort. I would like to read out something from the report of the wool conferences—

Thus the agreement was not entered into to assist the wool farmers of the world but purely as a business transaction, and this transaction has now run for a number of years and certain profits have been made. At this stage it suits the United Kingdom to get the Dominions to bear 50 per cent. of the expenses of financing the wool that has accumulated. It suits them, but why is the profit not paid out that was made under the contract up to the present to the rightful owners, that is to say, the wool producers of South Africa? Why also is that profit used to ease the contract for the United Kingdom? What worries me further is that as soon as the Minister comes with a new idea, or as soon as he comes with a fresh contract, he always wants to hold out to the farmers of South Africa that wonderful fortune awaits them in the future. When the Minister intimated the new agreement to the farmers of South Africa he said—

What El Dorado does the Minister not hold out to the wool farmers? It does really look as though they are going to have their bread buttered on both sides. According to the Minister the wool farmers have now received a minimum price without a fixed ceiling price, and according to the words of the Minister the wool farmers may expect that if the enquiry for wool increases and the prices go up they will obtain the benefit of the increase. But it is absolutely clear to us that there is no intention whatever of allowing the wool farmers to receive a price in any way above today’s basis. The intention is to keep the prices down. That is very clear from what is stated here—

In other words, if it is clear that the world demand for wool is large and there is a danger of the prices mounting, the organisation will forgo the open market and auctions and offer their wool at fixed prices with a view to keeping the price level low. This is very clear and we, as wool farmers, ask why these precautionary measures are being taken. As we now have the scheme with a fixed minimum and an open market, according to the statement, why with malice aforethought is a plan being made to prevent the price rising reasonably and why is care being taken that prices should actually be pegged at today’s level? You cannot take it amiss if the farmers are suspicious that the agreement signifies in the first place that the farmers are being prevented from getting more for their wool. Apparently it is further being sought that England should retain a monopoly of wool for itself and its friends. But what is more, because the wool industry of England is today virtually intact and its factories are intact England will be able to produce more quickly than other countries. Now they can make more use of our wool because they have the agreement and can produce, and at the same time they have succeeded in keeping the wool price as low as possible. As wool farmers we must protest against that, and we do protest, because we feel that our wool farmers have been treated unfairly. If there is one section of the farming community which during the war has not been treated on the same basis as other farmers in regard to their earnings it is the wool farmers. The wool farmer’s price has not risen to anything like the same degree as other products, but his cost of living and production costs have mounted. Consequently we feel it is unfair that the wool farmer should again be knee-haltered. Even where we are supposed to get an open market it is already being foreshadowed that the wool farmers will not be allowed to get a price above today’s fixed basic price. We realise that if the price of wool soars too high we run the danger that synthetic fibre will take its place and compete with wool in a greater measure than today, but if the world shows that it requires wool and is prepared to pay a good price for it, it is the duty of the Government, in my opinion, to permit the wool farmers to have the privilege of a higher price.

How is the price limited? You can sell to any other country.

The Hon. Minister was not present when I read out an extract from the agreement. In the disposal plan it is stated that if it is clear that wool is going to rise in price the organisation can prevent it by spiling it outside at the fixed minimum price.

Who?

The general organisation.

It is comprised of the producers of Australia and South Africa

No, the general organisation can offer wool outside without bringing it to the auctions, and it can offer it at a fixed price in order to prevent the price of wool rising. No one in the world will buy wool at an auction at a high price if he can get it outside at a lower price. This is set out clearly on page 23. We protest and we say that the Government must see to it that the wool farmers of South Africa derive the benefit of an increased price for wool, and that we are not knee-haltered in this way. I would further ask the Minister to give organised farmers stronger representation on the local organisation. In the last resort it is the farmers who are financing the whole scheme. The Government lends the money to the farmers, but it is not going to cost the Government a single penny. Every penny will come out of the pockets of the farmers.

But there may also be losses.

They are on their guard against that. The Minister has clearly stated that they do not want to make any profit, but the farmers have to finance the scheme, to pay the interest and to bear the expenses.

As the farmers are themselves financing the scheme, I would urge that the farmers should have a bigger say, a more effective say, in the organisation. As the directorate is composed under the Bill, organised farmers will have precious little say. A panel of four can be recommended by them, and the Minister can choose two of the six directors.

I said that I would select two from the four.

But there are six directors, and there will be only two for organised farmers.

There will be three representing the producers.

You cannot count the people representing the unorganised farmers.

Where does it say “unorganised farmers”?

They are unorganised.

They represent producers.

The persons who represent the producers and who can speak and act on behalf of the producers are the farmers recommended by the unorganised producers. Seeing that a third person is appointed here, it is clear it will be a person with whom the Minister is satisfied; he will be his choice. We cannot tolerate the interests of the farmers being trifled with on every occasion, and the farming representatives being in the minority. Here they are dealing with their own affairs. I will admit that the directorate is not on the same footing as an ordinary control board, but nevertheless we ask for a bigger say for the farmers in a scheme they must ultimately finance themselves. In connection with the Bill, so far as concerns the local wool board there is not much to say. The Minister has now come along, and though the organised wool farmers have pleaded for years for such a wool organisation and legal powers, the Minister has coupled this firmly with the wool agreement, and the upshot is that the whole wool board you are now going to get will be nothing else than a board that can interest itself in propaganda and research work, but which will not possess any real power. So long as the contract exists they will not be able to possess any power. Of what benefit is a board that has nothing to do with the handling of the product? Because the wool board has nothing whatever to do with it.

It is only the sugar coating of the pill the Minister has given the farmers to swallow with the contract. We protest that the Minister comes at this late stage and gives the farmers something which after all means nothing more than a little sugar to be swallowed with the other.

I would like to take this opportunity to thank the Minister for this measure. I can assure him that the vast majority of the wool farmers of this country will thank him heartily. The hon. member for Cradock (Mr. G. F. H. Bekker) said that the British Government refused to sell wool to Italy. Before that he also said that one of the reasons for going into the scheme was to enable the British Government to obtain cash to the extent of £80 or £90 million from the Dominions. But these two arguments are contradictory. If they were so keen on cash, why not sell the wool to Italy? I take it that the actual reason for not selling wool to Italy is that Italy cannot pay for it. I am quite sure the hon. member for Cradock will not sell any of his wool to Italy in view of the fact that the lira has practically no value at all. I also want to repeat the argument of the hon. member for Port Elizabeth (District) (Mr. Hayward) that the wool farmers are flourishing in spite of what has been said here. The mere fact that they have paid off large sums to State advances, that they have considerable bank balances, and that the price of land has advanced enormously is sufficient proof that the wool farmer is in a good and strong financial position today.

They are never satisfied.

I just want to ask the Minister whether in offering the wool on the open market the producer will have the right to withdraw part of his clip, or whether the whole clip must be either sold or withdrawn. If he is satisfied with the price for part of the clip, can he withdraw that part of the clip with the price of which he is not satisfied? Then in connection with expenses, we have been told that the expenses are in the neighbourhood of 1½d. per pound. That is the cost in connection with the sale of wool. One feels that it is a bit too high. One hears that the British Wool Commission’s expenses is something like 1⅞th penny overall cost. Once more I wish to say that the wool farmers will support the Minister with regard to this measure.

The Bill contains, as the Minister has said, two provisions. Provision is made for a Wool Disposals Organisation and a Wool Board with statutary powers. As regards the Disposals Organisation, the agreement relating thereto was published quite some time ago, and it is now included in the Bill. In that connection we would very much like the Minister to tell us why there was so much secrecy maintained in regard to the matter, for the wool farmers were not consulted before negotiations in connection therewith had terminated. The farmers were not properly consulted in this matter, and until recently, until three months after the negotiations had taken place in London, the utmost secrecy was maintained. Thereafter we were informed of the agreement which had been entered into, and the Minister told us this afternoon that he consulted with the Wool Board at the time and that they supported the scheme. I think that the Wool Board and the farmers had no other choice but to accept the scheme. Through the actions of the Minister they were confronted by an accomplished fact. An agreement was entered into in England in connection with our wool, that of Australia and that of New Zealand.

We entered into no agreement in London.

How can the Minister say that?

Have you read the document? It does not seem like it.

An agreement was entered into there which is now contained in the Bill, and as far as the scheme is concerned, the farmers are today in the position that they have no other choice but to accept it because they have been placed in the position by the Government and those who initiated the agreement, that they are forced to accept it. We surmise that this agreement was entered into and that the negotiations took place on the initiative of the British Government. The initiative did not come from the wool farmers of Australia or South Africa or New Zealand, but from the British Government. Why do I say this? It is very clear why the initiative came from England. The British Government realised that on this occasion—in connection with the wool transaction which it had concluded at the commencement of the war—it did not have the opportunity of making the profit which it made on the wool transaction during the last war. That is very evident. When the war broke out, the British Government offered to purchase the Dominions’ wool. It did not do this out of love for the Dominions, but for two reasons: It did so because it wanted to make a profit and to speculate with the wool and because it hoped once again to make as much profit as it did during the last war, and the second reason was that it purchased the wool because it wanted to keep the wool out of the hands of hostile countries. One can understand that these were the two motives behind the offer to buy the wool from the Dominions. Then, however, it discovered that things were taking a different course to what they did in the last war. There was not the opportunity they had in the last war of selling wool in Europe at high prices, not even after the war. England is worried about that. She is particularly afraid that the countries who do not want to buy wool will not buy the old supplies, but will want to buy fresh wool. England is afraid that there will not be a large enough demand to ensure that the old supplies are easily disposed of in competition with fresh wool. During the last war England made a huge profit during the war and after the war, for even during the war there were countries outside to whom wool was sold at a huge profit. This time that is not the case. The world is in such a state of chaos that England is afraid that she will be saddled with these accumulated supplies, and that they will not be able to compete with fresh wool, and that she will perhaps sustain a loss on the old supplies. For these reasons she approached the Dominions and made the proposition. The proposition was accompanied by a threat. The sword of Damocles is hanging over the Dominions: “If you refuse to accept the wool agreement, then I will offload the old supplies on the market, and the price of wool will drop accordingly.” That is what influenced the representatives of New Zealand, Australia and South Africa to enter into the agreement. One cannot regard the agreement which was entered into as anything but a leonine agreement. The British Government only stands to gain and can lose nothing. It was running the risk of sustaining a loss, for there was a large quantity of accumulated wool, and it ran the risk of losing in competition with fresh wool. And now England is going to share the financial burden, which she took upon herself in purchasing the wool, with the Dominions, for the Dominions will take over 50 per cent. of the liability. In this respect she is offloading half of the liabilities on to the Dominions. But there is an additional advantage which England has gained by her threat, namely, that she is endeavouring to establish a monopoly over wool, but it is not a monopoly of producers, but of producers together with one manufacturing country, namely, England. Thus we see the advantages which England has gained. Her liabilities are shared, and she is creating a monopoly over wool, and in the organisation which controls the monopoly she will have more than half the say. Half the directors in the organisation will be British representatives. But not only will half the directors be appointed by England, but a so-called unbiased chairman will be appointed, and we can take it in advance that he will also be someone from England, someone who will sympathise with England’s interests, who will have more sympathy with England as a manufacturing country than with the producing countries. Moreover, the Joint Organisation will have its offices in England. These are all additional advantages which England will have as a manufacturing country, and it will place her in a very favourable position in contrast with other manufacturing countries in the world. We can understand that England favours such an organisation, and where she has called it into being by threatening the Dominions that if they do not accept the agreement she will offload the accumulated supplies on the market, I fear that the Dominions were unnecessarily alarmed. I do not think that England would ever have dared to place the wool on the market, for by doing so England herself would have lost too much, and as a manufacturing country she would have stood to lose so much that she could not have risked it. For that reason I think that the delegates who helped to draw up the scheme in London were unnecessarily alarmed at England’s threat. If the delegation had had a sufficient representation of producers, I do not believe that the threat would have proved so successful. The hon. member for Cradock (Mr. G. F. H. Bekker) has already told us how the Australian wool farmers insisted on an open market, and then this concession was granted to the wool growers which was originally not included in the draft scheme, but nevertheless we feel that the representatives of producing countries at the conference were unnecessarily alarmed at the threat, and that as a result the interests of our wool farmers have been prejudiced. I have already mentioned the advantages which England has gained by this, and that she has been placed in a privileged position in connection with purchases of wool. She knows precisely what kinds of wool and how many of those kinds of wool there are. She has undoubtedly been placed in a very favourable position in contrast with other countries of the world who also want to purchase those types of wool. But we also have other reasons to be suspicious in connection with this scheme, because we have experience of the British Wool Commission. The British Wool Commission has proved in its activities in South Africa that it is not out to benefit the wool farmers of South Africa, but to benefit himself. The hon. member for Cradock (Mr. G. F. H. Bekker) has indicated how the British Wool Commission went out of its way to keep certain types of wool out of the market when there was a big demand for those types. The British Wool Commission kept those types out of the market and perhaps it sold that wool to British manufacturers. We would like to know where that wool went to. We know, and we heard that there were all types of wool in supply, but the British Wool Commission did not offer certain types and we are entitled to know what happened to that wool. Let us now examine what the disadvantages are. Supposing my argument is correct that those types of wool were only sold to one country and not to other countries. We can assume in advance that when wool is once again offered for sale, that particular country who has already bought wool and who has sufficient of it, will not enter the open market to buy, with the result that the demand will not be so great because that country has already sufficient for its needs. She will not need so much, for she has already bought up what she needs and the result will be that there will not be the keen competition that there would otherwise have been. If one buyer has already been fed, then competition will decrease. But we have another reason to be suspicious towards the British Wool Commission. Its actions so far have been of such a nature as not to win our confidence. Not only has it kept certain types of wool out of the market, but we have also heard that certain wool has been sold to certain countries who asked for that wool, and that wool has been sold on an unheard of commission basis. I do not know whether the Minister is prepared to furnish us with information in this connection. Our information is that wool was sold on an unheard of commission basis and that the commission was subsequently divided between the various wool buyers in South Africa. It would be interesting to obtain the information. It is well-known that something of that nature took place, that the commission was unheard of and that it was then divided among the people in the wool trade who had nothing to do with the transaction. If the British Wool Commission can lend itself to anything like that, then we have reason to be suspicious of an organisation where the same British wool interests will be strongly represented. The wool farmers stand to lose a great deal as a result of the proposed scheme. They stand to lose because competition has been eliminated and will be still further eliminated in the future, because England will not have the interest which she has had in the past in maintaining prices by encouraging the processing of wool as widely as possible in other countries. If England had been left alone with the accumulated supplies, then it would have been in her interests. I want the Minister to follow this argument. My contention is that because England is no longer saddled with this large quantity of wool, she is no longer in the position of being interested in seeing the greatest possible expansion of the manufacturing process of wool taking place in the world; she is no longer interested in certain countries being assisted to be able to process more wool. In other words, she is no longer interested in other textile manufacturing countries being encouraged to take more wool. If she had had large supplies and she did not want to lose too much on them, then she would have been in league with us in bringing about an expansion of wool processing in other countries. Now she no longer has that interest at heart. Her only interest is to obtain as far as possible a monopoly of the textile industry, and we are afraid that under this agreement it is given to her. There we are running the risk of losing a great deal. That chance of interesting and encouraging other countries in the processing of larger quantities of wool must now go by the board. For instance, we learn that the textile industry in France and Holland and also in Belgium has not suffered as much during the war as we thought it had. The fact is that they have sustained a relatively small amount of damage. ’We hear that even in countries like Poland and Czechoslovakia the textile industry has not been weakened or curtailed, but that on the contrary it has been strengthened and expanded by the Germans. If they had received the necessary encouragement, they could have developed considerably in that direction and manufactured woollen articles. But now I fear that by placing England in the position which we have, she will not be our partner in bringing about an expansion in those countries; she will no longer be interested in encouraging the consumption of wool in those countries, but she will rather oppose it and endeavour to obtain as far as possible a monopoly of the textile industry. Another loss one can indicate which the wool farmers have sustained as a result of this scheme is that even this year and next year the wool farmers will lose no less than £1 million. Prices have dropped by 5 per cent. We see, therefore, that according to the general tendency of the agreement the wool farmers have no reason to be delighted with it, as the hon. member for Port Elizabeth (District) (Mr. Hayward) tried to make out. He said that the scheme was the Magna Charta of the wool farmers, and he congratulated the Minister of Agriculture in particular on it. I fear that we on this side are not convinced that it is a Magna Charta for the wool farmers. It may perhaps be the rope which, if it does not hang the wool farmers, will surely strangle them in the future. As regards the scheme, the wool farmers have been told that they will receive a proposed price, but we must remember that the price is fixed from year to year, and it can drop much lower in the future. Instead of the textile industry developing and being encouraged in various countries, we are afraid that a monopoly will be given to one particular country and the result may be that instead of the textile industry expanding in other countries, we will have the position that they will make more use of synthetic wool. Instead of their interesting themselves in wool, they will interest themselves in synthetic wool, as a result of the Imperial monopolistic agreement which has given England a monopoly and has practically excluded them from getting wool. From now on we may perhaps find that this agreement will not be the Magna Charta of the wool farmers, but a retarding factor in the expansion and preservation of the wool industry. As regards the particular provisions governing the control organisation, I would just say that as far as the Joint Organisation is concerned we can make no further alterations to it. An agreement has been placed before us which South Africa cannot alter in any way. We have been confronted by an accomplished fact and we must accept it as it is. But as regards the local organisation, we trust that the Minister will compromise with the wool farmers. He knows that the wool farmers asked him that as regards the local organisation the wool farmers should have a majority on the directorate. The Minister informed us that the wool farmers were satisfied with the representation which he proposed here. I want to ask him a direct question: Did the organised wool farmers not ask him to give them the assurance that they would have a majority on the local directorate; and if they did ask him, why did he not give it to them? The Minister could surely have given the farmers a measure of protection. He could have given them a majority, and when we are in the Committee stage we are going to propose it, and then we hope that the Minister will take it into consideration and accept it. But there is another matter in connection with the composition of the board which I want to mention here, namely that the chairman of the board must of necessity be an official of the Government. Why cannot such a board choose its own chairman; why must he be an official of the Government? The wool farmers are most anxious that this chairman should not be a Government official, but a wool farmer. For this chairman will also be an ex officio member of the General Control Board, according to the provisions of the agreement. We are already afraid that on the Joint Organisation, where South Africa has only one representative, we will not have the necessary influence, and it is most imperative that the ex officio representative in the person of the chairman should be a wool farmer. The chances are that he will not be a wool farmer. If the chairman of the Wool Board is an ex officio member of the Joint Organisation, then he at least should be a wool farmer. Now he has to be an official, and the wool farmers therefore have no chance of having a direct representative on the Joint Organisation. When we come to the Committee stage and propose that a change should be made in this connection, I trust that the Minister will be prepared to accept the proposal. As regards the further composition of the Wool Board I would just like to know why he has made provision for a managing director as well as a general manager. I would like to know the purpose he has in view. As I understand the position I cannot see how any useful purpose can be served by having two such persons. I would like to have some information from the Minister in this connection.

And there is no need for them to be members of the board.

No, it does not follow. The chairman can be anybody. As far as the Wool Board is concerned I cannot do otherwise but express the fear which has already been expressed by the hon. member for Cradock, namely that we are now running the danger that the Government, by granting the power to the Wool Board to impose a levy on wool, and especially as a result of the control the Government has over the functioning of the Wool Board, will, in the future, not deem it expedient to provide the farmers with the necessary services connected with the wool industry, such as research. We can expect the Government to off-load those duties on the Wool Board. We have had experience of this Minister. We have control boards under the Marketing Act, and we see that the Minister has a strong tendency to offload on them the responsibility of performing certain research work and other services for the industries concerned instead of it being done by the Government and his Department. Do we find any such thing in connection with mining activities? Is any levy paid on the part of mining interests to make funds available which can be used by the Department of Mines for research and investigation in connection with the mineral riches of the country which are in the interests of the mining industry? No, no such provision is made. This Minister is the Minister of Agriculture and the servant of the farmers of South Africa. He forgets that he is a Minister and therefore is the servant of the farmers. But instead of promoting the interests of the farmers he is acquiring more and more dictatorial powers in order to prescribe to the farmers what they must do; not to help and support them, but to prescribe to the farmers what they must do and to compel them to pay for it themselves. We know that the Minister does not sympathise with the farmers. In every respect he thwarts them instead of giving them support. He forced the tobacco farmers to provide funds for a research station. He forced the wool farmers to contribute towards a research station at Grootfontein. Through this control board he is now going to force the wool farmers to pay themselves for that essential research work and necessary work which should be provided for them by the Government; he is going to force special agricultural interests to provide the cost of research and investigation while these are things which should have come from the Central Government. We fear that may happen. As far as the composition of the Wool Board is concerned I hope that when we come to the Committee stage the Minister will effect a certain amount of compromise. This is, after all, a board of producers. They deal with the production of wool, and why should the Minister have so much say. If a recommendation is made and the Minister does not agree with it, if he refers it back and the same names are once again recommended by the organisation concerned, then he can apply the veto right and can make the appointments himself. Once again he is acting as the dictator — the Government’s strong man! Well, we might just tell him that this attempt of his to be a dictator and to manifest his strength has not succeeded. From it we discern not moral strength, but cowardice. A Minister who entrenches himself with so many powers cannot have much confidence in his own capabilities or in always having the support of the farmers. A man like that sees trouble looming on the horizon, and when it comes he wants to have the power in his own hands. He has practically acknowledged that he is not safe, and for that reason he wants to be a dictator. When the time arrives that a recommendation is made which is not to his liking, or an appointment is made which he does not want, he wants to have dictatorial powers. When I heard that a Wool Board with statutory powers was being called into being I was curious to know what those powers would be. All that I can see in this Bill is that that organisation only has the power to impose a levy on the wool farmers. As I have already said, this is a power it is going to use against itself, for the Minister will force it to meet expenditure which in the past has been borne by the Central Government. This provision is not going to be as advantageous to the wool farmers as we would have liked it to be. We on this side have been placed in the position that we are confronted by an accomplished fact. We can see the dangers connected with it. We do not intend to say that we do not want the wool agreement. We were not represented at the conference as Australia and New Zealand were represented. If we had been, we would not have panicked at the threat. Now we are confronted by an accomplished fact. We are, however, pointing out the dangers which we see, and I am afraid that those dangers will from now on materialise. And as we are endeavouring to give the wool farmers a certain amount of security—at any rate in connection with the composition of the local board—and as we intend making certain proposals in the Committee stage, we would express the hope that the Minister will not be too obstinate, and that he will agree to making certain changes. As far as the Wool Board is concerned, the farmers have asked for what we are suggesting, and we trust that they will be allowed in future to function the way they want to function and that the Minister will not force his will on them, and that he will not off-load on the Wool Board the essential functions resting on the State, so that the wool farmers themselves will have to meet the expenses.

We know that after the last war, when there was no scheme, our experience was that at times we sold our wool for practically nothing, and at other times at 60d. and 70d. per lb. That position was an unfortunate one, the most unfortunate that our country has ever experienced. We can therefore be very grateful to the Minister that he sent a deputation to London in order to consult the wool-producing countries. There the matter was discussed and an agreement was arrived at to fix the price on such a basis that wool may again be sold, but not in excess of the world price. As a matter of fact the Imperial Government paid 5 per cent. more for wool than the ruling world price, and in so doing they lost 5 per cent. The price of wool consequently dropped 5 per cent. That is why it is 5 per cent. less at the present time. An agreement was entered into between the producing countries. They worked out a scheme in terms of which we will sell our wool for the first ten years with the object of disposing at the same time of the wool which has accumulated during the war years, so that the market will not crumble. If ever a good deed has been done to this country for which we ought to be grateful to the Minister, it is certainly this step, because today the position of the farmer is that he knows what he can afford to pay for grazing rights and what costs he can incur because he knows what he is going to get for his wool. It assures the farmer’s future. I feel, therefore, that we ought to support the Minister 100 per cent. to put this scheme through because it is not only in the interests of the wool farmers but in the interests of the country generally.

Before dealing with the scheme itself I should like to say a few words in connection with the remarks of the hon. member for Port Elizabeth (District) (Mr. Hayward) and the hon. member for Victoria West (Mr. Connan). The hon. member for Victoria West stated that the farmers were in a wonderfully flourishing position, and in order to prove that statement he mentioned the amounts which the farmers had repaid on their mortgage bonds. I thought that hon. member would be acquainted with the facts. The fact that the farmers repaid huge sums to the Land Bank and to the State Advances Recoveries Office does not afford the slightest proof that the farmers are in a flourishing position. It is a well-known fact that private moneylenders are prepared to make money available on mortgage at a lower rate of interest than the Land Bank or the State Advances Office. Thousands and thousands of pounds have been repaid to the Land Bank and the State Advances Recovery Office by farmers who have not got rid of their bonds but who have simply transferred their bonds to private moneylenders, because they were able to get the money at a lower rate of interest. The redemption of bonds to the Land Bank is no indication, therefore, that the farmers are flourishing. As far as the hon. member for Port Elizabeth (District) is concerned, he stated that it was necessary for the Minister to have the power to appoint a certain person to the Joint Organisation, and that the panel system is the correct one because, he said, “Look at the way in which the wool organisation is controlled today,” and that for that reason it is necessary to make that stipulation. I am astonished to hear a statement of that kind from the hon. member for Port Elizabeth (District), but I cannot say that I understand it. As far as I know, that hon. member has never attended a wool congress, and he has not the faintest idea how the control of the National Woolgrowers’ Association is constituted today. If he had known he would have realised how dangerous it is to place that power in the hands of the Minister. He went on to say that the farmers would receive a stable price for their wool under this legislation. What is that stable price? Can he or any other member tell me what the price of wool is going to be in 1947-’48; can he or the Minister or any other person tell me what the price is going to be in 1949-’50? He talks about a stable price, but he entirely forgets that the price will be fixed annually. England is one of the partners in this scheme, and according to newspaper reports the wool farmers of England themselves do not fall under this agreement. Why is that? Why does one of the partners of the scheme see to it that the wool of her own farmers does not fall under this scheme as well? Does that not give us good grounds for reflection before we are prepared to say that it is such a beautiful scheme? Now I come to the scheme itself. The wool industry is one of the biggest industries in the country, and I expected the Minister to come here this afternoon with legislation and to give us full details in connection with the whole position, by indicating to us what the position is in connection with this industry. But the Minister has not done so. Since this scheme has been in operation from 1st August, I thought the Minister would try to convince the House that this scheme is acceptable and to the advantage of the wool industry and that with that object in mind he would tell us how the scheme has been operating from 1st August. But the hon. Minister did not tell the House how the scheme has been operating from 1st August.

I have the right to speak again; I will have another opportunity to speak.

That is true. The hon. Minister will have another opportunity. I want to ask him whether it is because he will have another opportunity to speak that he withheld this information from hon. members. I thought the hon. Minister would regard it as his duty to give this information and not to shield behind the fact that he will have another opportunity to speak and then to furnish this information after the debate has been closed. I certainly expected to get this information before we started the debate.

This is not the last stage of the Bill.

I am aware of that fact, but the principle is being accepted at this stage and that is the most important thing. We shall be able to move amendments at a later stage but we shall then be faced with the fact that the principle has already been accepted. Only certain amendments can then be made. I thought the hon. Minister would tell the House this afternoon how this scheme operates at present and how much wool has been handled under this new scheme. I expected the hon. Minister to tell the House what quantity of wool was taken over by us from the Imperial Government, but we did not hear a single word about it. We know it is a well-known fact that when the deputation went to London and when the agreement was made there it was generally thought that the wool which had accumulated there would be sold at a loss. That is why there was a depreciation; it was for that reason the wool farmers in South Africa had to agree that one-half of the profits would fall away. But in view of subsequent developments we know that the accumulated wool which has been sold since 1st August, has been sold at a profit. Now we have the following position: The Imperial Government has already received one half of the profit which was due to the South African wool farmers on the termina tion of the wool scheme between the Imperial Government and ourselves. They have already collected those profits. One-half of the profit on the wool which was taken over by us and which will be sold at a profit again goes to the Imperial Government. The Imperial Government therefore makes a double profit on one-half of the wool that we took over. I want to be fair. They will make a double profit provided all the wool is sold, but as far as we are able to follow the wool market there is no doubt that there has been an unprecedented demand for wool and it has been sold at a profit. Since this legislation provides that wool is to be sold by public auction, what is the position in connection with wool which is now being sold in South Africa? Can the hon. Minister tell us what is being sold by public auction? As far as we know the British Wool Commission handles the 1945-’46 wool clip, and I want to know what steps the hon. Minister took to ensure that our Government and the wool farmers are properly represented or that the interests of the wool farmers are properly looked after under the present system of handling the wool. If any steps were taken to ensure that the interests of the wool farmers were properly looked after under the scheme up to the present, I want to ask the Minister whether he denies that certain types of our wool were frozen, that when there was a demand for it that wool could not be sold; and since that wool could not be sold, is it not a fact that that involved the South African wool farmer in a loss?

That is merely repetition. I shall reply to it.

I can well understand that the hon. Minister does not want us to keep on hammering on this subject, because in doing so we expose the manner in which the Minister looks after the interests of the wool farmer, and once this becomes clear to the people the Minister will no longer get the support of the wool farmers. The hon. Minister stated in this House that he had the support of the wool farmers. I should like to ask the Minister where he obtained the wool farmers’ support? I hope he will give us a clear reply on that point. As far as we know the wool farmers accepted this scheme in principle, but at the same time they accepted the scheme subject to definite conditions, and as far as we know the hon. Minister has not complied with one of the conditions subject to which the wool farmers agreed to accept the scheme.

What conditions?

In the first place, one of the conditions is that the farmers must have a majority on the Joint Organisation. That is one of the conditions, and the hon. Minister cannot tell us that that is the position. On the contrary, in terms of the present legislation the farmers will not have a majority on the Joint Organisation. That is one of the conditions which the Minister has broken up to the present. We want to express the hope that he will remove this injustice during the Committee stage. I want to make a very serious appeal to him. As far as public auctions are concerned, it is not clear to me at all from the definition of “public auction” in this Bill what the term “public auction” implies. On the one hand the intention is that wool may not be sold out of hand, but what constitutes a public auction? We know that in Port Elizabeth a South African Wool Buyers’ Federation has been established, and we know that that South African Wool Buyers’ Federation has a regulation to the effect that wool may be sold only through their organisation by public auction, and I know that the South African Wool Buyers’ Association is already taking steps whereby persons who do not belong to that body will not be able to operate in the future. Is the Minister going to safeguard our position there? It is provided in the Articles of Association of the South African Wool Buyers’ Federation that no one may join that organisation unless he has operated through the organisation for two years and unless he pays a commission of 2½ per cent. to the South African Wool Buyers’ Federation. If wool is put up to public auction and if the members of the South African Wool Buyers’ Federation are the only people who are allowed to buy it, it cannot be said that that does not constitute a sale by public auction; it is public auction, but certain persons or organisations are prevented from operating at the public auction, and where that happens it can only be to the detriment of the South African wool farmer. The South African wool farmer will support the Minister provided he introduces a scheme which we are satisfied is intended to benefit the farmers, but the information which the Minister has furnished to the House up to the present does not prove in any way that this scheme is intended exclusively in the interests of and for the benefit of the South African farmer. In the light of our experience in the past we cannot help being suspicious. When the wool agreement of 1939-’40 was entered into, this side of the House objected to that agreement and all sorts of accusations were flung at this side. We on this side advocated that the agreement should be on exactly the same basis as the agreement with the Australian Government. The Australian Government itself handled the wool which was sold to the Imperial Government. If at that time the other side of the House had heeded the plea of this side and if our Government had itself handled the wool it would not have been necessary for us to get the British Wool Commission here to handle our wool; and in that case the Minister would not have been in the position in which he has found himself since 1st August, that he has had no organisation to handle the wool. He would have had that organisation operating, just as the Australian Government has a similar organisation operating today, and the Australian Government did not find it necessary to get an Imperial British Commission to control this matter for a further year. The pleas which have been made in the past by this side of the House have proved to be justified on every occasion; experience has shown that the methods that we suggested are the right methods of doing business in the interests of the farmer, and we want to ask the Minister to listen to the suggestions of this side of the House in the future. If he does that there is a possibility of his getting the co-operation of the farming community and of amending and framing this legislation in such a way that it will give general satisfaction. [Laughter.] Yes, the hon. Minister laughs. I am pleased to’ hear him laugh. It shows, at any rate, that he is not altogether cross. But I want to make an appeal to him, since the wool industry is one of the biggest and one of the most important industries in the country, that we should exercise the greatest caution’ in connection with this Bill. We must not frame the Bill in such a way that the farmer will eventually be the loser; instead we should introduce a Bill which will benefit the farmers.

I am rising not so much to plead the cause of the well-represented and prosperous wool farmers, but rather to draw attention to certain features in the Bill which I think are open to objection. I cannot refrain, however, from saying to my friends on the Opposition side that the prosperity that the wool farmers have enjoyed during all these difficult years are due entirely to the vigilance of the much-abused Government which has so well looked after their interests. There are certain features in this Bill to which I would like to draw the attention of the Minister, and my one reason is this, that there is too great a tendency in our legislation to impose bureaucratic control on the ordinary commercial and business activities of this country, and this Bill is no exception to the rule in certain respects. Under Clause 5 the local organisation will be controlled by a board of directors. That board of directors is appointed by the Governor-General, which means the hon. Minister, who will be acting on the advice of his Department, and so again we shall have a board appointed entirely by civil servants.

Can you do better than that?

What I want to say is that we may not always have so fair and benevolent a Minister sitting on the front bench over here, but I think that the principle is the wrong one. However, the woolgrowers do not appear to have taken serious objection to that, but I object to the wide powers given to this directorate. Under Clause 17 they can tell the producer where to send his wool, whether to send it or not; in fact, they have complete control of the wool crop of the producer. It means that they can zone the country and tell the producer what to do with his wool. I think that the wool producers will agree with me that the wool industry has much to be grateful for to the wool brokers at the coast. During difficult times the woolgrowers were supported to a very great extent financially and otherwise in many ways by the wool brokers, and I can see that once this power is given to the directorate the power will eventually vest entirely in the heads of the department, because the Minister will act according to their advice, and the wool broker who has rendered such great services to this country and to the wool industry will be entirely eliminated. In the past our experience has been, during the war period, when controls have been imposed, that the legitimate channels of business have been entirely upset, and many a man on account of the way in which controls have been imposed has entirely lost his livelihood, and I particularly talk of the meat control in that connection. I say that that power should not be given to the directorate. It will mean simply that that power will vest entirely in the department itself and we will have entirely bureaucratic control as far as zoning is concerned, if that power is exercised. I understand that an assurance was given—I do not know whether the Minister knows of it; I do not think it is an official assurance—I understand that it was stated: “All right, leave that clause in the Bill; it will never be exercised.” Well, when the Greeks come with gifts I do not trust them. I would sooner see that power eliminated from the Act, or otherwise, if that power remains, I say do not let this directorate which is entirely appointed by the Minister exercise that control. Let them exercise that control in conjunction with the Wool Board that is appointed under Clause 23. But here again I have something to say about that. It is true that the wool producers are allowed to have eight producers on the Wool Board appointed by the National Woolgrowers’ Association or its branches, but funnily enough, although they have that power of appointing someone to preside on the Wool Board, under Clause 28 the Minister is entitled to say: “The person you have appointed is in my opinion not a suitable person,” and he can then call upon them to appoint another person in his stead, and if that person is not a suitable person in his opinion he can appoint some representative of his own. I think that is an entirely undemocratic provision to have in a Bill of this sort.

You are not stating the position correctly. It is only when they fail to nominate a person that I can appoint someone.

No, Clause 28 says distinctly that if in the opinion of the Minister the person is not suitable the Minister shall refer the matter back to the association and call upon it to nominate some other suitable person, and if the Minister is not satisfied with the second nominee the Minister may himself nominate a person who in his opinion is suitable.

I see you are correct.

First of all, it gives this power to the very people who ought to know best who can serve them on this board, and then under Clause 28 the Minister may say that the person is not suitable, apparently without giving any reason for it. I think that is an entirely undemocratic principle in an Act of this kind, and I hope that the Minister will in the Committee stage allow an amendment to eliminate that objectionable provision. As I have said, I am only drawing the Minister’s attention to what I consider are provisions open to objection and provisions that might interfere with the ordinary commercial activities of the brokers at the coast and of people who might be done out of their livelihood, and I hope that the Minister will give this matter very serious consideration.

We have had rather a lengthy discussion on this Bill. I must say I do not think that the wool farmers outside will be very proud of the discussion which has come from the other side of the House today.

What nonsense are you talking now?

Certainly not, especially as far as the hon. member for Cradock (Mr. G. F. H. Bekker) is concerned. The hon. member had a large number of points of criticism of the scheme. He is, as he wishes to appear, the ringleader of the wool farmers in the House, and while such an important matter as this was under discussion, he came here and said his say and sat here for a while, and then left the House.

He sat up in the gallery.

That may be but he was not sitting in this House.

You are always small and mean. Deal with the case on its merits.

On a point of order, is the hon. member in order when he say the hon. Minister is always small and mean?

I did not hear those words. Did the hon. member say the hon. Minister was “mean”?

I said he must not be mean. I withdraw it.

I do not know how I could know that the hon. member for Cradock was sitting up in the gallery.

I told you he was sitting up there.

Yes, but after I had already said that he was not in the House.

But in any case a man who is absent as often as you are, should not take it amiss of another member if he is absent.

I am glad that the hon. member for Cradock has now turned up because I would not like to say in his absence what I want to say now. He comes here and criticises one point after the other as we have embodied it in the Bill, but in doing that, the hon. member shows one of two things. He shows that either he did not understand the scheme when it was put before the Wool Association or otherwise it shows that he is the biggest somersaulter that ever sat in the House.

Rubbish.

The hon. member said that they accepted the scheme provisionally. They accepted it on conditions; they accepted it in principle and all that sort of thing. It often happens that the hon. member says that he heard this or that and his ear is as good as mine and he stands by what he said. I realise now that there is only one manner in which to deal with that hon. member, and that is to have everything in black and White, and I have it here. Here is the resolution adopted by the South African Wool Board on which the hon. member served. He is thus jointly responsible as regards this resolution, and I am now going to read it. I shall read the whole letter sent by the secretary of the South African Wool Association to the Secretary for Agriculture and Forestry. The letter reads— [Translation]

That is quite a different tone to that adopted here; then it was a question of sincere thanks for services rendered— [Translation]

Where is there a question of conditions or a question of principle?

On a point of explanation ….

It depends whether the hon. Minister is willing to allow the hon. member for Cradock to make his explanation. Is the Minister willing?

Yes.

My explanation is this. The Secretary for Agriculture desired that the scheme should be immediately accepted by the Wool Board. I objected to this, and maintained that unless the Minister acknowledged that the National Woolgrowers’ Association was the mouthpiece of the wool farmers, I would not vote for that, and it was with the greatest difficulty that the Wool Board later took the stand we would refer it to the Board of the Woolgrowers’ Association, and the woolgrowers accepted that scheme on certain conditions. That was the decision.

No, the hon. member is really making a laughing stock of himself now. There is not a word of what he has just said in this resolution. This resolution was taken unanimously, including the hon. member. There was no question of conditions or of principle, and his demanding that I must lay it before the National Woolgrowers. I undertook to do it. I said to the Secretary of my Department: Lay this matter before the National Woolgrowers’ Board, and let them know that we are going to place it before the National Woolgrowers’ Association. But this is what you get—twisting round and round, turning here and turning there, but when you come to the resolution you cannot get past it, and now you have the case of what we have seen here this afternoon. Things of which he approved 100 per cent. he now says are wrong. We know, because the written document is there, but he says: Yes, he has no confidence now in the directorate which has been appointed for the J.O. in England. But he approved of it 100 per cent. All those things were placed before them; all those things are part of what the conference decided. Now the hon. member turns round and says: No, we do not accept it now, there is something wrong now.

I say I accent the principle.

What value can you attach to such an attitude as the hon. member has shown today?

And your attitude.

He now says that he does not believe I had the co-operation and support for the agreement of the National Woolgrowers’ Association. Fortunately I also have that here in black and white. One of the members of the deputation wrote to me after I had met them and discussed this Bill with them, and after they had accepted 100 per cent. the panel of six of which I was to appoint two, and in addition a producers’ representative, after consultation with the woolgrowers ….

Which deputation are you referring to?

It was a deputation of the National Woolgrowers’ Board which came to see me on behalf of the management, and one of the members of the deputation wrote that to me.

On whose behalf does he write?

The hon. member need not be so fidgety. If he waits a while he will hear. He writes—[Translation]

Who is he?

I do not mind saying who he is. He is Mr. Lotz, one of the members of the deputation.

He does not write on behalf of that deputation and he does not write on behalf of the woolgrowers.

May I go further and say that when the chairman of the National Woolgrowers’ Association came to see me a few days ago there was not the slightest question that he had entered into such an agreement. He was satisfied that we had come to such an agreement.

He told me something different.

Business suspended at 6 p.m. and resumed at 8.5 p.m.

I was dealing with the groundless accusations made by the hon. member for Cradock (Mr. G. F. H. Bekker).

The Minister said that my accusations were groundless. May I put a question to the Minister?

Order, order.

On a point of order. I want to ask if Mr. Lotz was at the meeting.

That is not a point of order, but a question.

I should like, with permission of the Minister, to put a question to him.

That is not a point of order, and I cannot compel the Minister to answer. The hon. member may not put a question.

I had experience of the hon. member this afternoon when I gave him a chance to make an explanation, and all he did was to try to put right what he could not, viz., a resolution which was recorded.

Why did you not read my telegram?

It was a resolution sent to the head of the department by the Secretary of the South African Woolgrowers’ Association. The hon. member now talks of a telegram of which I have no knowledge. We know well what his position is. There are two things which made him do what he did this afternoon. The first is that he feels put out regarding the first deputation to London in connection with the international Wool Secretariat. What the member did there, was to tell the country in an irregular manner that Mr. Gerhard Bekker was going to London as one of the representatives.

That is what the Wool Board did, not I.

After that was done, the deputation had to be curtailed owing to transport difficulties, and then the Wool Board did not choose the hon. member.

The Wool Board did choose me.

In the first instance, but the hon. member was not finally chosen. He was then left out in view of the transport limitations. Another trouble with the hon. member and of other hon. members on the Opposition side is that they are in a pickle in connection with the Bill and the whole agreement. We entered into an agreement which was of the very best for the wool farmers. It is an outstanding agreement. We can only give praise to the deputation which represented us in London under the leadership of Dr. Neveling, whom the hon. member has also tried to belittle as a theorist. It is an outstanding agreement which has been accepted throughout the country as such. But now the Opposition are in a pickle. They find that the wool farmers stand 100 per cent. behind us, and now they must try to make political gain and criticise. The hon. member is doing it by trying to represent the matter wrongly. The wool farmers outside know much better and understand the matter well, perhaps better than the hon. member, and they accepted the whole matter unconditionally.

Not unconditionally.

I want to deal with a few points which were also mentioned by the hon. member. He went back into the old history of the previous agreement, and in this connection his contribution to the debate was that everything that was right and an improvement in the agreement was due to him, but everything that was wrong and no good was due to the Government. His proposal at the time was to sell to Japan on credit.

You know that is not true.

The hon. member now wants to sell to Greece and Italy, probably also on credit.

England sold to Japan.

Then the hon. member and other hon. members made a great song with the accusation that the British Wool Commission froze certain types. He himself knows that that is not so any more.

But they were frozen.

I admit that. The hon. member must not get so excited. For a short while certain types were frozen.

For how long? Two months?

What were the reasons?

I will go into the matter. We cannot all talk at once. Perhaps hon. members will be able to sing a song of lament together over Caledon tomorrow, but we cannot talk at the same time.

You cannot bear interjections.

I know hon. members are not very interested in wool. I would like, however, to give the reasons why the British Wool Commission froze certain types. I will read the reasons they gave to me.

You were jointly responsible.

I must ask the hon. member for Cradock to stop interjecting.

We know that the medicine is a little bitter for him. The reasons they give are the following—

1. (1) At the commencement of the season there were no stocks at all of certain types held by the Commission.
2. (2) In other instances stocks were so negligible as not to warrant offering them to the trade for disposal overseas.
3. (3) Largely owing to the drought, the British Wool Commission were unable to estimate the quantity of types they were to receive.
4. (4) The Commission was not prepared to sell wools forward. (By this is meant selling types of wool in anticipation of receiving stocks.)
5. (5) An endeavour was made to accumulate types that were in short supply in order to give all buyers an opportunity of having an equitable proportion of the stocks available.

I must say that the fifth reason they give seems to me to be a reasonable standpoint. The J.O. must satisfy the buyers. They will have to sell wool for years, and it is certainly a good policy not to give all the wool of one type to one buyer, and to disappoint the rest. It seems to me that is a reasonable standpoint, that they do not sell all the types of which there are only small quantities to one buyer, but try to keep an equal quantity of all the types available. But the position is that at the moment not one type is frozen. Anyone can buy from one bale to a thousand bales. I would also like to inform the House of the quantity of wool sold since 1st August. The demand was phenomenal. The figures show that from 1st August, 1945, to 31st January, of this year, 700,909 bales, valued at £14 million, were sold. Since 31st January, a further quantity of 141,697 bales have been sold at £2,833,940, which makes a total of sales up to and including 26th February, 1946, of 842,606 bales, valued at £16,833,940. There is thus no question of holding wool back. The sales in this short time were of a phenomenal nature. So much for the accusations concerning the types that were frozen. Then the hon. member said that we had made a bad bargain, because we get back nothing of the £2,500,000 from the profits. The member is wide of the mark. The agreement with the British Government made provision at the time that the profits would be divided at the termination of the agreement, and there is the possibility that there will be no profit, that there will be a loss. Therefore the £2½ million is by no means a profit at this stage. But in either case we have the advantage. The 50 per cent partnership provides that the write-off in connection therewith includes the £2½ million, so that really we have the advantage of a sum of money which we perhaps would never have had when the sales period comes to an end. As usual, the hon. member is wide of the mark. Then he states that the B.W.C. has only a small clique of buyers to whom it sells. They only sold to members of the buyers’ association when the B.W.C. was carrying out the old agreement, but I arranged that that position would not continue. Anyone is now free to buy our wool. There is no longer a clique. I shall be very pleased if that is well understood, also by the hon. member for Cradock.

There, at least, he was right.

Perhaps he is right in one of the twelve matters he mentioned. The hon. member came to the statutory Wool Board and he has strongly criticised the statutory Wool Board, but the test for me is the National Woolgrowers’ Association. He has asked more than once if I admit that they are the authoritative body. I admit that. They are satisfied with the statutory Wool Board. They saw the Bill and expressed satisfaction with it. But the hon. member is not satisfied with their satisfaction. That is his trouble. It does not suit him as critic that the wool farmers are as satisfied as they are. He now tries a little insinuation. If he chooses this method of political suicide, I am satisfied with that. Then he spoke of the 5 per cent. by which the wool prices were reduced. For a short time it was not reflected in the sales price, but in any case we have the advantage of it, we do not suffer. Any profit which results is to our advantage. Then the hon. member spoke of the open market. I thought the hon. member realised, as I read, what the wool conference recommended. It was not that there should be for the first year an open market, as he means. But apparently the hon. member is going round with his eyes shut.

Read my telegram.

Then he says that the Secretary for Agriculture will be landed with the levy fund; the Wool Board are treated like a lot of children. Has the hon. member read the Bill? It says something quite different. The clause reads—

The Secretary for Agriculture has control over the levy fund, but the share of the Wool Board he pays over to them and the Wool Board gives it out. Perhaps the hon. member did not read that. I do not think it is necessary to deal with the hon. member any longer. I come to a few points made by the hon. member for Port Elizabeth (District) (Mr. Hayward) and I am pleased to see that he as a big wool farmer, and responsible person, at least realises the value of the agreement for our wool farmers. I would like to take advantage of the opportunity to reassure hon. members in connection with Clause 17. The clause is only included to help J.O. to arrange the marketing properly. I do not think that use will ever be made of this. Then he asked what the interest of the Reserve Bank would be on an overdrawn account, and what we would receive on money we had there. That is a matter of arrangement with the Bank. It depends what the bank rate is at a given time. The hon. member for Somerset East (Mr. Vosloo) as usual took part in the debate in a very reasonable manner. His great objection is that the Bill was only published a week ago and that the conference document only came to light in January. The fact that that is his great objection, shows that he has little fault to find with the arrangement. As far as the publication of the Bill is concerned, I am sorry it could not take place earlier. It was a matter of getting it back from the Government Draftsman. I published it as soon as possible after that. Regarding the conference report, hon. members know that it took a considerable time to have it published, and it also took place as soon as possible. He also went back to the old agreement, and said that Mr. Waterson and Mr. Attlee first signed it only in 1942. But that was purely formal. The agreement was not even signed by Australia and New Zealand. I do not think there is anything in that. Then he asked if we received a profit and loss account in connection with the sales. We had that before our deputation went to London; it will be published as soon as circumstances allow. Further, the hon. member asked if we had enough security for the agreement, so that we would not have to go back to the old barter system. The hon. member need have no doubt about that. Our great security for stability lies in the fact that the four governments are behind the whole arrangement. J.O. is their creation, and acts as their agent, but the four governments are behind the scheme. The agreement will naturally be taken into review after five years. Then the hon. member for Smithfield (Mr. Fouche) stood up and said that I held out an El Dorado to the farmers, but in practice it is not so. I did not rate the matter too high. The fact remains that two big principles in the scheme are especially attractive for the wool farmers, viz., open auctions in which the whole world can take part, and in addition could have what in effect is a guaranteed minimum price. Naturally, you cannot expect that an organisation like J.O. will hold wool back when the prices are good, and that it will not sell. The world would not have any faith in them if they did that. It is their duty to sell the accumulated surplus if there is demand and if the price is right. But there need be no fear that they will act contrary to the interests of the producers, and will not let them receive a favourable price. They will look after this, and the Government will stand behind them.

†Then I come to the hon. member for Victoria West (Mr. Connan) who raised the question whether part of the farmer’s clip may be withdrawn or whether it must necessarily be the whole clip that is withdrawn. That is, of course, a matter that must be settled by J.O. The conference simply recommended that the producer should have the option and the right to withdraw his clip if he wished to do so. The hon. member also referred to the levy of 1½d. I think that the hon. member for Port Elizabeth (District) (Mr. Hayward) also referred to it and felt that it was rather high. I would like to indicate that that is not a levy. As I indicated in my introductory remarks that is the margin that at present exists between the price which the B.W.C. pays and the issue price. That is roughly over 1½d., and it is not expected that that will be the full cost of the administration of the scheme, but that 1½d. will be used to build up a reserve. If we go on putting this 1½d. into the fund for a few years it may not be necessary later on, unless prices drop very much—which is tied up with other economic factors—to make any levy in excess of ½d. a lb. So I would like to assure hon. members on that score also.

†*One of the biggest disappointments to me was the hon. member for Oudtshoorn (Mr. S. P. le Roux) because I think he found himself in the same position as his colleagues on the other side. He now has to create a little atmosphere that everything is not so happy in connection with the wool scheme, and he did try to create that impression. He painted a picture that it was all in England’s favour, and in the process of doing so he destroyed his second argument with his first, because he had proceeded from the standpoint that England held a Sword of Damocles over our heads and said to us: If you do not make this new agreement then I will throw all the wool on to the market. But the hon. member says virtually in the same breath that England has half the wool and consequently England has a monopoly and can do what she wishes to. It will not permit other manufacturers to be interested in the wool. She will buy the wool herself and have a monopoly. But if this was the intention of England she would have to retain all the wool and then she could do what she liked with it. Thus the hon. member cancels out the second argument with his own argument. He also endeavoured to create the impression that the country that is deriving a big benefit from this agreement is England, but the hon. member is entirely wrong. I shall read out of an official document of the conference. We did not consider it necessary to publish it. It was published in Australia. But I should like to read out what the position is in connection with that matter—

This is one of the conditions in the contract that they can review the terms every year. The document goes on—

And now I come to something which I should like the hon. member to pay special attention to—

Read that paragraph out to us.

I shall do so but I would like to make this point. It is quite clear that England could have remained as she was, and she could have come out of it in a highly favourable way for herself.

If you were willing to sell for the following two years, but you did not need to do that.

But it was one of the conditions of the agreement. My hon. friend sees now that his argument is wrong. If there was one country that would have benefited by remaining on the old basis it was England, because we must also remember that England is a consumer of wool. She has a big wool industry and it suits her to sell her wool cheaply to her wool industries. The picture that my hon. friend presents that it is only England that derives an advantage is thus entirely wrong.

Just read out that paragraph.

I am quite prepared to read it out—

Hear, hear.

Just wait for the second word. You should not always show this hatred of England.

Naturally these people put the whole position in a very sober and just manner. They put both sides of the case. [Laughter.] I do not know what there is to laugh about. I do not know whether it is necessary to say anything further about the speech of the hon. member for Oudtshoorn. I think his picture is altogether misleading, that it is very wide of the actualities of the case. Then the hon. member—I was very sorry to listen to it—made a personal attack on me. He says that in this Bill I am filling the role of a big dictator. He referred to that section that relates to the appointment of members of the Statutory Wool Board, and he says that that dictatorship of mine is nothing less than cowardice, and I am now the enemy and not the friend of the farmers. I should like the National Wool Growers’ Association, for whom my hon. friend is pleading in this way, to listen to those words, because that section in connection with which he has made such a personal attack on me is word for word as it was submitted to me by the National Wool Growers’ Association itself. I hope they will take due note of the standpoint the hon. member has adopted; and it is quite easy to understand that they should have submitted something of that sort, because that same provision is in every one of our control schemes. The hon. member does not need to be afraid that I shall act as a dictator.

Did the hon. member for Port Elizabeth (District) (Mr. Hayward) not talk about the same thing as I did?

Now the hon. member is trying to wriggle out of it. The hon. member for Port Elizabeth (District) dealt with this in an entirely different way to the hon. member for Oudtshoorn. I would just say this, that I had that power under all the control schemes under the Marketing Act, and I have never yet found it necessary to take such a step. That step would only be taken by me in exceptional circumstances.

But those boards under the Marketing Act have much wider powers.

I am referring now to the one instance where my hon. friend was completely wide of the mark. I can understand his anxiety to divert attention now to something else.

†In regard to the hon. member for Port Elizabeth (Central) (Lt.-Col. Oosthuizen) who referred to Clause 5 dealing with appointment of directors of the local organisation, I should like to know how he suggests these directors should be appointed. If the Governor-General is not to appoint them, who is to appoint them? I do not know how he arrives at the process of reasoning that because it is done by the Governor-General therefore they will be appointed by civil servants and therefore it is bureaucracy. I do not think he does justice to his legal standing as an old practitioner when he comes forward with criticism of that kind. I know he is a champion of the liberty of the subject and that he does not want to see any unnecessary bureaucracy. He also dealt with Clause 17, which I have already disposed of, and in reference to Clause 28 I have replied to the hon. member for Oudtshoorn (Mr. S. P. le Roux), and I do not wish to repeat myself.

†*I will conclude by saying that my hon. friends on the other side find themselves in an ugly fix in connection with the matter. To their mind the Government has done far too much for the wool farmers, and now they want to make political capital out of it. There is no doubt about it. I come now to the hon. member for Kimberley (District) (Mr. H. T. van G. Bekker). I do not think he mentioned any new argument. I think he repeated most of the arguments contained in his previous speech. The question of the types I have already dealt with. The question of England’s wool farmers not falling under the scheme is easy to understand. England’s wool farmers produce a type of cross wool, not the same wool that we produce here. There is a reasonable market for it, and if the hon. member seeks to create the impression that England’s wool farmers are better off because they do not fall under the scheme, he is missing the point completely. As far as the wool farmers of England are concerned it is all the same to them in regard to the price they get, whether they are under the scheme or outside the scheme. There is no ground for the criticism that has been raised against this Bill, and I think I have now covered all the points that have been raised, and I hope the second reading will be accepted.

Motion put and agreed to.

Bill read a second time; House to go into Committee on the Bill on 14th March.

I move—

This is quite a simple little amending Bill in respect of which a White Paper has been tabled which really sets out the amendments and the various reasons for these amendments, and they also say it is really an agreed Bill, as the hon. member for Swellendam (Mr. S. E. Warren) will know, as he takes a keen interest in these matters. The wine merchants have all had a sight of this Bill, and I can really say it is an agreed Bill. There are no amendments of any of the principles of the legislation we seek to amend. The amendments proposed in this little Bill are merely intended to improve the administrative machinery of the present Act, especially in so far as concerns the procedure for the fixing of the minimum price and the quality price of wine, and also to tighten up control, in order to ensure that the fixed prices are paid by those engaged in the wine trade. The main amendment is contained in clause 4 of the Bill which now substitutes a new sub-section (1) for subsection (1) of section 5 of the Act of 1940. That merely deals with the time factor. It fixes a date before which prices have to be published and a later date for the finalising of the prices. Experience has shown that it, will require at least two months between the date on which the K.W.V. makes their submission of the intended price and the date it is finally fixed. That has been done.

The old procedure created certain difficulties. In the first instance it was quite an anomalous position. I had to publish a notice in the Gazette indicating my intention of fixing certain prices when, in the result, I may not fix those prices at all because they are merely published to call forward objections. If those objections are well founded I would naturally have to give weight to them and ask the K.W.V. to fix another price, so in order to rectify that faulty procedure, that inadequate procedure provided in the old legislation, we now fix these new dates which I have mentioned, 20 th January as the submission date and 20th March as the final date. Under this new procedure the Minister will publish the proposals of the K.W.V. and call for objections. After considering any objections he may either approve of the K.W.V.’s proposal or call upon it to submit a new proposal which he then is empowered to approve without further objection. A further departure is contained in sub-section (a) (iii), which enables the K.W.V. with the approval of the Minister to fix the circumstances under which a fixed price may be increased and also the extent to which any such price may be increased. That is merely in order to bring the position so far as wine is concerned into line with what already obtains in regard to some of our other products, for instance mealies, namely making provision for storage charges, so there may be an increase in the price set out as well as the extent to which the increase may be made and the circumstances in which the price can be increased. Then we tighten up the control to some extent. The practice has grown up in the wine trade whereby merchants and distillers who have their own farms purchase wine at a price other than that payable by merchants and distillers, and it is very difficult to bring it home to them that they should purchase this wine at the properly fixed prices, and the Bill now deems in a case like that that they made the purchase as merchants and distillers and they will therefore be forced to adhere to the price fixed for merchants and distillers. A necessary exception has been made in the case of transactions between co-operative societies and their members as there is really no actual sale in a case like that. Finally, the Bill provides that persons who are not classified as merchants and distillers must purchase wine from producers at the same price as the K.W.V. pays for distilling wine. There again there has been the practice that some of the bigger people have been able to purchase from the smaller people, who have not the facilities, at the lower price. So now we lay down where they do purchase they cannot exploit the smaller people but they will have to purchase at the price the K.W.V. gives. These are the amendments that matter in this little Bill. As I say, it is an agreed Bill, and I hope the House will have no difficulty in passing it.

I think it is necessary to explain the reason for the amendment of this control Act of 1940. Under the constitution of the K.W.V., which is a cooperative, the price is fixed and the surpluses announced in the middle of January. The previous law made provision that the price of good wine must be fixed in November or December, while the price of distilling wine would be determined in the middle of January. It was accepted by the dealers and the farmers that the price of good wine ought to be £2 more than the price that the farmer receives for his distilling wine. Now you can realise that if the price of good wine must be fixed before you know what the price of distilling wine is going to be, and you have to make a difference of £2, you are beginning from the wrong end. The price the farmer receives for his wine depends on the consumption for the year, and there are still continual surpluses. I think the last surplus, declared in January, was 30 per cent. The position is that unless we know what the surplus is we do not know what the wine farmer will get, and if we are only paid the surplus in the middle of January we cannot make the difference of £2 they consider ought to be made. The difficulty was explained to the then Minister, the late Col. Collins, but he said we should let the thing stand and let it go through like that. The dealers are objecting; they say they must buy the wine in January, and they must know then what the price is. We explained the position to the then Minister. You must understand that the price depends on the surplus, and the surplus depends on the vintage we have to estimate, and the position in connection with the grapes is that if it rains in the fortnight around Christmas and New Year —that is the time that determines whether it is going to be a good crop or a bad crop —then the crop is usually twice as large as normally. If it does not rain the crop is smaller, and then the farmer gets more for his wine, and consequently a later date is fixed. We are grateful that the present Minister has accepted the proposal and that it has now been decided that the price for distilling wine and good wine will be fixed by us in January. We must give him notice on 20th January, and we will know by then what the price of distilling wine will be. Consequently, it is an improvement on the existing law. As far as the conditions go in connection with the fixing of the price of wine at the time laid down, the K.W.V. adopted this principle as far back as two years ago. When we come to the other part of the Bill, the part that deals with existing privileges that are being taken from the farmers, I think it is another matter. I should like to tell the whole story to the Minister, and then he can know what the position is. The remainder of the Bill and the alteration that is made here was made at the request of the merchants; the idea arose that the K.W.V. asked for it, but they did not ask for it. I must emphasise that here, because some wine farmers are dissatisfied over it. It is a privilege the wine farmer always had. If his neighbour had not the space for wine presses, or if he had a small number of vines and had no cellar, then it was a privilege the Wine farmer always had to buy his neighbour’s grapes and to press them. It has always been so. The right was also acknowledged in the 1940 Act. Unfortunately, there are three or four of these wine farmers—it is not the merchants who began to buy grapes from their neighbours; it is wine farmers who were not always able to sell their wine to the merchant, and who thus began to sell their wine by the cask. Those people were bound to the price. They could not sell it cheaper than the wine merchant had to pay. They had to submit to the fixed price, but naturally they sold it much cheaper than the merchant sold it, and in this way they built up a market. You will readily understand this when I say that £8 is paid for a leaguer of wine. A leaguer of wine is in the neighbourhood of 800 bottles, or 127 gallons. Every gallon contains six bottles. You can work it out for yourself. It is between 700 and 800 bottles. That means the farmer obtains for that wine round about 3d. a bottle, and the merchant sells this at the very cheapest for 1s. 6d. a bottle when it is new wine, wine that has not yet aged, and the result is that when the farmer starts trading he can undersell the merchant. So far as I know, there are only five farmers concerned. Two of them later took out wholesale dealers’ licences. Now the idea is that if they buy grapes because they are in the trade, they ought not to get them cheaper than the merchant pays for them. There is something to be said for it. But under any circumstances this is a privilege the farmers enjoy which is now being taken from them. This Bill is worded in so complicated a way that it has taken me hours to understand what is meant, notwithstanding the fact that I understood what the intention was. I have looked at both the Afrikaans and the English. I think there are passages where the wording could be improved. I am not worrying much about that because it is not my Bill, but I should like the Minister to have the wording clarified, especially in Clause 4, where there is a reference to the circumstances in which such a price may be increased and the degree to which such a price can be increased in the absence of these circumstances. I think that the word “moet” is not correct there. The English translation of it—or rather I assume that it is drafted in English—also seems to me very complicated. The price of good wine is fixed; the price of superior wine is fixed; you set out what percentage of superior wine the merchant must buy. Then you lay down the circumstances under which the price of wine can be raised, I assume that is if the merchant buys it. He buys in September; the price is £8 and he only pays in December. By that we assume that the wine farmer is entitled to interest and that he should receive a higher price, and that is what the Minister stands for there. If you look into it you will see it was expected of the K.W.V. that it should set out the circumstances, with the permission of the Minister, but the thing does not read right to me. If you look at the following clause you will also see that the same mistake is repeated there that was made in the old Act. The K.W.V. fixes the price of good wine, superior wine, etc. These prices are then sent to the Minister. This must occur before 20th January. Then the Minister advertises the price and the other circumstances in the Government Gazette, and he invites objections. Then objections are handed in. The Minister, after he has heard the objections, if he is satisfied the price should be altered, must request the K.W.V. to fix a new price, and if they fix a new price and he is not satisfied with that price, we are stuck; we can make no progress. It was the time in the old Act, and the idea was to rectify that. Someone must eventually have the last word in saying what the price should be. The proposal here appears to be that the Minister should accept the price that the K.W.V. has fixed the second time. I am satisfied if it is so, but I do not think this was the Minister’s intention. You had the same difficulty in the old law. It was a defect in the old law. You could get no finality. It had to be advertised, I think before 20th March, and if it was not advertised by that time no price was fixed for a year. Provision had to be made so that there could be finality, so that the wine farmers would fix a price that would put the Minister in a position to accept it. Someone must have the final say, and I think the Minister must make provision for that. Then we come to the last part. I should like the Minister to understand that the opposition there is emanates from the farmers who buy grapes, and if a farmer trades then I think there is a certain measure of justification for saying he must not get them cheaper than the merchants, because he is acting in competition with the merchants. I should like the Minister to consider seriously the position where a man makes wine and assists his neighbours. You get farms where there are perhaps only 5,000 or 6,000 vines or fewer. It does not pay that man to have a cellar, and he sells his grapes to a neighbour or to someone else who converts them into distilling wine. That privilege does not come into competition with the merchants. Nor would I make any objection to that. If the Minister would do that to protect the wine farmer there is perhaps something to be said for it. I would say this to the Minister, that the small farmer gets nothing more than distilling wine prices. The price of good wine has to be paid by the buyer, because the balance goes to the K.W.V. The idea of the Bill was quite good. It was to encourage the farmers to make wine themselves. I would say to the Minister that we can never make a good name for our wine if the farmers do not make the wine themselves. The merchant and the co-operative cannot make good wine. They buy grapes and wine and it is all thrown in together. They cannot make the quality wine that the farmer makes, that a man makes when he produces a wine of a good bouquet and flavour, because his production is localised and he has the cellar space to do it properly. We do things very differently here to Australia. There they do not have wine farmers but grape farmers. They sell the grapes to dealers who make the wine, and their wines cannot compete with our quality wines. A wine farmer builds up a name for his wine. It may be produced on the same farm and in the same environment for a hundred years. Such a country has at once an advantage over countries where the farmers do not make the wine themselves but where the merchants make it. It seems to me as if Clause 6 is depriving us of that privilege. I have consulted the draftsman, but it seems to me he does not know either what the position is. The farmers who buy grapes to make wine which they in turn sell to the merchant do not act in competition with the merchants, and it is only a small quantity of grapes that is bought by them. We must give these people a chance to do this and to make good wine. The farmer who buys the grapes pays the price for distilling wine. He will not get the grapes for less. He makes good wine and a part of the must he has to furnish as distilling wine. It is not right to make him pay the price of good wine for that. Then there is something in connection with the definitions. Farmers may produce moskonfyt and raisins and do not make wine. It seems to me that those farmers are excluded, because the reference here is to wine growers. In that respect the Bill should be reviewed. I shall endeavour to get into touch with the department and to propose the necessary amendments, so that the position may be clarified.

This amending Bill is of a technical character to make arrangements in connection with the K.W.V. and the merchants. We are, however, engaged in amending the Control Act of 1924, and I would like to bring to the notice of the House an important amendment which should have been introduced long ago. Under this Act of 1924 the K.W.V. may not sell its products in the country. It is an arrangement with the merchants through the wine farmers of the country that the K.W.V. will export its surplus liquor and not sell it within the country. The K.W.V. have built up a gigantic reserve. They have matured wine and today the position is that people overseas can get better liquor from us than we can get in this country itself. The K.W.V. have built cellars to mature wine and brandy. That good liquor is exported, but the K.W.V. may not sell a single bottle of it in South Africa. We can only obtain the product of the K.W.V. if you buy it from the merchant who has bought it from the K.W.V. In recent years a number of merchants have obtained supplies from the K.W.V. But you, Mr. Speaker, have knowledge of that, and every member of the House knows that we are frequently invited by the K.W.V. to come and see how the industry has developed and what class of product they can put on the market. Although we can sample the liquor as their guests we cannot get it on the local market. That provision in the Control Act of 1924 must be amended, because the public of South Africa would like to obtain the product of the K.W.V., and that in a legal manner. At the moment this cannot be done, and the external market obtains an excellent article while our local market is not provided with an article of the same standard. I think the House desires, with me, that the Minister and his Department should begin working in the direction of securing an amendment of the law so that the K.W.V. will have the right to place its product on the market just like any other co-operative has the right to place its product on the market in South Africa. We can understand the original reason for such an arrangement. I was young at the time, but I know in what a sorry plight the wine farmers were when they had to sell their wine at £2 and £2 10s. a leaguer. They had to go cap in hand to the merchants. Out of that distress of the wine farmer the K.W.V. was born. There were the vested interests of the wine trade. To put the matter in order this agreement had to be arrived at. But when the merchants in this country cannot place on the market the quality of liquor that the K.W.V. can the time will have arrived when we should help the K.W.V. to place its liquor on the market. We would then have a more perfect system of co-operation in the wine industry. I should also like to see the day when the K.W.V. has the right to assume control over the quality of the liquor that should be placed on the local market—that it should determine the quality. It should have statutory powers to determine the quality of the liquor sent to the market, under the supervision of the Department of Agriculture, so that we would be able to buy proper liquor on the local market. Today I fear that in the other provinces, especially in the Transvaal, the standard of the liquor people get leaves much to be desired. I think that if the Minister will go so far as to amend the Act of 1924 so that the K.W.V. secures the right to place its product on the market we shall have a better controlled liquor trade in our country, and we shall also arrive at the position that the farmer will get the reward that he has so richly earned. The wine merchants make thousands and thousands of pounds while the wine farmers on the other side are not as prosperous as many members think; 70 per cent. of the wine farmers each produce less than 100 leaguers. Consequently it is necessary that the K.W.V. should be placed in a position to manufacture the product of that 70 per cent. and to market it. I thought I should place these few opinions before the House, because the day has arrived for the K.W.V. to have a greater say in the liquor trade of the country.

I should like to support the hon. member for Swellendam (Mr. S. E. Warren) in his effort to remove a misunderstanding. The great object of the wine farmers in South Africa is to produce a better quality wine, perhaps I should say to produce a greater quantity of wine of a good standard. I can say with justice that the best wine that is produced here can hold its own with that from any part of the world. I am not one of those people who believe that we can produce wine that is as good as the small quantity of wine that can be produced in the northern climate with their cool summers. They produce a wine that is so outstanding that it cannot be equalled in any other part of the world. But take the good wine of France. It is produced in three districts — Burgundy, Champagne and Graves. Then we also have the Rhine, which is virtually part of that. They produce a very excellent wine, but only a small quantity, the same as with the French wine. We are speaking of good wine, a first-class product that is used for ordinary purposes, and I say that South Africa undoubtedly can produce a great quantity of quality wine which not only can compare favourably with that of other countries, but which in some respects is better than that of any other country. When we come to heavy wines we can produce wines that are just as good, and indeed better, than those of countries from which we have borrowed the names of those wines. Just before the war seven or eight sherries were placed before a group of prominent wine merchants, and they were asked to arrange them ‘ in order of merit. The South African sherry came first. That applies also to our port types. As the hon. member for Swellendam has pointed out, we, like France, have wine farmers. In Australia they do not have wine farmers, but grape farmers. They sell their grapes to the co-operative association or merchants, who then make the wine, and who cannot make quality wine, or at any rate the wine that is made by a merchant or a co-operative is usually weaker than the wine a farmer could make himself. We want in South Africa to encourage farmers to make their own wines, and that they should not supply it to co-operatives. I am not referring to the K.W.V., but to small wine makers. A farmer who makes his own wine specialises with his grapes. He plants special sorts to impart a special character to his wine. It is not really profitable for him, because usually grapes of that sort bear very little. These people do that, however, because’ with them it is a tradition of generations to make a good quality wine. It is their delight and their pride. I can mention instances that I have encountered. A man wants to put a certain standard of wine on the market. He has possibly his connections with a merchant. The grapes on his farm are perhaps lacking in a definite character for two reasons. He has not all the right sorts, and it may also be a question of ground and situation. Alongside him is perhaps a farm where he can get the right grapes. I can give you the assurance that a very small distance sometimes makes a great difference to the character of the wine. I can recall that on my own farm— within three miles of each other—the same sort of grapes have an entirely different character. So he has to buy these grapes from that farm. Now I come to another point. In such an event the farmer buys grapes from his neighbour because he wants the right character for his wine. If the interpretation of the hon. member for Swellendam is correct, this clause is not going to offer encouragement to the farmers to buy grapes to press with their own grapes and to make a good quality wine. Instead of encouraging them, it will discourage them. We do not want to do that. We must encourage them as wine farmers to make the best wine. Consequently, I hope that the suggestion of the hon. member for Swellendam will be adopted. We should not oblige these people to pay more for the grapes that they have to buy to press with their own grapes. We must rather allow them to obtain their grapes at a cheaper price to encourage them. The wine farmers who buy grapes to press them do not buy great quantities. They have good connections. But even if they want to make a big quantity of wine by buying grapes, we should still encourage them, because it implies that proportionately more good wine will be made. It means that more quality wine will be produced. In 90 per cent. of the cases where a farmer buys grapes to press with the grapes produced on his own farm, it is a man who makes quality types, and we must do everything in our power to encourage him. We should not place anything in his way which would make his position difficult. I hope that the suggestion of the hon. member for Swellendam will be adopted. The effect on the law ought to be the encouragement of the production of a first-class article, and we should do nothing that will be an obstacle in the way of these people.

I am glad to see there is practically no opposition to this Bill. The hon. member for Swellendam (Mr. S. E. Warren) gave his interpretation of one of the clauses, and the hon. member for Humansdorp (Mr. Sauer) felt that the effect might be that it would adversely affect the production of good wine while we ought to encourage it. There is no intention to place any stumbling block in the way of a man making good wine. We can go into the matter further on closer examination in the Committee stage. The hon. member for Gordonia (Mr. J. H. Conradie) mentioned a matter which I cannot go into at this stage.

It ought to be ideal.

He wants, of course, to make propaganda for it.

Are you then so full of propaganda?

Then I will assume that the hon. member does not want to make propaganda and was only talking.

Motion put and agreed to.

Bill read a second time; House to go into Committee on the Bill on 8th March.

I move—

Although this amending Bill is short, there is something in it both for the doctors, the dentists and the pharmacists. First of all it is proposed that the Medical Council in future should be known as the South African, Medical and Dental Council. That is a very worthy gesture to the profession who have for some time past asked that they should be included in the Council for the regulation of their business and affairs. Secondly, the South African Pharmacy Board has felt that its powers should be brought into line with that of the doctors and dentists. In the case of the latter they have representatives from each of the provinces, and this amending Bill seeks to give the same arrangement as far as the pharmacists are concerned, and provides that there shall be representatives on the South African Pharmacy Board of the pharmacists from each of the provinces. These are amongst the not least important but the easier and more straightforward amendments contained in this Bill. When we come to the amending of the medical part of it, we are confronted with some fairly far-reaching implications as far as these amendments are concerned.

The main objects of the Bill may be summarised as follows:

Firstly to provide for the registration with the Council (which it is proposed should in future be known as the South African Medical and Dental Council) of certain classes of medical practitioners (such as medical missionaries, and doctors working for scientific institutions and universities) who, owing to lack of reciprocal recognition as between the country in which they received their training and the Union, cannot under the law as it exists today be registered and practise as medical practitioners. Their registration and the conditions subject to which they may practise would be prescribed in terms of regulations to be made by the Governor-General.

Secondly to regulate the conditions under which internes shall be entitled to registration and to practise as medical practitioners.

Thirdly to permit of a managing director of a corporate body carrying on business as a chemist and druggist to accept an appointment as a director (other than a managing director) of another similar body.

Fourthly to enable the South African Pharmacy Board to require chemists and druggists to furnish information relating to pharmacies with which they are connected.

Fifthly to permit of the levying of annual fees to be paid by registered persons with a view to simplifying the administrative work entailed in keeping the relevant registers up to date; and ensuring the maintenance of a steadier income.

Finally to ensure that prescriptions in respect of habit-forming drugs, inter alia, shall be signed personally by medical practitioners or other authorised persons, thus obviating the risk of rubber stamp impressions being used in such cases.

Clause 1 provides for the change of the name of the South African Medical Council to the South African Medical and Dental Council. This change is being made at the request of the Council in deference to the wishes of the dental profession. The clause provides also for each province to be represented on the South African Pharmacy Board by at least one chemist and druggist (elected), thus constituting an extension of the principle which already applies in respect of the Council in so far as medical practitioners and dentists are concerned. At present six chemists and druggists are elected members of the Board. The proposed amendment in clause 2 is dependent upon the amendment contemplated in clause 4, and provides for the erasure from the relevant register of the names of any persons whose period of registration may have expired in terms of regulations made under sub-section (2) of section 22 of the Act. This would affect such classes of medical practitioners as medical missionaries and persons working for scientific institutions and universities who would not ordinarily be entitled to registration as medical practitioners. Clause 3 amends section 17 of the principal Act. The proposed new paragraph (d) of sub-section (1) of section 17 is dependent upon the amendment contemplated in clause 8, and provides for the erasure of the names of registered persons who may have failed to pay, within three months of the due date, any fee which may have been prescribed on the authority of the Governor-General under sub-section (2) of section 95 of the Act as it is proposed to amend the latter as set out in clause 8. This relates particularly to any annual retention fee which may be imposed by the Council (or the Board) upon registered persons. The proposed new paragraph (e) which is dependent upon the amendment indicated in clause 7 provides similarly for the erasure of the names of any registered chemists and druggists who may have failed (within a period to be determined by the Board) to furnish such particulars relating to pharmacies with which they may be connected as the Board may require in terms of paragraph (o) of subsection (2) of section 94, as set out in clause 7. Paragraph (a) of clause 4 is consequential upon the first of the proposed amendments of the section as set out in paragraph (b). Paragraph (b) provides firstly for the addition of a new sub-section (2) to section 22 to enable the Governor-General, upon the recommendation of the Council, to waive (by regulation) the reservation against the registration of certain classes of medical practitioners if the only bar to their registration as such is lack of reciprocal recognition as between the Union and the country in which they received their training. It is proposed that such persons shall, if registered, be allowed to practise as medical practitioners subject to regulations relating to the period during which their registration may be effective, the area or areas within which they may practise, or such other conditions as may be considered necessary. Such persons would include medical missionaries and persons (who have been trained as medical practitioners) employed by scientific institutions and universities. Cases have come to notice in which, because of the existing provisions of the Act relating to reciprocity as one of the conditions precedent to registration, persons of international fame have been precluded not only from performing for gain any acts specially pertaining to the profession of medical practitioners, but also from using any name, title description or symbol indicating that they possess a degree, diploma or other qualifications as medical practitioners, doctors of medicine, physicians, surgeons or accoucheurs. To do so would have rendered them liable to prosecution under Section 34 of the Act (No. 13 of 1928). In consequence the services of such eminent persons have been lost to the Union or have necessarily been subject to so much restriction as largely to deprive the Union of the full value of the services which they could otherwise have rendered in scientific institutions or in universities. Similar difficulties have arisen in the case of certain medical missionaries who, having been brought into the Union at the instance of missionary societies, have been debarred from carrying out the very functions which they were originally intended to do and which, but for the reservation in respect of reciprocity, they might otherwise have been qualified to do. Inasmuch as such medical missionaries generally have their headquarters in relatively remote areas where the absence of a registered medical practitioner entitled to practise as such constitutes a hardship in so far as the local communities are concerned, the fact that such medical missionaries have been precluded from filling the gaps in this respect, has reacted unfavourably from the point of view of the local communities and can hardly be regarded as in the best interests of the public. Thus the amendment to the Act would tend to bring about two beneficial results in so far as the public interest is concerned, viz.—

It may be added that at present only persons holding degrees, diplomas or certificates conferred by specified universities in the Union, Great Britain, Northern Ireland, Irish Free State, Australia or New Zealand are entitled to registration in the Union as medical practitioners. In addition, persons holding degrees, diplomas or certificates conferred by specified universities in France, Germany, Holland, Switzerland (in respect only of qualifications obtained prior to 3rd January, 1934), Austria, United States of America or Sweden, are entitled to registration in the Union only if they were born in or domiciled in the Union. It may be mentioned, further, that the question of registering such medical practitioners and allowing them to practise in the Union first arose some two or three years ago, when representations were made to the Council by the Refugees Representation Fund with headquarters in Johannesburg to the effect that the Council should agree to register various refugee doctors in the Union, emanating mostly from Europe. At the time the Council was opposed to the idea as other doctors from Europe had attended courses at South African universities for three years in order to secure registrable qualifications. Subsequently, however, a memorandum signed by those doctors who had taken further courses in the Union was submitted to the Council indicating that they were in agreement with the representations which had been made. Finally, following upon further representations made by the Swedish and Danish Consuls, the Director-General of Demobilisation and others, the Council appointed a committee in June, 1944, to investigate the whole position. This subcommittee found that the doctors concerned could be divided into three classes, namely, scientific workers, mission doctors and refugees. After careful deliberation the Council decided that the two first-mentioned classes merited sympathetic consideration. One or two refugee doctors practised illegally and were prosecuted. Paragraph (b) of clause 4 provides, secondly, for the Governor-General to prescribe by regulation the conditions under which internes may be registered and practise as medical practitioners. The necessity for such a provision in the Act was stressed as far back as 1939, when the Committee on Medical Training, under the chairmanship of Professor M. C. Botha, at that time Secretary for Education, and on which Dr. S. M. de Kock (then Vice-Chairman of the South African Medical Council), Dr. K. Bremer (as a member of the South African Medical Council), Sir Edward N. Thornton (then Secretary for Public Health) and Dr. P. J. du Toit (Director of Veterinary Services) served as members, recommended, in its Report (No. U.G. 25—1939), that a year of compulsory interneship prior to registration as medical practitioners should be instituted. In support of the recommendation, the Committee stated—

In comparing the training of medical students in Great Britain with that in South Africa, the Committee expressed the opinion that the standard of the latter was roughly equal to that in the former country, but pointed out that differing circumstances must be taken into consideration—

In further elaboration of its argument in favour of compulsory interneship, the Committee added—

The views expressed by the Committee received careful consideration by the South African Medical Council which has indicated that it recognises the necessity for instituting a year of compulsory hospital training for medical students after graduation before they are allowed to enter into private practice, and has intimated to the Government that the “time has now come when it is considered imperative that this power be given to the Council so that it can take effect from 1st January, 1947. To delay such an advance as the amendment will bring about, would be detrimental to the public, and the amendment is regarded by the Council as urgent”.

The proposed amendment of section 76 is intended to enable the managing director of a body corporate trading as a chemist and druggist to hold an appointment as a director of some other body corporate trading as a chemist and druggist. The restriction imposed in the present section 76 has been found irksome to persons who have been invited, by reason of their special knowledge, experience, or capabilities to become directors of other companies. The South African Pharmacy Board feels that there is no objection to a managing director being a director of another pharmaceutical company provided that he does not perform any of the acts described under section 37 in respect of the other pharmaceutical company to which he may be appointed director. A chemist and druggist carrying on business in his individual capacity may hold a directorship in other companies, but a chemist and druggist who is registered as a managing director under the law as it stands at present is precluded from being director of any other pharmaceutical company—an anomaly which it is considered, calls for remedy. Clause 6 amends section 80 and requires all registered persons to render detailed accounts in respect of the services provided by them and will obviate the necessity of members of the public having to ask for detailed accounts. The requirement that detailed accounts shall henceforth be rendered in respect of professional services will, it is submitted, tend to discourage the making of excessive or extortionate charges and, at the same time facilitate action on the part of the South African Medical Council (or the South African Pharmacy Board as the case may be) in cases where such charges are considered excessive or extortionate, with a view to such steps as may be indicated being taken under the disciplinary provisions of Chapter IV of the Act.

The proposal that the South African Pharmacy Board should be empowered to require chemists and druggists to furnish particulars of all pharmacies with which they may have any connection provided for in clause 7 is intended to enable the Board to compile a list of all pharmacies in the Union with all relevant particulars. To quote from an explanatory note submitted by the Registrar of the Board—

Clause 8 amends section 95 and is designed to enable the Council (or the Board) to impose, upon the authority of the Governor-General, annual fees to be paid by persons registered under the Act, with a view to simplifying the administrative work entailed in keeping the relevant registers up to date; and ensuring the maintenance of a steadier income. It is proposed further, having regard to the intention of the Council to ask that the amount of the registration fee payable in the future by medical practitioners and dentists under the Second Schedule to the Act be reduced by way of a proclamation, that the Council should also be empowered to impose different fees in respect of persons registered before dates to be specified by proclamation and those registered subsequently. In explanation it may be stated that the Council has intimated its desire that the amount of the registration fee applicable to a medical practitioner or a dentist under the Second Schedule to the Act should be reduced from £25 to £15. Thereafter it is proposed that medical practitioners and dentists who may have paid the higher registration fee and been registered prior to the date when the proposed reduction becomes effective shall be called upon to pay an annual fee of 10s., while those who become registered subsequently, after payment of the reduced registration fee, shall be required to pay an annual fee of £1. Section 96 of the principal Act is amended in order to remove any possibility of doubt as to the meaning of the term “signed”, and so obviate any possibility of abuse through the use of rubber stamp or similar impressions of signatures, particularly in respect of prescriptions relating to habit-forming drugs. One such case actually came to the notice of the Department of Public Health in the course of its administration of the Act but in view of the absence of a definition of the term “signed” in the Act, a case for prosecution was, on the advice of the Attorney-General, withdrawn. I trust that these remarks, Mr. Speaker, have explained adequately the purpose of the Bill before the House.

Much of the content of this Bill has been before the profession, and the Medical Council, and the public for a good many years. For the last six years it has been felt that these provisions with regard to the improvement of the equipment of the newly qualified doctor have been necessary; that has been felt by the Medical Council and the profession very largely for a good many years. And we are very glad at last we have reached the stage where this amending legislation is now taking effect. I want to say just a word with regard to including the words “Dental Council” with the name of the South African Medical Council. At the first request of the dental members we were only too pleased to recommend it, and I am glad the Minister has seen his way to adopt it and to Call it the South African Medical and Dental Council. I am glad to see the dental profession, and the dental members on the Medical Council feel they are at liberty to achieve representation for their profession on an absolutely equal basis with the medical profession, and in order to remove any possible doubt with regard to equality of status we are glad that the Minister has seen his way to adopt this change in the name. With regard to the new powers given to the Medical Council, with regard to creating registers for certain groups of medical practitioners, we realise that this is a very far-reaching change, and it gives wide opportunities to the Medical Council to create registers for certain groups of persons. It has not really originated with the Medical Council at all, but it has originated largely in a demand from certain public bodies and from sections of the public more than from the Medical Council itself. Everyone feels if it is thought necessary to bring into the country certain research experts for our institutes and certain professors into the medical schools, it would be below the dignity of those persons to do their work and yet in their contact with the public and with the profession be precluded from the status derived from being on our register of practitioners. As far as the Medical Council is concerned they were quite prepared for this innovation. The medical profession was agreeable to this, and I think the public will be agreeable. In regard to the request from the missionary societies that certain medical men from countries who do not enjoy reciprocity with South Africa should be allowed a limited field to practise, in and around a mission of any particular missionary society, it was felt that if the Medical Council had the power to limit the area, to limit the type of work and to limit the period during which such persons could do the work, no harm could come from such a concession. I feel most probably that demand will grow less and less and will eventually fall away entirely. During the war the missionary societies of other countries have learned they could very largely employ South African doctors, and the tendency today even for foreign missionary societies is to employ South African doctors; and I do not think this will in any way endanger the status of the profession in South Africa. This is a general clause and it gives the Council, perhaps unfortunately, the power to include any group of persons, to make a register of any group of persons and unfortunately one foresees that although the Minister will have the last word, it will be the Council who will be pestered for certain groups of persons to be placed on the register. But I would like to assure the House the Medical Council will not be found to be easy game in this respect. The Medical Council is perhaps on the whole rather conservative with regard to the admission of any new groups. In any case the Minister would have to give his approval to any such group. One new group we intend to institute almost immediately is a group of persons who will be registered not as full medical practitioners but as internes. It is the intention of the Council if the powers under 4 (b) (ii) are given that they will create a group of internes who will be the young newly qualified practitioners who have just obtained a degree in medicine and surgery. They will be placed on the register of medical practitioners immediately after their interneship but will make application to be placed in this new group which the Medical Council, with the consent of the Minister, will call into being; that will be the group of internes. These internes will work in the hospitals for a year. The date when this will take effect has not been fixed; it is dependent on the time when South Africa has round about 260 hospital appointments for the newly qualified medical practitioners. At the moment we only have about 200 such posts, if that, and of course it was unthinkable we should insist on a year of interneship from the newly qualified doctor if it is not possible for him to obtain such an appointment. Here again we come up against this very difficult question of the divided control as between the provinces and the Central Government, and before we can make this effective we shall need an assurance from the provinces that they will help to create these posts. I mention this here because it is of fundamental importance for the education of the young doctor that these interne posts should be created in South Africa in sufficient numbers. Why are these posts not created today in sufficient numbers? It is because it is expensive for the provinces to create these posts. The province has to pay these young men £5, £10, £15 or £20 a month, but that is not the chief expense. The chief expense is that they have to be housed and fed, and their laundry bill is also included, and the provinces find this rather a severe strain on their financial resources. As long as we are thinking in cheese-paring terms of the various small salaries needed for these people we will not be able to make this advance we want to make for the better education of our medical men. We cannot make that advance unless we secure that co-operation and unless we are given it immediately. The Medical Council is not a body which can approach the provinces. It has not the power to go to the provinces and ask them, with any authority, for the creation of these posts. The Public Health Department, the Minister of Health with the co-ordinating machinery he has at his disposal, should be the channel through which these appointments can be made available for the newly-qualified doctors. I mention this as being important because it was our desire to institute this regulation on 1st January, 1947, if this Bill has then become law. I do not see why it cannot be dope. I am convinced that our large hospitals can take twice the number of internes they are taking today, nor will the young men and women be underworked. They are largely overworked today. One young fellow left my house on 31st December last. It is now March, and he has not been able to come back to my house to collect his clothes, because he has been busy in the hospital day and night. They are not underworked, but overworked. Even if we employed twice the number, it does not mean they will be underworked; it implies new work. I think my colleagues on the other side of the House will agree with me we can improve the work in the hospitals, we can get more work done, and we can carry it out in greater detail amongst the large number of out-patients and in-patients if we employ these people; and in order to make this effective, I would ask the Minister to give us his assistance in this connection. We have made provision here that our own students who will qualify should become internes, or we have given the Medical Council power to say they shall be internes for a year, and at the end of the year we can make certain demands, and if these demands are met they will go on to the ordinary register of the country. But what occasions me concern is that we have not made provision for those doctors who have qualified outside South Africa. I should like the Minister to ascertain whether the Medical Council would have the power to make a regulation, with the consent of the Minister, providing that any person wishing to register in South Africa shall have to undergo a period of interneship, though not under the same conditions as the young South African doctor. It would not be under the same conditions, because conditions overseas would be different.

Even when there is reciprocity?

Only when there is reciprocity; we are not concerned with the other countries. We do not want to see young doctors from England, Scotland and Ireland coming here without having done their year of interneship, because we believe our medical education is equal in standard to 25 per cent. of theirs, and better than the training given in 75 per cent. of these overseas institutions. Therefore, we want to have the assurance that under the existing powers the Medical Council will be able to make provision in regard to the interneship of young doctors from overseas. I am not quite clear on the point at the moment; we were going to discuss the matter tomorrow with the Secretary for Public Health. But we do feel that the Medical Council should have the power to insist that every person registered in this country shall have done one year of interneship. I would be satisfied if this applied to any person qualified after, say, the end of this year. I am not desirous of making it retrospective in regard to doctors who qualified in those countries which have reciprocity with us before the end of this year. But after this year it should be laid down that they shall have done a year of interneship. In fact, it is quite impossible to think that we could allow this Bill to go through unless that power is in our hands. The next point I have to make, Mr. Speaker, is this. The Minister has made it clear that the Medical Council desires to alter the basis of contributions from members of the profession on registration. At the moment it is the intention to reduce from £25 to £15 the fee paid on registration, and —if the power is given us—to have an annual fee of say £1 per annum from every doctor who is newly registered, and 10s. per annum from all those who have paid their £25 registration fee in the past, or any such sum as the Minister may approve. But what I want particularly is that section 95 of the original Act should be altered so that the annual fee shall not be contingent on these words—

Then the Minister will allow the Council to levy this annual fee. I think that position can be met if the Minister is willing under clause 8 of this amending Bill to amend section 95 (ii) of the principal Act to read—

I take it from his remarks the Minister desires the Council to have power to levy this fee irrespective of whether its funds were exhausted or not. I hope it will be possible in the Committee stage to get this done. Then, Mr. Speaker, it is proposed to amend the original Act by making it compulsory for any medical man, dentist or chemist, to send a detailed account in the first instance; thereafter he can send an “account rendered”. Up to now the law has been when anyone demands a specified account the doctor must immediately comply with his request and give a specified account. But the public felt they were in an invidious position when they had to ask the doctor for a specified account, because the doctor might feel the patient did not trust him and thought he was overcharging. That is not the case. The public feel where an account is only sent once in three, six or twelve months—very often it is only twelve months—the doctor may have made a mistake, or the dentist may have made a mistake, and he has no control over it. After the lapse of nine months he cannot say to the man with any certainty: You were or you were not at my house on such and such a date. I hope the House will accept that. I see no objection to it. Doctors today know they have to keep book-keepers and I think other professions do this, and there should be no objection to the medical profession being called on to do so. There was a demand in this House last year, on both sides of the House to the Minister of that day, that power should be given to the Medical Council to fix maximum fees for services in a schedule. The Medical Council considered this very exhaustively and asked the Medical Association which speaks very largely for the profession what its opinion is. The Medical Association was not in favour of this innovation of fixing maximum fees in a schedule, but they were prepared to accept the term “standard fees”; they were agreeable to having a schedule of standard fees drawn up so that the public may know what the cost is of certain services. There is nothing in the Act with regard to maximum fees, although the Medical Council felt that the time had come to lay that down; we realise that that is a very difficult question and that it bristles with difficulties and on the whole I think that it would be better to have more definite consent and co-operation from the medical profession rather than to introduce it against the feelings of the profession so that it may be perhaps just as well to let that stand over until the profession has had a further opportunity to express its views on that point. I think we are going to improve the standard of the doctor let loose on the public very considerably by the powers we get under this Bill.

Let loose?

I am afraid that the public uses the term “let loose” quite correctly in many instances, and I hope that this Bill will have the passage which it deserves in this House.

One welcomes this amending Bill to the Medical, Dental and Pharmacy Act. Section four, as the Minister explained it, amends section 22 (13) of the 1928 and 1935 Acts. The only thing that worries one is this. Although the Minister explained that such registration will only apply to men and women who come here with high qualifications from overseas to do research and to missionaries and other specific classes who at present cannot be registered in South Africa, nevertheless once a recommendation has come from the Medical Council to register these persons it will be a most difficult thing to take the registration away once it has been granted, although I see that power is given to do so. But one feels that it would be a good thing if it could be provided in the clause that such applications should have to be renewed annually; in other words, that a registration of that kind cannot last indefinitely, but that application will have to be made annually for such registration, unless you lay down a hard and fast rule that persons so registered will not be in competition with established practitioners, and that they will limit their practice solely to what they are registered for, because in the Act once, they are registered their practice is not limited. I agree with the hon. member for Stellenbosch (Dr. Bremer) that section (b) is only there as it stands in name. In the first place I want to tell the hon. Minister that I am not very fond of the word “internes,” especially as it is spelt here. In Great Britain they talk about “house physician” and “house surgeon,” and in Afrikaans the Bill talks about “inwonende geneeshere.” This word is going to cause difficulty. It is something culled from the United States of America, and it is a word that is not at home in the English language as I know it. The Botha Commission quite correctly stressed that a resident medical and/or surgical appointment of at least one year should be compulsory, and this was also stressed by the National Health Services Commission, and every person agrees; but as the hon. member for Stellenbosch pointed out, as things are today in the Cape Province, and certain other provinces too, it is absolutely impossible to give every new graduate such a house physician or house surgeon position as this Bill specifies, unless we have a hospital system under the central Government. In the Cape Province at all events we will have the status quo. In the Transvaal we have seen that they are going forward with their free hospitalisation scheme, but in the Cape Province, although we were told a year ago in this House that the increased provincial subsidy was to provide health services, so far we have not heard of any increase in health services, and neither in word or act has anything been done in the matter. In fact, at Groote Schuur, which is a teaching hospital, we have the greatest difficulty in getting anything done in the way of improvements or in the way of new accommodation by the provincial authorities. It is almost impossible. After all, it is no criterion to say that so many house physicians and house surgeonships will be available on the number of hospital beds available. It is no use sending a newly qualified medical practitioner into a small country hospital of 30 beds. They are to be there for the specific purpose of being trained either to become first class general practitioners or as a preliminary training ground to take up a speciality, and in my opinion it is useless to send them to a small country hospital where the necessary experience and the necessary teaching facilities are not available for them, and they may actually evade the intention of this requirement by taking up such a position in a small country hospital, and in that way they may get past what the Medical Council lays down, and yet not give the public what they want us to give them in the way of qualified persons. In other words, we will still be letting loose people who are not fit and proper people to practice.

Of course, they will be working under supervision in the smaller hospitals.

Yes, but the supervision is hopeless. I speak from experience.

It is better than nothing.

But better than nothing is not good enough.

It is still better than nothing.

I know the hon. member for Stellenbosch will agree with me that it is preferable and advisable that these newly qualified practitioners should have their postgraduate training in first-class hospitals.

Definitely.

Now I come to another point where I am glad to see that the Minister in section 9 is bringing in an amendment to the effect that “signed” means subscribing directly in one’s own handwriting, and does not include the use of a stamp or other means of impressing a signature. The Minister said that that applied especially to a prescription for the supply of habit-forming drugs, but I know that the Medical Council and the various executives of the Medical Association in the past have had a good deal of trouble with medical practitioners signing certificates of incapacity or ill-health or signing certificates in connection with the Workmen’s Compensation Act. There also I think it should apply that the certificate should have the actual signature, and that it should not be merely a rubber stamp. It should not only apply to prescriptions of habit-forming drugs but I also think it should apply to any prescription given by any doctor. If that were insisted upon it would overcome many difficulties which are today experienced especially in connection with Workmen’s Compensation cases. Then I think that the deletion of the words “when so requested by such person” under section 6 in connection with the rendering of accounts, is rather hard on medical men. I think that the public will be expecting too much, especially where a patient is under long treatment, to require the doctor to give a complete specified account. I know that under the Workmen’s Compensation Act it has given a lot of trouble. Medical practitioners do not like the fact that they have to give the time and date for every visit paid, a description of everything performed, even to the number of stitches they put in—whether it was three or four. It makes the work of the medical man who is hard-worked, more onerous than is necessary, and I think the old law was quite good enough where it was provided that when a patient wanted to know the cost of any treatment beforehand he could demand it or where an account was sent he could demand a specified account afterwards, but now the onus is thrown on the medical practitioner, and I think it would have been better if we had amended the Bill or, for that matter, by the introduction of a scale of maximum fees. That would have simplified matters. It would have relieved the medical man of the onus of handing a specified account in every case to every patient. After all, I know that our profession is becoming commercialised but why over-commercialise it? I think that this procedure of requiring medical men to give full detailed accounts is over-commercialising the profession.

On the contrary it is to avoid over-commercialisation.

I think the fact that the man has to specify the time and the services performed is totally unnecessary unless the patient wants it, and under the old Act the patient has the right to ask for such an account. I just want to say that I hope that in the Committee stage, when I shall go more fully into section 4, the Minister will accept a proviso that in no case where such registration is granted shall such practitioner be in competition with a practitioner registered under ordinary circumstances; for example, that a missionary doctor working in a prescribed area should not be in competition with a doctor in the same area by attending to private patients. I shall be very glad if the Minister will perhaps use his influence with the Minister of Finance so that we can hear specifically this year what particular sum of the money given as a subsidy to the province, and what portion of the increase this year is specifically earmarked for health services, because until we can put our finger on that amount and get the province to show what they are doing we will get nowhere with hospital services in this province.

Whatever they give, we give 50 per cent.

But the Cape Hospital Board has not been able to spend anything near the requirement on improvements or new material at the Groote Schuur Hospital and we are very behind-hand in our requirements and I can state without fear of contradiction that the Cape Hospital Board and the Provincial Administration in the last year, have not met the needs of the medical sub-committee at that hospital, and from day to day the position is being shelved. As far as I can see the Cape Hospital Board and the Provincial Administration have no intention of implementing what we were told last year was to be the policy of expansion.

I hope it will not be regarded as presumptuous on the part of a lay member in this House to intervene in a debate in which our professional members have already taken part, nor is it my intention to enter into the disagreement which apparently exists between the medical men as to some of the details of this Bill. I rise to say first of all that I have no doubt whatever that whilst the profession is likely to benefit by this Bill I am sure the public would also get some benefits out of it. But I have a special reason for taking part in this debate. It is to bring to the notice of the Hon. Minister and also to the notice of the hon. member for Stellenbosch (Dr. Bremer) who is authoritative in these matters as far as the profession is concerned, the question of a number of practitioners— I do not know how many there are—who were refugees in this country from enemy countries and from countries in respect of which there is no reciprocity. During the war they have served with the military and they have given their services as doctors. The hon. member for Stellenbosch probably knows of some such cases. They have given their services and they have been found to be satisfactory, and the position in which they are placed at the present time, unless some provision is made in these regulations, will be that after having given their services to the country in a military-medical capacity, they will now be virtually thrown on to the street. They cannot go back to the country from which they came. As a matter of fact, the cases that I know of have either been sufficiently long in this country to be entitled to become Union nationals not only by reason of the period they have been here but also by reason of their military service, and I feel that since we are continually talking about playing the game with those who have served us during the war, we should not overlook the case of medical men who have also done service in the army during the war period, and who, unless some provision is made, will find themselves thrown out on the streets. I think it would only be fair to make some provision for them, and the suggestion I make is to include them not as a group, because that may imply a few specialists, but as individuals who have qualifications to entitle the Medical Council to allow them to become registered as doctors. I think that that will be favourably taken into consideration not only by the hon. Minister, but also by the hon. member for Stellenbosch, because I am sure that if the hon. member for Stellenbosch agrees the Minister will probably listen to him; he will not listen to me, but he will listen to the hon. member for Stellenbosch. I hope that will be done both in the interest of those men and in the interest of fair play as far as South Africa is concerned. The fact that they were good enough to serve as military medical men in the army proves that they are good enough to serve as, civilian medical men, and if need be the Medical Council, if they want further protection in connection with the matter, may provide for some special test or medical examination to satisfy themselves that these men are qualified. They have their degrees; they have their qualifications and diplomas. They have had years of practice both overseas and later in this country in the army, and I think it would only be a fair gesture by those of us who believe in playing the game to enable these men to become practitioners and to practise in this country.

It is always a pleasure for a Minister of Health to move amending legislation dealing with the Medical, Dental and Pharmacy Act, because he has a great sponsor in the hon. member for Stellenbosch (Dr. Bremer). I am grateful to him and to all the other members for the assistance they have given me in connection with this matter. May I deal with the various points raised by them? The question of making adequate provision for the accommodation of these “internes” in order to give them these facilities for practice is obviously very important.

You say “internes” [pronounced internees]—that is a new one on us.

That is the reason why the hon. member for Rondebosch (Dr. Moll) does not like the term “internes.” It is no use passing legislation insisting that a certain group shall be given special training unless facilities for such training exists. There are, of course, a great number of smaller hospitals which are not being used at all today. Some of them will no doubt provide an excellent training ground for that purpose. But the root of the problem is the one to which the hon. member for Stellenbosch (Dr. Bremer) has referred. We are depending for such facilities on institutions controlled by an authority other than the central Government. As the constitution stands, there is at present only one method whereby we shall be able to give effect to this most desirable arrangement, that is, by obtaining the co-operation of the hospital authorities. Fortunately, as the hon. member for Stellenbosch and other members know, there does exist today the necessary co-ordinating machinery. I refer to the Co-ordinating Council established by my predecessor last year, on which there is equal representation of the central Government and the provincial administrations. It is a body which might be expected and should be asked to consider this very important point. I threw out the suggestion that the Medical Council will request me to use my influence with the Co-ordinating Council for such arrangements to be made, so as to enable us to use the provincial hospitals, not only the big hospitals, but also the number of smaller hospitals which at present have no house surgeonship, and where these young practitioners can get this year’s training. The medical members of this House know that many of us have picked up very useful experience at such small institutions where the responsibility has been thrown on us to do the work. The second point made by the hon. member for Stellenbosch was in connection with the position of young graduates coming here from overseas. As I understand it, under the law as it stands at the moment, section 22 of the original Act, we have the power to insist on this very type of post-graduate training and experience. Tonight we are merely doing this: we are legislating so as to enable the Council to promulgate regulations whereby these young men who are to serve their internship can during that period be registered as practitioners. That being so, then the point made by the hon. member for Stellenbosch falls away. I can assure him that the legal advisers are satisfied that this point is fully met by the law as it stands today. He explained to the House the attitude of the Medical Council in connection with the fixing of maximum fees, later modified to be standard fees, and in his usual fair manner he pointed out that whilst the Medical Council wanted this to be enacted by legislation the Medical Association was not yet prepared to give this far-reaching step its blessing. Thus the position differs considerably from the legislation which this House was asked to pass a week or two ago—the amendment to the Nursing Bill. There we had a request simultaneously from the Nursing Council and every member of the nursing profession who by law is a member of the Nursing Association. The position is very different as far as medical men are concerned. The Medical Council for reasons well known to the House has pressed for some time for similar powers, but there has so far been no uniform expression from the Medical Association on this issue. It was felt, therefore, particularly as there has been no congress of the Medical Association for some six or seven years, that it should be given the opportunity to express its view on this very fundamental factor—which we hope it will do at its congress to be held in the near future. I trust that I have now dealt with the points made by the hon. member for Stellenbosch. The hon. member for Rondebosch would like us to provide for missionary and other classes to re-apply annually for their registration. One rather hopes that the amending Bill before us, by virtue of the very close circumscription of the conditions, makes this unnecessary. In any case this is a matter for the Medical Council; if the Council decides that to be necessary it can frame its regulations accordingly. I doubt whether it is necessary to incorporate that provision in the Bill itself. All that is being asked by the Medical Council is the power to frame regulations, and I have no doubt that in those regulations, knowing how jealous the Council is of the standing of medical practitioners, that it will consider the point made by the hon. member for Rondebosch. He objected also to the use of the word “interne.” I am told that this expression, as has been indicated, is freely used in America, and has also come to be used quite freely in this country. The difficulty is to find a single term which will cover both the house surgeon and the house physician and the gentleman who may assist in maternity hospitals and other institutions. Until we can find a better word than “intern,” which I hope will not be mispronounced, we may have to be satisfied with this term.

What about resident medical officer?

That would make him an R.M.O.

It may be confused with other terms. Another subject raised by the hon. member for Rondebosch is the question of “signing.” The definition of “sign” does not apply only to habit-forming drugs. I merely gave that as an example. In fact, it is meant to deal with prescriptions and other documents signed by medical practitioners. That, I think, meets his point. He is worried also about the amendment which provides for rendering detailed accounts. We must regard that as a part answer to a very difficult problem. This House, through its members, has asked repeatedly for some method whereby we should control what occasionally happens — the charging of exorbitant fees. There were two alternatives. The one was to fix maximum fees and this without the approval of the medical profession. It was felt that such action under these circumstances would not be justified. This is the other method of achieving, if not the entire ideal, then of getting somewhere near it. Lastly I turn to the issue raised by the hon. member for Troyeville (Mr. Kentridge). I must point out that this whole question of registration was considered by a special sub-committee appointed some time ago. The practitioners to whom the hon. members referred were here at the beginning of the war and asked to be given an opportunity to serve. The Medical Council, in consultation with the Military Directorate, considered each case on its merits, and the offer of several such practitioners was gladly accepted. I should like to take this opportunity of speaking in a semi-military capacity to pay tribute to these refugee practitioners who were commissioned with the S.A.M.C. They gave of their best and undoubtedly rendered great service to the State. Whether or not the law as it is now proposed to be amended will enable such practitioners to be included in any regulations which the Council might decide to promulgate is a point to which I cannot give an answer at present. It says in this clause: “Any class of person”. I see no reason why the Medical Council should not frame its regulations if it so desires so as to meet this group, or for that matter any other deserving group. But as in the case of regulations generally, so in this, the decision rests with the South African Medical Council. This Bill seeks to provide the power whereby the Medical Council will itself be able to promulgate regulations, and I repeat that it will rest ultimately with the Council as to whether this particular class will be provided for or not.

There was just the one point of the annual leave.

I had hoped that we might, with the permission of the House, take the Committee stage tonight. If we do so, then I shall move an amendment to Clause 8, which will meet the point raised by the hon. member for Stellenbosch. The hon. member for Rondebosch has, however, indicated that he may want to consider certain amendments. If that is so, then of course I shall not be able to ask for the Committee stage to be taken now.

Motion put and agreed to.

Bill read a second time; House to go into Committee now.

House in Committee:

On clause 4,

At this stage I would like to have this matter quite clear about people coming here from overseas. The Minister said that under Section 22 of the original Act the Governor-General may from time to time after considering any recommendation of the Council or Board prescribe by regulation the several degrees, diplomas and certificates granted after examination by a university, medical school or other examining authority which, when held singly or jointly with any other degree, certificate or diploma entitles the holder to practice under the law. I take it that the Minister means that the words “certificate which may be demanded” will cover the case of a person from overseas.

I can assure the hon. member that that is so.

In section 3, I want to move an amendment as follows—

The position is that these people are not always resident in the sense that they spend 24 hours of the day there. They are very often, there only from 8 a.m. to 5 p.m., and I do not know whether this legal difficulty might arise. I take it that we would regard these people as being “inwonende geneeshere” or resident medical officers. But seeing that in Afrikaans we have the words “inwonende geneeshere” I suppose we can use the words “resident medical officer”.

Apropos of what the hon. member for Stellenbosch (Dr. Bremer) said, in Great. Britain it is customary to use the term “resident house physician” and “resident house surgeon”. The term “resident” in certain cases applies whether they live in hospital or not, but usually it means “living in”. In Cape Town we have no residents, for example at Groote Schuur, who do not live in. I think that when the Botha Commission, of which the hon. member was a member, suggested this phrase “resident medical officer” they insisted on the sound principle that these men had to be actually resident in the hospital, because the very fact that they live in a hospital gives them that atmosphere and tradition which is so necessary in their training. I think my hon. friend will agree with me that the word “resident” should be retained, and as regards “inwonende geneeshere” in the Afrikaans print I think “resident medical officer” is the nearest translation.

I am prepared to accept that provided we insist that R.M.O. is used for Railway Medical Officer, because it could also stand for resident medical officer, and before long we will have another type of R.M.O., the regional medical officer. Provided hon. members are able to satisfy me that they are able to distinguish the one from the other, I have no objection to the term.

Amendment put and agreed to.

Clause as amended put and agreed to.

On clause 8,

I would like to move the following amendment—.

I am told that that is the problem of the hon. member for Stellenbosch (Dr. Bremer).

I am not at all sure about this yet. In the original Act, sub-section 2 of section 95, the conditioning part of the whole paragraph is this, namely the words “if at any time the funds of the Council or Board prove insufficient for its requirements”. I do not follow where the Minister wants to insert the words “or at any time”. It is not necessary to condition that section, and I feel that we should omit these words “if at any time ….” also. Then sub-section 2 would read—

And then follows this amendment as it is moved here now.

If the hon. member feels that that will still further meet the case, I am quite prepared to accept the amendment.

I would like to move the amendment then as follows—

The hon. member’s amendment is net in the proper form. It is in the form of an amendment to the principal Act—not the Bill before the Committee.

Is it not possible to delete certain words at all?

Only in the form of an amendment to the Bill before the Committee.

Then if it is to be conditioned by these words, we will remain in this difficulty, that we cannot do anything unless the funds of the Council are exhausted. It is really an absurd position. It was never intended to be like that. If the Minister can give me the assurance that the Council can levy an annual fee in spite of its funds not being exhausted, I shall be very glad. The Minister may know that we sold a property for £4,000, which the Minister of Finance kindly allowed us to keep. We need that money, and do not want to exhaust our funds.

I can assure the hon. member that the clause as now amended meets his case entirely.

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

Clause, as amended, put and agreed to.

Remaining Clauses and Title put and agreed to.

House Resumed:

The CHAIRMAN reported the Bill with amendments.

Amendments considered.

Amendments in Clauses 4 and 8 put and agreed to and the Bill, as amended, adopted.

Bill read a third time.

I regret that the Hon. Minister of Finance is indisposed and that he cannot be present in this House this morning. We know his disposition and we know that he will not be absent without very good reasons. We sympathise with him. The House will readily appreciate that to conduct a Budget debate without the Minister of Finance is very much like a production of Hamlet without the Prince of Denmark. In the course of the debate I shall sharply criticise the financial policy of the Minister of Finance. His financial policy is that of the Government and I trust that my criticism will be regarded as criticism directed against the Rt. Hon. the Prime Minister who in the final instance is responsible for that financial policy. Before dealing with the Budget itself I would like to correct a misrepresentation made by the Minister of Finance. The Hon. the Minister of Finance admitted in this House that since 1st April, 1940, the national debt has increased by £285 million. Since he felt that it was a large sum, he tried to put up a smoke-screen, and I would like to quote the Minister’s words in this connection—

The Minister gives us to understand that we should first deduct the £95 million and then we get the war debt. That is a misrepresentation. The Minister knows well enough that during the same period, viz. from 1st April, 1940, we received an amount of £69 million on loan account, and had we not participated in the war we would naturally have applied that amount towards meeting our national capital expenditure. Had there, therefore, been no war, or had we not taken part in the war, our national debt would not have shown an appreciable increase on what it was before the outbreak of the war. It would have been more or less the same figure. In the second place the Hon. Minister of Finance also tried to reduce the war debt in another manner or to represent it as being less. He tried to camouflage the position in regard to the war debt. He points to the £11 million which has accrued to the stabilisation fund, and the Reserve Bank fund. He also used that to reduce the war debt by that amount. The impression he tried to create was that this £11 million was in connection with the war and that it was brought about by the war itself for that purpose. That is also a misrepresention. The Minister knows well enough that the profits in the stabilisation fund and in the Reserve Bank fund are due to the increase in the price of gold and that the increase in the price of gold took place before the war broke out and before South Africa had decided to take part in the war. That is the position. I can quite understand the Hon. Minister of Finance being ashamed of the enormous increase in the war debt and that he should try to camouflage the position. But the fact remains that if South Africa had not participated in the war, our national debt would not have been one penny more than it was in 1940, had we spent the same amount in capital expenditure. The increase in the national debt is therefore war debt, pure and simple. It is a form of national debt, unprofitable debt, from which South Africa does not get one penny. It is the contribution by the Minister of Finance towards the creation of a sound and firm financial structure in South Africa. It is the millstone of £285 million which he has hung on the neck of South Africa and the future of South Africa. I can quite understand the Minister saying in his Budget speech that he was satisfied to leave it to the next generation and to history to express an opinion on that. I can quite understand that, because he will no longer be here to hear that judgment being pronounced, because I think it will be very unpleasant for him to hear that under his regime in South Africa our national debt simply doubled itself within the short space of six years. In the past we also waged wars and during the whole course of the history of South Africa, up to the beginning of this war, including all the development works and wars we have had, our national debt was only £285 million. In the short space of six years during which he has been in power the national debt has doubled itself. That is not the whole of the war account. That is simply the money we borrowed to pay for the war. In addition to that, enormous amounts were paid from cash reserves. It is somewhat less than the amount I mentioned a moment ago, but it is nevertheless the enormous amount of approximately £260 million. Then we still have the enormous pension debt, which may increase in South Africa. It is impossible to say at this stage what that pension debt is going to be. Our total expenditure in connection with the first world war was £45 million, and the pension debt which it has entailed to date is £20 million. That gives one some idea as to what this war is going to cost South Africa. One is still on the safe side in estimating it at round about £600 million. It will be close to that if not that amount. I am glad the Rt. Hon. the Prime Minister is present. That is the price South Africa is paying, not simply for the war but for the privilege of having a Prime Minister who only feels happy when he wages war. There has been talk of freedom and all those noble conceptions. We were told that through the war would be created a new, a better and a safer South Africa—a safer world.

Do you want to deny that?

Does anyone dare say that the world we are living in is safer than it was before 1939?

Yes.

Does anyone dare to allege that? Only a few days ago one of the great leaders in the war said that the world is today a hundred times more dangerous. Do these hon. members not know that all the nations, including America and England, are alarmed at the future; that they are more alarmed than even before in the history of the world? Mr. Churchill said that we fought to get rid of one dictator and now we have in his stead one who seeks to dominate the world; one who is greater and more powerful than Hitler and Mussolini were at any time. If ever we had a world where might is right, we have that world today. If ever there was a time when power politics ruled the day, where there is no such thing as national security, we have it today; and for that we have to thank our present Prime Minister; for that we scent nearly £600 million. I now come to the financial policy of the hon. the Minister of Finance. The fact that during the war years we freely borrowed and freely spent; the fact that during the war years, as the Prime Minister once admitted in this House, we shut our eyes and simply borrowed and spent without considering the costs—we do not look at accounts; the fact that all that money was spent in the most unproductive manner conceivable; the fact that all these things were done, resulted in the creation, in that way, of a semblance of prosperity in South Africa. A semblance of prosperity was created in the world and in South Africa in that way. There are still people in this country and in this House who consider that that is the right sort of thing, that the proper way to finance a country is to shut one’s eyes and to borrow and spend—that is the secret of national prosperity. Many people had that idea. On the other hand there are people who ask themselves this question: Have we not been creating a fools’ paradise for ourselves? This spending of money, this semblance of prosperity in which the country finds itself, is that not going to have a bitter aftermath; are the beautiful things we see around us not going to crash like a pack of cards one of these days, and are we not going to repent bitterly for what we did during the war years?

What a Jeremiah!

I shall not reply to that question, but this country has the right to know and the Minister of Finance should have given guidance to the country in his Budget speech. What South Africa and the people of South Africa have the right to hear from the Minister of Finance is this: Can we continue indefinitely as we have been doing during the war, borrowing and spending money in the most unproductive manner; and the more we lend arid spend the more we are creating that semblance of prosperity in South Africa? The people are anxious about the future, arid we have the right to hear from the Minister of Finance what would be the proper thing for South Africa to do now that peace has come and it is no longer necessary to camouflage the position—what is the proper position for South Africa? We search in vain in the. Minister’s Budget speech for a single word of enlightenment on the question which I put. I do not think I am exaggerating when I say that never before have we had a budget speech so devoid of a positive financial policy.

You say that every year.

Yes, that is what I venture to say. Never before have we had a budget speech so devoid of a positive policy as this last budget speech. The Minister of Finance calls this his first peace budget. I would like the Minister to point out to me one single place in the budget where he can say that the budget indicates that he appreciates the task of reconstruction during peace time; which indicates that he is doing, his duty in regard to it. I read through the Estimates vote by vote, and they are all the same as they were during the war years— even the Defence Vote. Over there sits the Minister of Defence. What is the position? The war is over. One can understand that it was not possible to let out all the defence secrets in the Estimates during the war years, but during the last few years I have been asking that when once the war is past we should restore defence expenditure to the sound position it was in before the war. What has happened? These are the Estimates we have before us; there is supposed to be a specification. I lay the charge against the Minister of Finance and the Minister of Defence that the specifications with which they are trying to mislead the public constitute nothing but deception. No one knows better than the Minister of Finance and the Minister of Defence that those specifications are not binding in the form in which they have been submitted to Parliament. That is mere information supplied to Parliament and it is by no means binding on the Department of Defence. The position is— that they do not say in the Estimates— that the Minister of Defence may, in terms of Act No. 27 of 1940 exceed any of these subheads by any amount, even to the extent of millions, and he need not come to Parliament for its approval by way of an additional appropriation. He knows that in terms of that Act there is such a thing as a War Expenses Account. That is a current account; it is not balanced at the end of the year. This money is being voted as a contribution to that fund. There may be a large amount in it because the balances are carried over from the previous year. Last year the amount was £8 million. The Auditor-General reports that during 1944-’45 an amount of £48 million was paid into the War Expenses Account over and above the amount voted by Parliament. Under the Act of 1940 the Minister of Defence and the Government can freely spend from that fund. It makes no difference what the amount is; they can spend it without Parliamentary approval. I say that Parliament cannot willy-nilly allow this a year after the war is over. No valid reason has been advanced for that. If we were to allow that it would mean the end of Parliamentary control over expenditure. I am going to propose an amendment, and part of that is definitely going to be that before we approve these Estimates the Minister of Finance or the Prime Minister should give this House the assurance that they will not shelter behind Act No. 27 of 1940, and that defence expenditure will not be exceeded without every excess being submitted to Parliament for approval by way of an additional appropriation. Let me make this quite clear: The war has given rise to a spirit of reckless expenditure. The financial conscience of the Minister has become dull; the financial conscience of the people has become dull; and the financial conscience of Parliament has become dull.

I want to say quite clearly that this side of the House is prepared to borrow and to spend money, but only when, in doing so, we create new and permanent sources of national welfare. We advocate a policy of expansion and development; we are prepared to spend money on it; but we are no longer prepared to tolerate the spendthrift spirit which is today rife in Government circles. It is time Parliament calls a halt. The Minister of Finance gets up and, in justification of his actions, he says that it is countering inflation. My attitude in regard to the matter is that money wasted—whether it is wasted by the Government or by the individual—has one and the same effect. When the Government wastes money you have the same inflationary effect as when the individual wastes money; and as far as I am concerned, if money has to be wasted, I would rather waste it myself than give it to the Minister of Finance to waste. And now I would like to deal with that part of the Minister’s budget speech which has provoked the most discussion, viz., his proposals to reduce war taxation. I want to say clearly and emphatically that the fact that the Minister has brought relief in taxation is not an achievement. It is not something for which he dare take credit.

Now that the war is over, there should have been taxation relief. In his budget speech, the Minister of Finance himself said that the standard of expenditure determines the standard of taxation. Since the war has now ended, it is obvious that there should have been a decrease in taxation. It is essential and inevitable. There are only two questions we must ask ourselves; not whether the Minister has brought relief, that is obvious; but the two questions are: (1) Has the Minister given the maximum relief he was capable of effecting, and (2) if he has given the maximum relief, is he spreading that relief equitably and proportionately over all those persons who were so heavily taxed during the war? These are the questions we have to put to ourselves. Let me say this quite clearly: If the Government is today canvassing for votes as it did at Caledon, and as its newspapers are still doing, with a taxation relief of £16 million, it simply goes to prove how impoverished that side is for anything to show off. They have nothing to show. All sections of the population endured hardships during the war, not simply one section. Commerce and industries knew that many of the taxes imposed by the Minister were injudicious and that they were to the detriment of our national economy, but during the war they put up with it. This side of the House and those who represent us were not in favour of the war policy; we rejected it; but Parliament decided, and we also had to shoulder the burdens.

And the advantages.

We often supported the Minister against our deepest convictions when he required money, and today, in common with all the other people in this country, we have the right to say that the necessity is now past, and we have the right to say: “Give us now what you are in a position to give us.” I want to lay against the Minister of Finance the charge that in his proposals in regard to taxation decreases he is revealing flagrant, unfair discrimination. I want to cast on the Minister this reproach: That when he was considering to whom he should accord relief, he was not thinking of the ordinary tax-payer whom he singled out year after year to help him bear his taxes. He forgot the farmer who was struggling along on his farm without farm labour, and who is now suffering under a drought; he did not think about the food shortage in this country and the necessity for encouraging food production. He did not bear in mind—and here I blame the Minister of Labour—that we had no strikes and no labour troubles during the war. The people did not selfishly think of themselves, even though the cost of living increased. They caused no trouble, but they were hoping that when once the war was over the Minister of Finance and the Government would bear them in mind. The Minister has forgotten the mine-workers of Johannesburg. During all the war years they did not get one penny increase in their wages—bonuses, yes, crumbs, but no wage increase during all those years. The cost of living increased, but they did not get one penny increase in wages. The Minister forgot about them. Now that the war is over, the Minister and the Government have been thinking of only one group. What has happened? The bells of peace had hardly finished ringing, when the Minister started the whole machinery of State and appointed a commission to investigate mining taxation with an instruction to bring out a report forthwith, as speedily as possible. And when the report was submitted he immediately adopted it and incorporated the suggestions in the taxation proposals. He as so concerned about the poor mining magnates, that I make no amends for saying that this budget is a mine magnates’ budget—it is a Hoggen-heimer budget, and nothing more. I put two questions and I shall answer them, because the Minister’s budget will have to be judged in that light. The first question was whether he is giving the people of South Africa the maximum relief he is capable of giving in regard to taxation. He is giving relief to the extent of £16 million. The question I wish to discuss is whether this is the maximum he is able to give, and I ask the House to follow me closely while I mention a few figure’s. I am just taking the Revenue Estimates and am leaving the Loan Estimates for the time being. During the past year we made provision under the Defence Vote for £45,375,000, and in these Estimates we are making provision for an amount of £18,350,000. On this one vote there is a saving of £27,000,000. I take a second vote, “Demobilisation”. One would have thought that this was going to be the great demobilisation year; but in the new Estimates provision is made to an extent of £733,000 less. Last year we spent £4,225,000 on UNRRA in the Estimates and this year not a penny. On these three votes alone the Minister is spending £31,983,000, or in round figures, £32,000,000 less during the coming year. We are endeavouring to ascertain whether he is giving the maximum relief which he is capable of giving. Here he is saving an amount of £32,000,000 on three votes alone. The Minister stated that last year he saved an amount of £4½ million on his Estimates. This year he is making provision for an additional £4 million. He is making provision for an additional £4 million on a Budget of £80 million, and without actually having new services he brings the Budget up to £84 million. It is characteristic of the Minister to over-estimate his expenditure. Now from the Estimates he should still have deducted the saving of £4½ million, which brings the amount which the Minister could have saved on the Estimates up to over £36,500,000. That is important. We want to know what is the maximum relief he ought to give. On three votes alone he saves £32 million and as regards the rest, last year he managed on £4½ million less than the amount he asked for. He may again save that amount. He therefore knows that he has £36,500,000 at his disposal. Now the Minister comes along and tells us that he has established a number of new services. I just want to enumerate them. Here we just have the following, as he gave them: Increased War Pensions; Scientific Research Council; Inland Air Mail Service; Increased Salaries of Public Servants, with retrospective effect; Contributions to the Pensions Fund for Public Servants; Extension of Health Services — an amount of £750,000; I should have thought it would have been at least £1 million; and finally, Import of Foodstuffs, £9 million, which gives us an amount of £15 million for new services.

What about the Police?

That has already been put into operation and we made provision for that in the Additional Estimates at the beginning of the year. The Hon. Minister is asking £4 million more than on the last Estimates, and the small additional amounts to which the hon. member is referring, are included in that On three votes alone he is saving £32 million. He can easily save £4½ million; new services amount to £15 million. The Minister therefore had at his disposal an amount of £21 million with which to reduce the taxation burden. He is merely giving relief to the extent of £16 million. The Minister is therefore needlessly retaining an amount of approximately £5,375,000. But there are two further considerations I would like to mention here. The Minister says that he requires £10 million for the import of foodstuffs. With that food will have to be bought. Not a penny may be spent on that without the approval of Parliament. Out of that £10 million he has to pay for the foodstuffs from overseas. I asked the Department concerned whether he intended making a free distribution of the foodstuffs in this country when it arrives. He said “No”. That means that the foodstuffs will be sold, and portion of the money will be recovered. It is misleading to say that the whole of the £10 million will be spent on foodstuffs. I cannot say how much the Government is going to pay overseas and how much the Government is going to recover in revenue in this country, but the amount he does not recover will be a subsidy. Let us suppose that to be £7 million. That leaves us with £3 million. The second consideration is this: I have already spoken about arrear taxes. The Minister said the amount I mentioned was excessive. We know that, since the time I spoke of it the position in regard to arrear taxes in South Africa has retrogressed considerably. There are people in South Africa who have not yet received their assessments over a period of three years.

They are fortunate.

But they will have to pay all their taxes at the same time. My computation is that the Minister can still recover at least another £3 million in arrear taxes. Therefore the amount which the Minister could have applied towards effecting relief is more than £11 million, apart from the £16 million which he is in fact appropriating for that purpose. The Minister is very fond of saying that we simply ask for a reduction of taxes without suggesting possible means. Here I have just done so on black and white. Over there are his officials. They can check all the figures. I hope the Minister will not come along again with the old tale that we are always asking for more without indicating where the money is to come from. We have just done so. I now come to the last part of my speech, and I now want to read my amendment because I would like to say a few words on that. I move, as an amendment—

1. (1) not to exceed Defence expenditure as specified in Vote No. 5 without the approval of Parliament by way of additional appropriation;
2. (2) to reduce substantially the incidence of direct as well as indirect taxation in respect of the lower and medium income groups;,
3. (3) with a view to the stimulation of food production and the reduction of cost of living, to encourage the agricultural industry in respect of the policy of taxation and relief from taxation in a measure equal at least to that extended to the gold mines;
4. (4) in view of the reduction of gold mining taxation, to pass a Silicosis Bill during the current session which will make provision for adequate pensions and improved benefits to all miners’ phthisis sufferers and their dependants; and
5. (5) not to enter into any financial and economic agreements or arrangements, either of an international or less comprehensive nature, which may handicap or hinder the development of our industries or which may be detrimental to the export trade of South Africa.”

That is my amendment and I would like to say a few words in connection with it. [Extension of time.] I have already motiated No. (1). It is not necessary for me to do so again. I now come to the second, the incidence, direct as well as indirect, of taxation in respect of the lower and medium income groups. We say that the incidence of taxation should be reduced, and that gives me the opportunity to come up for the ordinary man in South Africa. No other section of the community has been singled out to the same extent, year after year, to help carry the taxes, as the ordinary man in the street. I now want to read how, in the course of six years, the Minister has imposed seven-fold taxes on the ordinary tax-payer. On 28th February, 1940, he abolished the 30 per cent. reduction, thereby increasing the burden of taxes on the ordinary citizen by £2,165,000. That same year, on 28th August, 1940, the surcharge of 20 per cent. was introduced, and that brought in £900,000. The next year the Minister came with a brand new scale which incorporated all the increases and a little extra, and that meant another £980,000. In 1942 the Minister came along with his Personal Tax and Savings Fund Levy, which yielded another £1,500,000. In 1943 he increased the Personal Tax and the Savings Fund Levy, and imposed a surcharge of 15 per cent. on normal and super tax, which again meant over £1 million extra. In 1944 he singled out the farmers especially. Then he brought about changes in regard to the limitation of purchases of stock and improvements allowed to be effected, and he imposed an extra tax amounting to £640,000. Last year the only change he made—and here the change again involved the ordinary man in an amount of £180,000—was when the Savings Fund portion of the basic tax was abolished and the tax portion increased. To give you some idea as to how these taxes have been increased in the case of this class of person, I have endeavoured to compare the 1939-’40 figures with the present figures. It is difficult to do that in view of the amendment of the companies’ tax. At that time private companies paid as companies and not as individuals. I have, however, endeavoured as far as possible to find a uniform basis, and I think the figures I shall now mention reflect the position fairly accurately. In 1939-’40 the revenue derived from income tax and super-tax was £5,730,000, and, according to estimate, it would have been £17,300,000 for the current year. It has been increased from £5 million to £17 million. Now the Minister comes along and makes a few concessions. There are three of these. He writes off the Savings Fund Levy and he now allows a deduction in respect of children between the ages of 18 and 21 years, under certain circumstances, and he reduces the tax portion of the Personal Tax from 10 per cent. to 5 per cent. According to the figures given me by the Commissioner for Inland Revenue, and which I therefore accept as correct, the position is that before the war a married man with an income of £700 and two children paid a tax of £3 17s. 4d.; last year he paid £20 7s. 1d.

Only £20.

For a married man with two children an amount of £20 is quite an appreciable amount. The Minister is now making a little concession, and that person will have to pay £16 4s. 11d.

Compare that with Australia.

We are now dealing with South Africa. Take a married man with an income of £800, also with two children. Before the war he paid £7 15s, Last year he paid £29 1s. 3d. With the relief now granted he will have to pay £24 15s. 11d. This side of the House is of the opinion that more relief should be accorded to the ordinary man. Also for him the war is over, and he wants to feel with the rest that the war is over. These people have not been receiving double salaries, and they should also feel in their homes that the war is over. We feel that the Minister should at least have abolished the 5 per cent. Personal Tax which has now been incorporated; that he should now adopt the principle that a rebate should be allowed for medical and hospital expenses. That is absolutely essential. When a man has had sickness during the year he should be allowed to deduct his expenses in connection therewith for taxation purposes. We also feel that a man with an income of £600 should revert to the position before the war when a married man in this category with two children did not pay income tax. The Minister can afford to bring about that change during this year. I now come to another proposal by the Minister, viz., his treatment of the gold mines as compared with his treatment of agriculture and secondary industries. I said that we advocate a policy of expansion. One of the things which we require today is to encourage our productive industries in South Africa. We have three productive industries, viz., the mines, agriculture and secondary industries. If we want to have the maximum production in South Africa, if we want to increase our national income in order to raise our standard of living, we have to encourage them. I will not take it amiss if the Minister takes steps to increase gold production, but I say at a time when famine threatens our country and we have to import £10 million worth of foodstuffs, food production in South Africa is of greater importance than the encouragement of gold production.

It is cheap.

The first concern of the Government today should not be to place the mines on a sound footing, but to place agriculture on a sound footing and to encourage the farmers. I want to suggest to the Minister of Finance and to the Minister who is acting for him today, to encourage production. In what way? Tell the farmer that if he occupies his farm and has a bond on it, either private or with the Land Bank, we are going to allow him, in paying off during the tax year, to deduct it as overhead expenses for the purposes of taxation. I suggest this to the Minister of Finance and to the person who is today acting on his behalf. If he wants to encourage production, what should he do? Tell the farmers: If you want to occupy a farm and you have a bond on it or a loan from the Land Bank for improvements, we are going to allow you, over a certain period, to bring your instalments in charge against overhead expenditure in your income tax returns. I predict that the farmers will then produce as they have never produced before. South Africa will then have food and will have no need to import foodstuffs to the value of £10,000,000. But the most important matter is this: Should we have trouble during the post-war period we will have a farming community in South Africa untrammelled by debts and one which will be able to weather the storms of depression which will come over our country. [Interjections.] Is the hon. member for Rustenburg (Mr. J. M. Conradie) against my motion? If not, let him help us. The Minister still has a margin of £11,000,000. He can do so if he has the goodwill. I now come to the secondary industries. I want to say a few words about that, because something has been mentioned about it in the speech of the hon. Minister of Finance, a speech which struck a discordant note. The Minister stated that they have always stood for the protection of our industries, and that they are still there to give reasonable protection, but that great international conferences are in prospect and international co-operation is important. Those words strike us as ominous. I would like to tell the Minister this: We also stand for international co-operation and we are prepared to render our contribution towards the recovery of world trade and world prosperity, but not to the detriment of South Africa.

The same old story.

In the Select Committee on the Bretton Woods Agreement we specifically asked the departmental representatives: “If we accept the Bretton Woods Agreement, do we sacrifice our right to have tariffs for the protection of our factories?” Their reply was: “No,” and there we take our stand. I have here figures which will indicate exactly what role secondary industries are today playing in our national economy, and I think it will be a good thing if I just take our national income before the war. Just before the war our national income—this is according to figures furnished by Prof. Ritchards— was £434 million. Revenue derived from agriculture amounted to £53 million, from mining £98 million and from factories a mere £76 million. See how the position has changed during the war years. Now our national income is estimated to be £844 million. Agriculture contributes £76 million, mining £96 million and the factories £125 million.

This is a good Government.

The Government gets the credit for that. It was stimulated by the war, but the foundations of industrial development in South Africa were laid by the Nationalist Party. We came along with the policy of protection and today it is still the difference between this side and that. That side stands for reasonable protection if it is not deleterious to British factories or to international co-operation, and we stand for effective protection in South Africa, because we know what role the development of factories plays in the economic and national life of South Africa. I must honestly say that I am of the opinion that with that margin the Minister could have done more towards stimulating industrial development in South Africa. He should have said in his speech that no new undertaking in South Africa after 1st July last year will be subject to excess profits duty. That he did not do. That is the least that could have been expected of him. And the people are waiting. With the margin he has he could have reduced the excess profits duties tax still further. I have now elucidated my amendment. The amendment in connection with the Silicosis Bill will be elucidated by the hon. member for Westdene (Mr. Mentz). The Minister has given relief in taxation to the extent of sixteen million pounds, and I produced proof today that he could have given taxation relief to an amount of twenty-seven million pounds.

But has it been proved?

I mentioned all the figures. He has given relief from taxation to an amount of sixteen million pounds; he could have done so to an amount of £27,000,000 if he only had the goodwill. But as I said on another occasion, the Minister was thinking here more about himself and his reputation as a Minister with surpluses than he was thinking, during this critical period, about the welfare of the people in years to come.

I second. The war is over. The people rightly expected to get a peace-time Budget at least this time. With great expectations one and all looked forward to the dawn of a better world which has so often been promised to us, but for the umpteenth time—and this time even more clearly than in the past—the Minister has shown that all his sympathy is only with the mines and the rich people of our country. Moreover, this Budget has also produced an irrefutable indictment of the incompetence of the Minister of Agriculture, of the party opposite, and of the total failure of the agricultural policy of this Government; but more than that, we regret that we have to stigmatise this Budget as a being a party manoeuvre and as therefore not presenting the true state of affairs to the people. We are told that demobilisation is a huge success and that every soldier will shortly be discharged. Huge supplies are at the disposal of the Department of Defence for sale, and from the proceeds of which inter alia new purchases for the Department can be made, and notwithstanding that the war has been oyer for some time, the Government is able in this Budget to give us only the trifling taxation relief of £16,000,000. If that should be true, it seems as if the Government itself does not attach too much value to the peace and the wonderful world which it promised us. But as I have said, we regard this Budget as a party manoeuvre. This political move, we can assure the Hon. Minister, is far too obvious a disguise to cover the shortcomings of the Government. Why, it is being asked everywhere, have we received only a meagre concession of £16,000,000 now that the war on which we spent annually plus-minus £100,000,000 is over? The answer in my opinion is very clear. If we have to believe the present Minister of Justice then this Government intends to cling crab-like to its position whatever Caledon might have told the Government directly or by implication yesterday. Hence that all possible methods must be applied to try and bring about a more favourable turn of events than we see throughout the country today, in view of the general election. This small concession of £16,000,000 places the Government and the Minister of Finance, from their point of view, in a most favourable position in order that the Minister of Finance may be in a position next year to produce an excellently camouflaged surplus, which of course will then be used to pay off war debts; but at the same time, what a mighty election weapon does that sort of policy not produce? In 1947, just before the general election, relief will be granted to the extent of £25,000,000 or £30,000,000, which we will most probably get next year as a decoy before the election by way of taxation reduction or better social conditions. This relief should not have been announced only next year in the 1947 Budget; it should have been a reality this year. Even the. Minister of Finance will probably be the last person to say that the burden of taxation under this Budget does not fall too heavily on the shoulders of the people. The Hon. the Minister and the Government want the people, of course, to compare the taxation position of today with that of last year and the year before, and to be delighted over the crumbs which they received this year. This hope that the people will stare themselves blind at one tree and not see the wood, is an idle hope. I maintain that in this Budget the masses of the people have received only crumbs. £16,045,000 is granted by way of relief, of which not more than £9,885,000 is in respect of the mines, excess profits duty and reduction of trade profits. If in addition we subtract the taxes which we can describe as class taxation which are paid by only certain sections of the community, such as the, surcharge on telephone accounts, the suspension of the increase on railway fares, the relief in respect of petrol and the abolition of the tax on new motor cars, which together account for £3,860,000, together with the amount already mentioned, then we have the total sum of £13,745,000. That leaves only an amount of £2,300,000 which has to be distributed amongst the masses of the people. Crumbs indeed and very few crumbs which the people themselves are receiving. It is peace-time now and the people will start thinking in a sober manner and look past this tree of £16,000,000 and compare the taxation position of today with the taxation position before the war. Only if we do that, do we realise that to all intents and purposes we are still at war today and that this Budget can in no way be called a peacetime Budget. If in addition we take into consideration the higher costs of living, the tremendous depreciation in the purchasing value of our money, only then do we fully realise how little the actual concessions granted by the Hon. the Minister mean to us. Only then will the taxpayer realise how much worse off he is in the year of peace 1946 than he was in the year of peace 1939. But I rose to second this motion of the hon. member for George (Mr. Werth) and particularly in connection with the standpoint of the Government with regard to our largest and most indispensable industry, namely, the agricultural industry, also as affected by this Budget. We could have used up all our time by merely, for instance, by way of the report of the Auditor-General showing why the Government in view of its slackness and its wasteful actions year after year, should no longer be entrusted with the State’s money.

But we consider the lack of policy and the wrong actions of the Government in connection with agriculture of such great actual importance, that we would rather confine ourselves to that. We are living in a time when everybody is beginning to wonder when the storm of the next depression is going to hit us. But above all, we are living in a time of a hungry world. Everybody is clamouring for food, also here in South Africa. The people as a whole, but in the first place, the farming community, have hoped for actual relief in this Budget and what have we received? In the Budget speech of two hours and fifteen minutes, the hon. Minister of Finance did not even once refer to this essential industry of South Africa. The Minister of Finance considers this huge and essential industry not of sufficient importance to refer to it even once in his long speech; this industry which affords a living to 35 per cent. of our European population and 78 per cent. of our nonEuropean population has received only stones for bread from this Budget. In the Minister’s announcement he could not hide the truth that his love and sympathy are only for the mines and the rich people of our country. As an excuse for the huge concession made by the Government to the mining industry in South Africa, the Minister, with the utmost self-satisfaction, referred to the report of the Commission on Gold Mining Taxation which at that stage had not even been laid upon the Table of the House. But did not the Government have in its possession a report which was no secret any more, but a report which has been public property for years, which has afforded the Government much time to go into the matter and to provide the necessary means of carrying out the recommendations contained in that report on the reconstruction of agriculture. What became of that report? Did it land up in the waste-paper basket or would the hon. Minister for Agriculture get up here in this debate and will he assert that the white paper outlining the Government’s agricultural policy is now the document replacing this thorough and excellent report of his own Department? That would be an insult to that sound document, because this white paper is nothing else but a white flag policy and is hardly worth the paper it is printed on. One looks vainly for anything original or drastic in this document except for the re-introduction of a few old schemes which the Government, as a result of its shortsighted policy, has for years left in abeyance, as a result of which it contributed to making the agricultural industry more uneconomical and less productive, this document for the rest consists practically of idle words, but even for the little which is being offered in this white paper policy, we find in this Budget in the second year of peace, not the least reflection. The war is over, and today in this Budget we do not find the abolition of war taxation affecting the agricultural industry which the people and the farmers expected, but rather a perpetuation of such taxation. The taxation on the wine industry, for instance, which we were assured in this House, would only be temporary war taxation, the taxation for which the hon. member for Paarl (Mr. Faure), the hon. member for Worcester (Mr. P. J. de Wet) and the hon. member for Malmesbury (Mr. J. C. Bosman) voted on that condition, still exists and today it has not been removed yet, not to mention having been reduced, and it seems to us as if it has now become a permanent taxation. The same applies to the taxes on tobacco, beer and cigarettes. Instead of having reduced these taxes, it appears to us as if the Minister of Finance thinks they should now be made permanent taxes. The same applies to the tax on transfer duties. A small amount of relief has been granted in this respect, it is true, but as far as the 3 per cent. is concerned, which has been imposed, we cannot but assume that the Minister is thinking of making this a permanent tax for at least as long as he and this Government are in power. As regards the only other taxation relief in which the agricultural industry will have a part share, that is, namely, the fixed property profits tax, we would like to ask the Minister of Finance why he has not abolished this tax altogether. Does he still believe in his contention of 1942 that it should counteract inflation? Why now that the danger of inflation is still greater than in 1942, why now partly suspend it? We must assume that the Minister no longer believes in that, as has also been proved in America by investigation that it does not in any way contribute to inflation. The inexplicable attitude taken up by the Minister in burdening these properties which he taxed in the first instance as a result of his wrong assumption, with this tax today, must remain. It is not only a wrong but a most unfair tax, and we want to express the hope that the hon. Minister, in the light of his experience, will still see his way clear to abolish this tax. As regards the other expectations which the public had, there is the question of the cost of living. In this respect the hon. Minister has bitterly disappointed not only the agricultural industry but the whole population. The concession in respect of petrol, telephone accounts and railway passenger fares, will have no or little effect worth mentioning on the cost of living. This reduction in taxation will not produce more or better or sufficient food. Also in this respect the Government shows it lack of understanding of the stimulation of food production and the reduction in the cost of living. Apart from the Minister of Lands, who does the ploughing on his Government farms on the settlements with petrol, farmers do not plough with petrol but with power paraffin. And if the Government wishes to encourage food production, and to reduce cost of living, why not take this opportunity in this budget to make some concession in respect of power paraffin? Is it really asking too much to expect the Government to understand even the most elementary principles with regard to greater production and more economical production, and that notwithstanding the fact that our food production position is most disquieting, so much so that even the United States feel concerned over the position in South Africa, the fact that our food production is 14 per cent. lower than before the war and that for three successive years now it has been below the average. I say that even America is concerned over the position South Africa is facing. When, may we ask, and is there any hope, that the Government will wake up to the reality of the position and see to it that the most important foundation of our national economy, namely, the agricultural industry, will be given its rightful status, not only as a means of existence for the largest portion of our population, but also as the only source of supply of our food? Or what must we take to be the policy of the Government in this connection? Is it what we see here in its White Paper policy? Referring to the protection which has to be afforded to agriculture, the following significant sentence is used—

South Africa, according to this Government, will have to prepare itself to compete in future as far as agricultural prices are concerned with the rest of the world. Can we compete with a country such as America with regard to which we read in the report of its Department of Agriculture—

But why is it that America is in such a favourable position that it can achieve a record food production? Listen to what one of the great leaders in agriculture in America tells us. He says—

I maintain that America can do this because it has a Government which is sympathetic towards its agricultural population, and does these sort of things which we cannot compare with the basis adopted by the South African Government. But I go still further. As I have said, we must come to the conclusion that this Government wants us to compete with overseas countries. Here the Minister of Agriculture’s own Department gives us the position with regard to the purchase of machinery. What do we find? We find that if we take the index figure in 1936 to be 100, then we find that the index figure for agriculture has risen during the past ten years to 175. In America the figure is only 135. In addition to this huge difference, which the farmer in South Africa has to pay for his requirements, the Government comes along and announces in its White Paper policy that we must be prepared in future to adjust our prices to those of overseas countries. To get more a accurate picture of the economic condition of our farming community, however, we must ascertain what portion of our total national income is received by the farming community. I want to take the figures for 1939 not only because that was the last year for which rigures were fully compiled, but also because they reflect a more normal position than we have today. The agricultural production was worth £51,056,000. From this amount must be deducted the following large items: Cash expenditure £15,608,000, wages and rations £17,600,000. That is a total expenditure of £33,208,000, which leaves to the farming community a net working income of £17,857,000. From this amount must then still be deducted interest on mortgage bonds £2,850,000, interest on loans £490,000, together £3,340,000, which leaves a net income for the farming industry of £14,517,000. This amount has to be divided amongst 696,000 Europeans, comprising 35 per cent. of the European population. We would rather not work out the amount received by each farmer; but we do know that this 35 per cent. of the European population receives only 11.8 per cent. of the national income. If we go further and we take the latest census figures, and we also look at the report of the commission on the structure of family income, then we find that of all the European farmer families in the Union, there are 32 per cent., or nearly one-third, who have an income exceeding £200. Forty-six per cent. have an income of less than £100. The median income was £116. One half of these families, therefore, have an income of more than this amount, and the other half have an income of less than this amount. In view of these irrefutable facts and in view of the fact that we are on the verge of starvation, is it conceivable that the Government has not yet produced an effective scheme not only to alleviate the position, but to save it? From this Budget we have received nothing. The only thing we have received is this White Paper policy. What we read in this White Paper is so typical. Just listen to what this wonderful scheme for the reconstruction of agriculture is—

This is the first time we hear that this Government is going to construct roads and bridges. It reads further—

The Minister of Transport announced the other day that he has a deficit, and as long as he had that deficit, we did not hear very much about new road motor services. But this wonderful paragraph concludes thus—

No, we do not want schemes which still have to be developed. We want completely prepared schemes. Are other countries in the world as short-sighted as our Government as to fail to take energetic steps in connection with their farming industry? What happened in Canada? Here we have the fact that in Canada the Canadian Government passed a Price Support Act in 1944. In 1944 the Canadian Minister of Agriculture came along and he said: We must save the position of our agricultural industry after the war. They do not start only now to develop schemes. They already had this Act in 1944. What do we find in America? There we find that the Government stated that the farmers in America also had a supported price under an Act amended in 1942. That was not done in 1946. In 1942 they already had this Act. What does America tell us?—

That is what we find in the message of the President of America to the Senate. I am confining myself to countries which have taken part in the war. I am not talking now of neutral countries because then members on the other side get hot under the collar. I now come to England and what does the Minister of Agriculture of Great Britain tell us? He says that the aim of the British Government is to give the agricultural industry an assured future. Here we have his words in the British Parliament—

Where is that?

This is Mr. Thomas Williams, Minister of Agriculture in England. Then he explains how this scheme will work—

And note this—

That is what has been done in England by the British Government. The Minister of Agriculture made this announcement. The stock farmers know two years in advance what minimum price has been fixed. They can breed and build up the cattle for the market because, as the British Minister of Agriculture said, they must know that they will receive a reasonable reward for the capital invested by them in their industry. Hence the British Minister of Agriculture comes along and he announces two years in advance what the minimum prices are going to be. The farmers can then start feeding their animals because they know 12 months ahead what the actual price will be. That is what is being done in other countries and one can be jealous of the farmers in those countries; but here in South Africa we have to be satisfied with a White Paper and schemes which still have to be drawn up. It is no use waiting until the crisis has come and then to try and solve the difficulty. No, sound and accurate planning must be done before the time. It is not the soldier who wins wars and battles, but strategy. This is our charge against this Government; that it has no prepared policy to enable us to win the fight against the coming depression and the already pinching hunger. What did we expect from this Budget and what is required in order to provide the necessary security, the necessary food and the necessary supplies to the nation as a whole? The farmers fully realise that their bread is buttered in the cities. For that reason the farmer must and for that reason he desires to be in very close contact with the consumers and the salaried people of the country. The arithmetic of agricultural progress became very clear during the past few years. Take the example of what happened in America. There we find that in 1932 when there were 11 million unemployed, the cash sales of agricultural products amounted to 5 billion dollars. In 1937 when the unemployment figure was reduced to 6 million, the cash sales increased from 5 billion to 9 billion. In 1941 when unemployment was reduced to 3 million, the cash sales stood at 11 billion, and 1944 when there was no more unemployment the cash sales of agricultural products reached the colossal sum of 19 billion. It is very clear to the farmer that what he should have and the support he should get, is that the salaried people and the labour classes should receive a wage which will enable them to buy from the farmer to such an extent that the farmer will also receive for his labours what is due to him. Here is South Africa we have the same position. When we had unemployment and low wages, we heard of a surplus of agricultural products, and uneconomic prices, which today have changed to acute shortages. In employment, supported by a living and decent wage, lies the solution to this problem. Freedom! Yes, freedom is most valuable to millions in this world, but security is absolutely fundamental. What is the least we have expected from this Budget? We expected that the necessary security for the agricultural industry would be provided to enable it to fulfil its duty, which it realises full well, as the food supplier of the nation. Take the year 1939 when we heard of surpluses and of shameful malnutrition of a large portion of the population. At that time the agricultural population purchased machinery annually to the value of £3 million; fertiliser to the value of £1½ million; and seed to the value of between £5 and £6 million was used. If our Minister of Finance did not show all his sympathy to the mines, even these items, apart from the question of capital redemption mentioned by the hon. member for George (Mr. Werth), would have presented a golden opportunity of providing us with a better quality and adequate supplies of food at a more economic price. Enable the farmer to acquire machinery, fertiliser and seed at a more economic price, and you will be surprised at the stimulating effect it would have on production. Subsidy and assistance in connection with seed is not something new for this Government. If we refer to the report of the Auditor-General, then we see on page 220 that the Government and the Department of Native Affairs have assisted the natives under the Native Trust with seed to an amount of not less than £59,000. That is not all. Those natives receive subsidies of 20 and 45 per cent. on the seeds. The Minister of Agriculture will tell us that they also have a seed scheme for Europeans. True, but the Europeans have to pay every penny for such seed. We do not get a subsidy on seed like the natives under the Native Trust. Then we also expected that the Minister of Finance would at least have abolished this tax of 70 per cent. which he imposed on improvements. It has undoubtedly contributed towards a detrimental effect upon production, and if he had removed it, it would have contributed towards increasing the production of the country.

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

When the proceedings were suspended, I was dealing with points in the agricultural policy in respect of which we expected concessions in this Budget. In the few minutes at my disposal, I want to mention one other point in this connection. The Minister of Finance used these words which also appear in the report of his Commission of Enquiry into mining matters—

Now it does remain an irrefutable fact that in South Africa we have as the largest industries, as the largest sources of employment, the mining industry and the agricultural industry. The one is transitory in character and the other is of a lasting nature. Now the Government comes along and adopts a principle against which we do not want to raise any objection, but the Government adopts the principle that the system of taxation of the country should not have a restrictive effect upon the development of the one industry, the one of the transitory character, namely, the mines. The agricultural industry, which is something permanent and upon which we as a pation may probably have to fall back, is not treated in the same manner and is not granted the same concession. On mines, on new mines, the Minister allows a deduction of the total investment of their capital. Existing mines he allows to deduct 20 per cent. We do not object against that, but we want to know why the Minister does not grant the same concession to agriculture. If he did not want to give it to the full extent, in heaven’s name why does he not allow farmers also to deduct 20 per cent. in cases where they still have a mortgage? That would have a wonderfully stimulating effect upon the production of our country; but as I have said before and want to emphasise once more, this is the policy by means of which battles and wars are won. That is why we are asking for an agricultural policy which will take courageous action also in the interest and the welfare of its clients; a policy which will place the knowledge and resources which the Government has at its disposal, at the service of the agricultural industry, and a policy which will strive after the most effective and maximum productivity and which will provide means to the agricultural industry to enable it thereby to help itself; a policy which will not only contribute to the advancement and security of agriculture but which at the same time will contribute to the ultimate security of the nation as a whole. Vainly have we waited for such an effort from the Minister of Finance. We believe that a Minister should be capable of being cautious, but he should not be afraid—afraid to cast his bread upon the waters.

Mr. Speaker, may I at the commencement just point out to the hon. member for George (Mr. Werth) that it is many years that I have been seeing him in this House, and every year, if it is not a case of a direct accusation of the Minister of Finance by him, there is certainly a very definite insinuation that the Minister makes some or other misrepresentation to the House. I do not think the hon. member should take up an attitude like that, because if there is one member of this House with undoubted integrity, quite apart from his great ability as an administrator, it is the Minister of Finance—[Hear, hear]—and I do not think that language like that redounds to the credit of this House and its dignity, more particularly when applied to a man of that standing. May I appeal to the hon. member for George in future not to use language like that, but rather to leave it to the House to judge? The hon. member will recall that every year that language is used by him, and invariably when the Minister of Finance replies to his attacks, he makes complete mincemeat, if I may put it that way, of the hon. member. He cannot deny that the Minister’s explanations and statements of fact convince this House, and that his accusations of the Minister were always entirely unfounded. As far as the speech of the hon. member for George is concerned, I do not think there is much in it that calls for a reply, but there is one statement made by him with which I propose to deal, namely, in regard to the debt incurred in connection with the war. We need not have heated debates about this matter. The difference between the attitude of the Opposition and that of the Government in regard to the war is well known to the House and to the world, but what I wish to repudiate emphatically is this suggestion that the debt we assumed shall be looked upon as a liability. I look upon that debt as the finest investment that this country could ever have made. It is quite easy to prove that. Leave sentiment aside and leave aside the question of whether it was the duty of the country to engage in the war or not, but speaking from a purely business point of view, I defy anyone in the House to tell me that had this country remained neutral in terms of the hostile attitude adopted by the Opposition in the beginning of the war, this country would not have been bankrupt.

Yes, just like Ireland.

Yes, and just look at Sweden. But what did we receive for that debt? Hon. members may laugh, but I can assure them that if we had not engaged in this war the industrial development of South Africa could not have taken place, and that it has expanded for the benefit of all is entirely due to the fact that we were engaged in the war. Because we were in the war, the other countries sent us machinery and the raw material we required. It is said that we adopt the policy of nursing the gold mining industry. If we had not participated in the war, the gold mining industry would have had to close down automatically. Other industries would also have had to close down, so that the country’s markets would have gone, the farmers would have been bankrupt, and there would have been no industry. No one can deny that. The hon. member for George (Mr. Werth) suggests by the expression on his face that I am talking nonsense.

England had to get our gold to buy American dollars.

Why talk about gold? There would not have been any gold industry if we had remained neutral. We were importing materials in the ships of the Allies, and these would not have been available to us had we been hostile. But for that support we received from our Allies our industries would have languished and closed down, and we would have been bankrupt. Hon. members opposite talk about confining our arguments to South Africa. Well, Mr. Speaker, let us take the facts as they have been disclosed here. What did we secure as the result of our participation in the war? We secured industrial development, and what is more we must remember that wealth is not always expressed in terms ’of £ s. d. An invisible asset that we did secure was the reputation we earned, a reputation so high that today you can visit Great Britain or America or any overseas country and as a South African you will be welcome. Had we remained neutral—and hostile—no one at present would have left these shores on business visits to any of those countries. But today we can go anywhere in the world and negotiate agreements with ease, they are made every day. And South Africa, Sir, will look on this debt first of all as an investment for the industrial development that has taken place and has been linked with the great name South Africa has established throughout the world. As a result development will take place to an extent that will make it clear that this is the soundest business investment the country could have had. The hon. member is concerned about this debt. But supposing we had followed his policy and the country had remained neutral and things had gone on the lines I have indicated, as Germany had won the war as the Opposition hoped, an everlasting burden would have been imposed on us, we would have been bankrupt and bereft of our freedom, our country and our reputation. That would have been our position had we lost the war. Instead of that we preferred, as I said at the outset, to follow our great leader and to walk the path of duty, and I say with all sincerity we, as taxpayers, will willingly pay the debt. I am sorry the hon. member should have suggested that posterity will pass an adverse judgment on this debt. But could he tell us how much of that debt was incurred to keep internal peace? What proportion of our military expenditure was necessitated by the attitude of the hon. member and those associated with him? Let that go down to history.

It cost Sweden £450 million to remain neutral.

The hon. member then stated that the Minister in his Budget speech had given no indication of Government postwar policy. Surely he knows the Budget is not the place to indicate policy; it is purely a matter of taxation. The Government’s post-war policy has been repeatedly indicated by means of Bills and White Papers.

It is a paper policy.

The hon. member may call it a paper policy, but we have just emerged from the war and we are now only in the first peace year. Give the Government an opportunity to go ahead with its peace or post-war policy. The only policy that, fortunately for them, has come the way of the Opposition is that we are in the throes of a terrific drought; they are exploiting that to the full.

The poor mines are suffering from the drought.

I am coming to that. Then, Mr. Speaker, I shall not deal in detail with agriculture; my colleagues will do that adequately.

But I do wish to refer to the mining industry. I have here a few figures which will indicate its value to South Africa. The number of Europeans employed in that industry is 36,688; absent on national service, 5,006; natives and coloureds, 312,079. The total amount of wages paid in 1945 was: Europeans £20,891,000; natives and coloureds £13,603,000; I have not the details available of the total consumption of stores in 1945 but it was £2,500,000 greater than before. That gives some indication of the value of the industry. I do not think I need take up any more time in emphasising its importance. If I was Minister of Finance I would ease the burden of the mining industry more than has been done. It is the life blood of South Africa. Without the mining industry our industries would perish and so would agriculture. If ever there was an industry that should be kept outside of politics it is the mining industry. It is held out that enormous wealth is locked up in the industry. But what does it consist of? A certain company owns a certain mine. That company is conducted in the usual way by the directors and the office-bearers. Who owns the shares? Not one individual. There may be thousands of people walking the streets in South Africa who are shareholders. The profits are divided amongst them by wav of dividend, and a large proportion of the profit goes into the coffers of the State. The mining industry is indeed the main source of revenue to the State. Foolishly we hold cut that it is a terrific sin that the Government should have reduced mining taxation by £3,000,000.

I never said that.

You criticised that. I say the more we can ease taxation so as to give a longer life to the low-grade mines, the better for the whole country. I want to assure this House that the Government has the backing of the country as a whole in trying to preserve the life of the low-grademines. Then take the case of the Free State; if we are not going to allow the investor a reasonable return by way of dividend, money will not be forthcoming for the development of those mines. The hon. member criticised the Government in this connection, but if he explained properly to the farmer the farmer would welcome this easement of taxation, for mineral development in the Free State will mean a great market for his products. I think the hon. member is in agreement with me.

I only wish to deal with one other matter, in reference to the fixed property profits tax. In 1942 the tax was 6s. 8d. in the £ in respect of purchases since the war up to the time of the Act, and thereafter it was 13s. 4d. The Minister has now amended the law so that the tax will apply only to purchases during the war, and the provisions of the Act will be withdrawn from 1st March, 1946. This law was intended for the duration of the war, its purpose being to stop inflation. I do not think it had that effect; on the contrary, I think it caused greater inflation. But whatever may have been its effects, that is now past. I would, however, like to suggest to the Minister that the tax should not apply as from the end of the war, that is if he does not see his way clear to withdraw the tax altogether. At any rate, I would ask that discharged soldiers who had to buy homes for themselves should be exempt from the provisions of the tax.

Hear, hear

The law is so unpopular that I think it should be withdrawn. It could be made 25 per cent. from the date of the purchase, but the tax should disappear as soon as possible.

I should now like, Mr. Speaker, to deal with the hon. members on the Labour benches, but very few of them are present. In this country the position has developed that if a man is a capitalist he is a sinner, and almost he has no right to exist. I propose to touch on the capitalist system; it is private enterprise against socialism or nationalism. I would point out to my hon. friends on the Labour benches that they seem to be Rip van Winkles in their ideas, and still adhere to the Karl Marx idea, to believe that under our capitalistic system the rich get richer and the poor get poorer. I am an out-and-out capitalist. I stand for private enterprise. I cannot tolerate communism or socialism of any kind, except that I say that the capitalistic-socialistic system is the one I subscribe to. I believe in private enterprise, in private initiative, in private energy in the development of the country. The State will, of course, tax that wealth earned by private enterprise to the extent it is necessary to help others who cannot help themselves, to provide for social security, hospitalisation, free education and various social services. That is the natural system. If a man is born with more brain, more character, more energy and ability than the others, why should he not be allowed to use those qualities and to earn wealth with them? No matter how much he may acquire for himself, the State takes a proportion to be applied for the benefit of the rest of the community. That is the ideal system. Now the hon. members of the Labour Party come along and say this profit motive is a terrible thing. I would ask any hon. member of the Labour Party who is employed in business if he has ever thought of applying this doctrine logically and giving all the profit he makes to the poor or to a charitable organisation? They want socialism, which would mean everybody is employed by the State, and everybody is treated alike, with the complete sacrifice of initiative and energy in their work. The profit system is necessary. You may have the profit on a cash basis, you may have the profit by way of some benefit, but as long as there is some inducement held out to a man, he will use his energy and initiative. The Labour Party’s socialisation usually takes the form of a cry: Let us provide employment for everybody. But if that system is going to decrease the efficiency of your work and to reduce initiative, the productivity of the country must suffer in the end, with the result that the workers themselves must suffer, and in industry the costs of production must rise. The only thing then that could keep us going would be protective tariff which in turn would involve us in overseas antagonism. The Government would have it flung at them: You are carrying out a system to suit your political purposes and now you are going to exclude all of us. It is well known that a policy of this sort produces a vicious circle and the evil effects react detrimentally on the whole country. Labour members declare they are only out for the interests of the workers. But to my mind their policy makes for the undermining of the whole future not only of the workers but of the whole country. I shall give you instances. The hon. member for Durban (Berea) (Mr. Sullivan), speaking the other day for the Labour Party, declared in this House that, provided the native was paid the same wage as the white man, he is prepared to allow him to do skilled artisan work. If the natives of this country are allowed to do skilled artisan work and if they are given equality in the industrial sphere social equality must follow. Then what is going to happen to the European worker in South Africa once the native worker is placed on the same footing as him, with the same wages and working side by side? The hon. member must appreciate when that stage is reached—and there are natives capable of getting there—that the natives become foremen, or perhaps fill posts such as secretary of a company they will be in charge of European girls.

That is happening in Durban now with the Indians.

I want to warn European workers in South Africa that is the sort of statement made by the Labour Party representatives. It is the declared policy of the Labour Party, and the European workers must wake up and realise where that policy will lead them. When natives are given the same wage as the Europeans the only way industries can be kept going is by arranging that the combined wages of natives and Europeans shall represent a wage rate at a level that can compete with overseas industries. Once the native worker is given the European fate of wages the European worker’s wages will have to come down. Is the European worker prepared to face that? I would like to ask the Leader of the Labour Party: Are European workers prepared to subscribe to a policy that will lead to their wage rates coming down? The hon. member has told the House that provided it was over a period of ten years he was prepared that natives should be taken on as apprentices in the building trade and at the end of that period be admitted as skilled artisans.

That is not the correct position; that is quite wrong.

The hon. member says that is not so. I hope I have not misread the statement. I read it in the newspapers and got it from friends. Perhaps the hon. member would repeat what he did say.

Am I in order, Mr. Speaker, in making a statement?

The hon. member would not be in order in making a statement, he may only make a personal explanation. He will have his opportunity when the hon. member for Vereeniging (Lt.-Col. Rood) has sat down.

Now I have pointed out the danger of that policy to the hon. member I do not know whether he realises that statement went further than he intended. That is how I read it, but I want to be fair and I shall leave it there. The other point I want to discuss with the members of the Labour Party is the manner in which the trade unions and the employers of labour have all these years conducted their negotiations. Right through the war there were no industrial troubles. Disputes were always a matter of negotiation and agreement. On this I want hon. members to agree with me; the old days of capitalism—that dreadful word capitalism—is a thing of the past. There is no such thing as capitalism exploiting labour today in the modern economic world. Employers and employees discuss the terms and conditions of employment, an agreement is arrived at, or the Wage Board fixes wages—so where does the capitalist get the opportunity to exploit labour? I am a capitalist. If through my efforts I can accumulate wealth and as a result of that wealth develop industries and thus provide employment for those less fortunate than I am, provide not only employment for my fellow beings but assist in giving them concrete social security, am I to be punished, am I a sinner for doing good to my fellows? Why does the Labour Party hold out the idea to the workers that when a man has accumulated wealth he is a man that cannot be trusted. Under our present economic structure they provide employment and they are the only people under the capitalist system who can keep the country going. It is a system too that brings about efficiency. Now the Labour Party for the sake of political advantage are endeavouring to persuade the trade unions to join them as a political party. The day the trade unions join the Labour Party as a political body means the end of trade unionism in South Africa. I support trade unionism as it is the best channel through which trade union leaders can protect the workers. Their leaders come to the employers and differences are settled. But the day the trade unions become political, industrial matters will not be discussed on their merits, but the leaders will be after political glory, ’irrespective of where the money comes from. I have never heard any statement of policy from the Leader of the Labour Party where he has attempted to lay down how he is going to finance this policy. That is a side he is not interested in. Then is it not better to leave it to people who can lay down a policy and also earn the money to provide the means of carrying it into effect?

What is industry going to do with native workers in the future?

I do not think it can be expected that I should change the subject of my speech to suit the hon. member. I want to make an appeal to all trade unions in South Africa, though the Labour Party is trying to persuade them to link up they should not do so, because today the membership of the trade unions is representative of all parties. If the Labour Party wishes to solicit any individual member of a trade union to join them I have no objection, but should the trade unions as such join, that would be the day of their death. So they should not lend an ear to that cry. Let Labour fight its own battles. I can tell the Labour Party all they can ever be in South Africa is the tail wagging the dog, but who would want to be the tail of a dog that is so thin that it can be wagged by its tail? In South Africa there are two parties and there is no room for any other. Europeans are the artisan workers, the real workers are the natives. While the natives have not the franchise they cannot belong to the Labour Party. With its small European numbers, the Labour Party cannot build up a strong party. Therefore members of the Labour Party should join this side of the House; they should make up their minds which side of the House they will join, and this is the side that they can best assist in building up the country and looking after the interests of the workers of South Africa.

They thought the best thing was to say goodbye to your people.

One other matter I should like to deal with is the question of the natives. My attitude towards the native is quite simple; in South Africa the Europeans must be the guardians of the natives and as such must treat them justly and fairly, see they are clothed and well fed, and from the medical point of view well provided for. But they must be regarded as the servants of the white men. We must be honest. So long as we give the native food and look after him decently he will always acknowledge the white man as his master. But we must treat him fairly. Now I find the Labour Party—the hon. member will correct me if I am wrong—are beginning to champion the native and to say what he should get and what he should not get. I can only see one black mark on the horizon. The Labour Party are doing that in order to ally themselves with native support in case they want to force certain issues in the economic world in South Africa. But that is a dangerous weapon. I hope that with some new blood in the party in the person of the hon. member for Berea the party will be stopped by him from proceeding with dangerous things of that description. Politics is not everything. We have to remember we all have to live in this country, that we have numerous colour problems, and the more we can keep these outside the political arena and solve them as guardians of the natives the better it will be for South Africa.

Mr. Speaker, may I be permitted on behalf of the Labour Party to express our regret at the absence of the hon. Minister of Finance owing to illness. We have had occasion to differ very considerably from him on many matters, but we do pay tribute to his conscientiousness and diligence in the discharge of his duties, both in the House and outside. In that way he is an example to all members in this House. Our benches are also empty today through an unhappy set of coincidences. Five of our members have serious illnesses in their families. Now, Sir, I do not intend to deal at any great length with the speech of the hon. member for Vereeniging. This is a debate on financial matters. He has deliberately prejudged the Labour Party before listening to their contribution to this debate. I propose, therefore, to make that contribution on behalf of the party, and I believe that in doing so I shall provide the House with an adequate answer to the allegations of the hon. member for Vereeniging. I want to evaluate this budget, not as one that applies to a socialistic economy, but in its realistic application to the present economic set-up in South Africa. It is a capitalist budget for a capitalist economy. I adopt two criteria in assessing the value of this budget to South Africa. Firstly, is it an adequate incentive to investment by private enterprise, by local bodies and the State? Secondly, is it an adequate incentive to work by making sufficient provision for the lower income groups of this country? Let us take first the incentive to investment. It is customary to refer to the turnover of the Johannesburg Stock Exchange, regarding that as a barometer of the flow of investment in this country. It has been argued that as at 30th September last the turnover for the year was £1,327 million, and as that was an increase on the previous year of £136 million, the investment position of the Union is sound. The very opposite might be the truth. The adequacy of investment funds available for capital development must be assessed very differently from that. How far does this budget provide an adequate incentive to investment? In an illuminating paper published on the Rand towards the end of last year, Professor Richards, an orthodox economist of considerable standing in this country, came to the conclusion that South Africa at present has not sufficient liquid capital at its disposal to meet the present needs of the country. That argument was based on the ordinary assumption adopted by economists that at least 12 per cent. of the national income should go into savings or investment. In 1939 the national income of South Africa was £433 million. The net investment in that year was £39 million, that is, only 9 per cent. Therefore, there was in the first year of the war a net investment deficit of 3 per cent. or, in figures, £13 million. Now, during the progress of the war, that investment deficit accumulated to considerable figures. At the end of 1945, on account of the war, the net investment, the pent-up demand for liquid funds for capital investment, has been estimated as £213 million. That is a tremendous leeway for South Africa to make up. But the position is not quite as bad as that. We spent on the war altogether £430 million. Most of that was non-capital expenditure. Perhaps—and the Minister of Finance has given us this figure—£100 million of the £430 million is now available for capital investment. Allowing for that £100 million, the Union’s capital available for investment is about £113 million I believe that we can almost meet that amount from our present resources; but what of the demand for liquid capital for 1946? Judging by the statements of Ministers, and on indications in the amounts from loan funds to be available to the country during the coming year, and also judging by statements emanating from the mines from time to time and from industry and commerce, it can, I think, be fairly stated that for 1946 the amount available for investment will be about £120 million. So our position is this: We have an unsatisfied demand for £113 million for capital development. We have to obtain during the coming year £120 million. Our immediate requirements then are £233 million. My point is this. Where are we going to get that from? If we have to get it all from the national income, we shall not reach that amount. We can take the present national income as £600 million. It is true that is only an estimate; I like the word which fell from Dr. Holloway, the Secretary for Finance, the other day when he said that it is not so much an estimate as a “guesstimate”. If we have a national income of £600 million, and take 12 per cent. of it, we get £72 million for savings and investment, to meet a demand of £213 million. It is true that there are idle funds in our banking institutions, but as against them there is also a heavy consumers’ backlog, money that was not used as purchasing power, largely because of the restrictions on imports during the war. Generally, then, the consumers’ backlog, the pent-up demand for consumers’ goods, tends to offset, if not to cancel, the accumulated idle funds in the banking institutions of the country. I believe, therefore, that it can be put in a general way, it can be reasonably concluded, that we cannot in South Africa at the present time from our own resources find the required capital for development in order to maintain full employment. Therefore we must go outside the country for capital. The crucial test in following out that line of thought in regard to this Budget is its relationship to the mining industry. There at least I find myself in fairly close agreement with the hon. member for Vereeniging. Our whole economy rests on the mining industry. It is in fact the basic source of all incomes in South Africa. Capitalism, irrespective of its merits, must protect the gold mining industry in this country, or perish. Now, if this Budget we are considering today stimulates investment in the mining industry, then I believe it will stimulate investment in all industries and increase the national income by doing so. The question is whether the Budget will increase investment in the country.

There is more capital than we know what to do with.

The hon. member is not talking scientifically. That is one of the loose phrases we found also in the speech of the hon. member for Vereeniging. The general reduction of £3 million in taxation in the gold mining industry, certainly has not been enthusiastically received by the industry. There is disappointment that the reduction is not considerably more. It is true that the special war duty of 22½ per cent. is gone, but the changed formula is stated to produce—and this is important— only a 10 per cent. increase in the money available for dividends. Despite the fact also that the Budget will be a very effective stimulant to new mining ventures, it can, I think, be concluded that the incentive to investment in mining provided for in this Budget, even if it is considerable, is not vigorous enough. I follow that thought out by applying it to industries, especially with reference to the excess profits duty, and the trade profits special levy. These to me, are both forms of the capital levy. They are therefore unquestionably deterrents to investment. Industrialists at the present time should be encouraged, and given every opportunity, to build up their reserves during these times of relative prosperity against any recession in business and industrial activity later on. The E.P.D., even at the reduced rate, is to me an unfortunate impost. It would have been wiser had the Minister decided, even if the sacrifices are considerable, to drop it altogether and adopt a steeply progressive income tax; or alternatively, if the E.P.D. is to be retained, I should like to see some reference to the intention of the State itself to create out of the proceeds of that tax a reserve of blocked savings to be held against a trade recession. In my opinion the weight of the taxes to which I have referred, and the usage to which they are to be put by the Minister, will be to some extent a hindrance to investment. What then is the position in regard to the incentive to investment afforded by the Budget? We have not sufficient liquid funds in the country to meet our capital requirements. We must induce overseas investors to invest in South Africa. They will want the assurance of a reasonable profit, and the assurance that the risks involved will be at a minimum. This budget, notwithstanding the criticism I have made against it, has this outstanding merit: it affords on balance a considerable incentive to investment. I believe the Minister will in that way achieve a considerable amount of success, and to a degree we do not quite appreciate at the moment. In respect of the first criterion of judgment I have advanced, the Budget, I believe, comes out well. Now, my second criterion of judgment is this. Does the Budget make adequate provision for the lower income groups? For the purposes of argument, I want to describe the lower income groups as all those earning less than, say, £360 per annum. The incentive to investment must obviously be ineffective if it is not accompanied also by a powerful incentive to work. It is indeed one of the anomalies of the capitalist system, that it can easily promote an incentive to investment, but it constantly fails to offer adequate incentive for work. I believe that this is the fundamental weakness of this Budget. No State can succeed if it neglects its human material. Our European population, judged by overseas standards, has now achieved a fair amount of efficiency; but that is not the case with regard to our non-Europeans. They must be taught to produce more and to do it with more efficiency. Social factors, however— and this Budget deals just as much with social factors as with financial matters—are against their doing more and better work and being more productive. Take for example the manufacturing industries. In these industries there are 364,000 workers of all races, of which 244,000 are non-Europeans. The average wage at the 1942 level for Europeans in the manufacturing industry was only £23 a month. For the coloured worker it was £9 10s.; for the Indian £7 10s.; and for the native worker only £5. Now, what do these facts mean? These wage levels mean ill-health, inefficiency, tremendous economic losses to the industrialists and the distributors of the country. Wages can only improve with productivity and efficiency. That brings me to the point I want to emphasise about the Budget. This Budget could have been a powerful influence in the promotion of efficiency and productivity in every section of the population. It could have done that by making more liberal provision for health, nutrition, education and housing. When I speak of the incentive to work, I mean that these factors constitute the fundamental basis of work. They are the real incentives to work. I shall refer to each of them briefly. Take housing, especially for workers of all races. Dr. van Eck has told us frequently that the provision of housing, particularly for low income workers, should be an important part, a primary part, of a public works policy in this country. We would be prepared to vote in this Budget expenditure up to at least £15 million to achieve this aim of adequate housing. Such a programme as Dr. van der Bijl has pointed out frequently, would have a tremendous impact on every industry in this country. But what does this Budget propose in regard to housing? It proposes to set aside a sum of £200,000 as the State’s share of the losses on national housing. Clearly therefore if that is the amount set aside for such losses, then the capital sum is not going to be anything like adequate. And education? I think of the vast volume of illiteracy in South Africa. Take the Transkei. There you have a vast number of adolescents going to waste without education. Less than one-third go to school; they are without work and without a mission in life. They will not get the education, or the work, or the opportunity, unless a comprehensive scheme of village life is worked out for them and education and industries are developed. Here I want to pay a compliment to the hon. Minister of Native Affairs, for I know that his line of vision runs in that direction. What I have said in regard to the Transkeian natives is also true of all sections of our native and coloured communities, both urban and rural. This Budget in the fight against illiteracy cannot make proper provision for the social development of the non-Europeans by increasing the previous year’s vote by only £500,000. Then consider the toll of disease in South Africa. We have malnourished millions in this land. One authority estimates that nearly half the native children die before reaching the age of 16; due to malnutrition. That is true also to a large extent of all the lower income groups. It means loss of work and loss of efficiency. I have tried to make an estimate; I find that loss of work-hours as a result of sickness is costing the employers of the country somewhere around £6 million per annum. I look at the Health Vote. We propose to increase that vote by approximately £1 million, for all services. That I submit is not a serious effort in the conquest of disease in South Africa. Consider, too, the food shortages in our country. The provision of adequate food is an essential incentive to work. Does the Budget prove that we are providing for a planned programme to double our food output from South African soil? We must formulate such a programme. The per capita figures of agriculture in South Africa — I am using international units—is appallingly low, as compared with New Zealand, where it is 2,573; Australia, where it is 2,600; Great Britain, where it is 500. Our figure is 360. In terms of £ s. d. that works out at average income for the European farmer in South Africa of £82 per annum; for the non-European £10. According to the figures of the Secretary for Agriculture of the United States the figure for China is £10 a year; for India, £4 10s. These figures prove the alarmingly low productivity and inefficiency of South African agriculture. The position calls for the investment by the State of public funds to meet our desperate necessity in regard to the food shortage. What we want—and it should have been initiated in the Budget—is a courageous and full-blooded drive for food in European and non-European areas. The Budget is sadly deficient in its provision for this. Now, Sir, economists are generally agreed on this, that any tax that we impose on the poorer sections, i.e. the workers, can be justified, if those taxes return or more than return to the workers beneficial social services. All those earning under £360 per annum are heavily taxed in this Budget; their food, their homes and their clothes are taxed. It is true that they have been granted some relief in connection with the personal tax and savings levy and by the abolition of the Railway surcharge. Most of the concessions, however, have been given to those in the higher ranges of income. All the time inflation is lowering the value of the workers’ income. Butter, milk and eggs have recently gone up in price; and clothing is exorbitantly high. I give the following figures in connection with inflation; these figures are more eloquent than any words of mine. According to the 1944 report of the commission on native bus services on the Rand—and it is not only the natives who have to buy in small quantities— the percentage maximum increase in prices on the 1940 level is as follows: Mealie meal, 90 per cent. inflation; meat, 100 per cent.; sugar, 88.8 per cent.; tea, 126 per cent.; milk, 50 per cent. Then we come to Durban. In the survey of Indian families made by the Natal University College the figures are still more startling. Such figures have to be considered in framing the Budget. Calculated on the 1939 basis, rice went up in Durban, for Indian families, by 430 per cent.; dholl by 140 per cent.; beans, 35 per cent.; condensed milk, 60 per cent.; dried fruit, 500 per cent.; tinned fish, 300 per cent.; and cooking oil, 150 per cent. In the crucial battle in which the country is engaged now— and this is a challenge to the Government; if it can meet this challenge its existence is assured for years—against disease, ignorance and want, this Budget to me is a terrible disappointment. In the interests of the masses of our people, regarding their health, their education, their hospitals, their social welfare, their pensions, their nutritional services, the Budget, as far as I can see, provides for an increase over the previous year’s expenditure for all these services, for all the promised social security, of only £4½ million. Such a Budget falls lamentably short of an effective incentive to work. It has forgotten the workers. To sum up, it can be regarded as a Budget satisfactory as a stimulant to capital investment. It fails, however, to meet the vital social needs of the workers from whom we draw our labour, who create our wealth, and on whom our markets and the future prosperity of our country depend.

I am sure that we all regret the absence of the hon. the Minister of Finance from this House on this occasion, and he will probably regret it even more, not only from the personal point of view, but because of the fact that this debate has become “curiouser and curiouser” as it proceeded. We have the peculiar position of the hon. member who has just sat down, and to whom one always listens with a great deal of respect, who has criticised the Budget, but has very rightly decided not to move an amendment to the Budget. I take it that the absence of an amendment is an indication that in spite of the criticisms he has been levying, in reality the Budget before us is fairly satisfactory. The Minister of Finance, after having successfully piloted South Africa through the war financially, has now by this present Budget set us firmly upon the path of post-war reconstruction, and the least we are entitled to expect from the Opposition parties is that if they are dissatisfied with it they should give some indication of an alternative policy. The hon. member who has just sat down complained—and I would have liked to see the face of the hon. member for Benoni (Mr. Madeley) if he had been here—that there has not been enough reduction of mining taxation. Fancy hearing anybody from the Labour Benches pleading for a reduction of mining taxation. Again I would have liked to see the face of the hon. member for Benoni when the hon. member advocated the abolition of the Excess Profits Duty. We have been accustomed to listening to arguments from the Labour Party in favour of heavier mining taxation and of bringing the Excess Profits Duty up to 100 per cent., and I realise by the attitude of the hon. member today that he is a strong man struggling with adversity, who is obviously out of place in the company in which he finds himself. Perhaps I might permit myself a few minutes on the speech of the hon. member, for Vereeniging (Lt.-Col. Rood). We had the position of the hon. member for Vereeniging, who instead of dealing with the principles of the Budget, and with the Opposition, devoted a great part of his speech to a theoretical exposition of antediluvian ideas on capitalism. I am not going into that question beyond quoting to my hon. friend and to the House what was said by a very much greater man; one who has vision, one who realises the way in which the world is moving, and who wants this country to fall into line with that movement. I refer to what was said by the Rt. Hon. the Prime Minister at the Victory Function in Johannesburg on 30th August, 1945. The Prime Minister said—and I am sure that is the feeling of many of us in this House also—

Unless we do that we are going to get back to the old reactionary fight. We want to develop this country along lines where we can have the fullest possible co-operation between all sections of the population in the interest of the community as a whole. I would like to quote on that point a statement that was made a few days ago by a visitor to South Africa, Sir Reginald Coupland, who is the Beit Professor at the Oxford University, and who in an address delivered at Johannesburg recently made a statement which I think everyone of us should pay attention to. He was referring to the change of government in Great Britain, and to the subject of democracy. Referring to the fact that the change of government came about in Great Britain, and the fact that it has been generally accepted, he said—

That is the position we are all aiming at. Those of us who have a progressive outlook all aim at that position. We want to pursue a middle course which will create a state of affairs where private enterprise is given its fullest opportunity for initiative subject to control against the exploitation of the people, and where labour gets its full share of the wealth that is being created, and where both sections can work together in the interest of the nation as a whole. On the other hand our friends opposite have moved an amendment. The hon. member for George (Mr. Werth) has shown how the Opposition party, the Nationalist Party, is wriggling from day to day. They do not know where they are. For the last few weeks in this House they have been busy trying to get this House and the country to forget their war record. They have been saying: “Why throw up the war to us from day to day; why not forget what we have done?” As the Rt. Hon. the Prime Minister said the other day, they want to hide their war record in a cloud of oblivion. I do not know whether it is in anticipation of the result at Caledon, but all of a sudden today the hon. member for George, in dealing with the Budget, comes along and reverts to the war issue. Every piece of criticism he levelled against the Budget and against the Government is based on the suggestion that South Africa was wrong to have participated in the war, that the Opposition was right to fight against our participation in the war, and that all the evils to which, according to them, we are now being subjected, are due to the fact that we went into the war. I say in that regard, apart from the material points that have been made by the hon. member for Vereeniging (Lt.-Col. Rood) in reply thereto, that not only has South Africa benefited materially, but what is of greater importance, it has benefited morally because we have stood with the United Nations to bring down Nazism in the world, and it is because of that that we are able to be alive today, and it is because of that that we are able to look forward to an era in which the lot of the people will be improved. The hon. member glibly talked about the fact that there is no peace in the world today. Of course there is no peace in the world in the ordinary sense of the word, but I would like to know what peace there would have been under their policy if Nazism had been successful. You would have had the peace of the grave, whereas today, although we have no complete peace yet because we are passing through the birth pangs in the rebirth of a new world, we are moving towards a world which hopes to give to the people generally an increase in their economic standards and which hopes to bring about economic and political co-operation between all nations in the world. Of course, it is bound to take time. I would be the last one to suggest that overnight we are going to have all differences at an end. It is bound to take time; we are going to have difficulties, but I believe that our attitude, our policy, the policy particularly indicated continually by the Rt. Hon. the Prime Minister, will bring about co-operation between the nations, not only between the Big Three but between the small nations, in such a way that the time will come when we will have a peaceful world and a developing world in the interests of all sections of the population. Then the hon. member for George in his criticism made a statement coming very peculiarly from the Opposition. He said we were getting away from the whole policy of parliamentary control. Having regard to the attitude of hon. members opposite in the past, I wonder whether it lies in their mouths to talk to us about parliamentary control. I want to quote from “Die Vaderland.” Only on 3rd July, 1944, Mr. Ben Schoeman, the leader of their party on the Rand, who is going with the hon. member for Beaufort West (Mr. Louw) on a propaganda campaign in Natal— I suppose to appeal to the prejudice of Natal in the interests of the Nationalist Party—

When the Herenigde Party came into power the whole foreign British system, which did not conform to the character and the tradition of the Afrikaner, would be changed. Under the Nationalist system the executive authority would be strong and independent of any accidental parliamentary majority.

When the hon. member for George talks about parliamentary control, I want to know whether he remembered what Mr. Ben Schoeman said, and I want to know whether the Nationalist Party has in any way repudiated that policy adumbrated by Mr. Schoeman which means doing away with parliamentary control.

I am amused.

I want to say a few words on the policy of the Budget, and there again I want to say that the Budget is not merely a statement of figures, as stated by the hon. member for Vereeniging, It is based on policy intended to bring about social and economic national reconstruction. The policy of the Budget, whilst it may not go as far as the hon. member for Durban (Berea) (Mr. Sullivan) would like—it does not reduce the taxes on the mines sufficiently, it has not abolished the taxes on the excess profit maker—is based on a progressive policy. If you take the £16,000,000 which have been applied to the reduction of taxes, everyone of the tax reductions can be said to have as its object the economic development of the country to the fullest extent, the encouragement of the mining industry in the working of low grade ore to a much greater extent than has been possible during the war years, the encouragement of the mining industry to work new mines to a much greater extent than has been possible during the last few years, thus creating a state of affairs whereby there will be an increase in employment, there will be an increase of expenditure by the mining industry, and thereby you will help not only agriculture but secondary industries as well. And the same applies to the taxes that the hon. Minister of Finance has remitted in reducing the excess profits tax, the fixed property profits tax, in the abolition of the personal and savings levy, thereby directly benefiting 130,000 people in the lower-income groups. The hon. Minister himself stated, quite rightly, that remissions of war taxation must take place gradually. All those remissions are calculated to encourage industry to the fullest possible extent and thereby to create employment and to create a bigger wage bill and thereby not only to benefit those who are engaged in industry as employees, but also to benefit the vast majority of the working people in this country, and that is sound policy, because by developing industry, by creating employment to a much greater extent than is possible at the moment, it means that you will increase the national income and that you will improve the lot of the working men of all sections of the population. The hon. member for George spoke of the lower-income groups, and the hon. member for Durban (Berea) also referred to the lower-income groups. I say at once that if we are to help the lower-income groups directly it is possible that the remissions in the Budget are not adequate. But the lower-income groups are going to be benefited by the policy of the Budget through the development of industry, and a very large section of them are getting direct relief by the abolition of war surcharges and by the reduction in the petrol tax. I know some people will say that it only helps the wealthy people, but it helps the poor people as well. For example, it helps the commercial traveller, it helps the taxi-driver.

How will it help the poor?

It will reduce the amount of money they have to pay into revenue and, without in any way interfering with their own particular income. There is the reduction in telephone charges; there is the reduction in railway tickets. All those things are calculated to help the lower-income groups as well as other sections, and taking those two factors into consideration I venture to say that this Budget has set us on the path of national reconstruction, along which we will be able to develop South Africa to an extent which will redound to the credit of this country and to the benefit of all sections of the people.

And then I want to touch on another aspect which, peculiarly enough, our friends have been very quiet about. They have spoken about the national debt. They have spoken about the fact that we have increased our debt by £285 million as a result of the war. But in reality a great portion of that has been spent on productive work also, as has been pointed out, and on improving the position generally. But they overlooked this fact, a very important fact, and I think it is a fact that should commend itself to the members of the Labour Party. By means of paying in the £3,300,000 of the surplus of last year to the reduction of debt, by means of paying £11,000,000 to the reduction of debt from the revaluation of gold in the Reserve Bank, by those means as well as by the amount that is at present lying in the sinking fund, the Minister of Finance has reduced our total national debt to something like £570,000,000, and of that total of £570,000,000 it is interesting to note that the external debt has been reduced to £9 million. When we talk of interest, it means that the interest that is being paid today on the national debt is being paid to the people of South Africa. It is true that there may be an inequitable distribution as far as that is concerned, but the fact remains that the total interest that is being paid, except the interest on the £9 million, is being spent in South Africa, and that the Minister of Finance is in a position if he thinks that certain people are earning or getting too much, to reduce that amount by taxation, so that generally speaking we have a position of which we can very well be proud. In fact, I am not so sure whether this policy of continually reducing the national debt is really as satisfactory as some people imagine. In my view the national debt of a country is the same as the capital of private enterprise. With that national debt you develop the country. It is the national debt that has developed the Railways. It is the national debt that has developed many other activities in South Africa, and to that extent it is an advantage to have a national debt.

As long as it is reproductive.

I want to say this as far as the national debt is concerned. Whilst it is a notable fact that we have reduced it very substantially, whilst it is a notable fact that out of £570,000,000 our external debt has been reduced to £9,000,000, I believe at the same time in the interests of ensuring that the path upon which the Minister of Finance has set us for national reconstruction, should be trodden more rapidly, more expeditiously and more extensively than it is at the present moment. We should not hesitate to increase our national debt. We have a great destiny. By extending the avenues and opportunities of employment and by gradually breaking down the great disparity which today exists between skilled and Unskilled labour, and so making a fuller and better use of our human resources we will create a big home market in South Africa which will enable us to go in for a policy of mass production in this country which will not only be to the advantage of South Africa but which will enable us to capture, as I believe we will ultimately capture, the African market and to some extent take advantage of the Indian market which is at our door. That is the direction in which South Africa has to travel if it is to take its rightful place, as I believe the Rt. Hon. the Prime Minister would like us to take, not only as a sound and progressive nation, but also as a nation which has to play a very big part in leading the African continent in the regional arrangements that are to be made, and will play a big part not only in the British Commonwealth but in the United Nations. To do that it seems to me that our policy must be less of caution. That is one criticism I want to make. The hon. Minister of Finance, in speaking on another subject the other day, spoke approvingly of the caution and the conservatism of his financial policy. I am glad to see that in the Budget he has not followed that policy of caution and conservatism. He has rather followed a policy of courage and progress, and I believe if we are to achieve the development that we stand for, our financial policy will have to be less cautious, les conservative and more courageous, thereby creating the means with which to build up a great South Africa, from which all sections of the population will benefit and which will place us in the position of taking a proper and justifiable part in the affairs of the African continent and in the affairs of the world as a whole.

I will not go deeply into the speech of the hon. member who has just resumed his seat. If I understood him aright he really wanted to tell the House and the general public that the relief the Government has extended to the gold mines will be adequate for the development of industry in South Africa, that it will ensure employment and that it will lead to the conquest by our industries of the continent of Africa, and not only that, but of India as well. I would only say that if this is the spirit which inspires members on the Government side I must exclaim: “Woe to South Africa.” I am sorry that the hon. member for Vereeniging (Lt.-Col. Rood) is not here. I would like to congratulate him on the enhancement of status which has made him now function in this House as an embryo Minister of Finance. I would again congratulate him, but nevertheless, while doing so, I would say at the same time that he has hardly done himself justice on this the first occasion on which he has acted as an embryo Minister of Finance. He really overstepped the mark by the attacks that he made on the hon. member for George (Mr. Werth). I do not say that he made deliberate misrepresentations, but he certainly did not correctly interpret the hon. member for George. I would not have spoken on behalf of the hon. member for George if he had a further opportunity to speak, but as the hon. member for Vereeniging, as the responsible second speaker on the Government side, ventured to put certain statements in the mouth of the hon. member for George, I regard it as my duty to show that either the hon. member for Vereeniging misunderstood him or otherwise he tried to make a point that was not fair. In the first instance he attacked the hon. member for George on the grounds that, according to him, the hon. member made statements here which do not hold true, and more with the intention of diverting public opinion from the point. I think hon. members will agree with me that the hon. member for George is a hard worker in the same sense as the Minister of Finance, and though he may base his conclusions like the rest of us on personal conviction, his figures are not conjured from the air, and I think, therefore, that this was not right on the part of the hon. member for Vereeniging to make that assertion. Apparently he misunderstood the hon. member. The hon. member for George did not raise any objection to the promotion and the development of the scheme laid down in this Budget in connection with mining development. I think the hon. member for George expressed the opinion of all in this House that the significance of mining in South Africa is such that the duty of every government is to ensure that its progress is readily promoted, that its existence is reasonably assured. But the hon. member for George made no objection; he put that positively; he had no objection to make to the measures proposed to promote mining. What he said was that seeing that this was being legitimately done for the gold mining industry the same obligation rested on the Government to see that the two other great industries of the people, namely agriculture and secondary industries, were also encouraged.

He said it was a Hoggenheimer policy.

He said deliberately that as the country is today lacking in food production this encouragement ought also to be given to agricultural development and secondary industries.

What about the Hoggenheimer policy that he spoke about?

This is the trend of his speech; these are the facts and the data. I did not hear the rest of it myself.

I said it was a one-sided Budget for Hoggenheimer only.

I should like to have permision now to proceed. I think the hon. member for Vereeniging, in any case, owes a reply to the hon. member for George and to the country. He maintained that while the Government economised a little on the expenditure of the previous year, which was a war year, that it should have eased the burden of the people. The Government should have reduced more taxes. The hon. member for George said the Government was obliged, or at any rate could have effected reductions to a total amount of £27,000,000 instead of £16,000,000. I should have thought that this was one of the first points that the hon. member for Vereeniging should have answered, and I think that both the hon. member for George and we and the general public would like to have a statement from the Government side in order to learn what the attitude of the Government benches is in connection with this statement by the hon. member for George. I should like to draw attention to one other feature of the speech of the hon. member for Vereeniging. He made the extraordinary statement that the war expenditure was really a very advantageous investment for the people. I do not want to go into that. If it is true for South Africa it apparently should also be true in respect of the other belligerent countries; then it should also be true for the British people, who have made an investment of at least £24,000 million. But the British people do not regard this as an investment. The British people are placing claims before the world on the basis of the sacrifices they have made, according to them, on behalf of the peace of the world. They say it was a sacrifice on their part and not an advantage. It is something for which they must be compensated. And though the hon. member for Vereeniging says it is a good investment for South Africa, I think that there his opinion came from the realm of sentiment. I should like to voice a few opinions in reference to the Budget itself. To me it was a disquieting statement on the part of the hon. member for Vereeniging, which fortunately was corrected later by the hon. member for Rosettenville …

The hon. member for Troyeville (Mr. Kentridge).

… that the Budget is not a conglomeration of figures; it is not merely a question of tax relief or tax imposition; it is indeed an expression of the policy the Government has for the following year. But when the principal speaker on the Government benches states that these are taxation proposals that have nothing to do with Government policy it is very disturbing to me. Then I would say he has either entirely misinterpreted the hon. Minister of Finance or otherwise this Budget is worth nothing.

In other words, he could not get a policy.

A Budget should, in the first place, take into account the policy the State was following for the development of the people, and that development can only take place to the degree that means are available either by way of revenue or loan fund. A Budget policy must be an expression of the policy the Government follows in reference to the development of the country over which the Government rules, and consequently it is alarming when a Government states that these are nothing else than taxation proposals. I do not think that anyone can approach the Budget with an unprejudiced mind without being struck by a few outstanding factors, and what has been the most striking to me is that as a Budget it is still drawn up with big figures showing the war psychology, the war sentimentality. And now I want to make this statement. I do not think it is right to find the Minister of Finance alone guilty for the contents of the Budget. I think the responsibility rests with the Government as a whole, and consequently I would rather direct my complaint to the Government than to the Minister of Finance. I think one of the outstanding features of the Budget is that the public are still saddled with outstanding taxes which could be very much less. I shall presently quote some data on that. In the second place it affords no relief to the lower-income groups. I think that if the Government is conversant with the conditions which actually slipped into the report which was quoted here this morning there would be far greater anxiety over the real economic conditions of the large majority, almost three-quarters of the population. The third feature is discrimination. There can be no doubt that in this case the gold mining industry has been preferentially affected. We have no objection to the policy the Government is following, but we maintain that if it is the opinion of the State that all that is necessary for the welfare of the future of South Africa is for the gold mining industry to be encouraged, this is an unsound and a dangerous standpoint, and we maintain that the claims of the gold mining industry are nothing more and nothing less than the requirements of the other industries. On the contrary, I believe that the Government of the country should give more and more attention to the fostering of agriculture and secondary industries, to the provision of food for the people. This is the first essential, and in the second place the day will arrive when the gold mining industry will no longer be able to play the role it is playing today in our economy, and consequently the Government’s second responsibility in regard to economic conditions is to look more and more to the day when our internal industries will be strong enough to replace the gold mining industry. In this respect I consider there is an amazing omission in the estimates, because no account is taken of the encouragement that industry requires under the present circumstances. I shall return later to the view the Minister expressed in this connection in his Budget speech. It is, of course, not sufficient for him or for us merely to say that it will lead to industrial development. The matter I want to discuss today is the danger in which industrial development is being placed as a result of the attitude the Government of the day is adopting towards international relations. Despite the fact that in the past statements were made by individual Ministers that we would give reasonable protection to our internal industries, and as this is being coupled with international developments and the prosperity of the world as a whole, it shows that there has been more and more a watering down of the Government standpoint. I should like now to deal with this point in more detail. I claim that the burden of taxation is still too high. The Budget has been formulated under the influence of the big figures with which the Minister and the Government have had to deal during the war. For the year 1938-’39 the revenue from taxation was £35,644,000; in the year 1944-’45 it was £115,000,000; in the year 1945-’46 it will still be £99,000,000. The difference between 1939 and 1946 is about £63,000,000. As the Government has reduced taxation by about £16,000,000 there is still a big difference remaining between the £35,000,000 and the £99,000,000. It implies that an additional burden of £63,000,000 has been placed on the shoulders of the people as the increase during the war years. That remains a tremendously heavy burden, and the people will rightly ask why this burden is still laid on their shoulders and why these taxes are being imposed today. It is a matter that has significance to all who have to deal with the lower-income groups. Everyone must feel worried over this burden of taxation when one bears in mind the lower-income groups. The State must feel anxious in the first instance because it is responsible for the welfare of the community as a whole. I do not think the Government can allege that the figures in the report that has already been referred to in this debate are not correct. I refer to the figures that were published in Report No. 28 of 1945. In that we have a return of family incomes for a large part of the population. I believe these figures are correct. A return was made about the years 1941-42, and if the Government believes that this information is not correct it is high time that it gives new information in order to remove any possible doubt. If these figures are correct the indifference of the Government to the lower-income groups borders on the criminal. The percentage of families amongst urban families who have an income of less than £400 per year is 71.5 per cent. in the case of the Cape Province. In Natal it is 60 per cent., the Transvaal 60 per cent., in the Free State 76 per cent., and for the whole Union 65 per cent; Practically two-thirds of the European population of the Union has an income of under £400 a year in the case of urban families. In view of this information the question arises what sort of existence this two-thirds of the community has, seeing that money has depreciated in value by half. How can they maintain a reasonable standard of existence? And these are the people who have to protect civilisation in South Africa. Really no lightening of taxation has come their way. It is not only the urban group who have to live in such circumstances. The platteland, the farming families who have to produce food, are in a similar position. We find that 45 per cent. of them have an income of under £100, while the percentage of families who have an income of under £200 is almost 68 per cent.; it is 67.9 per cent. These figures apply to about 90 per cent. of the community on the platteland. Now I come to another point. In the peri-urban areas an investigation was made in regard to 36,370 families, and 75 per cent. of them have an income of less than £400 a year. With this information before us, and with the present Budget before the House, the Government must answer to these people for not contributing to an improvement of their living conditions. It is now announced that they will have the benefit of the reduction of the petrol tax. I shall be surprised if 5 per cent. of these people derive any benefit from that. Mention has been made of the reduction of passenger fares. What does this mean to them? These people have to live in circumstances which can hardly be stated to be above the bread line. I maintain it borders on the criminal, yet nothing has been done for this section of the population. The Minister may perhaps state that these people do not pay taxation. I do not think the Minister will do that, because only an ignoramus could do that. We have indirect taxes in the form of excise duties which, according to the estimates, will yield about £19,000,000, and these people pay that indirect taxation on the articles they use and which fall under that taxation. Then there are import duties which, according to the estimates, will yield £14,000,000. They are the unfortunate victims of the reduction of purchasing power of money by 50 per cent., and it has appreciably decreased compared with 1941. These people are consequently in the position that their capacity for subsistence has been curtailed, and again it is the primary duty of the Government to ensure that the livelihood of these people is ameliorated. To me the position is very serious when we have regard to the consequences. I do not want to trot out a bogey; I do not want to pose as a prophet, but bearing in mind the present position, and seeing that no adequate measures are being taken for the maintenance of purchasing power, and the fact that two-thirds of the community in the lower-wage groups contribute nothing to direct taxes, and seeing that one-third of the population have to bear that taxation to the tune of £99,000,000, this can only be persevered with on two grounds. The first is that we should continue to depreciate the currency and encourage a certain amount of inflation, or we should so increase the production of wealth in the country that a large amount of money can be kept in circulation. No one can maintain that the increase of wealth has kept pace with the increase in currency in the country. A good deal of the credit is not based on wealth. It exists on paper after big speculation. There is no foundation for security in these estimates. Unless the Minister does one of two things, unless he goes ahead with inflation and continues it— which can have serious consequences should there be any retrogression, or unless he can arrange for greater production of wealth, it is clear where such a state of affairs is heading. It is one of the responsibilities that rests on the Minister of Finance to see that steps are taken in the immediate future to guard against these two evils, both great evils, and which may be disastrous.

Now I turn to industrial development in South Africa. The Government has taken the intelligent step of appointing a commission of enquiry into the position of gold mining in South Africa. I have not yet had the opportunity to read the report, but I hope to do this shortly. The Minister of Finance presented certain findings to the House. They appear to be sound conclusions, and I shall not dwell on them at the moment. But though the Government has been to the trouble of finding sound bases for a sound taxation system in connection with the mines, it has had equally sound bases in the findings of the Board of Trade and Industries in the report published last year. Certain recommendations were made on page 145. The Board of Trade and Industries suggested what the foundations of taxation should be. One of them is that taxation should be of such a character as not to be detrimental to the spirit of enterprise. The Minister may now say that there is so much ready cash in the banks and that there is so much credit that there is abundant opportunity for development. He may, indeed, say that the capital for development was there. There is a great lack of consumers’ goods, and, on the other hand, no opportunity to invest capital. That position will not continue for ever. We have uncertainty about the future, and this Budget has not reduced that uncertainty. The Minister will also say that capital is coming from abroad. That is accompanied with further problems. Only a sound policy, one based on sound principles, is necessary to ensure the future of industries. It is necessary that our industrial development should receive attention, because these industries already play an important role in the production of wealth in South Africa, I do not want to be unfair towards the gold mines. I admit it is an industry that distributes purchasing power, that it is a market for our products, that it provides us with a currency that gives us status in the world and which gave stability to our economic life in the past. But I would boldly state here that the assertions we have heard today and that we usually hear about the role that the gold mines have played in the country are an exaggeration of the significance of the gold mines today in our economic life. We’ must take into consideration the value of the gold mines to us as a source of employment. I take the figures for 1942. Then the industries gave a livelihood to 400,000 workers, of whom 150,000 were Europeans. This is far more than the 36,000 mentioned here today by the hon. member for Vereeniging. The wages paid out by industries was not £30,000,000 as in the case of the gold mines, but £65,000,000. South African raw material to the value of £80,000,000 was fabricated. The contribution to the real wealth of South Africa was £130,000,000. In connection with this information we must also take into account the fact that the gold mines are decreasing in importance and should the gold mines perhaps disappear one day their place must be taken by our industries. I should also like to mention this aspect. In the speech of the hon. member for Vereeniging what struck me was that though in the past he has always devoted himself to being an advocate for industries in South Africa and assumed the task of pleading for the protection of South African industries, he has with the enlarged status he has received and the new political situation really forgotten to do this. Without being presumptuous I think it is very necessary that we should give our attention to the needs that are supplied in South Africa by industrial development. In his Budget speech the Minister of Finance mentioned certain overseas negotiations in which South Africa had participated, and in which South Africa still intends to take a further part. The Minister has in that connection stated that South Africa, too, has an interest in international welfare and that we should endeavour to contribute towards it. Those were not his exact words, but that was the trend of his speech. We have no objection to South Africa declaring itself willing to work with other nations of the world in creating new world conditions. But then it must be on a clear understanding that it will not be effected by the formation of new groups. The conviction in the mind of the Afrikaner people is this, if there is further grouping there will also be further clashing of groups, which provided the spark for the two world conflagrations of the twentieth century, and if this is going to be the case we do not want to have anything to do with it. But if this is an honest attempt at international co-operation to ensure a new mode of life for the world we shall want to contribute to that. But the first requirement is that we shall contribute to the prosperity of other nations, but not before we see to the welfare of our own people. It is this that is a sound principle—that we should not concern ourselves about the welfare of other nations at the cost of the welfare of our own people. On the second of this month I read a report from which it appeared the Government of South Africa had received an invitation from the Government of the United States—and this invitation was sent to 14 countries besides the United States itself—to hold discussions. This in itself at once awakens doubt. Only certain nations were invited to take part in the trade conversations. This implies that certain others were excluded. I shall be glad if the Minister of Economic Development will clarify this aspect of the matter. If the object is to promote the prosperity of the nations of the world with such international discussions why should grouping be started? In this invitation certain fundamentals for action were laid down. In the first place South Africa, like the other fourteen, was asked what tariff amendments we were prepared to make so that the flow of trade, of manufactured goods, to our country could be increased. In the second place we were asked what expectation we had from other States in connection with concessions by tariff amendments.

They only want information.

I want to assume that the discussions will cover this matter. Then the responsibility will rest on the Minister, before he takes part in those discussions, to inform the House fully in reference to the import duties he believes can be reduced. I think this House is entitled to know what concessions the Government is prepared to make and in how far it will affect our policy of protection. On the other hand we also wish to know what the Minister is going to ask for the promotion of our exports. We should like to encourage and stimulate world peace and the welfare of nations but we do not want to link it to the formation of groups which can increase friction until it comes to the burning point. But we have an invitation to participate in international discussions, to promote international trade, and we should like to have information in advance about the Government’s plans, and we should also like to sound a warning against a flippant attitude towards our own country’s industrial development. I think we should remind the Minister that from the farming angle South Africa is not a rich country but a poor country. It has already been shown in the present circumstances that South Africa’s farming cannot comply with the needs of our population in respect of foodstuffs. South Africa is a poor agricultural country and consequently it will be a crime for the sake of the export of agricultural products—of which we can export very little—that we should grant favours which can be detrimental to our protective tariff. If I have the time I should like to go into this matter. There are a few agricultural products which we could eventually export in small quantities. I do not want to anticipate the future. But if we make provision for our own people there will be very little to export. There will be a little fresh fruit, wine and spirits, a little sugar, eventually perhaps meat, but there will be very little for export. I repeat that we should do nothing detrimental to our protective tariff in order to gain advantages for this export, because the future of South Africa will be based on industrial development. The only prospect South Africa has is in regard to industrial development. I want, to warn the Government not to deal lightly in regard to industrial development when tariff reductions are asked for at an international gathering. There are commodities like wool diamonds, and gold, that we export, but which do not require any favouring. Our base metals ought to be worked here first and that applies also to skins and hides. Seeing that we have advanced so far as to develop a considerable number of industries to a reasonable extent we should do nothing detrimental to that development. I have footwear in mind. This is an industry of which South Africa may be proud. As a result of the protection that has been granted it an industry has been built up which can produce of the best. What is going to be the Government’s attitude in respect of the footwear industry? You have the iron and steel industry, which is a fine industry, although it only fulfils at present a third of our requirements. What is the Government’s attitude going to be? There is engineering, which has been built up appreciably, and what is the Government’s attitude going to be. We have a considerable number of primary products that are fabricated here because they are necessary for the independence of our people, and what is the Government’s policy going to be in reference to tariff protection in that respect? My time is up and I must conclude. This Budget is linked up with overseas negotiations. I have mentioned those proposed discussions. There are two countries especially which can insist on tariff reductions. One stands in the position of “export or die” and the other is in the position of “export or fight”. Are we going to be landed between the two millstones? Here we must look to our own existence, to our own industrial development and to the welfare of our own people. We will only say to the Government that we must be prudent. Let us make our contributions to world peace and to the welfare of other nations, but let us first see to the prosperity of our own country.

The attack on the Budget today, I think has been singularly weak. The hon. member for George (Mr. Werth) in an effort to criticise it brought forward very little upon which one can fasten one’s teeth. He started off by attacking the growth in the national debt during the war period, and several other speakers have dealt with that matter. I put it to the hon. member for George that no other country in the world has increased its national debt by so small an amount as South Africa, no country comparable in size to South Africa, whether it was belligerent or non-belligerent.

In proportion to its population?

Yes. When we take an increase which has been set out as £285 million, and from it a number of millions will fall to be deducted, and when we bear in mind that about £95 million of this money is invested in productive sources. I put the challenge to the hon. member for George, as to whether he can name one other country, that is in a more favourable position than South Africa, and ask would not any other country be glad to be in the happy position in which South Africa finds itself. I put it to the hon. member that if he had drawn up the Budget himself, he would still have found much in it open to criticism. It is a complex Budget, so complicated, that in the short time at the disposal of a member in this debate he can only touch upon a few aspects of it. It is a balanced and sound Budget, framed along orthodox lines. I do not assert for one moment that no one can quarrel with the Budget, but fundamentally and on a broad examination of the whole Budget, it is sound and orthodox and in conformity with the policy followed during the war years, a policy which has brought South Africa to the very high status that it today occupies in the world. I do not think that that can be denied. I think the price we have paid for the increase in the national debt due to the war can quite rightly be described as a well-made investment as far as South Africa is concerned. The fruits of development from that investment may be found throughout the length and breadth of the country. Hon. members have quoted figures here today to indicate the tremendous increase in the national income, an increase of approximately 50 per cent. during the war period. That in itself must far more than compensate for the increase in the national debt due to the war. This Budget is not easy to criticise unless one goes to extreme limits. There are big fundamental issues involved and as the first of two steps in the process, the Budget is a good Budget. Doubtless there are many who would have liked to see greater remissions.

That is the chief objection to the Budget. It does not give relief from taxation.

Naturally one wants greater relief, but let us examine that position. The Minister in the first place has completely revoked certain taxes.

They are all small amounts.

Yes, but I do not think we can quarrel with him for doing so. I think it is a good thing to clean them off the slate. I think the time has come when this country should as rapidly as possible clean the slate by getting rid of all the war taxes, and come back to a normal and simple basis of taxation, where the revenue of the country is produced from the broad back of the taxpayers, and not in dribs and drabs from sectional interests. If there is a criticism, which is justifiable, it is the criticism that the system built up during the war has been far too complex and inequitable. It has singled out certain persons for heavy taxation, whilst persons of equal standing— equal income — have by comparison been lightly taxed.

That is common ground.

Then we come to the substantial reduction in the price of petrol. I think we are all glad of that. There is also a reduction in the fixed property tax.

The whole thing should have been scrapped.

I am inclined to agree.

We are on common ground again.

He is getting on dangerous ground.

We come to other items where there has been a partial remission of taxes. With regard to excess profits duty there is a remission of 25 per cent., and 23 per cent. on the trade profits special levy. When we come to the one tax which does affect everyone, the personal and savings levy, the nett remission is 80 per cent. That is the biggest of the partial remissions.

That is part of the whole income tax and must be regarded from that point of view.

Yes, but I submit that in this problem it is correct to take the view that first of all there should be remission from those taxes, which are sectional and discriminatory, and then from those taxes, which fall, on the general body of tax-payers. This remission of 80 per cent. is from a tax which falls on the broad back of the general body of tax-payers, so that the Minister in deciding upon the remission, has taken a fair line through the whole structure, having regard to the fact that he has a certain amount of money available, £16 millions …

It is £27 million.

With further expenditure the nett figure is reduced to £16 million. I grant that its is undeniable that the remission on war expenses account amounts to £27 million, but there are many other increases in expenditure, and I can see the difficulty which would arise if an attempt is made to remit all the war taxes at this stage. It is a very difficult thing to put these taxes into watertight compartments, and I think in all the circumstances, with minor exceptions, the Minister is to be congratulated on the way he framed his Budget.

You are speaking as the mouthpiece of mining interests only.

Oh no, but I come now to the next point made by the hon. member for George, that this is a Hoggenheimer Budget. If ever a budget was not a Hoggenheimer Budget, it is this one. It cannot be described in that way. We have in the mining industry quite a different position from the position prevailing in commerce, industry and agriculture, where profits have increased during the war period.

Yes, you get a fixed price for your product.

The mines have a fixed price for their product in a time of ever increasing working costs.

That applies to all industries.

Having enjoyed an increase in price during the war, which today is 16 per cent., but has been less in recent past years, I want to say that I wonder what the increase has been in farm and other products —never as little as 16 per cent. The result of such a position has been that we have burdened an industry, which has suffered a very considerable diminution in revenue in profits and in dividends. I do not wish to weary the House with figures, but I think these figures are important. I have the comparative figures for 1940 and 1944. The taxable profit in 1940 was £37 million. In 1944 it fell to £24 million, a fall of £13 million. In the face of that, they have had to pay the Gold Mines Special Contribution.

They were simply working a little lower grade ore.

That is not the explanation. The working costs per ton rose from 20s. 9d. in 1940 to 22s. 9d. in 1944. There may be a fixed price for the product, but there is no fixed price for working costs. Although the taxable profits have fallen by £13 million, what did they pay in income taxes? In 1940 they paid under £20 million and in 1944 over £16¼ million, a difference of £3½ million. Of course, the inevitable happened. The shareholder had to pay the difference, and the balance in the hands of the mines fell from £17¼ million in 1940 to £7¾ million in 1944, a difference of £9½ million. So that of the fall in profits of £13 million the shareholders absorbed £9½ millions and taxation absorbed £3½ million.

Tell the House about the relief the gold mines got last year.

That was a bagatelle. Now we have the report of the Special Gold Mining Taxation Committee, and it has not disappointed us. I well remember the excellent work a similar committee did in 1935, and the committee of 1945 has repeated history. It is a credit to this Government that it has accepted the report and has come forward with progressive views upon the taxation of the gold mining industry. I have not the time at my disposal to enlarge upon this aspect, except to say that the various points enumerated by the Minister in his budget speech are in the main eminently sound, and in measure that this budget places the gold mining industry on a sound basis, it equally places South Africa on sound foundations as regards industry, agriculture and commerce. The hon. member for George shakes his head. I would like to ask him what he would do in these circumstances. The remission granted this year is just over £3 million, and it is a very small amount having regard to the fact that the mines pay increased taxes in the face of falling profits. In the case of commerce and industry, E.P.D. is only paid on the increase in profits, not the decrease in profits. The abolition of claim licence moneys is welcomed. Its effect is more or less unknown to the man in the street, because under the present law in certain cases claim licence moneys are remitted. The abolition of the pass fees is also welcome relief. Relief from any expenditure affecting working costs is relief in the right direction, and I would like to see the Minister go further, because there still remains imposed on the mines indirect taxation of considerable dimensions, indirect taxes which probably aggregate 6s. a ton milled, and if it can be brought about that all indirect imposts are substantially reduced, the effect on the economy of South Africa will be profound; it will have an equivalent effect to dropping a stone in a mill-pond and watching the ripples spread. It will have its effect in every corner of the country. With regard to amortisation, the step to regard, in the case of new mines, capital expenditure for amortisation purposes as an expense is a real step forward. I am here only perplexed at the proposal with regard to new capital expenditure by existing mines, and perhaps in his reply the Minister will explain what he meant in his budget speech, because he mentioned that existing mines spending fresh money will amortise such expenditure at the rate of 20 per cent. per annum on the balance. I want to ask him: What is, for example, to be the position of a mine with a life of less years than such a basis would ulitmately require Twenty per cent. on the yearly balance would take many years. I could understand it if he said that expenditure would be amortised over five years, but, perusing carefully what he said, I find that he made it clear that the 20 per cent. would apply to the balance. I now come to the proposed formula tax. The formula is a somewhat unknown quantity at the moment, but there is one disturbing element about a single tax to which I want to draw the Minister s attention. Under the permit tax system, there is an abatement of £20,000. It is obvious that with a single tax it will not be possible to continue the rebate in this form, and the effect will be to increase the taxation on the smaller mines, and here I wish to put forward a plea for the smaller mines. The effect will be to increase taxation considerably. I have some figures. In the case of one mine the taxation on the present formula is £900, and will be increased to £2,400. In another case it will increase from £900 to £2,900, in another case from £3,700 to £10,000, and in another case from £7,800 to £14,000. This introduces a very serious situation, which I think calls for careful consideration.

Is that only in the case of small mines?

It is in the case of all mines whose income is £20,000 or less. The abatement has a diminishing effect and ultimately disappears. I want to make the suggestion, and I put it forward as a possible solution to the problem that the abatement should be retained as it is in the present Act, but made applicable only to gold profits exceeding 15 per cent. At present this abatement does not apply to the flat 15 per cent. tax. In that way we would preserve a pari passu position and overcome the problem which is causing some alarm at present. There is insufficient time to deal with certain aspects of the remaining taxation, but we will have an opportunity later in the Committee of Ways and Means to do so. At the moment I just want to say this, that I think the greatest disappointment arises from the Minister’s statement that he considers the system of apportionment of the profits of private companies to be sound in principle. There is a most deeply-rooted objection to this principle of apportioning profits, and I want to say this in conclusion, that there is no possible analogy between a private partnership and a company. The system of apportionment applies in the case of the private partnership, and correctly so, for this reason, that in a private partnership the profits of the partnership are credited to each partner, who receives the share of profits, which is actually credited to his account and becomes his own property. But that is not so in the case of a company, and that is where the fundamental difference comes about. In the case of a company the undistributed profits are not credited to the individual shareholders, but remain as a reserve in the hands of the company. They are not available to the shareholders, in the sense that they have no legal claim to them. The shareholder in the private company can handle only what is paid to him by way of dividends. There is a fundamental difference, and I hope the Minister will give this particular aspect further consideration, because the impost of this apportionment principle is bearing most unjustly. It is a simple matter for a person to get an assessment for tax, which far exceeds the income he receives. It has a handicapping effect on development, because no one wants to put money into a private company, when he is subject to paying tax on the pro rata share of the parofits, when he has no control of that pro rata share. We see the natural result, an attempt on the part of members of private companies to turn those companies into public companies and to get quotations on the Stock Exchange in order to get rid of this problem. No less a person than Dr. H. J. van der Bijl has stressed the difficulty that apportionment introduced into the operations of the Industrial Corporation, and I want to appeal to the Minister earnestly to revise his views in this matter, and to give some consideration to this question, which in his next Budget will prove to be one of the most difficult problems facing him.

The hon. member for George (Mr. Werth) roundly condemned this Budget. He referred to a Hoggenheimer Budget and said that the gold mining industry has been treated in such a manner as to shift the burden of taxation on to agriculture and secondary industries. That is the way I understand it.

No, I did not say that.

You said there was discrimination in favour of the gold mining industry.

I wanted agriculture to be treated in the same way.

I would like to say that in my view the Budget as it stands is sound and well balanced. I have always applied the test of judging the impact of a Budget on the general economy of the country. I think it is agreed that such impact should not be abrupt or severe so as to cause wild speculation, nor should it go to the other extreme of causing severe recession of commercial and industrial activity. I think if one applies that test and examines the response to the Budget we may say generally that the Budget has been soberly and favourably received. Now I would like to examine the effect of this Budget on the three main branches of our industry, the points particularly made by the hon. member for George. There is a total remission of £16 million. The hon. member for George said that that could quite easily have been £27 million. I did not quite catch how, but I did gather that he meant that the £10 million which the Minister has set aside to be used for the importation of foodstuffs, on the reselling internally of which we would recover £7 million.

I said that of the £10 million he would recover £3 million.

Anyway, that represented one way in which he was going to recover portion of the £11 million. I have no doubt that the Minister will be able to give a suitable reply to that. It seems to me that if it is in fact so, it is an inexcusable lack on the part of the Minister to make a mistake of that magnitude, and one does not think it is likely that such a mistake would be made. I am afraid that when the Minister comes to deal with the criticisms Gf the hon. member for George, he will deal with him very thoroughly on this point.

You hope so.

There was a remission of £3,200,000 to the mining industry. In making that relief possible the Minister has adopted an expedient which is in line with Government policy of reducing working costs by remitting native pass fees, amounting to £400.000, and claim licences, which amount to £300,000, and he has surrendered the special contribution amounting to £6,800,000, a total remission of £7,500,000, but against that he has scaled up the taxation by altering the formula. I have not the time to go deeply into the details of this formula, but it seems to me that it will have a favourable effect on the low grade ore mines, which again is in line with Government policy which is to encourage the mining of low grade ore. There is another respect in which he has changed his taxation principles, and that is he has allowed the amortising of the capital charges on new mines in respect of all expenditure ranking for redemption purposes. He has allowed the entire amount to rank as working costs. It is obvious that that must have the effect of encouraging the opening of new mines. Then again, in a different form he has allowed a similar reduction in the case of producing mines, and in this case it will have the effect of encouraging the older mines to undertake deep level mining which is also a feature very much to be desired, especially on the Rand, where we are now meeting rich ore, at very deep levels. With regard to the opening of the new mining fields, which I regard as of the very greatest importance to this country, I do hope the Minister of Railways will bear in mind the importance of providing adequate rail and road services, and that the Government as a whole will bear in mind the importance of providing power services so that these fields may be opened up at the earliest possible moment. I would like, Sir, to refer to the impact of the Budget on secondary industries. The main relief industry will derive from the Budget is with the reduction of E.P.D. and the modification of the trades profit special levy. Great play has been made of the fact that we must build up our secondary industries. It has been said that the mines are a wasting industry, that eventually they must be worked out, and there must be something to replace them. But when I am told secondary industry can ever replace the gold mining industry I have serious doubts. I am inclined to think that our future development will rather be diverted to the agricultural industry. And there I come to the third branch of our industry.

The first.

Yes, I regard it as the most important and the first, and I want to refer the hon. member for George (Mr. Werth) to the White Paper issued by the Prime Minister’s department in regard to agricultural policy. I think he will find Government policy very clearly laid down in that little pamphlet, and I think it should be the policy of the country and of this Government to make use of the capital assets now lying in the gold mines and which we should extract to the greatest possible extent and divert towards the conservation of our soil, the conservation of our water resources, and generally to the building up of our agricultural system. I foresee the day when we shall be forced to depend on the products of our agricultural industry to provide us with the necessary exchange to enable us to import such consumer goods as we may never be able to manufacture in this country. There is one more point that was mentioned by the hon. member for George. He referred to the amount to be remitted to the gold mining industry, and in his amendment he asks that the Government should bring forward a Silicosis Bill. That again is in line with Government policy and was mentioned in the speech from the Throne. I am confident, and I am sure the majority of members of this House are confident, that the Government will bring forward a Bill this session which will meet all the wishes of those concerned and be to the benefit of all sections of the gold mining industry.

There is no pleasanter or more entertaining debater in this House than the hon. member for George (Mr. Werth). I realise that he, as the financial wizard on that side of the House has to play a part, and he plays his part very well indeed considering the poor material he has to build it up. The hon. member really loses his own personality in the act which he is doing and he brings to this House a sense of drama and interest in a speech which lacks any real material foundation for criticism of the Budget. But he does it very well and in a most pleasant manner. In fact at times I have felt myself influenced by his drama; and I think if this were a Latin country and the people were more emotional he might well capture their imagination and win the day. But we are hard-headed South Africans and that sort of thing does not influence us very much. There are four points he made that I could sort out of his speech. The first point was £400,000,000 had been wasted to make South Africa more secure but she was less secure now than before the war. He referred to the Hoggenheimer Budget. He referred to the fact that the middle classes did not receive any benefit from the Budget whatsoever, and he referred to the fact that the agricultural industry as a whole had been sadly neglected and that instead of encouraging the production of food it rather encouraged mining. Dealing with the first point with regard to the waste of Government money I would say let us judge it in the same way as he would judge a private balance sheet in his business. In the first place we know this war has cost us £400,000,000 odd. We know our debt is increased by £280,000,000; these are his figures, and I do not wish to question them. He states that if we had remained neutral we would have avoided all that cost, but that is not correct. If we had remained neutral we would have had to spend money on the defence of the country, in the same way as all neutral countries had to do. We have had the example of Sweden quoted to us. Sweden increased its debt by £480,000,000. Turkey had to go in for a big defence scheme. And I am sure that in South Africa even the Nationalist Party will not have been prepared to hand South Africa over on a plate to the Japanese. They would also have been prepared to defend the country. So I say money would have been spent during the war in any case. Therefore the interpretation he gives to the expenditure of £400,000,000 is quite incorrect. On the other hand we have heard from the hon. member for Houghton (Mr. Bell) in regard to the effect on the national income. Our national income has increased tremendously during that period. I think the figure for 1939 was about £350,000,000, and it has increased to £600,000,000. Would that increase have occurred if we had been neutral? We know that our mining industry would eventually have been at a standstill. We would not have obtained the machinery from Great Britain or America to keep it going. We also know we have obtained raw materials which in the ordinary course we would not have been able to do. South Africa would have been in an isolated position and therefore economic and industrial development could not have taken place. Actually a commission had to go to America to put our case before them, and they would not have looked at us had we been a neutral country. The other point we had in mind on this side of the House is there were moral obligations, and although the Opposition—excluding the Labour Party and the Dominion Party—did not recognise that, we had those obligations, and I say we emerge from the war a nation morally proud of our achievements. Internationally we would have been ashamed of ourselves if we had not entered the war when we did. I would like to refer to the hon. member for Durban (Berea) (Mr. Sullivan) and to congratulate him on the constructive way he has put up his case and continues to put up his case, regardless of criticism. I am, however, rather puzzled at the hon. member, because in his speech he referred to his criticism of the Budget and he said in his opinion the E.P.D. should go. He also said there was no incentive for investment and that the United Party as a government has not solved the problem of providing an incentive to the working man, in which he included the native. I cannot follow that up with the hon. member’s point of view regarding the no confidence motion amendment of the hon. member for Benoni (Mr. Madeley). The House will remember that in this amendment it was stated—

The hon. member for Berea seconded that motion, and yet—quite rightly—he says you must give incentives for production and take away E.P.D. That is our cry. It has never been the Labour cry. The hon. member for Benoni has stated in this House, for his part E.P.D. should be 20s. in the £ and remain for good, while the hon. member for Berea says it should go. That is our argument here, that there should be this incentive to investment. The hon. member for Benoni would leap up in the air with rage if he had heard that. He would have said: You do not need an incentive for investment, you can turn out the money in a machine, money will come from overseas. But that was the policy of the hon. member for Berea, and I congratulate him; at least it is a sane policy. That brings me to the various points the hon. member did raise. He raised the point of the incentive to the working man. He said we had neglected that aspect of our economic outlook. I agree with him. I say that is what is needed; in the combination between capitalism and labour some incentive is needed for the working man to produce. We saw the results in Durban, where a man paid a bonus to his bricklayers, with the result that 800 houses were completed a year before the contract date. The hon. member’s place is not on that side, but it is with us in developing a sound economic outlook which will set South Africa on the path of progress and embrace not only European workers, but native and coloured workers. On the other hand, the hon. member for George seemed to get the jitters. He said there is not enough conservatism in the budget. According to him, the Minister has been profligate in his spending, and that he should be more careful. We say, let us develop with courage and enterprise and solve our problems, as we can solve them, not on sectional lines, but with the idea that South Africa should go forward as a nation.

This is the first budget I have had the pleasure of listening to, and I was hoping it would be possible to raise a debate of such importance above the usual level. It should be possible on an occasion like this to forget differences and to give credit where it is due. It seems impossible to discuss many subjects in this. House without the differences of the past creeping into the debate, and it seems to me that the only way to solve our difficulties is to start a really virile policy of immigration and to get a large white population into this country which in the end will have the effect of obliterating these differences and bitternesses. In a way I listened with interest to the address of the hon. member for George (Mr. Werth). I understand if ever my friends on the opposite side come into power he will be their Minister of Finance, and I must say I have a great regard for him, for his charming and disarming smile, and I was rather disappointed at the somewhat unfair way in which he presented the budget to the House from the Opposition point of view. But, before I go on to that, I should like as a young parliamentarian to take him to task; I am sorry he is not here. The hon. member for George, after painting a dark picture of the financial position of this country, made this statement, that the position was due to the fact that we had a Prime Minister who was never happy unless he went to war. A statement like that, an attack on that sort on the Rt. Hon. the Prime Minister, is not only unworthy of the hon. member for George, but it is unworthy coming from that side of the House. If we had not had the Prime Minister leading this country at that very difficult time this country might well have followed the path of dishonour instead of the path of honour. It is true that a large debt was incurred during the war but it is a debt that will pay heavy dividends in the future. The name of South Africa is honoured throughout the world, and our boys have shown what fibre they are made of. The only thing that has been a matter of grief to me is that the policy of the Opposition kept so many of our young South Africans from joining our forces, from seeing the world, and from being able to say to themselves: we have fought for our Father-land when it was in danger. The question of the war debt has been fully discussed, but I would like to remind hon. members on the other side of the House that there is certain credit due to the Minister of Finance. He has reserved large sums for social security, for the increase of the police force, and an improvement of the pay of that fine body of men. They must realise that was necessary seeing that they so severely criticised the Government on account of the crime wave. I think the hon. member for George drew the wrong implication from the statement made by the Minister of Finance in regard to the protection of industry. It is the set policy of this Government to protect secondary industries, and the Government is carrying out that policy. The Minister of Economic Development not long ago said he had undertaken to give secondary industry in this country additional protection for two years, during the transition period by the continuance of import control. That shows the Government is keeping faith as far as secondary industries are concerned, and my hon. friends on the opposite side need have no fear in that particular direction. According to the figures from Professor Richards’ book, quoted by the hon. member for George, secondary industries are contributing £153,000,000 to the national economy of the country, so the Government must protect secondary industry. I would say this to the hon. member for George, that you cannot keep raising your tariffs against goods from outside because it causes retaliation on the part of other countries and we must have a market for our goods. Consequently it is not possible to raise the tariff beyond a reasonable limit, and the way to assist our industries, provided they are economically run may be to give subsidies to our industries so as to bring the price level of their products on to a competitive basis. The farmers have had many subsidies, and I do not see why industry should not have subsidies if it is in the interests of South Africa; and the development of our secondary industries certainly is in the interests of the country, because we cannot rely solely on the mines for our national economy. The mines are a wasting asset, and when the mines disappear our secondary industries must be so well established that our national economy will be on a sound basis. I should like to offer certain criticisms I have to the Budget. I think the Minister of Finance would have been well advised to abandon the fixed property profits tax. I understood from him that tax was to prevent inflation of the price of immovable property, but I think it has entirely failed to achieve that object and it has in fact inflated the price of immovable property by freezing properties and thus enabling owners of property not subject to that tax, to sell their property at higher prices. I hope the Minister will reconsider that matter and abandon this tax. If he must have money from that source it would be a much fairer way to have a tax of ½ per cent. or 1 per cent. on all property sales, which would be equal to about 1d. or 2d. in the £, on all land sales. I maintain he is stopping the building of houses by keeping this tax.

Like everybody else, Mr. Speaker, I very much regret the absence of the Minister of Finance. I perhaps have a special reason for regretting his absence because I wanted to talk to him not so much in his capacity as Minister of Finance but as Minister of Education. There is no doubt that South Africa is in many respects an odd country. We are supposed to be a Union, but in some matters for all the Union there is we might as well be four different countries instead of four different provinces. Take, for instance, this matter I desire today to discuss with the Minister of Education, this matter of extending the school farms that the Transvaal has set up over the last ten years to the rest of the country. There is no doubt after ten years experience that the Transvaal has developed what is, I suppose, the finest example of rural education that any country can have. The Transvaal Education Department has transformed the education of its country children from a backward and rickety affair to an education that will fit the country child to compete on equal terms with the children in the towns. In 1936 it set up an experiment. It has developed that experiment over ten years until today, in 1946, what was the experiment of 1936 has been proved by ten years of concrete experience to be one of the answers, if not the whole answer, to the poor white problem of this country. But for all the reactions the Transvaal experiment has had on the rest of the country it might not have existed at all, and yet the situation that the Transvaal strove to remedy in 1936 is a situation that exists throughout the country. The North-West Cape has exactly the same problems as the Transvaal had, a widely distributed rural population, a scattered people, and backward children. The Transvaal decided the time had come to do something about it, and proceeded to take action. It did so with success, and this is what it did. Instead of taking the school to the child it did the reverse. It brought the child to the school. It has been the general practice in rural education in this country to set up small schools scattered about on farms, schools which in the nature of things must be unsatisfactory not only from the point of view of education, but in addition expensive as well. Instead of that the Transvaal went for a system of Centralisation, it brought the children to the schools. It set up centralised schools and school farms. The centralised schools are for preparatory education and the school farms for the elder children, these latter going up to Standard VIII. It made of these centralised school farms boarding schools so that children who came there, however backward their original education, however poor their homes, however badly fed and undernourished they might have been, were given a chance for the first time. They were properly fed, they were properly taught in fine school buildings which have cost the Transvaal in the last ten years about £500,000 for school farms and about £500,000 for centralised schools. They were given an education and physical rehabilitation that has achieved miracles. When I use the word “miracle” I mean it, because I have myself seen what a year at a centralised school or a school farm can mean for undernourished children. It has not only rehabilitated the children physically but it has given them an education which for the first time in the history of rural education in this country enables the country educated child to go into the towns if he wants to and compete with town children. It has been expensive but magnificently worth it, and anyway it is not all loss, because by setting up these nine school farms and 44 centralised schools the Transvaal Education Department has found it possible to shut down no fewer than 320 of the poorly equipped farm schools. That has meant a great saving to the Education Department in the Transvaal. I do not want the House to confuse the school farm the Transvaal has set up with the farm schools well known through the Union. The school farm begins by the Transvaal Educational Department buying a farm, and on that farm putting a farm manager to, as it were, teach the children as well as farm. On that farm its sets up a proper school with a proper curriculum and a domestic science department, a woodwork department, a library, playing fields and so on, and in that farm school children are given in addition to the ordinary curriculum that all Transvaal school children have some training in practical farming, I do not want the House to run away with the idea they are given proper farming training. The point is they are given the ordinary curriculum with a farming bias so that the children may develop an interest in farming, and if they want to go in for farming they are not, by their education, cut off from their roots on the land. That is important because it does mean that the country child retains his love for the land, which he so often loses when he goes to schools and hostels in towns. The school and hostel system in the towns cuts him adrift from his moorings in the country. It does tend to make the country child believe that the only possible pleasant life is town life with town amenities. Whereas the school farm and the centralised school do show this is not necessarily so. They keep in the child that feeling for the land, which is so important if we are to stop the drift to the towns which is constantly deplored in this House. That drift from the land is a problem that is common to all countries, and if it has been particularly marked in this country it is, I firmly believe, because of the nature and the kind of education we have hitherto given the country child in this country. Until the Transvaal experiment there was no attempt to give the country child a country background; there was no attempt to give the country child some of the social amenities, some of the games and sports, to give the country child the library facilities and the general training facilities that the town child had. Well, all those things the country child is now being given on the school farms, and I would like to urge upon the Hon. Minister that this has now become a national matter. I would like to urge upon the Minister this important fact, that this educational method is a means of combating the poor white problem, because as the House very well knows the poor white problem is in its essence a matter of under-feeding and ignorance. The poor white becomes such not because the stock is bad—it is in the main good, sound pioneering stock—but poor white-ism comes because of the large distances and the far-flung nature of the country areas. The result is that hitherto the children in scattered areas have not been given an opportunity of being educated; they are not fed properly either in many instances; and these school farms by combating this ignorance and by feeding the country child properly, where he has not been properly fed before, is an effective measure, indeed, the only means of dealing with the poor white problem. For that reason alone, if for no other, I would urge upon the Minister of Education, to call a conference of the Directors of Education and the Administrators in committee of all four provinces. The great spaces of the Free State and of the North-West Cape would be fertile soil for similar experiments for what has been so successfully carried out in the Transvaal, so let the Minister call a conference, to point out to the various Administrators the benefits that the Transvaal has won by means of this very successful experiment, and to urge upon them to try to carry out something similar in their own provinces. I think it is his job as Union Minister of Education to forward the general advance of education in this country and co-ordinate it, and I feel that not only as Minister of Education but in the general national interest he must take cognisance of what is being done so successfully in the Transvaal. It is a matter that I have very greatly at heart, and I am hoping that the points I have made will be put to the Hon. Minister of Education and that he will consider ways and means of extending the benefits of the Transvaal experiment to the rest of the country. That is the main object of my speech today.

There is another object which is allied to it from the point of view of nutrition and that is the question of margarine. I would like to ask the Minister of Agriculture whether he will not at last see his way clear to make a bold effort to remove this question of the manufacture of margarine, which really does not fit in with his Department, from the hands of the Dairy Control Board, and transfer it where it rightly belongs, and that is in the hands of the Hon. Minister of Economic Development. The manufacture of margarine, is after all, an industrial matter. It should not be possible for the Dairy Control Board, of all boards, to have it in its power to stifle the development of what it might consider as potential opposition—quite wrongly in my view, but nevertheless it does so consider it. It is an anomalous position, indeed a ridiculous one, that agriculture should have the say over industrial production. So I would urge the Minister of Agriculture to rid his Department of a source of trouble and to hand over the manufacture of margarine to the department where it essentially belongs, the portfolio of Economic Development.

I would like to say a word or two on the subject of the “fixed property” tax which the hon. Minister is continuing, and in respect of which he is reducing the amount by 5 per cent. for every six months. I want to put in a plea for the returned soldier in this respect. This tax falls very heavily on those who have been serving in the army and who have come back, who have been demobilised and have had to buy property in a very inflated market. I think that the least that the hon. Minister can do is to relax this tax so far as the returned soldier is concerned. It would not mean a very great loss to the Treasury, but at any rate it will be a gesture on the part of the Government towards the returned soldier. Now I would like to quote a letter that I received today from a returned soldier, a letter which puts the case very clearly. He says—

He goes on to say that he eventually bought a property of the same dimensions with the same accommodation as the one he had sold for £2,500, and he had to pay £5,250 for it. This goes to show that the returned soldier is under a very great disadvantage in regard to buying a home for himself, and I do appeal to the Minister to relax this fixed property tax so far as the returned soldiers are concerned. I think it is the least that the Government can do.

I understand that this debate embraces the Railways and Harbours Budget, and I would like to say a word or two to the hon. Minister of Transport. He has recently undergone a very severe trial lasting four days when he submitted to many criticisms of the Railway Department. May I have the Minister’s attention? I was saying that the Minister of Transport was subjected to very severe criticism over a period of about four days on the Part Appropriation Bill, but I want to vary the monotony so far as the Minister is concerned, and I want to congratulate him on his enterprise in giving out a contract for two tugs to be built in South Africa, which is virtually a commencement of a shipbuilding industry in this part of the world. I am aware, of course, that a small craft called the Lady May was built in Durban in 1895, but I think it is to the Minister’s credit and I give him full credit for it that he had the enterprise to put out on contract the building of two tugs which were built in Durban and successfully launched. I was present at the launching of one of those tugs, and but for the fact that an Admiralty crane was employed of very great lifting capacity to lift these craft off the wharf and to put them in the water, it would not have been possible to launch the tugs at all. It was entirely due to the fact that this very high capacity Admiralty crane was used that the launching was possible. I hope that the Minister will excuse me for speaking of my home town and that he will not accuse me of parochialism, but I think the head of the Durban Bay is most suitable, and it has been favourably reported on by experts as most suitable for shipbuilding, but unfortunately there is no slipway there, and I know that the Railways and Harbours need a considerable amount of ground for workshops and marshalling yards, but there is still ground for a slipway. Seeing that Durban is the nearest port to the great coal mines and to the great steel industries in the Transvaal, Durban is the most suitable place for a shipbuilding industry, and I do earnestly appeal to the Minister not to rest on his oars, but to see that the accommodation is made available for a slipway, and to give out further contracts for ships to be built in South Africa. I understand that it is contemplated to build coasters, and although they are small I think a start should be made in that respect.

There is one other small matter to which I would like to draw the attention of the hon. Minister, and that is the question of a parcels depot to be situated somewhere centrally in Durban. My colleague, the hon. member for Durban (Central) (Mr. Derbyshire), brought the matter up a short while ago, and I wish to support what he said. If anyone wants to send a parcel away in Durban, one either has to travel to Cato Creek, a very inaccessible part of the town, or else go to Congella, which is very far from the centre of the city. Surely it is not impossible to have a depot in some central position where these goods can be despatched. In days gone by Berea Road Station was available for despatching goods of this description, and I would suggest that the Minister take this matter up and see that the people of Durban are afforded an opportunity of despatching goods from some central place within the city boundaries.

There is one other matter to which I would like to draw the attention of the hon. Minister. It is the question of the Zululand train. A lady reported to me that she had come from Zululand to Durban, and that she intended to catch the Pullman to take her as far as Gilletts. But the Zululand train was late, and on arrival there were no porters whatsoever to attend to her luggage. She is an elderly woman, and could not carry her luggage herself. There were no porters whatsoever to meet this train from Zululand, probably because it was a little late. The result was that she had to wait until she could find someone to help her, someone other than a porter, and the result was that she missed the connection with the Pullman and had to take a taxi to her destination, and the taxi fare amounted to £2. I hope that the hon. Minister will also pay attention to this complaint, which was made to me by an elderly lady in Durban.

If this Budget were to be described in a short sentence I would describe it as a “sock the rich” Budget. Of course, if there is one thing that the Budget does, it relieves the poor man and it adds an additional burden to the super tax-payer. That is not an action on the part of the Rt. Hon. the Minister of Finance which will bring tears to anybody’s eyes. But there are certain aspects of the Budget which I think might have been dealt with in an easier way towards the existing tax-payers as a body. The Minister has saved a sum of £11 million and instead of appropriating this sum to some suspense account or in a manner which can be appropriated to the relief of the taxpayer he has appropriated it towards a reduction of debt. I feel that in view of the fact that it is this particular body of taxpayers which has borne the burden of the war, that that was not a fair thing for the Minister to have done. The Minister justifies his action by saying that it is no use our saying that posterity will pay; we are posterity. But if a bachelor may be described as posterity, I as a married man and father can regard myself as an ancestor, and I do not see why he should allocate to me a burden which could quite well be passed on, if not to future generations then to future years.

I think that one of the most remarkable speeches which has been made here today is the speech of the hon. member for Durban (Berea) (Mr. Sullivan). Other speakers have commented on the fact that while the Labour Party stands for the non-profit idea in finance and in the general administration of the affairs of the country no stronger speech in favour of the profit motive could have been made than the speech made by the hon. member for Berea. It was in essence a capitalistic speech, it was a speech in which he pointed out that if the resources of this country were to be favourably developed it would be necessary for this country to get capital from outside on a basis which would pay the capitalist outside to invest in this country. How can you have profits for the foreigner and no profits for your own people? We have often felt that there is no sincerity in the principle which has been enunciated so often by that party that the profit motive must go. We know that the profit motive is the underlying motive which stimulates enterprise, energy and ability, and the hon. member’s speech was, strongly in support of that idea. I must say that while the hon. member for Berea has taken up that attitude, it is diametrically opposed to the attitude of the hon. member for Benoni (Mr. Madeley). The attitude of the hon. member for Benoni has always been to “put a spoke” in the profit motive in this country and in doing that he has during the period of his office done irreparable harm to South Africa. No man is more responsible in my view for the present shortage of housing in this country than the hon. member for Benoni by means of the legislation introduced by him and the trade union principles which he is amongst the very first to support. I have before me a cutting from the “Rand Daily Mail” of 1st March, 1945. It is in these terms—

If that was the attitude of the hon. member for Benoni during the period he was in office and if that is the way in which he dealt with this crying problem, the necessity for training young people so that they can in the future take their place as artisans in this country, what prospect is there for any hope that he would do anything better than he has done if he were once again given a chance?

A number of members have referred to the Fixed Property Profits Tax. I must say that that is the ugliest child that the Minister of Finance has produced, and like so many doting mothers who produce an ugly child he regards it with even more affection than any of the finest legislation he has introduced. The Fixed Property Profits Tax is the evil spot in what is really a brilliant series of financial legislation by the Minister. I do not think anywhere in the British Commonwealth is there a Minister who during the war has been able to finance his country more ably than the Minister of Finance has done. He has been able to extract from a small population an enormous income without in any way handicapping the prosperity of this country and without in any way handicapping its future. But why in the face of such a record the Minister should persist in hanging on to a tax which is almost universally condemned is one of the curiosities of genius. That is the only way in which I can describe it— the curiosity of genius. I would like just to quote the opinions of a few people who are competent to judge as to the effect of this extraordinary tax. First of all I would like to quote an article by Prof. C. S. Richards, written in the South African Journal of Economics in September, 1945, and before I quote it I want to preface my quotation with this remark, that the Minister has always justified this tax on the ground that it will tend to prevent inflation, which of course, is an evil that it is his duty to try to prevent. But it has not had that effect. It has actually had the effect of stimulating inflation. This is what Prof. Richards says—

And then he quotes figures to show that the maximum sum produced by the tax was in 1944-’45 £725,000. That is a Prof. of Economics. And the next quotation that I propose to read to the House is one by the Transvaal Land Owners’ Association. They are people who are intimately connected with the purchase and sale of land. One may say that they are interested but everyone is interested in this sort of thing and the question is whether their judgment is of any value of not. I am going to quote from the report of the Transvaal Land Owners’ Association, where this paragraph occurs—

Lastly I have a letter here which was addressed to the hon. member for Johannesburg (West) (Mr. Tighy) which he has handed to me, from the Builders’ Association in which they also condemn this tax in these words—

They suggest that vacant and purely residential stands purchased should after 1st March, 1946, be completely exempted from the tax, even though they changed hands during the period in respect of which the tax was leviable. The idea of prolonging this tax in the way in which the Minister has suggested seems to me an extraordinary idea. Why not abolish it? It is quite true that some people may gain. But why should the person who purchases in February, 1946, have to pay a tax of 13s. 4d. in the £ and the person who purchases after 1st March be completely exempted from the tax? That is surely an absurd state of affairs, and if it is possible to appeal to the Minister, I would appeal to him to face the position and to repeal the tax in toto.

I am sorry that the Minister has not seen fit to announce a revision of our income tax law. Our Income Tax Act contains provisions which are possibly crueller—and I use the word advisedly — than those contained in any other Income Tax Act in the world. I refer, for example, to the existing Act. Under that Act a person who may have an income of two or three thousand a year or more and who omits an item of £100 is liable to be taxed at a treble rate in respect of the whole of his income. I do not know whether it was intended that the amendment should have that effect, but that is the effect as it stands today. Fortunately, in the present Commissioner of Inland Revenue, who is a very able and experienced man, we find a man who tries to hold the balance evenly between the tax-payer and the State, and who recognises the severity of some of these provisions, and he tries to do what is the fair thing. But the idea that a provision of that nature should be on our Statute Book is absolutely wrong, and the first opportunity should be taken, and I hope will be taken, by the Minister of Finance, to re-introduce the provisions of the old Act, under which the delinquent, the tax-payer who omitted an amount, is liable to treble tax only in respect of the amount he omitted. There are other provisions which it is not necessary for me at this stage to go into, but there is one which I raised number of years ago, namely that the idea that the Commissioner should be able to treble tax without an appeal is quite wrong. The reply given by the Minister at that time was that during a war, we must not weaken sanctions. At that time that was a fair answer, but I do think that these provisions which allow the most severe penalties to be imposed without appeal, should now be modified. Another matter to which I wish to refer is the necessity for a revision of the Companies Act. Our Companies Act, which is largely based on the English Act, has not been revised for a number of years. The idea of the State keeping a fatherly eye on companies has been long recognised, and during last year a commission was appointed by the English Board of Trade which made a report and proposed a large number of amendments to the Act, practically all of which are being adopted by the British Government. Speaking from memory, I think there are something like fifty amendments. I have read that report, and I must say that the conditions in this country require that something similar be introduced here. I will give just one example. Many of the big houses have their boards of directors filled entirely with nominees. These people hold qualifying shares in a representative capacity only, but hold nothing for themselves. They are simply called upon to vote in accordance with the dictates of the employer. The proposals of this commission in England have been that every director should have a personal stake in the company, and to declare to shareholders whether he holds the shares of anyone else or not, and whether the amount of money he receives in respect of being a director has to be paid to someone else or not. That is the correct idea. Otherwise a director’s position becomes farcical. But that is the position in many companies here. I think the time has come when this whole matter should be gone into and when the rights of minority shareholders in companies should be protected. The position in regard to private companies also wants overhauling, and the experience gained during the last twenty-five years—our Companies Act was passed in 1926 and amended in 1939—but not on the lines of this report— indicates that the Government should consider the question of appointing a similar commission here, so that the newest ideas can be introduced in the Companies Act. On the whole one is bound to admit that the Budget is a satisfactory one, but the effect of the decreases which the Minister has given, I am afraid will be purely illusionary. Whilst he has taken away certain taxes, for example in respect of the excess profits duty, they still may be paid by super tax payers and others. The result of all this is that next year, instead of having a surplus of £11 million, the Minister will come to the House with a surplus of perhaps £15 million. But I hope that when he does that he will not do the same old thing again, and pay it in reduction of debt, but will use it to expand social services in this country, which will require millions of pounds and are necessary for the welfare of the country.

I am sorry that the Minister of Finance is not here, because I wanted to congratulate him for remitting £3 million in taxation on the mines, which will be of general benefit to the low grade mines.

You are listening to his master’s voice.

I want to mention one of the mines in my constituency, the Langlaagte Estates, which I understand is just about to be closed down. I am taking some figures from the “Mining Journal.” I understand that in November—and I mention the month of November in particular for this reason because in a later month there is a clean up, but I do not think any clean up was done in November—that mine produced £88,426 worth of gold, and the profit made on that was only a matter of £3,167, which left the mine with an expenditure of £85,259, money which was put into circulation during that month. The point I wish to make is this, that when we realise that an amount of £85,000 is put into circulation every month, we should try to avoid closing down such mines. The information I got is that there is practically one million pounds worth of gold in that mine still, and I think some encouragement should be given to prolong the life of that mine, in order to put that amount of money into circulation. When we realise the benefits conferred in connection with employment, expenditure on stores, etc., it is an important matter. I am sorry the Minister is not here as he may have been able to give me some information as to how that £3 million will be distributed. If it is possible for the Government to make a contribution of £1,000 a month, that might be a means of keeping such a mine going for another two years. Another point I wish to bring forward—and I am sorry the Minister of Mines is not here—is the question of closing down mines. I have just said that I am told that there is a million pounds worth of gold left in the Langlaagte Mine which is about to close down. That is a very unsatisfactory piece of business. I am informed that a commission is supposed to go into the matter before a mine closes down, but my information is that in the case of two or three mines that has not been done; they have been closed down without a commission being asked to report. If that is so, then I hope that some attention will be paid to the charges I am making, so that this state of affairs will be avoided in future, because closing down the mines is an important matter. There were no less than 900 Europeans employed on the mine at one time, but that has now been reduced to 700, and taking men away from the place where they worked for thirty or forty years is not a light matter. It is something which many of these people will not get over, because they are too old to be employed by new mines now. I do not know whether my information is correct, but I have been told that it is so in the case of the Wit Deep. That mine had five years of life before it if it were worked properly, and it should never have been allowed to close down. The Ferreira Deep was also in my constituency, and that mine was closed almost two years before it should have been, and the reason I understand was that the manager of that mine was after another job which he particularly wanted, and therefore he wanted to see the mine closed down so that he might get the new job. I hope that something will be done in connection with this important matter. I want to mention one more matter, namely, the question of letting houses. I know that a board has been appointed, but the way things are carried out amounts to a serious interference with the liberty of the subject. I know that something had to be done, but I want to appeal to the Minister and the Government to see that this emergency measure is done away with as soon as the need for it has passed.

I have listened with patience and with interest to all the contributions made to this debate, but to no contribution did I listen with greater attention than that which came from the representative of the Labour benches, the hon. member for Durban (Berea) (Mr. Sullivan). I think the claim that his speech is a direct indication of the policy for which the Labour Party stands is to assume something that is not correct. Those hon. members who listened to the hon. member for Durban (Berea) must have been impressed with his criticism of a capitalist Budget from a capitalist point of view, but he introduced his remarks by saying that he was not prepared to put forward any amendment to the Budget. That might come at a later stage, he said, but his criticism was directed to this Budget from purely the capitalistic point of view, and he asked the House to judge, in the light of his criticism, whether or not as a capitalist Budget, it afforded the opportunities which are claimed for it. He claimed that the real essential of a capitalist Budget was to afford secure opportunities for profitable investment, and in his criticism of this Budget he said that it afforded excellent opportunity for profitable investment, particularly in the gold mining industry. Then he examined this corollary for profitable investment, which is the incentive to work, because there can be no profitable investment if there is a go slow policy on the part of the workers, and his criticism directed from the aspect of whether or not there is sufficient incentive to work, was that the Budget had fallen far short in this respect. Any criticism directed to the hon. member from any other angle is unfair. The hon. member does not need me to champion his case or his socialistic economics. I am not a socialistic economist, and the reason for my sitting on this side of the House is because I am allied to the capitalistic economics which are adumbrated and supported by the members on this side of the House. I am, however, one of those liberal-minded people who object to the flagrant advocacy of the fundamental idea of capitalism as we understand it, namely, the exploitation of every opportunity to buy in the cheapest market and to sell in the highest market. That is a fundamental conception of the capitalist system. We all adopt it as far as we can in our private life.

None of us gives more than we are forced to give, and we all try to get the maximum amount for our goods and services. That is one of the inherent characteristics of human nature, but human nature also has to be graded, and where we have an obligation to exist with others in a community of nations we must restrict our human characteristics, and I am one of those who belong to the capitalist system, in the hope that it will be able to produce for the benefit of the less privileged some of the things they need. I am in favour of giving equal opportunities to every citizen of the State. He must be afforded the maximum opportunity of making the maximum contribution possible to the State. There are unfortunately many people in the State who are unable to make any contribution at all. We are not prepared, because of our Christian feelings, to let them go to the wall. They must be provided for. It would be an impertinence on my part to attempt to dictate any cogent criticism to the Minister of Finance on the manner in which his Budget should be presented to the country, but I will say this, in answering the hon. member for George (Mr. Werth), that we have in this country two primary industries, gold mining and agriculture. It is true that we have some secondary industries, but there has always been a claim by the industrialists in this country that one should build up as high as possible the tariff wall in order to ensure for the producer an article 100 per cent. dearer than it can be bought on the international market. I am prepared, like most nationalists, using the term in the wider sense as a proud citizen who is national in his outlook, that there must be secondary industries, and that the only justification for the existence of secondary industries in this country is that they should afford a higher standard of living to those who work in secondary industries. In other words, the justification for the establishment of a secondary industry, the justification for asking the consumer to pay more for an article produced in this country than he has to pay for the overseas article, will be the amount of human happiness enjoyed by the employees in the protected industry. There can be no justification for the establishment of secondary industries, unless maximum opportunities are given to the employees in the industry. And this is where the Budget could see to it that the maximum amount of protection, which after all is a subsidy to that industry, is expended not in profit to the shareholders, but distributed amongst the workers. And that is why I am allied to this side of the House. My other criticism of the hon. member for George is that the national economy cannot be based on agriculture if the agricultural industry in this country can only exist by exporting its surplus at the expense of the internal consumer. We know very well that wheat, sugar and everything else in this country, every ton is exported as the result of the consumer paying for it. The export of primary products can only be justified if the social and economic working conditions of those who work to produce that primary product are improved to the same extent and by the same amount as the subsidy received by the industry. Take our maize. Every bag of maize we produce over and above our internal consumption is exported. What for? Is it exported at world prices? No. The internal consumer is forced to pay 5s. for every bag exported. There can be no sound national economy based upon the protection of secondary industry or primary products if the export market is subsidised. I want to appeal to the Minister to maintain a balance between producing on the ordinary economic principles applicable to capitalist states, and providing opportunities for profitable investment, and limiting the application of those profits to the benefits of the people who work in the industries in this country. Then and then only will we continue to give them any support. One will be entitled to criticise the measure of contribution which the worker gets in the form of a standard of living, and hope and encouragement for the working man in this country. There are many men in this country who made their contribution during the war in the hope that South Africa will be able to give better opportunities to the less privileged people in the country, and as long as the Government is prepared strenuously to advocate and sincerely to apply the curtailment of profits for the benefit of these less privileged people, so long will they get the support of every section of this country. The application of our financial system has, in respect of the provinces, been changed on many occasions, and some little time ago there was a readjustment of the financial position between the Union Government and the Provincial Administrations by an increase in certain subsidies which the Provinces got from the Government on condition that they were prepared to give up certain provincial revenues like licences. I am thinking at the moment of liquor licences. Nineteen years ago the Cape Province gave up its licence revenues and the Government in turn took over the charitable institutions which had been under the care of the Provincial Administration. That was also done in the Free State and the Transvaal, but not in the Natal Province, probably because in Natal they received more in licences than they spent in charities.

It could have been because of mistrust.

That may be. I want to draw the Minister’s attention to a particular charitable institution to which I am devoted. It is an institution catering for the needs of non-European blind children throughout the whole of the Union, drawing children from Natal and the other three provinces. The hospital side of the institution was registered as one of the charitable institutions under the ordinance passed by the Cape Provincial Administration in 1919. The institution was financed by the Government on the £ for £ basis, the Government giving £1 for every £1 collected by the public. It is perfectly true the Union Government pays 100 per cent. of the teachers’ salaries in that institute, and that it is prepared to subsidise instructors’ salaries to the extent of 50 per cent., and to pay £ for £ in respect of all capital charges. But my criticism in respect of capital charges is that development is being stopped by reason of the fact it is very difficult to induce the Central Administration to approve of the development plans framed by these institutions. The Central Administration is prepared to pay 50 per cent. provided it has a say in determining the amount of development which shall be offered to that particular institution, and if it is prepared to support and to approve of the plans of that development. There is a change there, and I hope the Minister in charge of the Bill will do everything he can to permit of these people working in a charitable cause having a wider discretion in the adoption of plans. With regard to the maintenance of the children in the institution—which is just outside the Cape Peninsula—there are 150 to 160 blind people there, and the charges for the hostel accommodation are very considerable. The subsidy paid by the Union Government for every child who comes into the institution is a matter of about £21 per annum. You cannot keep a blind child in an institution like that on anything like £21 per annum. There was an agreement between the Provincial Administration and the institution in regard to the children who came into this school. It was agreed they would subsidise the school under the Act of 1919 and be prepared to pay 50 per cent. of the cost of maintaining those children, that is the difference between the amount paid by the Union Government and the actual cost of the maintenance of the children. For the first three years after the Central Administration had taken over the obligation to provide for the charitable institutions of the Union it paid every penny of the obligations in respect of that institution. But then there was a conflict between the Department of Education and the Department of Social Welfare, it was considered that the obligation to subsidise was a social welfare obligation. Then there was a readjustment of the obligations between the Department of Social Welfare ’ and the Department of Union Education. It was felt two governmental departments should not look after the one institution, even though one was a hostel where the children were provided with maintenance and amenities. The result was everything went over to the Union Education Department, but the obligation under the Charitable Institutions Act for the payment of a subsidy in respect of children who came to the institution fell away. That institution has today a deficit on the last calendar year of £1,684 in respect of the maintenance of the blind children who came there from the Transvaal Province. There is a deficit of about £300 or £400 in respect of the children from the Free State. The Union Government is prepared to pay no more than it has done, namely the obligations under the ordinance, and the Union Education Department, in contradistinction to the Department of Social Welfare has repudiated the obligation to give any subsidy at all other than this £21 per annum in respect of children from the Transvaal and the Free State. Let me say there is always a very great desire on the part of the general public to support any deserving social cause and it is perfectly true one is able to finance at the expense of future development and of the amenities which should be provided in such an institution—one is able to provide for these children who come from outside provinces at the expense of future development. I hope the Minister will take into serious review the departmental attitude on this question and the prejudice which is being sustained by a national institution catering for children who come to us from other provinces.

If the Minister agrees I should like to move the adjournment of the debate.

Yes, you can do so.

Then I move—

I second.

Agreed to.

Debate adjourned; to be resumed on 11th March.