I move—

When the hon. member consulted me yesterday in connection with this matter, I very clearly indicated to him that I did not consider that it was a matter which was contemplated by Standing Order No. 33.

I move—

In order to illustrate the need for the reform that I am suggesting this morning it is necessary to go back to the time of the National Convention when the fathers of our constitution had gathered together to lay down a constitution for the Union of South Africa. They had to pay heed to certain fundamental factors, amongst them the federalist sympathies of the people of Natal; the strong attachment which colonials still had for their old colonial boundaries; and the need for a stepping stone between the Central Government and the purely local governments. When the Provincial Councils were finally constituted in their present form they were so constituted largely due to the fact that they desired to safeguard principally the interests of the Union Government, to keep politics out of the Provincial Councils, and further to provide for the representation of minorities. Therefore they decided on a system of the executive being separated from the legislature and the introduction of a non-responsible provincial executive committee elected on the principle of proportional representation. I think I should briefly recapitulate what the Act of Union lays down. It provides in each province firstly for the appointment of an Administrator by the Governor-General-in-Council, which means the government of the day. Secondly it provides for a provincial executive committee and, thirdly, for a council which will have the same number of members as represent the province in Parliament with a minimum of 25. With regard to the executive functions of the council the Administrator first of all, as I said, is appointed by the Governor-General-in-Council; he is nominated by the government of the day and he is paid by the government of the day and is only responsible to it. He holds office for five years and in the Provincial Council executive he has a casting vote as well as a deliberative vote. He cannot be removed by the Provincial Council nor can he be removed by the executive committee. The executive committee is elected on the basis of proportional representation and the members are not responsible to the Provincial Council itself. The executive committee is charged with the duty of administering the affairs of the province in which it exists. The members of the Provincial Council itself are elected in the same number as there are members of Parliament in the province, provided the number does not fall below the minimum of 25. That system of government was based on the system prevailing in ’the United States of America and the Cantons of Switzerland, but there was a very material difference. In the United States the President is elected by the people and he appoints an executive which is entirely divorced from the legislature and whose members have no say in the legislature. In Switzerland the members who are appointed to the executive cease to be members of the legislature on appointment. In South Africa the position is entirely different, and the members of the executive committee continue to be members of the legislature but are not responsible to it. Also they are not appointed by the Administrator, but by the Provincial Councils themselves. So in effect we have in South Africa a hybrid organisation and, like that other hybrid, the mule, they have no pride of ancestry or hope of posterity. When the matter was discussed in the National Convention the Hon. C. R. Brand made these remarks—

That has been falsified time and again and there is no doubt that this body was conceived in hope, born in exhilaration and nurtured in disdain. It has fallen far short of the hopes that were expressed. There are i three practical reasons why the Provincial Councils could not hope to keep free of politics. In the first place, as I pointed out, the Administrator is appointed by the government in power and usually from members of a political party. Secondly, the Senate is constituted on a provincial basis, eight senators being appointed from each province; they are elected by the members of the Provincial Council of the province together with the members of the House of Assembly elected for that province, sitting together. That alone must cause politics to enter into the Provincial Councils. Then there was the fact that the first elections for the Provincial Councils that were held after Union coincided with the election of members of Parliament, and as a result politics came in, and came in to stay.

The executive committees in terms of the South Africa Act function to carry on the administration of provincial affairs on behalf of the Provincial Councils; with the Administrator as chairman, they prepare and agree to the estimates; and, thirdly, they are entrusted with the duty of carrying out the policy of the Provincial Councils. But if a provincial executive does not carry out the policy of a Provincial Council there is no redress by provincial councillors. The only redress they have is to refuse to vote Supply, and should they do that too frequently very obviously the Central Government would have to step in, and under such circumstances might as well abolish the Provincial Councils. There is a good illustration of this point. In 1914, by some strange chance, the Labour Party in the Transvaal managed to gain a majority in the Provincial Council. When it came to the election of an executive committee they were entitled, under the proportional representation system, to two members only on the executive. As there were also two members of the opposing party on the executive and the Administrator was a member of the opposition party, the Labour Party took the step of refusing to nominate any member of their party to sit on the executive. When the estimates came before the council the Labour Party had its revenge by refusing to vote Supply. A deadlock ensued and it was only overcome by the Government rushing to the assistance of the provincial administration to enable them to carry on. It was done illegally, and subsequently this action had to be legalised. There have been other instances where deadlocks have occurred, and they are bound to occur under the present system.

In 1924, when the Minister of Finance was then a very youthful Administrator of the Transvaal, the Pact Government came into power and the Transvaal Provincial Council, which consisted of the majority of Pact members, desired to remove the Administrator from office. They approached General Hertzog and asked him to remove the Administrator of the Transvaal and to appoint in his place a member of their own party. They were backed in that by three Cabinet Ministers, but General Hertzog ruled that the post of Administrator was a nonpolitical one, and he refused to give way. In the Cape the Provincial Council has run fairly smoothly and successfully; particularly when the party in the majority has also a majority of members on the provincial executive. This has not always been the case and even this does not always lend itself to smooth working. The position did arise, in connection with the preparation of the estimates that after they had been discussed and agreed to by the provincial executive, in which there were two members of each party, when the estimates subsequently came before the Provincial Council the strange situation developed that two members of the provincial executive who had previously helped to draw up the estimates crossed the floor of the House and voted against them.

There is another aspect. At present in the Cape Provincial Executive we have only one member who is a member of the Opposition party. I submit he is put in a very unfortunate position, because if there is any leakage of information from the meetings of the executive he is automatically suspect. He may be entirely innocent and not have breathed a word of what has been going on, and yet should any important information of a secret character see the light of day, he is blamed—and it often happens that the Opposition party in the Provincial Council is armed with information which has not yet reached the members of the majority party, so that the Opposition are thus prepared beforehand to attempt to defeat the executive’s proposals. That, I submit, is an unsatisfactory state of affairs, and one that should be rectified. In my opinion, and it is the opinion of a large number of people, the ideal system would be to have the Administrator elected by members of the Provincial Council themselves, and the members of the executive committee should then either be appointed by the Administrator or elected by a majority vote of the majority party in the Provincial Council. I submit if that were done, it would not mean a loss of power to the Central Government, because it could retain the power of refusing assent to an ordinance; it could still initiate legislation on a matter falling within the legislative competence of a Provincial Council; it could, if necessary, take away certain legislative powers from a province; and it could, in the fourth place, refuse a province financial assistance. There you have the complete control which is necessary under the new system, which I submit would be a better one. I am, however, not going so far as that this morning. I am merely suggesting that the provincial executive should be elected by a majority vote of the majority party in the Provincial Council. I would like to quote here the considered opinion of one of the members of our executive committees, Mr, George Barrell, a highly respected public., man. He said—

The positions which the Administrator and the executive committee hold under the present system makes serious conflicts and even deadlocks at times of crisis unavoidable.

The policy of this Government is that the Provincial Councils, as such, should continue, but ever since Union there have been strong movements amongst large sections of the population aimed at the abolition of Provincial Councils. We had first of all the Jagger Commission of 1916. That commission recommended that education should be taken away entirely from the Provincial Councils and that fourteen Divisional Councils should be constituted to take over their remaining functions.

Was that right through the Union?

Yes, that was to cover the whole Union. Then in the early 30’s General Hertzog, who was then Prime Minister, was playing with the idea of doing away with the Provincial Councils. The Social and Economic Planning Council reported that—

Considering also the report and recommendations of the National Health Services Commission, especially the references to hospitalisation, and considering the educational anomalies that exist as between the different provinces, it is clear that strong reasons exist for such movements towards abolition. There is a difficulty in the Cape of retaining the services of teachers and nurses when they are offered better rates of pay in the Transvaal. When these anomalies are considered it is obvious that some steps should be taken at least to bring the policies of the Provincial Councils into line with each other or to abolish them altogether and to substitute something better. It is, however, the policy of the Government to retain the Provincial Councils. In 1934 General Hertzog introduced an amendment to the Act of Union whereby the position of Provincial Councils was safeguarded in as much as they can only be abolished by petition from the Provincial Councils themselves. That, however, is an Act which could be altered by a majority vote in this House, and when the time to take this step is considered necessary it would be a simple matter for this House to reverse that amending legislation. I do not consider, at the present time, that we should abolish our Provincial Councils. I do suggest, however, that the ills with which they are afflicted requires a major operation, and that is the substance of the motion I have brought before the House this morning.

There is one thing we must bear in mind, and that is that the history of constitutional development in South Africa is the history of a struggle for responsible government. It is difficult to understand how the fathers of our constitution could have departed from that principle. However they did so, and I submit that their experiment has not been a success. I believe that if Provincial Councils are to carry on as effectively as they should do the election of members to an executive committee should be the result of the majority vote of the majority party in a Provincial Council. This would represent a big step forward and a reform that merits early attention.

I should like to second the motion moved by the hon. member; and there are one or two aspects of it I wish to stress. The first is that I feel the present system is unsatisfactory. We have a conflict between the executive and the Administrator and between the executive committee and the majority party, which is very undesirable. I remember quite well the incident referred to by the mover when the executive committee of the Cape Provincial Council was divided on the main taxation measure, and I think it is very undesirable that members of an executive committee, who presumably have agreed on certain taxation measures should cross the floor of the House and vote against the measures they themselves have introduced. I think that is something very undesirable, and if an executive has to take responsibility the men who take that responsibility should represent the majority party who, after all, have to introduce the financial measure. I think it is absolutely essential we should have, at an early date, a revision of the Provincial Council boundaries. The present Provincial Council boundaries are hopelessly out of date and if, in the near future, we have the incorporation of South-West Africa we should at the same time raise the question of the revision …

I am afraid the hon. member is going far beyond the terms of the motion.

I do not wish to do that. I was going on to illustrate that point, but in deference to your ruling I shall not pursue it. I shall content myself with saying that I feel a uniform policy is desirable and with seconding the motion moved by the hon. member.

I am sure all hon. members are indebted to the hon. member who introduced this motion for the manner in which he has done so and for the historical background he has provided to the position. As he has pointed out, when the National Convention sat in 1910 and evolved the Act of Union, they were confronted with the tremendous problem of federation and the problem of* unification, and a compromise was effected by the establishment of Provincial Councils, and in their judgment they were desirous that Provincial Councils should not be carried on in the way that the Union Parliament itself was carried on, on party political lines. That was the ideal they had before them; and in that measure they sought for all parties to be represented, by proportional representation, on the executive. It is quite true that the executive of a Provincial Council cannot be removed from office. They are elected for the full period, while the Administrator is appointed by the Government. Cases have occurred when there have been difficulties, but, with a working knowledge of Provincial Councils—having been a member of an executive, and as Minister in charge of the Department of the Interior during the last three years—I have had no request brought before me to deal with the question in the manner in which the hon. member wishes it to be dealt with. The practice was brought into existence many years ago, and I have inherited it, of a joint meeting of the provincial executive. During the war there was a meeting once a year, and prior to the war twice a year, and now it is twice a year. The next meeting will be held in Pretoria. At this meeting every effort is being made to bring the question of education and the question of hospitals and various other services into line, so that there will be no competition between one and the other, and on the whole, except for the circumstances mentioned by the hon. member, the system that is in existence at the present moment is functioning satisfactorily. It is quite true an occasion can crop up where the members of the executive are equally divided when the question of taxation crops up, but in that event the majority rules, and if a majority is against the executive, and it has occurred in the Provincial Council, the executive has had to bow to the decision of the majority. Mr. Speaker, this is one of the fundamental principles of the Act of Union, and with it is bound up the question of the election of senators, and I do not think that we should now start to change the system which has worked well for 36 years until the majority of people concerned have had an opportunity to express their views. I promise the hon. mover of the motion that I will bring this matter to the attention of the consultative committee in Pretoria at its next meeting, and in the meantime I hope that the hon. member will allow this motion to be withdrawn. Then, in the next session of Parliament, I will give the House the views of that committee. I appreciate the motive behind the motion of the hon. member, but shall be glad if he will allow the motion to be withdrawn.

I cannot associate myself with this proposal to the effect that the members of the executive committee of the provinces should be elected by a majority of votes in the Council. I listened attentively to the speeches of the mover, the hon. member for Cape Flats (Mr. R. J. du Toit), and of his seconder, the hon. member for Griqua-land East (Mr. Fawcett), and there was not the least reason mentioned as to why this motion was moved. The facts were not mentioned. The only fact which was mentioned is that sometimes a tie of votes takes place at the voting of executive committees, but it is necessary that this should happen, because Provincial Councils are elected on political party lines, and when there is a minority which can be sufficiently represented, they can also elect one or two of their members; then it of course represents the opinion in the province in the executive committee, and in that way the feelings of the minority are expressed. It is a democratic system, and it gives the provinces the opportunity of having the opinions of the minority expressed in the executive committee. Take, for example, the Free State. Some time ago there was, for example, just one of the Opposition members on the executive committee, but after a few years the position changed in such a way that the reverse was the position, which shows how sound the principle is. At that time the minority had some voice, and later the majority, who were then the minority, had a voice. It is absolutely unsound that the committee should be appointed from above by the Administrator. We have, for example, matters affecting hospitalisation and education and roads which are of interest to the province and which affect both sections of the population, and it is very important that the feelings of both parties in the province should be expressed in the executive committee, and for that reason I cannot support, the motion, and I am glad that the hon. Minister also does not see his way clear to supporting it.

Those of us who have had municipal experience must thank the hon. member who moved this motion. I appreciate the fact that the Minister of the Interior said that he will bring this matter before the United Executive and Consultative Committee at its next meeting, but this matter has been before that committee time and again, and it is a fact that nothing has been done. The system, as was pointed out by the hon. mover of the motion, is detrimental to the Cape Province as regards education, hospitalisation and other things. It is true that Natal always differs from the other provinces. Natal has its own Housing Commission and its own Provincial Health Committee, and as the Minister said not long ago, it really does not matter what happens but Natal must have special legislation in regard to these matters. I cannot understand how the Minister can say that this system has worked satisfactorily for 36 years. I remember coming to a congress in Cape Town on this matter 14 years ago, when we dealt with hospitalisation and free education in the Transvaal up to matric, but not in the Cape Province. I think it is time the old system was revised from every point of view, and I hope the Minister will not come back here next session and tell us that he reported to the executive committee but that nothing has been done, because that is what has been happening for many years past.

I appreciate very much the interest the Minister has taken in the subject, and that he has undertaken to bring the matter before the Provincial Consultative Committee. I am satisfied to withdraw my motion in view of what the Minister has said, and I hope that at the next session of Parliament the Minister will be able to give us a satisfactory report in regard to the deliberations of that committee on this subject.

With leave of the House, the motion is withdrawn.

I move—

Mr. Speaker, the life blood of the God of War, the blood that courses through his arteries of steel, is not warm and red; it is cold and black. It is oil. This war, which possibly will decide the fate of civilisation, was won by the Allied powers primarily because they had the greatest industrial output. We see, therefore, what an important roll industry plays in war, but we feel that industry plays an even more important part in time of peace. What is true, therefore, of war is equally true of peace, and if oil is the life blood of war, it is no less also the life blood of peacetime economy. The fact that oil is one of the most vital needs of modern civilisation calls for neither proof nor comment. We have in this country certainly been very fortunate. We have been able to import all our requirements of oil. We have enjoyed this fortunate position of having our life lines kept open even during the war, thanks to the protection afforded by the command of the seas by the Allied powers. It is, too, a proud reflection that many of South Africa’s sons played a very important part in rendering this national service. But what of the future? This country has been very richly endowed. We have diamonds to satisfy the avarice of the world. We have gold to fill the vaults of all international banks to overflowing. We have a wealth of base metals to feed industries throughout the world, but unfortunately we have no oil. Tests have been carried out to discover gusher oil, or natural oil, but so far drilling operations have not yielded positive results, and, according to the best scientific opinion the possibility of ever discovering gusher oil is very remote. For my part, I sincerely hope that we will strike oil. But we cannot wait. This is something which may occur in the distant future. It is something which may never occur at all. We have therefore to look for other sources of oil. As I have said, we are very richly endowed with mineral wealth, but we are lamentably lacking in oil. Now, if we cannot have natural oil, is there any alternative? We know that a start has been made in this direction, and here let me pay a tribute to the pioneering efforts of the S.A. Torbanite Mining and Refining Co., known generally as SATMAR. They started working torbanite deposits in the Ermelo district. They had many difficulties to contend with. The undertaking was novel and untried as far as this country was concerned, but in the operations over the course of the last 12 years they have gained very valuable experience, and they have garnered scientific knowledge which will stand this country in very good stead. They are reaching the stage where they are producing six million gallons of petrol per annum, and with the considerable extensions being made to their plant they will soon produce 12 million gallons a year. That, hon. members will appreciate, is not yet sufficient to found the basis of a national oil industry. Unfortunately, the occurrence of our oil shale and torbanite deposits are not sufficiently extensive to warrant their exploitation for the purpose of founding a national oil industry. For such a national industry the only other raw material basis is coal, of which we have enormous reserves. Next to our soil, coal is the most precious of our possessions. Our coal reserves have been variously described. It has been claimed that they are without limit. I will not go so far as to say that our coal deposits are limitless, but at a conservative estimate this country has at least 250,000 million tons of coal, the existence of which can be accepted as proved. At our present rate of production, that will last us for 20,000 years. I know this Government is a good one, and will remain in office for a very long time, but I do not think that even its most ardent supporters need concern themselves about the destiny of this country after we have exhausted our coal resources.

We will take your word for that.

Now that we have the backing of Natal, we know it must be so. As stated, we have coal deposits that will satisfy our needs for 20,000 years, which is approximately four times as long as our known civilisation, and therefore I think we can proudly boast that we have in our coal deposits a priceless asset, an asset inestimable in value. But because our coal deposits are extensive, that is no reason why we should allow wasteful exploitation. Now, there are various processes which can be applied to convert coal into oil, and whilst we are speaking of oil, let us get away from the idea that oil must necessarily be a liquid. Oil is no less oil because it happens to be impregnated into the molecules of a substance like coal. It is still oil. The House has already adopted the principle that the ownership of oil vests in the State. The Base Metals Act passed some years ago lays down that the ownership of oil vests in the State; and I say that whether that oil is in liquid form or whether we find it in solid form, the obligation of the State to carry out its stewardship is nevertheless there, and the State is saddled with the responsibility of seeing to it that we exploit our oil reserves to the highest degree and to the greatest possible national advantage.

Now, can that be done? I emphatically say that it can, and let me here mention the figure which would be involved. To start off with, we could instal an initial plant at a cost of approximately £8,000,000 to form the first unit of our oil industry. That is not going to satisfy all our needs, but let me here outline what will be required to start a national oil industry. A plant that would cost about £8,000,000 to erect should be capable of producing about 75 million gallons of petrol per annum. That is less than half our imports, but nevertheless it is a very substantial contribution, and that industry will give employment initially to about 1,000 Europeans and 6,000 non-Europeans. But we shall deal with this later on. Let us consider the question of the process to be employed. There are various processes. You have the low temperature distillation process and the hydrogenation process. There is another process for which satisfactory results are also claimed, the process patented by Mr. Charles Turner, who has a plant which has been working in Scotland for more than 20 years and where good results are obtained. All these processes, unfortunately, have not been found to be suitable for our local conditions. Hon. members will know that most of our coal deposits here are of low grade value. Our high grade coal, as the term is generally understood, in comparison with coal deposits elsewhere in the world, at the most amount to 5 per cent. Therefore 95 per cent. of our coal deposits in this country are of low grade. That means that it is coal which is not capable of producing more than 9 to 11 lb. of steam per lb. We also have coal yielding up to 14 calories, but for the moment we will leave that high grade coal out of account. I will touch upon that at a later stage. We have an unlimited quantity of low grade coal in this country, and it has been proved that low grade coal will form an admirable raw material for the purpose of conversion into oil. The process that I have in mind, and the one I would advocate, is the synthesis process. That is perhaps the best known process, and it may not be out of place to give a brief description of this process.

This process was started in Germany by Drs. P. Fischer and H. Tropsch in the Ruhr and later it was developed by the Ruhrchemie Algemeine Gesellschaft for industrial purposes. It was started in 1936, and although the first plant was only built then, Germany was able during the war to swing eight plants into production, and these eight plants produced 740,000 tons of oil per annum. A ton of oil gives you approximately 300 gallons of petrol, so that if you multiply 740,000 by 300 we get approximately 222 million gallons of petrol per annum. From these eight plants, however, Germany could produce that amount of petrol, and if it were not for this synthesis process she would never have been able to sustain her tremendous military effort for so long. But not only Germany. Japan before the war started a similar industry. She voted £44 million for the exploitation of her coal reserves for the purpose of conversion into oil. Italy, England, America, France, New Zealand, there’s hardly a leading country in the world today which has not embarked upon such undertakings. How does this process work? It is a low pressure and low temperature process and no special alloys are necessary in plant manufacture. In an emergency the whole plant can be made locally. Of the last retorts required by the Torbanite works in Ermelo, more than 90 per cent. were built locally. Any raw material can be used which is capable of producing carbon monoxide and hydrogen, and therefore low grade coal is eminently suitable. Briefly, the process consists first of all of producing carbon monoxide and hydrogen from coal and steam in gas generators. The mixture of the two gases is purified from sulphur compounds which would otherwise poison the catalyst. The purified gases are then passed over the catalyst at the correct conditions of temperature and pressure. A catalyst, as hon. members know, is a chemical agent employed to decompose a chemical compound and then to build it up again. In this case the catalyst works as follows: the chemical compound, consisting mainly of the two gases, carbon monoxide and hydrogen, is broken down. After being decomposed it is built up again, and the result is that you have fuels, oils, fatty acids or wax, or almost anything you like. It is a very simple chemical process, and by varying the catalyst, by varying the conditions under which the catalyst is employed, in regard to temperature and pressure, etc., you can determine the product that you require. The catalyst itself does not change its form. It may become lazy and require to be revivified, but the catalyst remains, for all practical purposes, static. Therefore, you can reemploy the same catalyst over and over again. I shall not weary the House with the technical details of the chemical composition of the catalyst, but I can assure the House that to scientists it is quite a simple matter. The catalyst works like a magic wand. It is the wizardry of chemistry. You pass these gases over a catalyst and say to yourself: What do I want? Do I want crude oil or Diesel oil, or petrol, or do I want solids? Do I want wax, or fatty acids? Whatever you want you can have by a variation of your catalyst, and when the catalyst has done its work, you can further refine the product to the extent that you require. You can regulate the catalyst to such an extent that the petrol which comes off can immediately be put into a car for use, and you can drive off right away. Let me here emphasise that the quality of the product obtained by this process is just as good as any of the products obtained from natural oil. If you take the natural oil as it comes out of the bowels of the earth, it also requires refining, and even then you can do no more with it than you can with the oil derived from coal. In point of quality and variety of products, they are equal. That, briefly, is the principle involved. As I say, you can turn your oil into almost anything you like, and it may interest hon. members to know what really can be produced; but before I go into details, I want to make this point perfectly clear. It is a most economical process. There is no wastage whatever. I cannot over-emphasise this fact. The coal is completely gassified, and there is no residue. All that is left over is ash, and ash in any case, as far as we know, can serve no useful purpose. So there is actually no wastage whatsoever in this process, and the products which can be obtained are almost unlimited. If we look around this room there is hardly a substance which does not contain hydro-carbon as a base, and the basis of this whole industry is the combinations you can make from hydrocarbons. Take the first case. Take water gas as an example. We know that in the Modderfontein Dynamite Factory they use expensive coking coal for the production of ammonia from water gas, coal that costs 25s. per ton. By employing the synthesis process with low-grade coal, we can achieve the same results at a cost of only 5s. per ton. Water gas is the cheapest method of producing hydrogen. Out of the gases which you produce by converting coal into oil, you can also produce nitrates. Nitrogen and hydrogen are very important ingredients necessary for the manufacture of fertilisers, so these products will stimulate the establishment of fertiliser industries. That one branch alone affords tremendous possibilities. We have large quantities of rock phosphate in this country, and with those rock phosphates and the gas produced from coal you can have a fertiliser industry which can satisfy all our requirements. Then we come to the question of plastics. You can turn out a resin. That resin will form the basis of a plastic industry, and when we talk about plastics, there is hardly a thing which cannot be produced today from plastics. You can rectify the spirits produced and have aeroplane spirit. You can have a spirit which will drive the most delicate aeroplane engine. The gases given off in this process have tremendous heat, and that heat can be employed in the steel industry. By employing the direct method—I do not know quite how that works, but I understand it was successfully used by Krupps in Germany—these gases can be used to make the finest steel in the world. You can therefore use these products in connection with your steel industry. You can have bottled gas. That can be extensively used. Farmers can use it for lighting and power purposes. As I say, there is almost no limit to the uses to which these by-products can be nut. Take propane gas, which is used for the manufacture of vitamins. With the propane gas you can establish a vitamin industry. Take your fatty acids for soaps. You could also have edible wax; this edible wax was used for the manufacture of margarine, and I am sure the ladies will support the plea for our indigenous oil industry, because this industry is not without romance. The perfect symmetry of a dainty ankle displayed in the finery of nylon hose will delight the eyes of the most fastidious, and nylon is made from coal. Yes, we can make our own nylon.

There is a claim which has been recently advanced that by the utilisation of some of the chemical products of this industry, crop production can be enormously stimulated. I read the other day that in America certain chemicals were being used to spray crops, and the resultant increase in production was tremendous. There is nothing that cannot be made once you start with this industry, which can form the basis for a chain of chemical industries throughout the country. It is impossible to envisage the limits to which they will go, but we can also mention synthetic rubber and the dye industry. To come back to the process itself. Is it economically sound? I say it is. And to what extent can that process satisfy our requirements? Let us consider first what are our requirements. I have taken an extract from our importations, I have selected the highest figures from 1939 to 1944. In 1942 we imported 387,195,302 gallons of crude oil. In 1940 our imports of lubricating oil amounted to 14,445,569 gallons. In 1944 our importations of power paraffin totalled 17,006,937 gallons. During 1944 the importations to this country of illuminating oil totalled 27,200,325 gallons. The importation of petrol in 1939 was 180,557,703 gallons; that is the peak year. We have never imported more petrol than we did in 1939-’40. The total value of all these importations c.i.f. Union ports was £7,100,785 and the total gallonage was 626,405,836 gallons. It is claimed for this process that a ton of coal will yield from 45 to 60 gallons of oil. Taking the lower figure of 45 gallons it would require about 12,000,000 tons of coal per annum to satisfy our total oil requirements. I am not going to weary the House by going into the various branches of all our oil requirements. For my purposes this morning I shall confine my attention to petrol. Petrol is very much in the mind of the public. It is the most popular form of fuel we use in our country, and we should initially concentrate our efforts on the production of petrol. On the basis of motor vehicles registration to European population South Africa with one motor vehicle per 5.7 European persons is second in the world in the field of motor transportation. The first place is held by the United States with one motor vehicle to 4.3 persons, and the United Kingdom is seventh with one to 19.2 persons. We have also a registration of something like 396,684 motor vehicles, so that we are the ninth largest motor vehicle operating country in the world. We can therefore see what an important part petrol plays in our national life. The importation of petrol has been a source of revenue to the country. The highest duty collected on petrol in one single year was over £5,494,471, it was collected in 1941-42, when the duty was increased to its present figure. The amount of petrol imported in 1939-’40 was 180,557,703 gallons, of which 157,759,000 gallons were conveyed by rail to the inland centres, and on this petrol traffic the inland consumer paid, at the rate of 7¾d. per gallon, £5,094,000. The tariff charges for petrol for conveyance by the South African Railways is at the second highest rate in the tariff book and, as stated, the Railways collected an amount of almost £5,100,000.

What is the cost of petrol? The c.i.f. price landed at Durban is 6.04d. per gallon, which can be taken as the average. Before the war it was about 2d. per gallon less, but I doubt whether we will ever get back to the pre-war level. We can thus, for practical purposes, take the present import figure as an indication of what the price will be in future. According to the oil companies, it costs them 6.04d. to land petrol at Durban, and on this figure they take a gross profit of 4.71d., which means that the oil companies are charging the wholesale distributors 10.75d. per gallon, but, of course, to this figure we must add the customs duty which, until yesterday, was 11½d. per gallon, and also the railage, amounting to 7¾d., so that the wholesale price of petrol in Johannesburg, for instance, works out at 2s. 6d. per gallon. Then there is an amount of 4d. per gallon allowed the retailer by way of distribution charges, which brings the retail price of petrol to 2s. 10d. per gallon to the consumer. As there has now been a reduction in the customs duty, from how onwards the retail price of petrol will be 4d. less.

The question arises: Can we produce locally at prices that will compare favourably with the price of imported petrol? I say definitely it can be done. It is computed that petrol can today be produced from coal at a price between 6d. and 7d. per gallon. If we take railage at 7¾d., that will give you an overall price of 1s. 2d. or 1s. 3d. Taking it at 1s. 2d., it means we can establish an industry if it can supply petrol to the inland market at a cost of no more than 1s. 2d. to the wholesaler. Such an industry can be self-supporting and stand on its own feet. Let me here emphasise that the local industry does not ask for any surrender of revenue from the State. The State, instead of deriving the revenue from the customs duty on imported petrol, will obtain it from an excise duty on the local article, so that the State will lose no revenue whatsoever on account of the establishment of this industry. Can it be done? I say it can be done. You can, with the initial capital of £8,000,000, supply at least half the requirements of the inland market at a price which will compare favourably with the price of the imported article.

As far as quality is concerned, the quality can be matched. We know that during the war the quality of petrol was not of a very high standard, but it satisfied our requirements and we managed to get along quite well.

On the question of distribution, at present we have several oil companies competing with each other, and the distribution costs are high. We know that the oil companies have an overall profit of 4.71d. per gallon. We say that initially if you start an oil industry here you could by arrangement with the present companies allow them to distribute your product through their present channels of distribution. I say that the margin we have is quite sufficient to support the local industry. America produces petrol today at under 7d., with coal costing two dollars a ton. Our coal should not cost us more than 4s. to 5s. In England, by the hydrogenation process, a much more involved process and one requiring a much higher degree of skill and with coal costing £1 15s. a ton, they can produce petrol economically from coal. Nowhere is the cost of the raw material lower than in South Africa. There is no reason why we should not produce petrol from coal cheaper than anywhere else in the world. We know that the wage structure in America is probably the highest in the world, and if they can produce petrol at round about 7d. a gallon with their coal costing twice as much as ours, and a wage bill two or three times higher, there is no reason whatsoever why we should not produce oil in this country at a price that will compare more than favourably with the cost of the imported article.

What form must this enterprise take? The State is already a senior partner in the oil industry. The duty which the State collects on the imported article and the railage that is paid to the State railways constitute the State as by far the senior partner in the oil industry. It is therefore in the interests of the State to take a hand in the exploitation of this vital product. We are in favour of private enterprise, and we say the State should encourage private enterprise as far as possible. But we also say in view of the national importance of the oil industry the State must safeguard its interests. Therefore in the first place we should like the State to undertake this industry. But if the State feels it should rather be left to private enterprise it must create conditions which are favourable to private enterprise.

What form should that enterprise take if the State itself does not embark upon the project? We can have a corporation very much on the lines of Iscor. The capital of Iscor is about £10,400,000, 80 or 90 per cent. of which is subscribed for by the State. The State is practically the holder of all the stock in Iscor today. And what could this country have done without Iscor? The State has not lost on Iscor. It has already collected 6 per cent. in the form of dividends on its money. Iscor last year had a gross profit of £1,500,000 and a nett profit of £1,104,000, after making liberal provision for reserve account. The total assets of Iscor are valued at £22,134,169. We could thus have an enterprise, as I say, based on the Iscor model or we could, if so preferred, have a public utility company. Or we could have something like the Victoria Falls Power Company. The structure of the V.F.P. will, I think, specially commend itself to members opposite. To appreciate the position, might I refer the House to the evidence given by Dr. Bernard Price before the Select Committee on the fishing industry development Bill where he crystallises the position as follows—

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

Continuing to quote from Dr. Price’s evidence, he says—

And then over the page—

A point to note is that the Company’s share of surplus profits, though small in relation to the consumer’s share, has been fixed at a level adequate to serve as an inducement for the Company to raise efficiency and promote economy. It is clearly in the interests of consumers that this inducement shall be retained at an adequate level, however prosperous the undertaking may become. Any system which limits dividends or in other ways fixes a ceiling beyond which no further reward can accrue is liable to produce stagnation and result in a lowering of efficiency.

We have that outstanding example of the V.F.P. which has operated very successfully for many years, and when I say successfully I mean also as regards the interests of the consumers. The consumers on the Rand, the gold mines, are well satisfied with the treatment they receive from the V.F.P., and we could very well model our oil industry on the basis outlined above. But we need not necessarily confine ourselves to that form of undertaking. We could have out-and-out private enterprise. Oil is of such national importance that whatever happens the State must exercise some measure of control so that it can in any emergency step in and take over. I have no doubt that private enterprise will not be found wanting. We know that in the Reserve Bank today there is approximately £300 million lying to the credit of the Commercial Banks. I think we can safely regard this as idle capital in the sense that it is awaiting investment. I am sure that private enterprise will not be found wanting provided only favourable conditions safeguarding their investment are assured. What favourable conditions do we ask for? We say that the project is scientifically sound and economically practical and should be able to stand on its own feet. Therefore we do not ask for any State assistance. There is no plea that the State should surrender any revenue, but what we do ask is that the State should guarantee stable fiscal conditions and that it should guarantee the indigenous industry against unfair competition from outside and that such guarantees must be entrenched in a long-term legislative charter. We know but too well that the oil combines are powerful, in fact, they are all powerful and that they wish to maintain their sovereignty supreme. They will not likely brook any interference from outside. We know that if we start an independent enterprise in this country it will be nothing for the oil company to spend a few million pounds to stultify our efforts. All we want is that the State should lay down a fixed policy, in return for which the State can expect an undertaking from the industry that it will produce an article which compares favourably in price and quality with the imported article. In this way there can be no possible prejudice to the consumer and the State will be able to safeguard the local industry by preventing outside oil interests which would seek to forestall and frustrate the inevitable development of oil from coal, having as its aim and object the independence of our country. That is all. We know that we have dumping laws and other protective measures designed to safeguard local industry, but in a case like this it is doubtful whether the existing provisions are adequate and sufficiently all embracing. We are therefore entitled to ask the State to go further.

Who is “we”?

We, the public and the oil industry as representing the public interests. I use the Royal “we.” Let me repeat. We do not wish any outside oil interests to forestall and frustrate the inevitable development of oil from coal. If the necessary safeguards are guaranteed private enterprise will undoubtedly come forward and the Government can say to it: “We are prepared to guarantee you a zone in which to operate.” In that zone you will be given preference to sell up to the limits of your production, provided always that your price and quality are right. Until such time as you have disposed of your full quota we shall not allow any outside competition in your particular zone. As the coal deposits are mainly found in the inland centres it will in the first place be such inland centres which will be zoned, and it goes without further argument that such zoning must operate to the substantial benefit and advantage of the inland consumer. Talking about zoning, I feel that in all modesty I can with absolute justification plead that the first zone should be established in the eastern Transvaal so that the first plant can be laid down in the Ermelo district. I do not wish to appear parochial for I would remind the House that in pleading the cause of my constituency I am at the same time pleading the national cause. After all, Ermelo has lead the way in the field of the establishment of an indigenous oil industry, and we are the pioneers as the first oil distillation plant was established by Satmar at Ermelo. We are not unmindful of the fact nor are we ungrateful to the Government for the valuable support given this industry in its infancy. We freely acknowledge our thanks to a sympathetic Government which has made it possible for the industry to be established and to survive its teething troubles. Unfortunately, as pointed out before, torbanite deposits are not sufficiently extensive to form the basis of a national industry which can only be maintained on the basis of coal as its raw material. For this industry we do not ask financial support, and we know that we will always have the sympathy of the Government, but sympathy is not enough, and we must have the safeguards outlined above. Sympathy, like loyalty, is its own reward, and that in itself will take us no further. We want positive action. The time has never been more propitious than the present. Although I might be accused of being “boring” as I have pegged away at this subject for a considerable number of years, I shall nevertheless continue my efforts until we do strike oil. The subject is an exhaustive one to which full justice cannot be done if debate thereon is unduly restricted, but as I am convinced that all hon. members in this House are wholeheartedly with us, I shall as far as possible curtail my further remarks to afford other hon. members who feel so disposed an opportunity to participate in the discussions here today. To revert to the practical issue let me reiterate that the first industry should be established in Ermelo from where we could supply all the needs in the zone allotted to us. There could be a second plant at Vereeniging, a third at Witbank, and seeing that the hon. member for Vryheid (Dr. Steenkamp) has so plaintively interjected, we would also be prepared to establish a plant in Natal, possibly in the Vryheid district. As long as these plants are able to serve the needs of their particular zones to the limit of their output, all we ask is that no one else shall be allowed to import petrol into such areas. I again stress the fact that by this arrangement the consumer will decidedly benefit, as we always have to take into account the question of railway transportation charges.

Why I say that the present is the most suitable time is this: Although it is claimed that the process has been scientifically proved and has long since emerged from the experimental stage, we know that science is progressive and the limits of human ingenuity and achievement have not by any means been reached. We also know that during wars the protection afforded to patent rights is subject to a moratorium which makes it possible for such patents to be freely used. I would like to ask the Government what steps they have taken as one of the victorious Allies, who helped not immaterially to contribute to final victory, to secure to us our quota of the information which has been made available to the victors through the defeat of the Axis powers. We know that America has adopted many German patents and that they have put the scientific knowledge thereby gained to the greatest possible use. We do not wish to be left behind. If we do not obtain our quota of scientific information now, we may very shortly be faced with a fait accompli. Other nations will forestall us and they will say that any patents which have been adopted by them have been so improved upon as to justify protection in their favour, with the result that if we wish to employ those patents we shall only be able to do so oh the payment of considerable royalties. I repeat, no time is more propitious than the present, and the need for immediate action is absolutely imperative. We read in the Press that some of the Allies “have helped themselves to engineering plants in Germany.” I do not suggest that we should “help ourselves” without giving a quid pro quo, but our claims must be borne in mind. Why should we not be able to take over plants to enable us to start our oil industry at once? The Axis powers evolved scientific processes which were mainly employed in forging the instruments of destruction. Now we have an opportunity of utilising the knowledge so gained not for the purposes of war, but only in the pursuits of peace in the furtherance of the happiness and wellbeing of mankind.

The supply of oil is by no means unlimited. Even America has said that she cannot possibly oil another war. World statesmen have all issued a warning that the time may not be far distant when the point of exhaustion of oil supplies is reached. Without attempting a dissertation on international complications, need we remind hon. members of what is taking place in Persia today? Persia looms ominously on the horizon, and it is certainly not without significance that the Persian Gulf contains rich oil fields. Oil has before now proved an inflammable product in more ways than one. If we do not wished to be forced by the dictates of self-interest to become involved in any international conflagration which may be started by this inflammable product, there is only one safeguard we can adopt; we must make ourselves independent of outside oil supplies.

Another important consideration which must weigh with us is the fact that we are not really a rich agricultural country which can compare with the great agricultural countries of the world like the U.S.A., Canada, Argentine, New Zealand and others. In many parts of our country the balance of nature is very delicately poised. I hope we shall never return to the ruinous and visionless policy of exploiting the meagre agricultural wealth of our country by exporting our protective foodstuffs for the enrichment of overseas countries and the impoverishment of our own. Only through the consumption of all agricultural products in this country can we possibly hope to maintain a complete organic cycle. We must therefore not look to agricultural exports to increase our national income. No, we must look to the expansion of our internal market through industry, and we must also look to industry to increase our national income, and I submit that we cannot do better than to follow the lead I have given this afternoon.

There is another very cogent factor. Coal mining as at present carried on in this country, is decidedly wasteful. The method of mining is dictated by the economic demands of the market. I said earlier that we have only 5 per cent. of high-grade coal. We dare not allow coal to be used for any other purpose than that for which, by reason of its special qualities, it is peculiarly suitable. Let me here refer to a statement made by Dr. H. J. van der Bijl, as Chairman of Iscor at the company’s general meeting in November, 1945—

And Dr. Hall, in addressing the annaul meeting of the Chemical, Metallurgical and Mining Association in 1938, also stressed this need. He said—

This statement of the position is applicable to all the products usually classified as minerals, but much more aptly to that restricted class generally termed fuels.

The reason for this peculiar position of fuels in the family of minerals is three fold.

Firstly, power, the mainspring of industrial activity, is derived almost exclusively from the combustion of fuels. Nor has any alternative scheme yet been discovered which could take the place of power production from fuels.

Hence, not only can a fuel deposit be worked once and once only in the history of the world, but also the fuel from that deposit may be used once and once only in the history of the world.

If we do not wish to besmirch our trusteeship and if we do not wish to hang our heads in shame as we are bound to admit our guilt to an indictment which posterity can prefer against us for prodigality, we must take steps to rationalise our coal industry. Mineral erosion is just as pernicious as soil erosion. We must see to it that coal possessing special qualities are only used for the special purposes for which they are peculiarly suited. Our high-grade coal is very limited. In the past we have allowed this high-grade coal to be used indiscriminately. We know that, especially during the war, we were forced by the exigencies of the emergency to export large quantities of coking coal, but we admit that we possibly had no option but to do this. Fortunately, however, the war is over and we must now practise rigid economy in relation to our high-grade coal, under which our coking coal shall only be allowed to be used for specific purposes. Incidentally we may state that today we are the largest coal exporting country in the world, as we are doing about half a million tons per annum by way of export. Our present methods of coal mining are decidedly wasteful. To illustrate this let me quote the case of two small coalfields, one 430 acres and the other 840 acres in extent. In the smaller field there were four seams. The mining company concerned found it profitable to work only the lower second seam. After total extraction, including the drawing of pillars, the roof collapsed, with the result that it was then economically unprofitable ever to work the two upper seams. Even the lowest seam would now appear unprofitable to mine. So that in this area alone 4½ million tons of coal have been lost to posterity. In the other field of 840 acres there is an 18 ft seam of coal, but only the bottom six feet were mined because of the demand for only high-grade coal. The top portion of the seam was separated from the lower seam by a band of sand-stone, but was left unmined. In this upper seam approximately 14,000,000 tons of coal were left as being unsaleable and uneconomic. It will in future not be economically possible to work this upper seam with the result that here alone 14 million tons of coal are lost. The total tonnage of coal lost in these two areas alone, therefore, amounts to the considerable figure of 18½ million tons. This national loss is due entirely to the wasteful methods of coal mining as practised today. One cannot blame the private owners too severely, for private enterprise must concern itself with the profit factor which demands that mining be carried out in such a way as to yield an adequate return. Coal bearing ground is as yet not very expensive, and thousands of morgen can still be purchased at anything from £5 to £10 per morgen. It is computed that a morgen of coal-bearing ground with a seam of coal of a width of 5 ft. 6 in has approximately 16,000 tons of extractable coal, which means that the average colliery possessing rights over a few hundred morgen has a life expectancy of anything from 50 years upwards. It is therefore understandable that the ordinary private concern is mainly interested in what takes place within the life expectancy of its particular property. The result is selective mining which is calculated to yield the highest profit. Mining methods are therefore regulated by the economic dictates of the market. At present the demand is almost exclusively for high-grade coal which is thus the only coal that is produced. For low-grade coal there is practically no demand. From the consumer’s point of view no serious blame can attach to him. If he has to pay railage from Witbank to Cape Town one cannot very well expect him to pay the same transportation charges for a ton of coal which only has a calorific value of 9 lbs. when the same railage will ensure the delivery for a ton of coal having a calorific value of 13 lbs. or 14 lbs. The only hope of rectifying this undesirable state of affairs is to create a market for low-grade coal, and the only possible solution is to establish an oil industry which is capable of utilising the lowest grade of coal. Last year our coal output touched 26 million tons, and it is estimated that on a conservative basis there must have been something like two million tons of coal dumped. The coal dumps dotted all over the coalfields furnish incontrovertible testimony of our wasteful methods of mining. Out of the coal which is lost through spontaneous combustion on the coal dumps alone we could produce at least anything from 90 to 100 million gallons of petrol. The mining companies would be glad to sell the coal which they are forced to dump at a nominal amount of 6d. or 1s. a ton, or they might even be prepared to give it away so as to save the handling involved in dumping it. Out of a product which is today thus being allowed to be entirely wasted, we could supply at least half the petrol needs of the country. Do we require stronger proof in support of our plea? I mentioned earlier that in the process of conversion tremendous heat is generated and this heat can be usefully employed in the generation of electricity. If we run our conversion plants next to our power stations the heat generated could be used to produce steam, which in turn will drive our electric generators. By this method the fuel bill of the power station could be saved; we would have cheap electricity which could be supplied in the areas concerned. The Karoo is said to have large deposits of low-grade coal. If we have a conversion plant in the Karoo on the main line from here to Johannesburg powerful electric generators can be installed and the current produced could be utilised for the electrification of the entire railway line from the coast to Johannesburg.

Viewed therefore, from every angle, there is in fact no answer to the plea I made this afternoon for the establishment of an indigenous oil industry.

To summarise. The need is urgent. That requires no further evidence. We have adequate raw material. The methods advocated have been proved to be scientifically sound and economically practical. We ask for no surrender of revenue by the State. We shall be able to increase our national wealth and save our soil. There will be tremendous industrial expansion, we shall lower the cost of living, we shall make ourselves independent of external oil supplies. The Minister is a comparatively young man. Here he has an opportunity to make a name for himself and not only for himself but also for South Africa. But we want action and immediate action at that. In our relatively young country we still have the opportunity of developing big schemes with a minimum amount of waste by proper co-ordination of cognate interests. In the development of petrol production from coal there lies the possibility of welding the production of iron and steel, the generation of electricity, the production of petrol, and the enormous future chemical industry, into one solid economic structure which can stand before the whole world as an example of co-operative technical effort resulting in the most economical utilisation of the country’s raw material and the total elimination of waste. I conclude: There is but one answer, and that is that we translate our thoughts into action and that we move forward immediately. [Cheers]

I am very pleased to have the opportunity of seconding the motion introduced by the hon. member for Ermelo (Mr. Jackson). He has dealt so exhaustively with the particular side of the motion he moved that I would beg the House to allow me to confine myself to the industrial side rather than to that covered specially in the motion moved by the hon. member. May I, however, say at the outset that technically I do not profess to know anything of the Fischer Tropps process beyond what we have read and the information that is available to us. I do not know anything more than what the hon. member has put before us.

I would like to support the hon. member in his remarks about the Minister. The House must admit that since he assumed the portfolio of Industries he has definitely put certain things on the industrial map of South Africa; that must always stand to his credit. Speaking, as one more or less intimately connected with industry, I maintain that those two Bills be introduced and which became the law of the land, the Standards Bill and the Research Council Bill, that those two Acts are absolutely essential in our industrial structure, and the Minister, as has been rightly pointed out, would add further honour to his credit if he would now initiate an investigation into the proposal made by the hon. member this afternoon in order that we might satisfy ourselves that this industry can be established. The raw material is available, there is the locality, the power, the water and the labour supply. We often plead for the decentralisation of industries and we find coal deposits situated in the remoter parts of our country, and by establishing the type of industry mentioned by the hon. member we could spread out industries instead of persisting in centralising them in a few areas.

I have a copy of the Bill introduced into the Senate of the United States and I should like to read what was intended by that. It runs—

In order to carry out the purpose of this Act, the Secretary of the Interior is authorised—

1. (a) To conduct laboratory research and development work necessary to determine the best demonstration plant designs and conditions of operation;
2. (b) to acquire, by purchase, lease for a term of years or less, donation, or otherwise, land and any interest in land, including easements and leasehold interests; options on real or personal property; plants and their facilities; secret processes, technical data, inventions, patent applications, patents, irrevocable non-exclusive licences, and other rights and licences under patents granted by this or any other nation…

This Bill was actually introduced in the American Senate, and they have now taken up this process, which is a German invention. After further research work they have reached the stage where they can produce fuel from coal more economically than the Germans could before the war. From that stage we could take it up and develop it further. Although we have our research work, our individual industries are too small to carry out research work on a large and elaborate scale such as is necessary. Whether an industry is large or small, the research work is as necessary in a small industry as in a large one if you are to make those technical discoveries that you aim at. Because of the smallness of our industries our companies will be limited in their scope compared with what is possible in research work in America or the United Kingdom. So I have come to the conclusion we should build up on the scientific discoveries of America and the United Kingdom or other larger and older countries. We are convinced that in order to make rapid strides in our industrial development we must link up with these countries and profit by the technical advice that is available so that we may start on the right foot and do it in a most scientific and economic way. We should arrange to take advice from old-established research works and to link up with them. I believe that if a concern has the right process there is no reason why it could not produce the article here in South Africa at the same cost as is done in America. That being so, it means it is an industry which cannot be a burden to this country. It can only be of immense benefit and a great asset.

What section have you made arrangements for?

Steel. We, the Union Steel Corporation at Vereeniging, are now going to engage in the manufacture of tool steel and special steels. As you can imagine, research work is going on daily, and instead of us worrying about experimental work, we get research information and advice from England, and we start straight away on the manufacture of good quality tool steel and special steels. That seems to be the most progressive and economic way of developing. When one talks about industry in South Africa there is generally a presumption that protection is required in order to exist at all. That may or may not be so. But I divide industry into different categories. No. 1 is the key industry. If it cost the country money to establish a key industry without which a nation cannot exist in time of a crisis when we are cut off from the outside world—I would say steel is one and I think fuel is another—even if we do pay a price for the establishment of the fuel industry I maintain it is justified. Incidentally it appears from the information before the House there would be no need for any protection in respect of this fuel industry except that originally the Government imposed customs duties which have to be considered. The Government originally had a tax on imported tyres as it considered them a luxury article. While it was in existence for purely revenue purposes no local industry was established. Now one has been established the Government cannot drop that source of revenue because the withdrawal of the customs dues would ruin the local industry. Similarly in the case of imported petrol. The imports amount to something over 300,000,000 gallons a year. The Government have not only levied a heavy duty on petrol but there is heavy railway freight. Assume it amounts to four or five million pounds. I quite agree that this concern could reimburse the Government by way of an excise duty so that the Government would get an amount equivalent to that now derived from customs. On that score, therefore, they would lose nothing. It is now just a question of whether the Government will continue to levy that customs duty on imported fuel. It will cost the consumer no more, but in order to give security to an industry like this, which will cost about £8,000,000 to establish, the Government must pledge itself either by special licence as in the case of the V.F.P. or by way of contract that in the event of the concern being established they will not levy customs duty at a lower rate than exists today. That undertaking must be given definitely. Then it would cost the country no more, the revenue would be the same, and the railways also would have the same revenue, only in an indirect way. There would be nothing but direct benefits to the country. I have before me some figures to indicate how industrial development has one automatic result. It increases the affluence of our people, and to those who are concerned with our imports from Great Britain let me assure them that a study of statistics shows that our increased imports have corresponded with increased industrial expansion. It is the increased affluence of the citizens and their augmented purchasing power that enables them to buy additional commodities. The fact is that there has been an increase of imports every year since the protective policy was introduced and industries were established. There is sometimes an inclination to think that the development of secondary industry in South Africa automatically creates an additional burden on the mining industry. Here are some figures which give an indication of the value of secondary industries ever since we thought of the protection of industries. In manufacturing industry, the gross output, that is, value added to raw material, was £80 millions in 1921. In 1939 it was £200 millions gross output. That is after we introduced protection. I do not think that with the exception of a few industries we can complain about the measure of protection in South Africa. The cost of raw materials used by manufacturing industry in 1921 was £40 millions, and in 1939 it was £100 millions. That is an indication of the value to the country of the industrial progress in South Africa. In regard to wages paid in the manufacturing industry, that item was a little more than £12,000,000 in 1921 and in 1929 it was over £36,000,000. The cost of stores to the mining industry was between £30 and £35 millions in 1921 and in 1939 it was £30 millions, that in spite of the protective policy and in spite of the development of secondary industry.

They have not used as much.

Here we have another figure. The imports into South Africa in 1921 were £60 million, and in 1939 the figure was over £90 million, which shows how progressively imports increase with the increase of industries. Under the heading “Industrial Progress in South Africa—European Employment” we see that in 1921 the number of Europeans in employment was 60,000 and in 1939 it had risen to 160,000. The figures for non-Europeans are as follows: In 1921 just over 100,000, and in 1939 over 200,000. These figures surely are proof that the protection of industries is only in the interests of the country, and no one can gainsay it. Take the steel industry. I have the figures here. Some hon. members seem to have a slight misconception of the protection of steel industry, and think it is heavily protected. That is not so; it has no tariff protection. It only enjoys a protection against dumping. According to the figures I have here, the steel industry employed 12,700 odd Europeans in 1932, and 20,000 odd non-Europeans. In 1942 46,000 Europeans were employed, and 77,542 natives. These figures are very important. Other figures show the cost of materials used and total wages and salaries paid. The latter amounted in 1932 to £4 million, and in 1941-’42 £11 million was paid in wages. The cost of materials used in this country was £2 million in 1932 and £5 million in 1941—that refers to imported material. Now, we find that in 1941-’42 the cost of local material used —that is material produced in this country, was £7 million, which together with the amount of imported material used amounts to £14 million. I think these figures make the position clear.

There are a few points in connection with the development of industry which I would like to bring to the attention of the Minister. We have the right Minister. He is a young man with progressive ideas. He has proved himself already, and I would like to commend to him the immediate investigation of the establishment of industries of this kind. Here, particularly, we want to emphasise the fact that it is not an industry that requires any protection. It is an undertaking that will not take away the income from the customs duty. We have to decide what our future economic development is going to be. We must start thinking now of an alternative economic development to the mining industry. We cannot forever rely on the mining industry. To-day it can almost be described as the backbone of the country, and there are other industries dependent on the mines, such as agriculture and industry. We cannot rely on something which will gradually disappear, and it seems to me that a careful investigation should be made into the establishment of industries, especially key industries, that can gradually take the place of the mining industry. We must adjust our economic development so that we will have industries which will progressively take the place of the mining industry. I do not know whether hon. members have read the address given to the Technical Societies by Mr. Kenthack. He is an authority on technical and irrigation matters, and it is surprising to read in his book how small our water supply is, and how small the population is that this country can carry owing to its small rainfall. The rainfall of South Africa and South-West Africa per year cannot fill the Hoover Dam in America once a year, and our agricultural and industrial development depend on the water supply. We have 500,000 square miles of country, and the annual rainfall for one-third of it averages 20 inches and over; another third has 10 to 20 inches, and the other third has under 10 inches. We have a very low carrying capacity in an enormous stretch of country. What is the alternative? The agricultural industry existing in the country cannot carry the population of to-day, still less the population of the future. The mining industry cannot carry it to-day, and as it is a disappearing asset it will certainly not be able to carry our people in the future. We have other resources, such as coal, iron, base minerals, such as chrome, magnesium and asbestos. Here I wish to associate myself with the views of the hon. member for Ermelo (Mr. Jackson) when he said that when we have certain assets, such as those I have mentioned, then we must avoid exhausting our supply by export. Coal and coke I particularly want to refer to. I believe we have had several investigations made, and invaluable advice has been given. We have been told that we must not export our coking coal because our deposits are very limited, and therefore I hope that in the course of these investigations the Minister will be good enough to take steps to prevent the export of our coking coal. Another point I want to emphasise is that an industry must have some sense of security, and know on what basis our labour structure is to be founded. Are we going to follow the advice of some hon. members of the Labour Party who say equal pay for equal work, or not? That is something which industry must definitely know, because the wrong policy might give rise to industrial upheavals. It will be seen, therefore, that a definite labour policy which gives security to industry is very necessary. Then we have the question of untrained people. In order to train them it is necessary to link up with the older countries, and send our young engineers overseas for training, so that they can come back as trained, skilled and technical men. For the small market we have here, we have to build only those industries suitable for our market. We know that we import over 300 million gallons of petrol a year, and the industry we propose can be established in units, and each unit should be an economic one, which could be so distributed to give economic relief to the areas which require it.

There is another point which I cannot emphasise enough, viz., that here you have an industry not only for the production of fuel and oil but a chemical works for the production of an enormous number of byproducts that result from its production. There is no end to them. The establishment of a chemical industry in this country will not only have an economic value, but will do much in the way of improvement in the field of our technical knowledge in this country. These chemical industries are of tremendous importance in regard to our technical knowledge, and in that field more should be done.

I would like to refer to another matter on which I feel very strongly. My hon. friend would rather have the industry run by the Government than nothing at all. But I think that anything run by a political body is useless. You cannot get efficiency, and find that the employees think that because they belong to this or that or the other party in power, their employers will not discharge them. That does not make for efficiency. It is a wrong principle. I do not know of a single Government industry, including the Railways, that could not be run better by private enterprise, and I say that because I know that you cannot have efficiency under the conditions I mentioned. If a man cannot do his work properly, the employers have the right to discharge him immediately—I am talking, of course, about fair discharges, without any ulterior motive behind them. I realise that there are certain things that private enterprise could not undertake, such as the Railways at the present time. It has such a tremendous monopoly that only the State can take charge of it. So I admit that there are certain things which must be run by the State, and I feel that if the State did take charge of a particular industry, it should do so by way of a public utility company, or by a corporation of some kind, free of political interference. For all their boasts of socialising and nationalising everything, the Labour Party Government in the United Kingdom have taken over the coal mines in the form of a public corporation, not with the Government running it, and they are going to pay directors and employ people to do the work independent of politics. But my point is, that there is nothing that private enterprise cannot do. I object most strongly to the head of a State Department being paid £1,800. That is a sum of money you pay a senior engineer in a successful industry. That is not a salary to pay a man in a responsible position. If you have a corporation that is not tied down to the Auditor-General or any Government concern, you can have the best brains in the world, and pay salaries accordingly. That is, in short, the reason I am opposed to the Government running a concern instead of private enterprise. If the Government would give the undertaking I mentioned previously about retaining the present import duty on petrol, private enterprise would provide the money. Private enterprise has done excellent work, and what better proof of this have we than the outstanding success of the V.F.B.

*Then there is another very important aspect, and I am sorry that some of our hon. friends of the Labour Party are not here. I would like to see in industry an increase in the productivity of our people in South Africa. I would like to quote a few figures in regard to the net output per employee per year in various countries. In Canada the figure is £445, in New Zealand £352, in Australia £339, and in South Africa only £242. In this regard I should like to say this: that if we do not increase the productivity of our people per head, then we cannot compete with other countries. We should develop a pride in our work, and we should be able to say to the world that we in South Africa per head stand at the top of the list, and not at the bottom. We can increase our productivity and lower the cost of production, and be better able to compete with the outside world.

With these few words I would like to conclude, and say to the Minister that we—and when I say we, I do not only refer to this side of the House, but all members of the House and the country as a whole—would welcome an investigation into this matter, and if at all economically possible, to see it established as soon as possible.

In an hour’s time, as has been the case during the last few weeks, the House will be divided on a critical struggle over questions of principle, so these few hours spent on a different subject affords us an opportunity to join forces in the House and to concentrate on other subjects of great national importance. I do not wish for a moment to compare the two matters, but I do feel that having a subject before us of such great importance, and on which the House cannot be divided, that we should today make an effort, make some headway and possibly generate a force that will contribute to the strengthening of the economic power of South Africa. I have great pleasure, personally, and I believe also on behalf of everyone on this side of the House, in supporting the motion. I think the hon. member for Ermelo (Mr. Jackson) deserves credit for having prepared his case so thoroughly, and for having given us so comprehensive an exposition of the matter that neither the hon. member for Vereeniging (Lt.-Col. Rood) nor myself feel that we are in a position really to amplify his remarks to any extent. All the more credit to him for having put the position so fully before the House.

I should like to preface my few observations with this premise, that we must approach this problem, that is to say, the motion with all it imports, from various angles, because the importance of the matter is not to be found only in the hypothesis that we must manufacture oil from coal; summarised, it may probably be interpreted as an appreciation of the importance of that, but nevertheless I do not think we can do justice to the question unless we regard in a detached way the various aspects of our economic life that are thereby involved. The attention of the world has for several years been directed to the manufacture of oil, and I think it stands to the credit of the Union Government that its attention has been devoted to this subject for quite a number of years now. I know there was one engineer who at a very early stage drew the attention of the Government to it. But the State, or a department of State, presented a most important report to the relevant Minister as far back as 1927. Thus for almost twenty years the attention of the Government of the Union, together with that of the public, has been turned to the importance of this great problem, and I am grateful that this matter has never really escaped the notice of the Government. I am also grateful that I had the privilege myself to prepare a memorandtun for the Government, and I understand that today the attention of the Government is being devoted to this important matter. But I wish that the country and the public should pay specialattention to a few aspects of the motion before the House; and the first is that in this care-ridden world of ours wherein peace is assured for a time at any rate, it is the duty of all peace-loving peoples—and I do not employ that word in the ordinary sense but in the deeper sense—I say it is the duty of every peace-loving nation intent on defending its freedom in a troubled world to provide itself with the requisite fuel. I think there can be no two sides to the question in regard to how far every such nation must provide itself with the fuel which in modern times may turn the balance between victory and defeat in time of war. In connection with that matter we must give as much attention as possible to that aspect of it. When the next trouble may come we do not know—may we be preserved from it for generations—but a nation which does not place itself in the position to obtain supplies will be in a hopeless plight should it be involved in a struggle, and should a nation wish to remain neutral it will have no prospect of obtaining those supplies from another country which is involved in the war. On that account especially it is a matter of supreme importance to South Africa in these days where it is no longer a matter of conjecture or chance, but when science has proved the economic possibilities, it is the bounden duty of the State to enquire into how far this incalculable quantity of raw material cannot be converted into other articles on which the very existence of the nation may largely depend in the future. I should like the House in this connection to devote particular attention to the role filled today by fuels and lubricants. I should like to learn from the Minister whether it is possible by means of this process to secure the necessary by-products in addition to fuel.

All the products that can be manufactured out of crude oil.

I shall revert to that in a moment. A second aspect to which we should give attention today is that it is precisely in connection with this development, as has been rightly stated by the hon. member for Vereeniging (Lt.-Col. Rood), that we can stabilise and promote the extension of our economic life, and of our industrial life. If we take the position of Europe today, especially of those countries which are poor in coal resources in the first place, and in the second place in respect of the fabrication of coal for various necessities, then I think it affords a solemn warning to us not to remain indifferent to the incalculable quantities of raw materials lying idle or to be left to develop as fate may decide, or still worse to waste as South Africa today is allowing her coal resources to be wasted. Seeing we have these huge quantities of coal of various standards, we must stress that here we have new raw material, local raw material which can be exploited by this country’s mind and muscle, thereby invigorating the economic vitality of our people. Especially concerned as we are at present over social security, this is a raw material that may contribute appreciably, not only to primary exploitation, but to employment, thereby rendering a considerable service towards the social security of thousands of people. Whether the hon. member for Ermelo is accurate with the figures he has mentioned is another matter, but if we take into consideration the concatenation of factors that link the product from the mine to the point of delivery, there must be considerable scope for thousands of citizens of varying degrees of ability, from the highest to the lowest.

In the past I do not think we have paid sufficient attention to our tremendous reserves of coal. As a nation we have not displayed the requisite interest. That there are considerable reserves does not admit of doubt. Whether the data furnished by the hon. member for Ermelo is absolutely accurate we do not know, because only this morning I read in the newspaper that new discoveries of coal have been made in British Bechuana-land. South Africa may have large coal resources as yet unknown and unsurveyed. But the information given us by the hon. member for Ermelo is more or less correct. It is estimated we have 225,000,000,000 tons of coal of various grades and standards available for a wide range of purposes. But the minimum quantity of bituminous coal which we know of to-day is 25,000,000,000 tons. This is the minimum amount of which we are reasonably assured. With this great reserve of bituminous coal our obvious course is to make the best use of it. I would join in what was previously stated, and what was stated too by both speakers who have taken part in this debate, that South Africa has hitherto tapped its coal resources in a most reckless way. It seems, and I say this in self-reproach as well, that South Africa with its wide spaces and its clear air has given itself over to overcropping. It is high time that we realised that the assets we have received may be utilised but not wasted. But this applies not only to agriculture, but to other activities, and particularly to our coal fields. In the past we have exported coal at uneconomic prices. It was only on a small scale but still before the war we did export coal at uneconomic prices. Probably we did that more with the idea of lowering overheads in the ordinary sense. We permitted that in respect of our best coal, steam coal, which was exported for bunker purposes. It cannot be sufficiently emphasised that not only were we engaged in abusing one of the articles that have a bearing on our very existence, but in applying it to purposes which can no longer be permitted. In this connection I should like to mention with appreciation that in the last annual report of our fuel research institute the request is again addressed to the Minister with emphasis that a commission should be appointed to put an end to the misuse of our coal resources. We have developed our coal resources on a fairly uneconomic basis. When we bear in mind one feature of Russia’s first five-year plan I feel all the more keenly that we have wasted our coal. Under the first Russian five-year plan it was laid down that they should utilise their low-grade coal in such a way that it would not be wasted. It was stipulated that there should be development of, I believe, less than 3 ft. How much have we not lost in the past by developing seams of from 6 to 22 ft. and sometimes more. When I think of that it is really a painful reproach. Drive in the evening in the direction of Witbank and the vicinity. I see mounds of coal burning there, and I gather the impression then that we are afire ourselves to destroy resources, and resources that can never be restored. In this way we are being deprived of great assets, valuable assets, which we should utilise to our advantage to see that this wealth might contribute to our independence, especially in time of war, and contribute to our economic development, so that thousands of citizens could be given a livelihood by the exploitation of that raw material. We have this further good fortune that we can mine the coal at relatively low cost. Our coal can be delivered at the pithead at from 5s. to 6s. a ton, while our retail price is £1 4s. 6d. to £1 5s. a ton. According to the most recent information, the cost of coal in England to-day is, I believe, 37s. per ton at the pit head, which compares with our retail price of £1 4s. 6d. per ton. In Canada the retail price of anthracite is £3 3s. per ton and of bituminous coal £2 2s. per ton, while in England the price of bituminous coal in the trade is £2 7s. per ton. We have tremendous resources but much of it is being lost. Here perhaps I may mention the name of one who is still with us, Mr. F. Meyer, who as far back as 1927 invited the attention of South Africa to the great loss of coal through sheer waste. I will not go into the question of the quantity that is lost every year. But the time has arrived when we should turn to the best account these great reserves, especially in the direction indicated in the motion we are discussing.

For many years now oil has been made from coal. There is the high temperature carbonisation process. That is not very productive. Then there is the low temperature carbonisation which yields even less in raw material. Then there is the hydrogenation process which has been developed on a large scale only in England, and finally, and this is the most important process which should receive our attention, there is the Fischer-Tropsch process, the synthetic process. Our thoughts run more towards this process because it is apparently the cheapest. Probably it is only these two processes that are known to have been tested on a large scale, namely the hydrogenation process and the Fischer-Tropsch process. In regard to the hydrogenation process I have not much information at my disposal beyond that contained in a memorandum prepared in England in 1938-’39. A large plant was installed at Billingham in England. In this memorandum it is stated that the price of petrol obtained by hydrogenation still works out at a little more than 12d. a gallon, and this was regarded as an impossible figure. Consequently, despite the heavy capital that was sunk at Billingham, about £6,000,000, it was not developed any further. It was found that it would cost too much, that the costs of production would be too high, and that the State would lose too much revenue by it. So the process we desire to have investigated, or rather that we should like to recommend, is the Fischer-Tropsch process, and perhaps the hon. member for Ermelo, and particularly the Minister, has information available in regard to costs which I have not at my disposal today. But I have some information in regard to maximum costs, and they boil down to this, that under the Fischer-Tropsch process the cost of production will run to about 8d. a gallon, but I want to add to that, that this data is from American sources and it is calculated on a basis of 10s. a ton for coal in America. That is the estimate of the probable maximum production costs in America, namely, 8d. a gallon. I will accept that the hon. member for Ermelo is very near the mark when he says that the local cost of production will be between 6d. and 7d. It is clear that on that basis we have to deal with an economic proposition. As has already been stated by the hon. member, petrol is landed in Durban today at 6d. a gallon. To that must be added the Government customs dues which since yesterday have been 8d. a gallon, so that a gallon of petrol costs 14d. landed. Should we rail the petrol to Boksburg an additional 7¾d. per gallon must be added for railway charges, which brings the price delivered at Boksburg to 21¾d. That is for the Transvaal. If we assume that all industry of this sort will be established in a coal area or in coal areas—I do not wish to compromise myself by mentioning one town or the other, but I think such an industry must be established in a coal-bearing area, and I do not mind if it should go to Ermelo—then the position is that if we can produce the petrol locally at 6d. or 7d. a gallon, and if we eliminate the freight from Durban, petrol can be manufactured in the Transvaal—and the State can impose a high excise duty on it, at least the same impost as there is today—and it will still be cheaper than the imported petrol. On this data it is not open to doubt that petrol can be manufactured on an economic basis by this process. There only remains, then, finding the necessary capital, the arrangement in regard to thé distribution and the control of production. I will be brief in regard to these three aspects, and I should only like to say this, that the finding of capital will not be an insurmountable obstacle, especially when we are dealing with such a vital matter. Private capital will probably take up a cautious attitude until such time as the Government elucidates its future policy in this regard. That is only right; you cannot expect the people’s savings and their capital to be hazarded in a process while no certainty exists in regard to the policy of the Government. But bearing in mind the services that can be rendered by this capital investment, the State may be expected to enunciate and announce its policy and the State itself may also contribute its share towards making the capital available. I will not go so far as the hon. member for Vereeniging and say that the capital can be raised without any of it being made available by the Government. I think we must accept that in connection with a key industry of this sort the State must interest itself. The interests of the State are definitely involved in more than one respect. Without going into details I would prefer the State to associate itself with the production of fuel and its byproducts by participating in the provision of capital.

In regard to production I have the greatest respect for the ability of our service, but at the same time I have learned over a long period of years that if you wish to make a success of an enterprise in the economic sense you must keep public attention focused on it, and not merely let the Auditor-General turn his attention to it once a year; the public attention must be continuously focused on it.

In the second place a measure of selfinterest must be associated with the investment. I do not wish to voice any lack of faith in my fellow men, but I express it as my conviction that idealism is not enough— provided my own interests are involved I shall give the matter my best possible attention. I would not say that is immoral, but if you want to make a success of anything you cannot ignore material interests. Consequently I believe that it would be best if this, enterprise eventuates that the State should have an interest in the capital. What the capacity should be I do not know. At Billingham the potential was calculated at that time at 150,000 tons a year. A considerable number of years ago it was calculated that for South Africa the production would probably be 42,000,000 gallons a year, with a capital expenditure of £9,000,000. I think we may assume that in normal times it would be less. As I stated, the capital that was invested in Billingham at that time was £6,000,000.

The control that will have to be exercised will, in my opinion, have to be joint control. The State must have an interest in it. Whether we should establish it on a basis of the Electricity Supply Commission I do not want to say at the moment. This is a matter of detail. We may have to establish it in the form of a utility company. I have not had enough experience of that, but I cannot associate myself with the hon. member for Vereeniging who held up Iscor as a model. I do not think that is quite the ideal that I have in mind. I should prefer, if I were responsible, to build on a different foundation.

We ask for the sympathetic consideration of the Minister and of the Government, and I have no doubt that in view of world conditions he will accord it serious consideration, and be in a position to take the necessary steps that will lead to the establishment of this vitally important industry. As it presents itself to us there is no insurmountable difficulty, and all that is required is the creation of a real will to give effect to this matter. I should like here to quote briefly something I found this morning in the report of the Jowitt Committee of April of last year. This is what the report says in reference to the Fischer-Tropsch process—

This is in contrast to the product of the Billingham process—

On behalf of this side of the House I have pleasure in supporting the motion, and so strong a case having been presented here I believe we may hope that the Government will give effect to the wish of this House as a whole.

I want to associate myself with the motion sponsored this afternoon by the hon. member for Ermelo (Mr. Jackson), and I want to do so from the point of view of the consumer. I am particularly interested for the purpose of discussing a fuel which is produced in considerable quantities in Durban by the distillation of molasses at the Natal sugar mills. That fuel has been produced since 1917; but since 1930 the company, the Natal Cane Products, has manufactured a first-grade motor fuel standardised on the basis of 50 per cent. alcohol and 50 per cent. first-grade petrol. This usage of petrol in the manufacture of what is known as Union Spirit links up in my mind the production of fuel from sugar with fuel from the oils referred to in the motion of the hon. member for Ermelo. They are both complementary. Both are distinctively South African. Both are indisputable proof that if South African production is properly fostered and—this must be emphasised—if distribution is adequately rationalised, I believe South Africa can become practically independent of world resources in regard to a high first-grade motor spirit. The production of petrol in South Africa plus the production of alcohol in Natal can provide the Union with an ideal fuel. I say that because we must keep in mind two very important factors. The first is the tendency on the part of manufacturers of motor engines towards higher compression, needing a fuel of a much higher octane value; that value is undoubtedly found in the Natal product. The second factor is that the petrol resources of the world are limited as against rapidly increasing demand all over the world. I believe we can meet the South African demand provided we get the right production and distribution organisation from our own resources. My chief reason, however, for referring to the need of the development of our own fuel resources is to draw attention to a development which is absolutely necessary if the Union is to create the right conditions in the oil industry and achieve independence in its fuel supplies. I refer to the urgency of creating in South Africa a national system of distribution for motor fuel and oils. Unless a rationalised distribution system is introduced the Union market will remain as now closed to a great extent to South African production. That lack of an open market for our own products in our own country is an obstacle of great magnitude which only a new system of distribution can overcome. Such a system is a sine qua non for the attainment of the object the hon. member for Ermelo had in view when he introduced his motion. What is the present marketing system for motor fuels in the Union? Our market is practically dominated by large overseas cartels; and the chief petrol importers in South Africa are marketing subsidiaries of these big overseas organisations. It is not now appropriate to go into the ramifications, and the possible dangers to South Africa, of these cartels; but I do wish to stress the position as I see it. The cartels in South Africa are a very effective determinant as to the extent of the development of our own oil resources. Secondly, they definitely clamp down the absorptive power of the market in the Union for South African fuel products. It is a very dangerous position. That was proved during the war when we found how helplessly dependent we were on fuel imports. Our transport system, our defence system, in fact our war potential, was seriously threatened. There seems to me to be two lines of aoproach to this problem of distribution. First we can set up a State distributive organisation, a State monopoly, to import, to distribute, and to plan South African output, and generally govern South African oil and fuel development. Secondly—and here I find myself in line with the hon. member for Vereeniging (Lt.-Col. Rood)—we could set up a public utility corporation, that is to say, one single distributive wholesale organisation for the Union, say on the lines of the Electricity Supply Commission. Such a company will undoubtedly lower overhead costs. It will eliminate a great deal of the waste always associated with competition; and it will bring down retail prices. It would also create opportunities for securer and better employment. For these reasons I would favour the setting up of a public utility company. In particular, such a company would do what the present organisation cannot possibly do, that is to say it would foster fuel production from our own resources; it would foster production with our own manpower. The present system undoubtedly enforces a policy of restriction on South African development. The position calls for investigation into the distribution as well as into the production of South African motor fuels and oils. I am sure the hon. member for Ermelo will agree with that. The House and the country will be grateful to him for bringing forward this proposal. I am happy to associate myself with it.

I think the House must feel indebted to the hon. member for Ermelo (Mr. Jackson) not only for introducing the motion but for the way he introduced it and the great deal of work he has done to place all the facts before us. I think it appears quite clearly from the hon. member’s remarks that two things are necessary in order to establish this industry. One is enterprise and the second is encouragement from the Government. If there is that encouragement there can be no doubt that private enterprise would be perfectly willing to find all the money necessary to establish this industry and establish it on a great scale. But the industry cannot be established without a considerable amount of additional work being done in order to find out the correct type of process which is suitable to the coals we have in South Africa. There are in the Waterberg district, for example, vast quantities of low-grade coal, coal which is not suitable for steam-raising, but it may be very suitable for the production of petrol and oil; and it will be necessary for any organisation which seeks to produce petrol from coal to investigate the circumstances under which that type of coal can be best treated. The hon. member has mentioned the Fischer-Tropsch process. It may be that is suitable. It may be the Bergius process would be more suitable. But they have to be investigated. In 1937 a commission was appointed in England which went into the whole question of the production of oil from coal and in the report it states at page 443 (I.37-’38; Vol. XII, para. 9)—

In order to ascertain what is the most suitable process in this country it will be necessary for the applicants to have protection, or for some system under which the Government will protect the enterprise after it has been established. It will have to spend a very considerable amount of money to produce the petrol on a factory scale. It will be necessary if the Government wishes that to be done for the Government to give them some assurance at an early stage that they will see to it that they will be adequately protected on the establishment of the industry. One must realise, as has already been pointed out, that the financial interests which control oil in this country, are among the most powerful in the world, and unless the Government itself offers security for the future of the industry I do not think anybody will be prepared to risk money in establishing it. The hon. member has pointed out its establishment will cost many millions of pounds. The British Hydrocarbons Act was passed some time before this commission to encourage the production of oil from coal and it gave protection to oil produced from coal up to 9d. a gallon, and during the war at Billingham in England a very considerable plant was established to produce oil from coal. The plant cost something like £17,000,000, and produced 150,000 tons of petrol a year during the period it was most needed. The establishment of a plant on the same basis in this country would cost anything from £5,000,000 to £8,000,000 on the basis of producing 30,000 tons a year. The point I want to make is when once the earlier stage has been established, when the utility of our coal for processing into petrol is established, it will be necessary to embark on this great scale of expenditure. I want to support up to a point the remarks made by the hon. member for Vereeniging when he says he wishes this to be done by private enterprise. But I do not say that the reason we want private enterprise is as he suggests, to put it crudely, to enable the workmen to be sacked without recourse. I think that is absolutely the wrong basis, because it is not the political complexion of the workman which secures his employment, but it is his trade union which is at least as powerful as any political party to which he belongs. But there is a much more valid reason why it should be private enterprise, and that is this. If you have it done by private enterprise and you give an adequate return to the investor, you will get the best and ablest men in the country interested in the enterprise and interested in making it as efficient as possible. Hon. members have heard mention of the V.F.P. system. That is a very simple system, and it has been developed entirely in South Africa; it is an indigenous system. The V.F.P. company produces power and supplies most of the mines on the Witwatersrand, and the shareholders are guaranteed a minimum return on their capital. If any amount over and above that return is earned—and it can only be earned by running the organisation on an efficient and sound basis—that is divided, 30 per cent. to the shareholders and the balance of 70 per cent. goes to the consumers in reducing the price of electricity. So there you have at once a system which has the effect of giving a good return to the investor and stimulating the effect of the management to produce their product at the lowest cost in a most efficient manner, and they actually sell their electricity at a not greater rate than Escom produce their electricity. It’ shows you whatever may be said in favour of a public utility corporation, it is very doubtful whether a public utility corporation which has no motive for improving the efficiency of its production, can really compare with private enterprise. It is for the Minister and the Government to go into the question of what system should be adopted. But if they want this enterprise to be launched in South Africa it must be protected, and unless it is protected it can never be established here on an efficient basis. As to whether petrol can be produced on a payable basis I do not think there is any doubt about that. In the Billingham factory in England petrol is produced at approximately 1s. a gallon and, as was pointed out by the hon. member for Ermelo, the cost of coal there is very much greater because they use not only more costly coal but a better quality of coal. If in this country we can use enormous deposits of coal in the Waterberg district and other areas which are of too low a grade to be worked ordinarily, I think we will be establishing an industry which will compare favourably with the gold mining industry in the future.

Mr. Chairman, the mover of the resolution evidently is concerned, in the matter of South Africa’s economy, that the Government should do something to enable that economy to be developed. He has referred particularly to the matter of the Government taking steps to establish an indigenous petrol industry. It seems to me that if the Government were prepared to listen to the hon. member, who, after all, is a member of the Government party, it should not have been necessary for him to have moved this motion. The idea should have emanated in a statement by the Minister concerned, who could have given his views on the proposal, and it seems to me that although members here expressed their indebtedness to the hon. member for moving this motion—and I do not wish to take away any credit that is due to him, we could have hoped that the Government would have saved the hon. member from going to the trouble as a layman—because he certainly is a layman; none of us are experts on the matter under discussion—of bringing this matter to the attention of the House, and could have seen to it that the Minister gave a considered statement on the matter straight from the horse’s mouth, instead of allowing a private member to move a motion of this kind. Now, the balanced economy that the hon. member is evidently reaching out for is something that at the moment does not exist. I think we are all agreed that that is so, and when we hear expressions of opinion as to the desirability of setting up the kind of industry proposed here, we get references to aspects of our economy, and the hon. member for Vereeniging (Lt.-Col. Rood) particularly, made two or three references to that economy. One was when he looked at these benches and commented regretfully on the lack of attendance of Labour members, and for some reason of his own made reference to equal pay for equal work. When the hon. member for Vereeniging brings in the economic question of equal pay for equal work in connection with the setting up of an enterprise of this kind, his own position betrays a state of things sadly out of balance. I have had the privilege of being entertained by the hon. member at Vereeniging on the occasion if a visit to the industries there, and am sure that people who want equal pay for equal work would be very glad to exchange jobs with him. If it is this kind of balance he is thinking of in our economy, that a few should have much and the many only a little, then, of course, the fight is on. If it is this type of balance he wants in our economy, then if you move the point of balance far enough to the right the people on the left may be able to weigh down the people on the right, for as things are the people on the right are so heavily loaded that they can weigh down millions on the left. That is the present state of affairs, and I am anxious to make the point that if the Government can be persuaded in this instance to take an interest in the setting up of an indigenous petrol industry in which will be ensured that there are not a few people getting a tremendous amount of profit out of the proposition and the many getting very little, one thinks it will be a good thing. Something has been said about the method by which this industry should be established, and hon. members suggested a utility company. In our present arrangement one does not object to the utility company because a real limit can be set to the amount of its rake-off. The enthusiastic member who spoke last (Mr. Davis) (Pretoria City) mentioned the V.F.P. as some indication of what a utility company can do. Well, of course, the V.F.P. is not a utility company. It is a limited company in that it is limited to the payment of limited dividend. But that dividend is very ample, I can assure the House, and when the enthusiastic member mentions the further fact that of any additional dividend earned 30 per cent. goes to the company and 70 per cent. to the consumer, he simply proves the fact—a simple example will illustrate. If a baker can sell a bun priced at 1d. for ¾d. because he makes an adequate profit in selling it for ¾d., then the fact that he is prepared to split the other ¼d. between himself and the purchaser, he is doing very well. It seems to me that once it is agreed that a certain amount of profit shall be made because it is enough, then that should be the limitation that should exist, and that would be the kind of utility company that one would be prepared to accept in the present arrangement. Now, in the discussion, the point has been made by a member of the Government party that it is the Government’s duty to interfere in the functions of society, one of these functions being industry. That point is made very clearly, and it is not disputed. The drawback emerges when we talk about the means by which it shall be done. There are those of us who believe that the Government should not only interfere in the functions of society, but that its interference should be intelligent, and not merely a question of butting in and then, having butted in, being sorry about it and apologising to the people who are then left as exploiters. We want something which will, in effect, create a real balance. There is no objection to the Government engaging the best men, and paying a man a salary which will adequately reward him for his work. But it is not right that anybody receiving a big salary should be able to use a surplus above his needs to become an exploiter in the money market in order to get more money, to amplify an already adequate salary. This uncontrolled use of surplus money by the individual is the thing that gives rise to most of our troubles. People complain, when we talk about the Government interfering, that the Government in interfering is cramping private enterprise, and from time to time the case of the gold mines has been mentioned. Figures are quoted to prove this or that point. We are told that the Government has cramped the gold mines because they are taking too much in taxation.

At 4.10 p.m. the business under discussion was interrupted by Mr. Speaker in accordance with the Sessional Order adopted on 31st January, 1946, and the debate adjourned; to be resumed on 12th April.

The House proceeded to the consideration of Government business.

Mr. Chairman, I want to say a few words about the amendments proposed. We have dealt with the question of occupation in clauses 4, 5 and 6, and the provisions that have been passed are to the effect that occupation shall be subject to permit. Now, the question arises: What about licensed trades and businesses; in what position will they be? The provision which is here made in clause 7 is this, that a licence for the carrying on of a licensed trade or business by itself, apart from anything else, is not occupation, and therefore does not call for any special permit. That is the provision as it stands here, and there has been a good deal of criticism of this section, but I submit, Mr. Chairman, that there is a good deal to be said for it. We have the control system by way of a permit, to control occupation. Special machinery is instituted in this Bill for that purpose. In regard to licences there is another system of control. Licences are issued by public authority under Government auspices, and it seems to me that that is another system of control, and we must not confuse these two systems. When a licence has been issued to carry on a trade’ or business it is assumed that that is done by a public authority, and one should not say thereafter that although the licence has been granted, the trade cannot be carried on. The licensing is done under State auspices by the public authority, and it seems to me logical that when a licence to carry on a trade or business has been issued, it should not be negatived by some other department of State which can say: “You have your licence; now find the necessary premises to carry it on in.” If a licence is issued to carry on a trade or business at a certain place, that should be looked upon as a matter of control, and as not calling for any further control by way of a permit. I think that is the logical position, and I leave it there. I do not want any abuse of it. We know how these provisions are abused, and how the law is evaded, and therefore hon. members will see that in sub-section (3) the very strict provision has been introduced that the business shall be carried on solely by itself; it should not be mixed up with residence, because as soon as you do that you establish an easy opening by which, under the guise of a licence, people will reside on the premises, and that will again lead to an infringement of the clause on occupation we have just passed. I think the licensed businesses should be strictly controlled. I look upon that as essential.

That only applies where the condition is in the agreement.

That is in subsection (3). I am referring to sub-section (2). The hon. member will see that subsection (2) says that the land or premises should be used exclusively for the purpose of the business or trade, and should not be mixed up with the question of residence. So there is no exemption, and his residence will have to be licensed. His residence will be subject to a permit. Without a permit he cannot carry on his business. It may look strict, almost too strict, but when one sees the alarming number of evasions taking place, one must be strict. The main point here is this, that when a licence has been issued to carry on a trade or business at a certain place, there should be no further enquiry about the decision of the Board.

Even if it is occupied by an Indian?

It does not matter whether he is European or Indian. We have passed a clause on occupation by Europeans and Indians, and here we simply say that a licence issued by a public authority for a certain place can be exercised there, and there should be no further enquiry.

The hon. member for Cape Eastern (Mrs. Ballinger) has tried to widen this, and she has moved an amendment to enable the licence holder to buy ground. He can acquire ground for the purposes of his business or trade which has been licensed. To my mind, the amendment goes much too far, and is really an infringement of the provisions we have already passed in clauses 4 and 5. If that is done, it nullifies the whole position. I only wish the trade or business to be carried on under licence when it has been definitely allocated for a certain place, and not for a place which is going to be used for that purpose.

The argument used by the hon. member for Pietermaritzburg (District) (Col. Stallard) is this, that licences are issued irrespective of race considerations, and therefore the racial question with which we are dealing here has nothing to do with the licensing question, which is dealt with on a non-racial basis. I do not think that is so. I think the licensing authorities do go into this question pretty carefully. There is no doubt about that. In spite of decisions which have been given by our lower courts, the fact is that licences are largely dealt with on a basis which takes into account the racial question. We know that that is so, and if it is not so it is for the licensing authorities to see to it. I do not wish to overload this Bill which is already heavily overloaded with contentious matters, also with this licensing question. It seems to me that that will put me into a very dangerous position. No, keep off the ground there. The question of licensing rests with the municipal and provincial authorities, and I am not going to mix up the authority of the provinces with that of the central Government. I am dealing with a question which is within the purview of the central Government, and the provincial council and local authorities must carry out the licensing laws. It is their province, and if there is any slackness it is for them to rectify it. Although from some points of view it looks rather harsh, it is quite correct as I put it here. I leave the question of licensing alone, and deal with the question of occupation. I think that is the only logical and safe basis, and I therefore have to resist the amendments both of the hon. member for Cape Eastern and the hon. member for Pietermaritzburg (District).

There is a passage in the speech which has just been made by the Prime Minister which I think could be taken by the licensing authorities as a direct invitation to them to introduce into their decisions the question of race.

Hear, hear.

The Prime Minister has said that the public knows that as a matter of fact the licensing authorities do take into account the question of race.

I am told that that is happening all the time. That is one of the complaints made by the Indians.

That is wrong. They are not entitled to do so. I refer to a case which was recently decided in the Appellate Division, where it was held that they have no right to do so. In those circumstances, how can the Prime Minister tell this Committee that notwithstanding that position he expects, indeed he knows, and he practically invites licensing authorities to act in defiance of the law. If it is not that he expected them to do so, and realises that they are doing so, apparently portion of his reading falls away. The Prime Minister has chosen to base no small portion of his argument upon the reliance he places upon licensing authorities doing that which they have no right to do, but which, if my amendment is adopted, they would have the right to do; and yet, in the face of that, he asks that this amendment be rejected. I cannot see how these two positions adopted by the Prime Minister can possibly be reconciled, and I hope that on the very statement the Prime Minister has made the Committee will come to the conclusion that it is desirable that as regards the occupation of business premises, the question of race should be taken into consideration, and if it is to be taken into account it can only be done lawfully by adopting the amendment I have moved or some other amendment to the same effect.

I want the House to give attention to the implications of these two sub-clauses if they are accepted. As the clause appears here, it means that in any place in the Transvaal, except perhaps the proclaimed goldfields, and in a European locality in the Transvaal, whether it is a residential or business area of the town, Asiatics can lease a site or a building or land for business purposes. In other words, as far as business penetration of Asiatics among Europeans is concerned, this Bill has no limits. The position which now exists in the Transvaal, especially in the country towns, where Indians are penetrating everywhere among Europeans and are seizing whole portions of towns for business purposes is that that development will simply spread rampantly.

If they can get licences.

Yes, if they can obtain licences. The Prime Minister says now that he does not want to overload the Bill with the question of licences. Nobody is asking him to do so. All we ask is to apply the prohibition on occupation as regards residential rights to business occupation as well. We do not ask for a prohibition on residential occupation alone, but also in respect of business and trading purposes. Otherwise, this unfortunate state of affairs will continue. I think the Prime Minister ought to know that in various towns in the northern province you do not only find penetration of Indians into residential areas, but penetration of Indians into European business areas, and the Prime Minister ought to know that the population there are just as opposed to penetration by Indians into European residential areas as into European business areas. Take the centre of Pretoria. There the Indians are also already penetrating. The same applies to Johannesburg, and also six other towns in the Transvaal. There sit hon. members who represent Pretoria. They will be able to tell the House how Indians have already penetrated into the centre of Pretoria, and later you will have the position that ’ the inner town will be nothing but an Indian bazaar. Is that what the Prime Minister wants? The Prime Minister tried to draw a red herring across the track, but that will not put us off. He says that the question of licences is in the hands of the provincial authority, and if they want to issue licences, he does not want to prohibit a person who holds a licence from conducting a business. But the Prime Minister knows very well that if there is a provision in the Bill prohibiting Indians from establishing businesses in European neighbourhoods, that in that case the provincial authorities will not issue licences to such people. This is not a new principle. I want to quote a few examples. Take the native areas. There Europeans may not establish businesses without special permission. Would a provincial authority grant a European a licence to establish a shop in a native area? Naturally not, if they know that the European has not the right of occupation. Let me quote another example. In many towns in the Transvaal you have the position that as a result of regulations in connection with trading rights, etc., trade may not be carried on there. Would an authority or any board which issues licences grant a person a licence to establish a business in that area, knowing that it is prohibited? Take the national roads. As far as I know the law provides that no one can establish any business within a certain distance of a national road without obtaining permission. The Licensing Board knows this and it will naturally not grant a person a licence who has not the necessary permission to establish a business on a national road. Naturally not. Precisely the same principle applies here. If these two subarticles are cancelled, the Licensing Board will know that a licence would be worthless and useless. You are not interfering with the issue of licences, but you are prohibiting any further penetration of Indians into neighbourhoods which belong to Europeans. Whatever other advantages this Bill may have in relation to penetration by Indians, the use thereof is to a large extent rendered null and void because the Prime Minister is purposely allowing Indians also to penetrate into European neighbourhoods to establish businesses. I wonder whether the Prime Minister travels through the country with his eyes closed. He sometimes visits the platteland. There is his own constituency, Standerton. Does he like seeing the main streets comprising a row of Indian shops, and the Europeans being forced out? Under this legislation this development will simply continue and one European after the other will be forced out through buildings being let to Indians in business areas. The Prime Minister is rendering no service to the country. Hon. members on the other side who vote for these two sub-clauses are rendering no service to the country or to white South Africa by voting in favour of the two sub-clauses. I wonder whether the Prime Minister and his advisers think that the Indians cannot ride roughshod over these two sub-clauses. They can establish shops. Is there anything to prevent an Indian keeping a caretaker on the premises? In the large towns businesses have caretakers on their premises every night. Are Indians also going to be prevented from placing caretakers in buildings in which they rim their businesses? The caretaker will quasi not live there, but only be the caretaker. What then? I predict that in this way the Indians will penetrate further and will have caretakers who do not live there but in reality live there all the same, and then they are not only business sites, but in this way they also become sites where residential occupation is taking in European areas. What will be the practical result of this? How many inspectors will the Prime Minister have to appoint to hunt through Indian shops every night to see whether there are no Indians sleeping there? The Prime Minister will have to maintain a small police force to hunt through shops every night, and if Indians are found there they will say that they are caretakers and do not live there. Surely the Prime Minister should know the Indians by this time. The people who plead for the Indians apparently do not know anything about them. One does not want* to be insulting, but there is no race on God’s earth who understand the art so well of evading any law which is made as the Indians. With this clause of the Prime Minister this will continue and I want to make an earnest appeal, particularly to hon. members from the platteland. People in the towns apparently do not see these things in their true perspective as a result of the great masses in the towns, but we in the small country towns see what goes on. I appeal to hon. members on the other side who, together with me, have to witness the disfigurement of country towns every day through this penetration of Indians who have dirty little shops there, and they see the dirty streets where the Indians are. Every day we have to witness this disfigurement, and I ask them to vote with us for the amendment of the hon. member for Pietermaritzburg (District) that the two sub-clauses be cancelled, so that further penetration by Indians into European business centres will be stopped, which is just as great an evil as penetration into European residential areas.

I want to make an appeal to the Prime Minister to accept some amendment to this clause. I wish to propose another amendment. Before doing so I should like to make a few comments. It is generally accepted, particularly in Natal, that this Bill is designed to bring about gradual zoning as between Indian and European people, by a system of permits, and by a system of voluntary co-operation. In that respect it is supported by the Durban City Council, by the Natal Municipal Association, and by the Durban Wards Committee. In connection with this clause there is a definite feeling that the policy of zoning may be put into reverse. Because of that I again want to appeal to the Prime Minister to accept an amendment. As the clause stands now it means that Indians can purchase, not fixed property, but busineses or trading rights, outside the exempted areas. That means that he will get a licence to trade. In fact, apart from his ability to buy rural property he will be able to carry on a trade or business in a European area without any restrictions. The real fear is that this will mean changing the very character of many of our towns and cities.

Hear, hear.

We have that in the case of Dannhauser, Stanger and Newcastle. I do not wish to labour the point; but I cannot see why the Prime Minister should not reconsider his decision not to accept an amendment, and I therefore propose the following amendment—

That does not go quite so far as the amendment moved by the hon. member for Pietermaritzburg (District) (Col. Stallard). I move accordingly.

I should like as a representative of Durban to appeal to the Rt. Hon. the Prime Minister to reconsider the position and accept the amendment moved by the hon. member for Pietermaritzburg (District) (Col. Stallard). The Rt. Hon. gentleman mentioned that the control of the licences was in the hands of the province. The Government does take some notice of the issue of licences. I have been connected with the issue of licences in South Africa and have had to appear on many occasions before licensing boards and licensing officers, and the great difficulty they have in the urban areas is that they are tied down by the Licensing Consolidating Act, which states very definitely they must not take into consideration the question of race or colour. Although in the urban areas you have a licensing officer who issues a certificate of fitness for that licence it is the Government who actually issue. I have appeared in many cases and said: We would like to turn this licence down; it may have been an application for a licence in a European area; but we were not successful. The only grounds on which we have been successful in getting licence applications rejected is that there is no necessity; unless you can prove that the Indian gets away with the licence every time. There is nothing to prevent an Indian turning his place into an Indian business and with what result we know only too well in Durban. Business people are gradually being crushed out on account of the business methods of Indians. Their cheaper way of living is one factor. We have no objection whatever to the issue of licences in an Indian area, but as the Bill stands we are not helping the licencing authorities. We are not giving them that assistance they are always requesting and demanding; and as we are now dealing with a Bill of this nature which has taken years to bring before Parliament, I appeal to the Minister, let us make a good job of this Bill. It took us many years to get the Pegging Act through the House. The Prime Minister has been accused of bringing in a “ghetto Bill”. Every objection possible has been brought forward by the Indians, and I think the Prime Minister would be justified in tightening up the very thing the country is crying out for. In the Transvaal to obtain his licence an Indian pays his money over the counter, stays on the premises for fourteen days and the licence is automatic. In many cases they are not considered at all. A licensing officer will tell you that when an application for a licence is received unless objection is made to that licence it is granted automatically.

No.

I know that is the case, and why not? Who is going to search all the business premises that happen to be to let in order to find out whether a notice has been stuck up on the door to state that a licence has been applied for? I have not taken much part in this debate on the Bill, but I do say there is a demand by the European community in South Africa for some measure of protection, and in asking for that we are quite prepared to say: In the Indian areas give the Indians all the licences they require. I think I am correct in saying that something like twenty licences are granted to Indians for every one granted to a European. If we allow this state of affairs to continue where they can just come along, buy up a business and trade in European areas it will only be a matter of time when European businesses will disappear, and they will all become Indianised. We are justified in asking for something we are quite prepared to extend to the Indian community. We want some protection for ourselves here. I could quote a case to the Prime Minister of a business in one of our larger towns the proprietor of which was offered by an Indian £50,000 more than he paid for it. That gives you some idea of what is likely to happen, and this will do them no harm whatever.

The argument used by the hon. member for Durban (Central) (Mr. Derbyshire) assumes that this Bill divides up the province he comes from into definite areas, Indian and European areas. The Rt. Hon. the Prime Minister has already made it clear that that is not the position. This Bill simply controls racial acquisition and racial transactions. That is the principle of the Bill. I want to appeal to the Rt. Hon. the Prime Minister again to consider the implication of the amendment by the hon. member for Cape Eastern (Mrs. Ballinger). In terms of this clause as it stands it is competent for a licensing authority to grant a licence for occupation irrespective of the race of the applicant. That is the existing law. But before the applicant can have his application considered by the licensing authority he has to have some right to occupation. It might be by virtue of a lease or acquisition. As the Bill stands at present apparently a right of occupation can be acquired by a contract entered into under which the applicant has the right of occupation unless the contract amounts to an acquisition of the property— in terms of the definition in clause 1. An applicant applies to the licensing authority and before he can get the licence he must show, he has the right of occupation, that is the ordinary common law. In those circumstances the licensing authority can only consider the application if he has the right to occupy his premises. All we are asking is that the man who has the right to occupy premises shall have some security of tenure, and we ask it should cover not only occupation of the trading premises but ownership or acquisition for the purpose of trading. As the matter stands a man may have got a licence but he would have no security of tenure. Having allowed a man to occupy the premises you are preventing him from carrying on his business. It is not difficult to get a renewal of a licence, but it is difficult to get a new licence. Therefore we ask that sub-section (2) should cover not only occupation but also acquisition or ownership. As far as residence is concerned I want to ask the Prime Minister to consider this. The purpose of the amendment is that if a man got a trading licence, not in an urban area, but out in the country, how could he carry on his trade without the right to reside on his business premises? If it was restricted to urban areas it would be a different proposition, but where a man is far away from other residential areas he should have the right to reside where he is lawfully carrying on his business.

I wish to make a special appeal to the Rt. Hon. the Prime Minister in regard to this sub-section. The whole purpose of this Bill is to keep the races apart; although the intention is somewhat camouflaged by using such terms as “exempted areas”. Under this sub-section there is nothing to preyent an Asiatic buying up a store in central West Street, or in central Adderley Street for that matter, and occupying it and carrying on business in an area which is predominantly a European area. This clause leaves the door wide open for abuse of the main purpose of this legislation. It has been a tremendous task to prepare this Bill and a great task falls on hon. members and on the Rt. Hon. the Prime Minister, and the whole of this work is going to be nullified if these two clauses remain as they are. The Indians will take advantage of it and encroach into European areas and buy up businesses not only in Durban but all over South Africa. If the Prime Minister does not feel inclined to give way at the moment in respect of these two objections I hope he will allow the clause to stand down and let us get on with some other clause, so that he will have an opportunity of thinking over the matter.

If we pass this clause as it stands, it is going to place South Africa in the stranglehold of the Indians, such as we have never experienced in the past. It will create a dangerous state of affairs. In reference to this, I want to put a few figures before the House. These are not fictitious figures, but figures which have been extracted from the census report and from other official reports. In 1936 it came to light that 85 per cent. of the Indians in the Cape Province were traders, and that no restrictions applied to them. In the Transvaal 71 per cent. of the Indians were traders, and throughout the Union one out of every four Indians was a trader. They will be able to occupy sites as traders just where they please. That position is being perpetuated in this Bill, and quite possibly that state of affairs will still develop, because it is being encouraged to some extent under this Bill. The Prime Minister will now tell us that the Indian must first obtain a licence. That is the case, but he will got a licence. I just want to mention a few cases in the Transvaal to show what has been the position up to the present. Take a town like Klerksdorp. Before the second War of Independence there were two licences held by Indians, and in 1907 there were 11. They fled when the war came, but after the war they flocked in again. They came in unlawfully. In 1930 there were 15 licences belonging to Indians, in 1933 there were 20, and in 1936 there were 22. I do not know what the number is in respect of 1946, but with the development of the goldfields in that area we can expect a considerable increase in the number. Hon. members will find these figures in the Feetham Report, part 7, chapter 5, paragraphs 1 to 10. One-ninth of the Indians there are traders. As far as the European population is concerned, only one out of every 70 is a trader. Take Krugersdorp, for example. Before the second War of Independence no records were kept, but in 1903 there were 15; in 1919 there were 24, and in 1932 there were 43. These figures are also given in the Feetham Report. One out of every 10 Indians is a trader, and only one out of 70 Europeans. It will be seen what the ratio is between the figures in respect of the Indians and the figures in respect the Europeans. Take Potchefstroom, for example. This will interest the hon. member for Potchefstroom (Mr. van der Merwe). In 1920 there were 157 licensees, and of that number 50 were Indians and 107 Europeans. Subsequently the ratio changed considerably in favour of the Indians. Of the grocers and general traders in 1920, 16 were Europeans and 41 Asiatics. Those figures appear in the Lange Report. In the case of Pietersburg there were 33 Indian traders as far back as 1920. That figure is given on pages 104 and 105 in the Lange Report. Since 1927 licences have been granted on farms owned by Europeans to 28 Indians. They get these licences in some way or another. They use all sorts of methods, but somehow or other they obtain licences. In Pietersburg 61 licences were held by Asiatics. Hon. members will therefore see the tremendous increase in the number of Indian traders. Under this Bill they are being given free rein. They are perfectly free to go from one town to another. There are no restrictions, Take Middelburg, for example. I do not see the hon. member for Middelburg (Dr. Eksteen) here at the moment. He may be able to give us a little more information on this point. In 1940 there were 33 Indians who held trading licences. As far as Natal is concerned, I think it is very clear that Natal is being taken up by Asiatics from one end to the other. The hon. member for Natal (South Coast) (Mr. Neate) mentioned in this House last year that one finds nothing but Indian shops along the main road from Newcastle right up to Durban. As far as the eye can see, there are nothing but coolie shops. The hon. member for Newcastle (Mr. Robertson) might like to say a few words to explain how the Indians were outwitted by deviating the road. They had to do everything in their power in order to overcome the difficulties there. When we analyse this matter it will be seen that in framing this Bill it is a question of giving further assistance to the Indians step by step. In 1914 the Prime Minister entered into an agreement with Gandhi in connection with this expansion. In his letter of 7th July, 1914, Gandhi wrote, inter alia—

How does Gandhi define “vested rights”? Gandhi’s definition of vested rights is as follows—

Under this legislation the Minister can now allow Indians to shift their businesses not only from place to place in the same town, but from one part to another. It will be seen, therefore, how the Indians are being favoured.

Before I conclude, I just want to say that I really feel sorry for Natal, because of this problem with which it has to contend. On one occasion it was quite correctly said by someone that Natal had two great leaders in the past, the one being Chaka and the other Gandhi. In the beginning of the 19th century Chaka conquered Natal for the natives. In the 20th century Gandhi is conquering Natal for the Indians, and it seems to me that the conquest will be completed shortly after this Bill goes through.

Mr. Chairman, I would like to submit to the Rt. Hon. the Prime Minister that the retention of these two sub-sections will mean that in the case of established businesses passing into the hands of Asiatics in what I may term the permit areas, there will be a flood of applications to the Board for permits to occupy, for the reason that at the present time these businesses are run by people who reside in the back premises of their businesses, and if we allow that, it means that in small urban areas we are going to establish a nucleus of Indian residential premises, which will gradually expand as business expands, and ultimately we shall have the position in some of these places which will approximate to the position pertaining in Verulam and other places like that. I hope it will never be the lot of the Prime Minister to have to stay in one of them. There is another case I would like to put to the Prime Minister. There is a township on the south coast of Natal, the title deeds of which date mostly from after 1917, and every one of them contains a clause prohibiting the residence of non-Europeans. Some thirty deeds of grant were issued prior to 1917, and these thirty or thirty-three people have, in the last few months, had a deed of servitude included in their title deeds to prevent non-Europeans residing in the area. At present there is 100 per cent. European occupation, ownership and everything else. Now, there has been in existence in Scottburgh a tearoom, fresh produce and mineral water dealer’s business for the past eight or ten years, and during the last two years there has been a very strong suspicion that the lady who has been running this business has practically passed over the right of her business to Indians. If this legislation goes through, and these clauses are retained, it simply means that next year she can dispose of her business, but not the ownership of the property, to those Indians who might carry on the trade or calling of this business, though they cannot occupy the premises. Now, the first thing they will do is to apply to the Board for a permit to occupy residential premises in Scottburgh, and there is a servitude against everyone of them. What are we going to do in that case? The Board will have the privilege of recommending to the Minister of the Interior that a permit for residence and occupation shall be granted, and if it does, it means that the first Indians will come into the township, and that is the end of that township. There is a concrete case which I expect will take place if this legislation goes through as it is intended, and I do appeal to the Prime Minister to take this matter into consideration, and at least in cases of that sort to give some protection against the influx of Indians into a township which at present is 100 per cent. European in ownership and occupation. I am afraid of this clause, because in this township the local Transportation Board has gone out of its way to try and let the Indians come in. In this township there are no residential Indians, but this local road Transportation Board has issued licences to two Indian servants there, such of whom works at an hotel, to run a taxi within the area, and on a report being made by the town clerk, they were simply told that the remedy was in the hands of the residents themselves—they need not patronise the taxis. Incidentally, an ex-serviceman will probably have his application turned down, simply because there are already four taxis. I do ask the Prime Minister to try and protect us against this possible intrusion of Indians into a 100 per cent. European area. We do not want these Asiatics in this township.

Mr. Chairman, I should like to appeal to hon. members to come to the voting on these amendments. We have discussed this matter now at great length. These amendments have been on the Order Paper for some time, one of them at all events. We are simply wasting time over this particular clause without making any progress at all, and I would earnestly appeal to the Committee to vote on this matter.

Mr. Chairman, one would like to oblige the Prime Minister, but I do take umbrage at his suggestion that this clause, because he accepts it and he thinks it is right, has been adequately discussed. Nothing of the sort has taken place, and more and more as the discussion and examination of this Bill proceeds in all its clauses, I am convinced that we should have had a Select Committee to enquire thoroughly into the whole question. The Bill is being rushed, and the latest evidence of that is the plea of the Prime Minister. Is this, or is it not, a Bill designed to separate? If it is a Bill designed to separate, there has been an excuse for its introduction, and sufficient protection should be given to leave no loopholes at all in the law. Now the Rt. Hon. the Prime Minister himself has shown us how weak is the position under this clause, because he says they cannot trade there without a licence, and that the licence is a matter for local authorities. Is that the way, Sir, to deal with a piece of legislation of this description, by putting the responsibility on someone else, and to see that one section at all events is carried out without the responsibility of the Government being involved? What is the position under which local authorities control licences? First of all, as has been rightly pointed out, the law lays down that no racial discrimination shall be made in the granting of these licences, and the Prime Minister suggests that such racial discrimination would be made in conflict with the law. What is the practical effect of the right of municipalities to grant licences? We do know that in some cases municipalities have refused licences, not publicly, on the grounds of racial discrimination. If that were taken to be true, and it was proved to be the case, one would probably be had up for damages. But at all events it might happen that the licences might be refused. Go along the Reef— never mind about Natal—and you will find that most of the townships are literally riddled with Asiatic traders. You have them in the heart of Johannesburg; in Springs you have them and I think, though here I cannot speak with certainty, on the West’ Rand you have them. It is not only in Natal. I am speaking of existing shops and businesses owned and controlled by Indians trading in the European areas. In the circumstances I am compelled to vote for the amendments moved by the hon. member for Pietermaritzburg (District) (Col. Stallard) viz. to delete these two sub-sections.

I just want to remind the Prime Minister of the attitude which he adopted on a previous occasion in connection with this self-same question when in 1943, on 14th April, 1943, the Pegging Act was discussed here. At that time the Prime Minister made a particular point of the fact—and he did not specify whether it related to residential areas or whether it related to trading sites—but he said that penetration was taking place on a large scale as far as Indians were concerned. Here are his words; he argued that the Indian compelled him and his Government in 1943 to adopt the pegging procedure. He went on and said—

That was the attitude adopted by the Prime Minister in 1943, and I want to ask him now whether in his view the character of Durban as a European town was only being spoilt as far as residential areas were concerned when Indian penetration took place or whether he felt at the time that the character of the European town of Durban was also being affected by Indian penetration as far as trading sites were concerned. This is a very clear question. I do not think the Prime Minister can come and simply say to us: I want you to leave the matter there. No, the European population would blame us if we were to do so. I think that the town of Durban and every part where Indian penetration has taken place, also as regards trading sites, would have every right to blame us if we were simply to allow the European character of those parts to be spoilt, as it is now being spoilt by sub-clause 2 which is now under discussion. The Prime Minister said that this measure is a continuation of the Pegging Act. He said at the time that he was not offering a solution, but a measure which at the time he said would be merely temporary. Now he is forcing this measure through the House for he says there is no time to wait, and now I want to ask him why, as regards the question of trading sites, he wants to spoil the character of the European town of Durban to such an extent; why does he introduce a half-hearted measure, a measure which will give the impression, as clause 2 defines, that he wants all the same to bring about a measure of separation in so far as residential areas are concerned, but in relation to trading sites he will not bring about any separation whatsoever; does he want to stain and spoil the European character of this country, that European character which he said he wanted to keep and preserve? Now it has simply to be stained and defiled by Indian penetration. It is a very serious question and I now charge the Prime Minister that he is forced to depart from the viewpoint which he adopted in April, 1943, when he rose and advocated in the case of Durban—and there are many other similar cases in the country—the preservation of the European character of those areas, and now he is simply departing from that policy under pressure from the Minister of Finance; he is following a policy of further equality and by this clause he is simply allowing that disfigurement, to which the European race is so much opposed, to take place and to spread unchecked in the future. This is not a question we can simply drop like this, and I still want to say this to the Prime Minister:. He is taking a very great responsibility on his shoulders; he is not only taking on the responsibility of allowing that disfigurement to spread on such a scale, but he is also taking on the responsibility of preventing members of the House from doing their utmost to put an end to those evils. When he appeals to us to vote on the question now, he must remember that first of all he silenced the voices of members on his side. Even though they feel with us that the subclauses are very dangerous and are contrary to the will and wishes of the country, they may not speak. He wants to silence all sides of the House. We must cease our pleas for the safeguarding of the European race. I just want to say that he may perhaps expect it from his side, but he certainly cannot expect it from our side. We are here as the champions of the principle of segregation in which we see today security for the future of this country. We do not intend ceasing our pleas, but intend to stick to our guns and to continue our pleas, and the general public will be the judges of what took place at this stage in connection with such an important question. I want to repeat that the Prime Minister’s appeal to us is useless and needless. We do not intend to bind ourselves; we will continue to fight until we have won or lost the batle for the survival of European civilisation in this country.

The Prime Minister in his reply indicated that he considered that occupation under this clause was incomparable with residence. He said that the question of residence was a different one, and he intimated—so I understood him— that that disposed of residence and that his intention was that this section would not countenance residence upon the property. Since then I have been reconsidering this clause and reading it very carefully, as the result of which I am very doubtful whether this clause does exclude residence. It is a very important issue which is raised and I hope the Prime Minister will follow it. The clause says that the provisions of sections 4 and 5 shall not prohibit any person from occupying any land etcetera, exclusively for the purpose of carrying on a business or trade. Whether that as a matter of fact excludes residence I am not quite sure, but I am inclined to consider that it does not. For example in several speeches made in this Committee it has been made quite clear that it is the practice of Indians in the country districts to take small pieces of land where other accommodation would not be available and there to establish a business. Is the Prime Minister in a position to assure us that the law advisers have advised him that in such circumstances such a person might not successfully contend that he was occupying these premises exclusively for the purpose of his business, and that he resided there, because there was nowhere else for him to reside? I think on the contrary —

I should like to return the compliment to the Prime Minister that he paid to the House, and we too want to ask him to be a little more accommodating. He will notice what strong views are held on this subject. As I said yesterday, it is a good thing to be determined, but one can overdo it, particularly when dealing with public opinion and sentiment. I want to ask the Prime Minister to be a little more accommodating too, and to admit that this side of the House which moved this amendment has a stronger case. We shall make ourselves ridiculous as a result of this clause. If it really was the intention to draft this Bill in such a way that it was understandable and if the sincere intention was to bring about separation, why were these provisos not inserted in clauses 4 and 5? Why first get the House to accept these two clauses by a majority of votes and then render these two clauses nugatory by means of sub-clause 7 (2)? What is the hon. member for Pietermaritzburg (District) (Col-Stallard) moving? He moves the deletion of these two harmful sub-clauses, namely—

In other words, the main reason for all these objections to Indian penetration, the reason why the Europeans object to the penetration of Indians, on account of their mode of life, their standard of business, the standard of their conceptions of life, which is in direct conflict with ours, is being ignored. If the Prime Minister wants to know why we object, let him ask the police to submit a report to him of the position on the corner of Commissioner Street and Market Street in Krugersdorp—not as viewed from the street, but as seen from the back of those premises. Let him have a look at the position, and then he will realise why we strenuously object. Must we be satisfied with everything? It is not only the ordinary business which is carried on there; it is not only a shop, but at the back of the premises there are pigs and horses and goats which no European would ever dream of keeping there, and which no European locality in the world would tolerate; but the Indians are doing this in the very centre of Krugersdorp. We had hoped to remove these people gradually but it is now provided in clause four and five that if they are traders they can remain there for ever and carry on with their pig farming and dairying and that type of thing in the very centre of the town. I also want to make an appeal to the Prime Minister to be accommodating. We are not discussing this Bill as the result of a (mere whim, but because we know what the views are of the people in our constituencies. What the hon. member for Pietermaritzburg (District) moved represents the consistent attitude not only of ourselves but also of the people in the country. This is the desire of the public in the Transvaal and Natal. I want to ask the Prime Minister whether the Europeans are expected to swallow everything and always to be satisfied, and whether the wishes of the Indians are always to be met without their making the slightest sacrifice? The wishes of the European public are apparently not taken into consideration. It is going to be the cause of further friction if the Indians are given everything they want, because in spite of all the hullabaloo they make their wishes are complied with hundred per cent. and the Europeans have to swallow everything. I want to make a serious appeal to the Prime Minister to be accommodating and not to be so determined to put this Bill through completely unaltered as it now stands. This amendment of the hon. member for Pietermaritzburg (District) represents a great improvement to the Bill, but if the Bill goes through as it stands, the Prime Minister is making nothing but a lot of fools out of the members of this House, because what has been accepted in previous clauses is now being destroyed by this clause.

Are you speaking for your party now?

I want to say to the hon. member for Hospital (Mr. Barlow) that his value and his weight, when it comes to serious matters, have already been assessed. It is of a minus quantity and I am not going to reply to his interjection. This clause makes the other two clauses totally worthless. If this Bill was framed with the object that the public should not be able to understand its contents, then it has been a success, because to begin with, we accepted certain provisions in clauses four and five and now we are being asked to lay down that these clauses are worthiess.

I just want to say a few words in regard to the relationship between these clauses and trading licences. I think the position under the old Act, after the introduction of the Pegging Act of 1939, was that an Indian could not obtain a licence unless he was entitled to lawful occupation of the site. That was the provision in the 1919 Act. To a great extent it kept the Indians out after the Pegging Act came into operation, because after the Pegging Act came into force they could not obtain lawful occupation in the European areas, and the result was that they could not comply with the requirements of the Act of 1919 to obtain licences. But the position has altered as a result of clause 7 (2). An Indian may now hire a site in a European area for the purpose of carrying on a general dealer’s business. As soon as he has obtained a lease for this purpose, which he is entitled to do under this clause, he is going to apply for a licence in respect of the site, and in this way he gets past the provisions of section 9 of the Act of 1939. In other words, as far as the Transvaal is concerned, this Bill will place the Indian traders or future Indian traders in a much better position than they were after the Pegging Act, because the protection afforded by the Pegging Act, read together with the 1919 Act, is now being rendered nugatory. The position is tantamount to this, that clause 7 (2) of the Bill with which we are now dealing affords the Indian traders an opportunity to overcome the difficulties they experienced under the Act of 1919, in any event after 1939. A very serious alteration in the legal position is now being brought about. I do not know whether the Prime Minister realises how serious the alteration is. He says he does not want to deal with the matter of licences in this Bill, that that is a provincial matter, but I want to point out to him that the question of licences is dealt with in the Act of 1919, as far as Asiatics are concerned, and at that time the Prime Minister was also a Cabinet Minister and apparently he did not hesitate to deal with it, and indirectly he is doing the same thing today because he is taking away the protection which was given to European areas in 1919, also as regards the granting of licences. The licensing court can no longer say that it refuses to grant a licence because section 9 of the Act of 1919 prohibited it, because the Indians are now in a position to get past that provision. The Indian will now say that he is in lawful occupation under clause 7 (2). Clause 7 (2) does not stipulate that he must first obtain the licence before he can lawfully occupy the site. Clause 7 (2) merely says that he must use it for business purposes. He will be in occupation of the site, and he will then apply for a licence. He will occupy it for the purpose for which he applies for the licence. His occupation will be lawful and he will then point out to the licensing court: “You cannot refuse to give me a licence because the provisions of the Pegging Act are no longer in operation; I have the site and you must give me a permit.” I feel with the hon. member for Pietermaritzburg (District) that the more deeply one tries to delve into this clause the more defects one discovers. The more one goes into the implications of clause 7 (2) the more one discovers to what extent the position is being thrown open to further evasion, even of the scheme which the Prime Minister held out as the scheme of the Bill. I think the time is overdue when we as well as the people of this country should realise the implications of this clause.

I should like to come back to the argument advanced by the Rt. Hon. the Prime Minister that it is not his object to prevent Indian penetration in business areas by means of this Bill, because he says that if licences are issued he does not want to interfere. He rather hinted in his speech that if it is to be prevented it must be done by the people who issue the trading licences. It will be up to them to prevent it. It is clear to me that he is relying on the excuse that these licences are issued by other bodies, and that these other bodies in the process of issuing licences or withholding licences must prevent Indians from penetrating into European areas by hiring trading sites. The hon. member for Pretoria (East) (Mr. Clark) also stated by way of interjection yesterday that the licensing courts can prevent it because they need not state their reasons for refusing to grant licences. I do not want to go into the question whether that is the right way of dealing with the matter, but let me draw the attention of hon. members and of the Prime Minister to the position in the Transvaal as far as licences are concerned. As far as I can remember a trading licence can be issued only if the licensing court approves of the granting of the licence. In towns it is usually the city council or the town council. In respect of areas outside the towns there is a committee which is appointed by the Administrator. According to the Transvaal law such a court or committee may refuse, without giving any reasons, to grant licences, but if an Indian is dissatisfied with the decision of a licensing court he has the right to appeal to the Administrator, and the Administrator, in spite of the decision of the licensing court, may decide to grant the licence. It is within the Administrator’s power, even where the licensing court refuses to grant a licence; and that has happened in the past. But now hon. members will more fully realise the danger of the position, if they bear in mind the standpoint explained by responsible members on the other side. If the Minister of Finance or the Minister of the Interior, or some of the leading members on the other side, or the Minister of Justice becomes the Administrator of the Transvaal, is there any member on the other side who imagines that such an Administrator would ever refuse to grant a licence to an Indian? Of course, he will not refuse it. Take the hon. member for Vereeniging (Lt.-Col. Rood). He is sometimes mentioned as a possible Minister, and he might easily become Administrator of the Transvaal. What would he do? During the course of this debate he adopted the attitude that we, as guardians of the Indians, must not do anything to restrict the economic rights of the Indians in any way. Not only is he a front-bencher, but a front-bencher who is mentioned by Government newspapers as a possible Minister. That is the attitude he adopts, and he is not the only member on that side who adopts this attitude. There are numerous supporters of the Government who adopt this attitude, and they are the influential people on the other side, and not those people who adopt the attitude of the hon. member for Pretoria (District) (Mr. Prinsloo). People like the Minister of Finance, the Minister of the Interior, the Minister of Justice and the hon. member for Vereeniging are the people whose opinions carry weight in that party, and their attitude is that we must not do anything to restrict the position of the Indians in the economic sphere. That would be most unreasonable! If that is their attitude, what hope has the public got in our towns and in our cities, if the power is in the hands of those people to refuse to grant licences to Asiatics? There is not the slightest protection. There is not the slightest protection unless the clause is altered. Up to the present the Indians have been granted licences, and they have penetrated deeper and deeper into European areas. In Pretoria the Indians have penetrated beyond Market Square. The majority of the members of the City Council of Pretoria support the views of the members on the other side, and if they hold the views of the hon. member for Vereeniging, we can appreciate what will eventually become of Pretoria (Central). It will eventually be nothing but an Indian bazaar. The excuse which the Prime Minister and his front-benchers sought to advance in order to cover and to justify his negligence, namely, that this power is in the hands of the licensing courts and that they will not allow this, is an excuse which is so thin that it cannot cover the political naked-ness of the people who advance that argument.

I hope we shall not be moved in this matter to suppose that this is an unimportant clause. In my view it is one of the most important clauses in the Bill. The Bill sets out to say in clauses 4 and 5 there shall be no occupation by the respective races in Natal or the Transvaal in certain circumstances. Now this clause which deals with trading, the main occupation of those Europeans who live in the urban areas, allows the Indian to invade European urban areas and to disregard the provisions of clauses 4 and 5 which constitute another way to protect the property they already possess. It now allows the Indians merely to hire the property for trading, in spite of the restrictions laid down in clauses 4 and 5. The hon. member for Krugersdorp (Mr. van den Berg) has indicated that in the case of a man carrying on dairying—and the Indians are very often engaged in dairying—he would find it imperative to occupy and reside in the area besides making use of it for the purposes of trade. The same thing applies to boarding houses which often provide an occupation for Indians. It seems to me this clause is going to allow the European trading community to be robbed of their occupation by the Indians. It is bad enough for them to contend in the ordinary case with Indian occupation and competition but we now find the Government throwing their weight in on the side of the Indian and facilitating his entering closed areas and trading there in spite of restrictions which will prove false and illusory. The matter of the operation of the clause which it is sought to pass is very important, and I hope hon. members will realise its importance, realise it is vital to the survival of those who look after us; those people who are specially affected in their possession in these areas are going to be ousted and displaced by the Indian who is going to be permitted to occupy the areas in terms of this clause and to reside there. In addition to that I want to remind the Prime Minister that in quite a number of towns the Europeans, driven to it by hard bargaining on the part of the Indians, have entered into what they imagine is a gentleman’s agreement. That gentleman’s argeement is going to be kicked aside by the introduction of this clause. The clause will enable the Indian to get behind that agreement and to invade areas which otherwise would not be open to him. By this clause we are opening up further penetration and legalising what without this clause would be illegal. I hope the Rt. Hon. the Prime Minister will realise the incalculable harm that will occur to the trading community who are the people who mainly justify their existence in the town by the services they render to the rest of the community.

I should like to clear up this question of licences which the Prime Minister referred to this afternoon. He gave us the impression he was of opinion that local authorities have the last word in regard to the issue of licences, but that is not the case. We had a recent case in Durban where Indians applied for a licence to open up a business in the European business area, a receiving depot for a laundry, and the licencing officer turned down the application. These Indians went to the Supreme Court and Mr. Justice Hathorn gave judgment. The Indian applicant contended that the refusal on the part of the licensing officer was due to racial reasons, and the court upheld the Indian and granted the licence. That rraises a very important point. If the Prime Minister is under the impression that the local authority has the final say, I think he should know that if the local authority turns down an application, the applicant can appeal to the Supreme Court, as he did successfully in the case I have mentioned. I urge most earnestly that the Prime Minister will allow further consideration for this clause, or allow it to remain in abeyance.

When this Bill was introduced the Prime Minister and many more of us were hoping that when it became law the Asiatics would realise they had brought this trouble upon themselves and that had they not been penetrating into European areas. …

What clause is the hon. member discussing?

We are discussing Clause 7.

The hon. member is referring to the Bill.

It is not possible to refer to a clause without referring to the Bill. I am merely suggesting if we can remove racial strife in the future by the deletion of the two sub-clauses. …

Order, Order! the hon. member must confine himself to the details of this clause.

That is what I am doing and I am endeavouring to assure the House and the Prime Minister that what we have in mind here is that racial peace will not be brought about if we allow these two sub-sections to remain in the Bill. By removing them we can come to an understanding as between the Europeans and Asiatics in Natal exactly where we stand in the future, and that it is not a scrap of use the Asiatics asking for further facilities which have not been granted them by law. I make that appeal to the Prime Minister. We are sick and tired of all the ill-feeling between Indians and Europeans in Durban; let us remedy it. We will not remove it while the Indians are allowed to buy up premises in areas which are predominantly European. Hon. members ask: why do Europeans sell to the Indians? It is true that if no Europeans sold to Indians, this Bill would not be necessary. I quoted a case of an Indian offering a man £50,000 more for his business premises than the figure he purchased at; and, now that they are being restricted in connection with the purchase of properties in European areas, they will come in to trade, and hon. members and the people of South Africa will still be faced with the Indian problem, but in a more accentuated form. The Indians will say: Certain avenues have been closed to us and we will go more and more into business. I would suggest that the Prime Minister accepts the suggestion of the hon. member for Musgrave (Mr. Acutt) and agree to this clause standing down for consideration. This will enable him to get the opinion of our local authorities and of the licensing officers, and if the replies he receives are satisfactory I shall be content. But I have had the experience of licensing officers and this is the trouble they find, that they are tied down by the licensing laws. Today in Durban the licensing officer finds it almost impossible to consider another case owing to his time being completely taken up by the consideration of objections and appeals and matters of that nature, whereas if he had the protection of the law he could say: I cannot grant a licence under those conditions. But today he has to comply with the regulations prescribed by the health authorities, and if the applicant for a licence complies with certain structural conditions the licensing officer cannot refuse that licence. One case has been mentioned, and in fact there have been two cases quite recently where the licensing officer said: I can do nothing for you, I must grant the Indian the licence. Let me appeal to the Prime Minister: We are all anxious for that co-operation that once existed between the Europeans and Asiatics to be restored so that we will have no more of this friction. But I say if this Bill goes on the Statute Book there will be a continuance of the agitation we have experienced all these years. The Bill will not help us unless we tighten up the licensing laws. We are endeavouring to give Natal and the Transvaal some real protection. We have been accused in Natal of being the most horrible people on earth as a result of the introduction of this Bill. But this Bill will not be doing an injustice to Asiatics; they will have ample opportunities to trade with their own people in their own areas, sand the Minister of the Interior knows that we have almost had to measure the boundaries in Durban; he knows very well the difficulties we have been experiencing in Durban, and that it would often be remarked that five yards away or 20 yards away it must be let to an Indian, as it is not a European area. Let us make it so definite that it will be useless for the Indians to attempt to cause more friction. I am most anxious for friendly relations to be resumed between the Indians and Europeans in Durban, and I am certain this amendment of the hon. member for Pietermaritzburg (District) will go a long way to restore the harmony that once existed among the two races.

One is really and truly astonished at the Prime Minister’s attitude. One cannot help coming to the conclusion that he has aimed at opening up as many avenues as possible in this Bill through which the Indians can penetrate. The article as it stands is one of the most dangerous articles in the Bill. The Prime Minister bases his argument on the fact that the local boards have the licences in their hands. The Prime Minister knows better than any other member in this House that that policy in the past has been one of the most dangerous things in this country. The Prime Minister knows better than any other person in this House that that policy has in the past created confusion on a scale which was most unpleasant for the local boards themselves. You had the position that one local board refused a licence. Another local board coming into office granted that licence. The one local board refused a licence and the adjacent local board granted the licence. Confusion resulted which was most unpleasant, so unpleasant that the Prime Minister knows that the vast majority of municipalities, particularly in the Transvaal, appealed to the Government repeatedly to take this matter in hand once and for always and to place it on a sound footing for all time. The whole object must be to attain uniformity in the country. That uniformity is lacking in what the Prime Minister has announced here. I say that time and again appeals were made by municipalities, particularly in the Transvaal, that the Government should once and for always place this matter on a sound footing. It is not fair that the Prime Minister should again place this responsibility on local boards. It is most necessary in the interests of the whole question that complete uniformity should be attained. As the position is today it will lend itself to malpractices on a scale which the country has never before experienced. Even in the case of local boards today we cannot help looking the fact in the face that we have had several cases of corruption. You will now see corruption on a scale never, before experienced in South Africa. It is unfortunate but it is true, and it will also take place on a large scale. It is a great pity that the Prime Minister should adopt this disagreeable attitude and really and truly not budge an inch as far as this serious question is concerned. There is only one party who will suffer and it is the European population of the country. What is more, the repercussions of this question, for the non-European population as well, will be of a most unpleasant nature.

Mr. Chairman, before you put the amendment, will the Prime Minister answer the very important question that I put to him as to whether residence is to be included or not.

Yes, in subsection (3).

Question put: That the words “The provisions of sections’’ in line 57, proposed to be omitted, stand part of the clause,

Upon which the Committee divided:

Ayes—74:

Abbott, C. B. M.

Abrahamson, H.

Allen, F. B.

Ballinger, V. M. L.

Barlow, A. G.

Bekker, H. J.

Bell, R. E.

Bosman, J. C.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Butters, W. R.

Carinus, J. G.

Clark, C. W.

Connan, J. M.

Conradie, J. M.

DaviS, A.

De Kock, P. H.

Delport, G. S. P.

De Wet, P. J.

Dolley, G.

Du Toit, A. C.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fawcett, R. M.

Fourie, J. P.

Friedman, B.

Goldberg, A.

Gray, T. P.

Hare, W. D.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Fopf, F.

Howarth, F. T.

Humphreys, W. B.

Jackson, D.

Johnson, H. A.

Kentridge, M.

McLean, J.

Maré, F. J.

Moll, A. M.

Molteno, D. B.

Mushet, J. W.

Payn, A. O. B.

Pieterse, E. P.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Russell, J. H.

Shearer, O. L.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Sonnenberg, M.

Steenkamp, L. S.

Steyn, C. F.

Stratford, J. R. F.

Sturrock, F. C.

Tighy, S. J.

Tothill, H. A.

Ueckermann, K.

Van der Byl, P. V. G.

Van der Merwe, H.

Van Niekerk, H. J. L.

Van Onselen, W. S.

Visser, H. J.

Waring, F. W.

Warren, C. M.

Waterson, S. F.

Williams, H. J.

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

Noes—54:

Acutt, F. H.

Bekker, G. F. H.

Bekker, H. T. van G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Brink, W. D.

Christie, J.

Cilliers, H. J.

Conradie, J. H.

Derbyshire, J. G.

Döhne, J. L. B.

Dönges, T. E.

Erasmus, F. C.

Erasmus, H. S.

Fouché, J. J.

Grobler, D. C. S.

Haywood, J. J.

Kemp, J. C. G.

Klopper, H. J.

Le Roux, J. N.

Le Roux, S. P.

Louw, E. H.

Ludick, A. I.

Luttig, P. J. H.

Madeley, W. B.

Malan, D. F.

Marwick, J. S.

Mentz, F. E.

Neate, C.

Nel, M. D. C. de W.

Olivier, P. J.

Pieterse, P. W. A.

Potgieter, J. E.

Serfontein, J. J.

Stallard, C. F.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Sullivan, J. R.

Swanepoel, S. J.

Van den Berg, M. J.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wessels, C. J. O.

Wilkens, J.

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

Question accordingly affirmed and the amendment proposed by Col. Stallard negatived.

Amendments proposed by Mrs. Ballinger in sub-section (2) put and negatived.

Amendment proposed by Mr. Sullivan put, and the Committee divided:

Ayes—54:

Acutt, F. H.

Bekker, G. F. H.

Bekker, H. T. van G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Brink. W. D.

Christie, J.

Cilliers, H. J.

Conradie, J. H.

Derbyshire, J. G.

Döhne, J. L. B.

Dönges, T. E.

Erasmus, F. C.

Erasmus, H. S.

Fouché, J. J.

Grobler, D. C. S.

Haywood, J. J.

Kemp, J. C. G.

Klopper, H. J.

Le Roux, J. N.

Le Roux, S. P.

Louw, E. H.

Ludick, A. I.

Luttig, P. J. H.

Madeley, W. B.

Malan, D. F.

Marwick, J. S.

Mentz, F. E.

Miles-Cadman, C. F.

Neate, C.

Nel, M. D. C. de W.

Olivier, P. J.

Pieterse, P. W. A.

Potgieter, J. E.

Serfontein, J. J.

Stallard, C. F.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Sullivan, J. R.

Swanepoel, S. J.

Van Niekerk. J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wessels, C. J. O.

Wilkens, J.

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

Noes—75:

Abbott, C. B. M.

Abrahamson, H.

Allen, F. B.

Ballinger, V. M. L.

Barlow, A. G.

Bekker, H. J.

Bell, R. E.

Bosman, J. C.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Butters, W. R.

Carinus, J. G.

Clark, C. W.

Connan, J. M.

Conradie, J. M.

Davis, A.

De Kock, P. H.

Delport, G. S. P.

De Wet, P. J.

Dolley, G.

Du Toit, A. C.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fawcett, R. M.

Fourie, J. P.

Friedman, B.

Goldberg, A.

Gray, T. P.

Hare, W. D.

Hemming, G. K.

Henny, S. E. J.

Heyns, G. C. S.

Hopf, F.

Howarth, F. T.

Humphreys, W. B.

Jackson, D.

Johnson, H. A.

Kentridge, M.

McLean, J.

Maré, F. J.

Moll, A. M.

Molteno, D. B.

Mushet, J. W.

Payn, A. O. B.

Pieterse, E. P.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Russell, J. H.

Shearer, O. L.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Steyn, C. F.

Stratford, J. R. F.

Sturrock, F. C.

Tighy, S. J.

Tothill, H. A.

Ueckermann, K.

Van der Byl, P. V. G.

Van der Merwe, H.

Van Niekerk, H. J. L.

Van Onselen, W. S.

Visser, H. J.

Waring, F. W.

Warren, C. M.

Waterson, S. F.

Williams, H. J.

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

Amendment accordingly negatived.

Remaining amendment proposed by Mrs. Ballinger in sub-section (3) put and negatived.

Clause, as printed, put and the Committee divided:

Ayes—75:

Abbott, C. B. M.

Abrahamson, H.

Allen, F. B.

Ballinger, V. M. L.

Barlow, A. G.

Bekker, H. J.

Bell, R. E.

Bosman, J. C.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Butters, W. R.

Carinus, J. G.

Clark, C. W.

Connan, J. M.

Conradie, J. M.

Davis, A.

De Kock, P. H.

Delport, G. S. P.

De Wet, P. J.

Dolley, G.

Du Toit, A. C.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fawcett, R. M.

Fourie, J. P.

Friedman, B.

Gray, T. P.

Hare, W D.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Hopf, F.

Howarth, F. T.

Humphreys, W. B.

Jackson, D.

Johnson, H. A.

Kentridge, M.

McLean, J.

Maré, F. J.

Moll, A. M.

Molteno, D. B.

Mushet, J. W.

Payn, A. O. B.

Pieterse, E. P.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Russell, J. H.

Shearer, O. L.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Steyn, C. F.

Stratford, J. R. F.

Strauss, J. G. N.

Sturrock, F. C.

Tighy, S. J.

Tothill, H. A.

Ueckermann, K.

Van der Byl, P. V. G.

Van der Merwe, H.

Van Niekerk, H. J. L.

Van Onselen, W. S.

Visser, H. J.

Waring, F. W.

Warren, C. M.

Waterson, S. F.

Williams, H. J.

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

Noes—52:

Acutt, F. H.

Bekker, G. F. H.

Bekker, H. T. van G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Brink, W. D.

Cilliers, H. J.

Conradie, J. H.

Derbyshire, J. G.

Döhne, J. L. B.

Dönges, T. E.

Erasmus, F. C.

Erasmus, H. S.

Fouché, J. J.

Grobler, D. C. S.

Haywood, J. J.

Kemp, J. C. G.

Klopper, H. J.

Le Roux, J. N.

Le Roux, S. P.

Louw, E. H.

Ludick, A. I.

Luttig, P. J. H.

Madeley, W. B.

Malan, D. F.

Marwick, J. S.

Mentz, F. E.

Neate, C.

Nel, M. D. C. de W.

Olivier, P. J.

Pieterse, P. W. A.

Potgieter, J. E.

Serfontein, J. J.

Stallard, C. F.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Sullivan, J. R.

Swanepoel, S. J.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wessels, C. J. O.

Wilkens, J.

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

Clause, as printed, accordingly agreed to.

On Clause 8,

I move—

1. (4) Any permit issued under sub-section (1) shall lapse if the agreement in question is not entered into or if the land or premises in question are not occupied, in pursuance of the permit, within a period of six months after the issue thereof.

I move—

1. (3) Before exercising his powers under subsection (1) the Minister shall at the cost of the applicant publish at least once in two successive weeks in a newspaper circulating in the district in which the land concerned is situated a notice—
   1. (a) making known that he has received and is about to consider an application the particulars of which shall be set forth therein;
   2. (b) stating when and where the report made by the board in terms of paragraph (a) of section twelve may be inspected; and
   3. (c) inviting all persons who have an interest in the matter before a date to be specified in the notice which shall be not earlier than 30 days after the first publication, to make representations to him either for or against the granting of the application, and to give him all available information relative to the matters which he shall in terms of sub-section (2) take into consideration.

The use of the word “any” would seem to me to imply that the Minister might act before any report were made, and I wish to make it quite clear in my amendment that before the Minister acts at all there shall be such a report. I think that object is attained by deleting the word “any” and substituting the word “the”. Then I also move to omit the word “may” in line 76 and to insert the word “shall”. I think it is as well to have a statute as definite as possible, directing the Minister to take into consideration the subjects and aspects which concern the racial groups, and which it is obviously intended that he shall take into consideration. This amendment, I think, may be taken to be in the nature of verbal, but they are not unimportant amendments.

Then I come to sub-section (2). I am quite aware that now the Prime Minister has made some additions with this same object which I have in view, by giving notice that he will move an amendment to clause 12 which is set out on page 471 of the Votes and Proceedings. With your permission, Mr. Chairman, I wish to set out my reasons for persisting in the amendment which stands in my name. The amendment proposed to be moved by the Prime Minister—I think you will allow me to refer to it for this purpose —is of a very much more restricted character than the one I want to propose. It is that before advising the Minister as to any matter referred to in certain paragraphs of section 12 the Board have to publish in a newspaper notice of the matter being investigated, and invite all persons interested to make representations. He makes it optional for the Minister if he chooses, but not unless he likes to do it, to get the Board to comply with the provisions of sub-section (2), and this is a very ’important matter indeed. Under the proposals of the Prime Minister it is optional for the Minister to do that. But this is a matter on which there should be very compulsory terms adopted in the statute itself, and therefore I desire to persist in submitting the amendment standing in my name. These powers, under section 8, are very important. It covers permits and determinations. Permits and determinations are matters which have been discussed in this Committee at some considerable length, and therefore I think I may be relieved from describing what they are to do, and assume that every hon. member of this Committee is now familiar with them. But the importance of these permits to the applicants, and to a large range of other people who are affected by these permits, is of course obvious, and the determinations are of a similar importance. Therefore I think it is desirable that it should be compulsory to publish a notice making known that the application for a permit, or a determination, is to be published at once, and the report then to be received is to be open to inspection to people affected thereby. I submit it would be very undesirable if this advice or report that the Board has to make to the Minister is kept quite quiet. It is a matter of very great importance, and the substance of that report, I submit, should be made public. That is one of the differences between my amendment and the one which the Prime Minister proposes to move. I submit to the Committee that the report on applications for permits and determinations shall be made in writing and shall be open to inspection, and should be made available to the public. The invitation to persons who have an interest, I think, is common both to the amendment to be moved by the Prime Minister and mine, so I shall not take up time at present in dwelling upon that. I therefore move the amendments standing in my name.

At 6.40 p.m. the Chairman stated that, in accordance with the Sessional Order adopted on the 31st January, 1946, he would report progress and ask leave to sit again.

House Resumed:

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