May I ask the Minister of Justice when he expects to lay the report of the Police Commission on the Table ?

The report will be laid on the Table to-morrow.

With the permission of the House I would like to make a brief statement as to the position with reference to a civil air service. On March 12th I made a full statement in the House of the position at that date in regard to a tentative agreement that had been entered into by the Government with certain gentlemen for the payment of a subsidy towards the assistance of a civil aviation service which it had been proposed should be established in South Africa. I explained that the fundamental conditions of this agreement were that a South African company should be formed and that the promoters should lodge with the Government a substantial bank guarantee for the due fulfilment by themselves and the proposed company of the various undertakings entered into. I mentioned that over three and a half months had elapsed since the agreement was signed, and that as, up to the date on which I was speaking, nothing had so far eventuated in respect of either of the fundamental conditions mentioned, I had decided to give the gentlemen interested definite notice that they must satisfy the Government within one calendar month that they really intended going on with the scheme on the basis agreed upon. Notice accordingly was given on the 12th March, and the time has now expired. The South African Company has not been formed, nor has the bank guarantee been produced. On the contrary, a few days before the expiration of the period fixed by me, the promoters of the enterprise approached the Department with proposals extensively to amend the conditions which had previously been accepted by them. One of the most important proposals now made was to dispense with the financial guarantee, and another was that after the termination of the first year of the contract the Government should undertake to give the contractors—

These and other minor proposals made could not possibly be accepted by the Government, and I have consequently caused the parties with whom the Government have been in communication to be informed that the Government regard the matter as at an end. The position now is, therefore, that it is again open to any company or representatives to come forward with proposals for the establishment of a civil aviation service in the Union as a commercial proposition. The Government decided that in order to encourage the establishment of aviation in South Africa they would be prepared to grant a subsidy to an approved company working under approved conditions, though they were obliged to fix a maximum for this subsidy at £8,000 per annum. While from the purely post office point of view it is not regarded that there is any real need for an aviation service at all at this stage, certainly not sufficient to justify an expenditure of £8,000 per annum, the Government are still prepared to devote a sum not exceeding this amount to assist in starting aviation in the Union if acceptable proposals are made providing reasonable guarantees of an efficient service. My attitude in the matter is not to call for tenders in any sort of way because it is not a case of establishing a Government service, but merely to give a careful consideration to any proposals that may be made.

When the House adjourned last night I was discussing the aspect of State socialism which is concerned with mining and particularly coal mining. I demonstrated that in England and in Germany State socialism from the point of view of coal mining had been a disastrous failure. The experiments in Australia and New Zealand have already been referred to in this House, and I am not going to dwell on that at any length, but in passing I would say that one of the reasons held out by the advocates of State mining is that there would be a cessation of strikes. We know to what extent that has been falsified in Australia. One State mine easily held the record for strikes. There can be no doubt that the institution of State mining has not succeeded in doing away with strikes. Let us take Russia. In Russia the coal mining industry was very much disorganized during the revolution. All the available information however points to the same result, that is, that the output under State ownership declined. The production fell from 35.8 million tons in 1913 to 8.3 million tons in the first nine months of 1916. In 1913 the number of employees was 160,000 ; in 1916 it rose to 235,000. We find that in Russia, where the proletariat is supposed to govern, the State made abundant use of female labour, even in the pits, although as we know, this is prohibited by legislation in most civilized countries. Also by a Soviet decree of 18th February, 1920, the working hours in the mines extended to ten hours, and severe penalties were laid down for striking. There is no doubt that in Russia State control has been disastrous both to the consumer and to the worker ; both have suffered. In 1913 Russian coal was about double the price of English coal. State ownership of the mines in Russia has been a national disaster of the first magnitude. Bureaucratic control is incompatible with successful mining operations. Many years of hard work and the enormous expenditure of capital have often to take place before any results are achieved. Resource and daring have often proved the only way to success. With State control this would never be done, and much potential wealth would have remained undiscovered. Hurd’s book mentions numbers of such instances. Let me mention only the case of the Thorne colliery in England, where for 15 years they struck no payable seam of coal, but after a vast expenditure of time and labour the famous Barnsley seam was struck. Bureaucratic control could never have achieved this. No State official could have induced a Minister to face hostile criticism, doubt and denunciation for expenditure of public money on a speculative mining venture. The British coal industry has been built up by private capital. The owners have taken enormous risks which no Government department would be justified in taking. In the Union, the mining industries—gold and diamonds—have been built up by private capital, and we know that in the case of the Government mining areas the lessees had very poor success in the initial stages. It is only by work and great risk and by the expenditure of much capital that potential wealth can be unearthed, and under the bureaucratic system that cannot take place. These statements are confirmed by a report of a commission that enquired in regard to State mining in this country during 1916-1918. We know that by the nationalization of mines in England the Labour party means the mines for the miners, without regard to the interests of the nation. This is proved by the introduction of the Nationalization of Mines and Minerals Bill in 1924. Speaking on this Bill, Sir Douglas Hogg said—

There is no doubt this movement in England was the thin end of the wedge. Mr. Robert Smillie on November 9th, 1919, said—

That is what we have to face. If once a commencement is made with State mining, the objective which Mr. Smillie and his confreres have in view is the nationalization of the other industries of the country. To make life tolerable under State socialism, we should have to be cast in a very different mould from what we are to-day. We are too imperfect. We have not sufficient forbearance, tolerance or sense of justice, and it is a curious fact that these dualities are exhibited in the least degree by the warmest advocates of State socialism. The socialist state may be suitable for angels, but not for erring frail mortals such as we humans are. We see that when we consider the proceedings at the Port Elizabeth Congress of the Labour party. A more sordid exhibition of mistrust, suspicion, prejudice and recrimination is inconceivable, and remember there the cream of the socialist movement had foregathered. The hon. member for Troyeville (Mr. Kentridge) had a long oration yesterday on the virtues of a State bank, a favourite theme of his. I do not think there is much prospect of a State bank being started in the immediate future, but assuming it is, the hon. member would probably be designated for a high office. I do not say it is jobs for pals. Socialism is against the canons of right and justice. It strikes at the foundation of modern civilization, which is based on the rights of property. What does the hon. member mean by his constant clamour for a redistribution of wealth ? He means that the machinery of the State must be used for taking wealth from those who have it and giving it to those who have it not.

Why don't you read something of socialism—then perhaps you will understand something about it.

I have read more about it than the hon. member may think, and probably with a better appreciation of the subject than he. The hon. member for Troyeville said not long ago that when the Government had borrowed money from the public the pound was worth only 15s., and should pay back only 15s. for each £ borrowed, because the sovereign was then worth only 15s. In Russia they do not pay 15s., but take the lot. We do not believe in spoliation. The Minister of Posts and Telegraphs at Port Elizabeth said that he was an extremist and an out-and-outer, and was going to carry the socialist banner throughout the country. Now we find that, after all, he is as mild as any sucking dove, and is now all smiles, amiability and affability. We know how in the past he has denounced capitalist government indeed such a government is now in power. We find the capitalist or competitive system still in vogue, and that the three labour members of the Government are silent with regard to State socialism, and are in fact the allies of this capitalist government. They are in league with politicians whose principles are the very antithesis of their own. They have shed their principles. Why ? Have their principles been sacrificed for pocket, or is it lure of power? What do their followers think about it ? One thing is certain, that most of the leaders have done very well for themselves from a material point of view, and exhibit none of that sacrifice which is the very essence of the socialist state.

That is very worthy and nice!

That is an unfair statement for the hon. member for Hospital to make.

That may be your opinion, but that is the conclusion to which I have come. My advice to the Government is to concentrate on the land, and let us get on the land a self-reliant, strong farming class— after all that is the country's wealth and backbone. I would advise the Government to get rid of their bed-fellows, with their fantastic and half-baked ideas of what would constitute the happiness of humanity. The Government is itching to be freed of labour control. They should introduce into this country more immigrants descended from the stocks from which our forefathers have sprung. The other day Sir Herbert Hamlin, the deputy chairman of Barclay's bank, a man of vision and experience, advised the Government to introduce half a million Scotch farmers on the land. I hope the Government will seriously consider this question of state-aided immigration. Our land settlement laws are certainly liberal. The reclamation should be made firstly in this country of those that are found suitable.

That is socialism.

Socialism is a very different thing. As I have said before, I think it is a very great mistake to take many of the European inhabitants of this country and place them on the railway, which does not hold out much prospect for them ; and it is a blind alley. Put them on the land.

It is not a blind alley.

The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) is always harping on this question of civilized labour, which our party has adopted as a matter of policy. What surprises me about the hon. member for Caledon (Mr. Krige) is that the rights of the coloured man are not so much advocated, but hon. members opposite seem to hold a brief for the imported native from other parts than the Cape-Colony.

Absolute nonsense.

The hon. member always says that the policy of this Government is to replace natives with coloured men. Well, I do not know what they do in the harbours here, but I know that in Johannesburg no native is dismissed to make room for a coloured man.

Read the Auditor-General’s report.

If a native leaves the service of the railway and there is a vacancy, either a coloured man or an unskilled European labourer is put in his place. We have had many native drivers of these railway trolleys, and whenever they have left, the Administration has always, to my knowledge, put a white man in their place. I am surprised at my hon. friend here not looking after the Cape people—his voters. I was walking along the Sea Point beach the other day and I saw a native reading a book.

Do you object?

No. I asked the native where he came from and he said, Pondoland. He said he was working on the railway, and got 3s. 6d. a day. I say we should look on the Cape Peninsula as the preserve of the coloured man of South Africa. These natives from Pondoland ought to have no show in the Cape Province The coloured people should get the first preference for employment in the Cape Peninsula.

Are you speaking for your party ?

I think I am speaking for the policy of my party. We want to uplift these coloured men. In Johannesburg thousands of white youths have been taken on on the railways as unskilled labourers. It has been the policy, and I think the correct one, to say to the boys “You must start on the lower rung of the ladder.” Some of them have matriculated. Some boys who started at 3s. or 4s. a day were not there a month before they were promoted, and some are now earning 15s. and 16s. a day. It is far better for us to encourage these boys to start at a small wage than have a lot of unemployed walking about the country, and is a much better policy than that adopted in England of giving doles to the unemployed. Because of the latter policy there is very little emigration from England to-day. They are developing there what appears to me to be the professional loafer. Even if it did cost more to employ these youths, that is better than giving out doles afterwards. It is also the duty of the State to find employment for its citizens, and to utilize the State machinery in a large organization like the railways for this purpose of finding employment for the State’s citizens.

The native citizens?

We do not want to do the natives any injustice. To my mind the hon. member for Rondebosch (Mr. Close) should look more to the interests of the men who sent him to Parliament, than of men from Pondoland. In regard to the coal position referred to by the hon. member for Hospital (Mr. Papenfus), a very interesting article appeared in one of the Johannesburg papers of March 16th, by Mr. Black, who is well known, giving a resume of the coal position. He refers to the last three years. He says that the output for 1925 was just over thirteen million, and is a record, and that more coal is being produced to-day in South Africa than in Australia and Canada ; also, that there is a great market for South African coal. I would impress on the Government to see that the railway rates are so regulated as to encourage not only bunkering, but the export of coal. We can send thousands of tons away in the railway administration tackle this question, and so adjust rates as to make it possible to land coal in competition with China. Even in the east we can sell thousands of tons more.

What will your Labour colleague say?

I am not speaking as a Labour member, but as a Nationalist. The Labour party are quite capable of looking after themselves. Our bunkering trade has fallen off considerably during the last couple of years. Then I mentioned to the Minister the other day the question of grading and promotion in the railway service. The men have just cause for complaint in this regard. A case was brought to my notice of a young man born in Cape Town—we will call him B. He was 30 years in the Government service and was in the same grade as A who was born in England. B went overseas to take part in the war, being away for three or four years, and while he was away fighting the battles of A the young South African was left behind when promotion came. I think a great wrong has been done this young South African through the railway system of grading. The Minister would give more satisfaction to the railway employees if he adopted the system of the Public Service Commission, so that length of service should count but efficiency should be the test. I know a young man who was an expert on economy who joined a large railway system in America and within years he was promoted assistant general manager. Efficiency should be the crucial test. The railway medical service so far as it affects the large towns should be enquired into by means of a commission. I do not say that the Minister must change the whole of the system, but in the large centres another system should be followed more calculated to give satisfaction. Our highly respected friend the hon. member for Cape Town (Central) (Mr. Jagger) touched a very important point when he talked about protection. He made a great point of our having to pay 30 per cent, on imported boots. Personally I would prefer to see almost a prohibitive duty on certain kinds of boots. South African boots are quite good enough for me, but if I want to wear red Russian boots—

They would suit you excellently.

People who wear these imported boots should pay for them.

They are made in South Africa.

It is far better for me to pay £2 for a pair of South African boots than 30s. for a pair of imported boots, for in the former case all the money remains in the country, but in the latter case 25s. out of the 30s. leaves South Africa for ever. We should have more protection for the natural products of the country. The hon. member for Cape Town (Central) has forgotten that last year we passed a Land Settlement Act, the conditions of the old one having been very onerous. Land was bought in the Free State at such an exorbitant price that it has now been turned into a national park. Fortunately that policy has been reversed, and under the new Act the time for repayment has been extended from 20 to 40 years. Any man wishing to become a farmer can now do so. He can either obtain ground from the Government or from a private owner, and in the latter case the Government will advance up to 9/10ths of the purchase price. I now wish to draw attention to the immigration laws. We ought not to encourage people to come to South Africa who are parasites. The doctors, lawyers and parsons are also parasites on the community, but they are necessary evils. But we have a class of parasite—a man who lives by his wits and who “toils not, neither does he spin.” We want men who will cultivate the top six inches of our soil. The Government should take an example from the Argentine. It is very difficult to enter the Argentine unless you are a producer. Should you not be a producer and obtain ingress to the country by stating that you are a farmer and you do not obtain a farm within twelve months then you are deported. We want white men who will live on the land and produce. I want to say a few words to the Minister of Mines in regard to the platinum industry. This year platinum is going to be produced in this country in a fair quantity. The platinum fields which have been discovered here will, I am told, be sufficient to supply the world for very many years. It is very necessary that platinum should not fall under the same class of legislation as gold. It should really fall under the same class of legislation as diamonds, and it should be controlled by the State, otherwise we shall have one company producing all the platinum required, and the other companies getting no share at all. I would also like to briefly touch upon the question of the electrification of our railways. Fortunately, I can speak quite openly on this subject, as one who has an open mind. What has happened so far in connection with the electrification of railways in Natal ought to act as a warning to our Government in the matter of the electrification of the Cape Town —Simons Town line. I think the Minister of Railways would be well advised if he took note of what has happened in Natal and saw that the same faults and the same overlapping shall not take place under the construction of the electrified line in the Cape Peninsula that happened in Natal. It will be seen from the Auditor-General’s report that the estimate for the electrification in Natal has increased by over a million. There are reasons for that, some of them very good reasons, because the line has been lengthened, but I would impress upon the Minister of Railways the need of taking warning from what has happened in Natal, and of seeing whether he cannot carry out the line in the Cape here under a different organization or system from that which was adopted in Natal.

May I say how very much we, on this side of the House, and. I think, members on all sides, appreciate the speech made last night by the hon. member for Port Elizabeth (South) (Sir William Macintosh), a speech which, to my mind, was one of the best that he has ever given in this House. With that speech I am almost entirely in agreement, except on two points, and those were the references which he made to the Minister’s proposals in regard to the disposal of the surplus, and also in regard to sinking fund. Regarding these proposals, both of them, as unsound and unorthodox, I was somewhat perturbed to hear my hon. friend (Sir William Macintosh) give them his blessing. I have a certain amount of criticism to offer on the proposals, as outlined by the Minister in his Budget speech, in regard to these two points. The Minister now finds himself with a surplus of £500,000 and he says that half of that he proposes to appropriate to the Transvaal pension fund, and the other half to debt redemption, and nowhere in his speech, on in the speech of the hon. member for Port Elizabeth (South), was there the slightest recognition of the fact that this proposal is a breach of the law as it has stood for years, and a gross breach of faith with the investing public. Our debt redemption policy was started in 1910. The settled policy of South Africa in that regard was laid down by the Cabinet of that time, enshrined in legislation, and has been followed ever since It said that although we did not have a definite sinking fund provision so far as new loans are concerned, for the redemption of public debt, we should, at any rate, hand over to the Public Debt Commissioners the surpluses of revenue as and when they occur. Mr. Hull, the then Minister of Finance, made these remarks—

That was the promise held out by South Africa to the investing public 15 years ago, and put on our statute book in Clause 5 of the Public Debt Act. What does the Minister do with the first surplus that he has had, the first surplus that any Minister has had since 1919-’20 ? Does he hand it over to the Public Debt Commissioners? No. One would have thought that if he had any weighty reason which caused him to depart from that policy, he would at least have told us of it. Reading his speech, I failed to see any recognition whatever of the liability which the Public Debt Commissioners Act imposes. In the calmest possible way he tells us that he proposes to devote one half of the surplus to an entirely foreign object. During all those 15 years we have no sinking fund provision, except such as was attached specially to certain pre-Union loans. The first time when the sinking fund can legitimately benefit by a surplus, he proposes to devote half to another purpose. What does the Minister propose to do? An amount of £250,000 is to go to assist to make solvent the Transvaal pension fund. That fund, he says, was insolvent to the extent of £560,000 on the 31st March last on the assumption that three-quarters of the members of that fund retire at the age of 55 years. We know that the retiring age for public servants in the Cape and the Free State is 60. We know that the Union has fixed its retiring age at 60. Only in the Transvaal and Natal is the age fixed at 55, with power to the Government to extend it to 60. I say that, on all grounds of fairness, no Transvaal or Natal civil servant should be allowed to go at 55, even if he wants to, so far as the State can stop it, unless he is inefficient. I think it is ridiculous to say that a man is past useful work to the State at 55. Instead of taking £250,000 from our surplus and putting it to the fund, the remedy is fairly easy—don't get rid of these men until the age of 60. That, if it does not go the whole way, will go far in the direction of making this fund a solvent one. If there is a deficit, I would suggest to the Minister that it should be financed, not by illegal plundering of the surplus in this way, but by fixed annual payments to make it solvent, as was done in other cases. The other point that I wish to deal with is in regard to the Minister’s proposals for debt redemption. Unfortunately, the hon. member for Port Elizabeth (South) was not on the Select Committee on Public Accounts when this subject was discussed at great length, and the Auditor-General and the Secretary for Finance were heard. If he had been, I venture to say that he would not have made the remarks that he did last night, and in the spirit that he did. I was rather aghast at some of his remarks. The Minister of Finance, at any rate, thinks —and I cordially agree—that it does tend to make our name better with the investing public if we seriously tackle this question of debt redemption. Does the hon. member for Port Elizabeth (South) know that progressively from the day of Union we have gone back in regard to sinking fund provision ? In 1911-12 we had a public debt of about £117,000,000. and our debt redemption provision in those days was £1,267,000, of which nearly £600,000 was statutory debt redemption. From that time onwards we have gone on with repayments of existing pre-Union loans, which, from time to time, have been paid off entirely, and we have replaced those loans with fresh borrowed money, in respect of which, until recently, no sinking fund provision has been made at all, until we reached this state last year, that our debt was in the region of £210,000,000, and all we provide in the way of debt redemption was £400,000 a year. I must confess that I cannot view that state of affairs with the equanimity which was shown by the hon. member for Port Elizabeth (South), and I am glad that the Minister of Finance is tackling this question, but I must add that I am profoundly disappointed with the manner in which he has approached that problem, and endeavoured to tackle it. The report of the Select Committee on Public Accounts reveals the sharpest division amongst members of the committee on this subject. All the members of the S.A.P. voted on the one side, and all the members of the Part voted oil the other. I believe it is the first time that has ever happened. All the members of the S.A.P. on that Committee think that the principles that the Minister has accepted should not be accepted without a certain amount of examination. What did he tell us? He said—

And then, so far as he gave reasons at all. He gave reasons that differ entirely from them. He fixes the amount of the unproductive debt at £55,000,000. Why, heaven only knows. His own department fixed it at £61,000,000. the same figure as the Public Debt Commissioners fixed themselves. On that happy assumption, for which he gives no reason whatever, the Minister says the debt redemption provision of £650,000 a year is equal to £1 3s. 7½d. per cent, on that. His own department fix £61,000,000, and the auditor-general fixes the unproductive debt of the Union at £70,000,000. How did the majority of the Public Accounts Committee arrive at their recommendations? They said: “There seems no hope of reconciling tile two financial schools of thought. We will simply strike a balance, and fix the unproductive debt arbitrarily at £65,000,000, and recommend a sinking fund contribution of one per cent, on that.” The proposal lacks any sort of principle or science, and I want to tell the House how it works out in practice, because I am certain the country will be told that the new Minister of Finance, the new broom, has at last swept away the cobwebs of the S.A.P. Government, and has initiated financial reform, foremost in which is proper revision for debt redemption. I have not the slightest doubt that the new proposals of the Minister are a step backward, and not a step forward, and he is not doing anything whatever to ameliorate the position in regard to debt redemption. I will give the House the figures. What is the present state of affairs? We have to make sinking fund provision for existing debts as follows: The old Transvaal and Free State loan of £40,000,000, attached to which is a sinking fund of one per cent., which involves the State in an annual liability of £400,000. Then the Minister is now attaching sinking fund provision to locally raised loans involving the State in an annual liability at present of £24,000. He proposes to raise another £9,000,000 locally, and proposes to attach to it the same sinking fund provision, which involves a liability of £90,000 a year. That is the total of £514,000 a year, which has got to be paid in any event. What does he propose? He says—

No; they did not do that—this House repealed it.

I will grant you that. We repealed it for them. We removed it from the category of provincial taxes. Of course, that was a tax paid by a very limited class only in the Transvaal. I come now to the more pleasant aspect of the Minister’s budget, and in common with other hon. members, I welcome this increase in the exemption from £300 to £400 for income tax purposes; but do not let us be under any illusion. This increase is in no way relieving the burdens of the poorest men in this country, and it will make not a halfpenny’s worth of difference to the average working man. In pleading for an increase of the exemption to £500, the hon. member for Troyeville (Mr. Kentridge) was not fighting the battle of those of his constituents, who are working men, but the £600 to £800 a year man. Labour members seem to consider that they sit in this House representing the middle class, and who is going to represent the lower class and the under-dog. I do not know. I was waiting for the hon. member for Troyeville to denounce the Government’s proposal with regard to flour. The Minister proposes not a fixed duty of 2s. 11d. and a removable dumping duty of 7d.,but a permanent duty on the people’s bread of 3s. 4d. I would have thought that that was something on which Labour members would have waxed eloquent, and I hope that they will. The Minister gives one more twist to the screw of taxation, and one more help to keeping up the price of bread. The Minister is, perhaps, justified in saying that his proposals will not increase the price of bread, but it will certainly remove any hope of reducing the price of bread, because the dumping duty was placed on in the hope that it would be a temporary one only. We were hoping that when the abnormality disappeared that 7d. was coming off. The permanent duty will never come off.

Never?

Not until the hon.member for Brakpan (Mr. Waterston) becomes Minister of Finance. It amounts to this: That the poorest in South Africa, be they black, white or coloured, must continue to pay tribute to the wheat farmers of Caledon, Swellendam and Malmesbury. During the recent Easter vacation I travelled in the Caledon and Swellendam districts, and I could not help asking myself: Why is it, with black labour, a friendly (government and these broad acres and cheap land, our wheat farmers have to come to Parliament and ask for protection of 3s. 4d. per 100 lbs. to enable them to compete with the wheat farmers of Australia, who have to carry on their operations with white labour and ship their wheat 6,000 miles to South Africa?

A supply of water.

Is Australia not a country under conditions similar to our own? I am not a farmer. Why is it, when we are asked to pay tribute, that the poorest man always pays again—to the sugar farmers in South Africa ? Every penny given to the protection of sugar, wheat, or anything of that sort, is paid, not so much by the middle-class man, or by the man to whom it means nothing whether the exemption for income tax purposes is £300, £400 or £500, as by the man who is on the poverty line. I am waiting for Labour members to say it with courage and conviction.

Your speech is two years too late.

What I am saying now can never be too late. It is timely. I would like to hear what these hon.members are going to say about ready-made clothing. The increased duty does not matter to the man who buys a tailor-made suit, but it does matter to the poor man, who is going to be faced with the extra 5 per cent. duty. I think the Minister of Finance is on absolutely unsound lines in doing that. Each year the screw of taxation gets a further turn, and the remission given is not to the poor man, but to the better-off man. I will ask my Labour friends if they will go back to the Labour Congress and tell them whether the Bill I have presented is a true one, and then explain how it is that they continue to support a Government which is at least as conservative as the South African party, and certainly less tender towards the feelings of those who dwell in the towns. I am now going to indulge in a heresy—a heresy from the point of view of those who sit around me. I am not prepared to join in the hue and cry against those who are opposing those who support a State bank. Where we have only two commercial banks, or rather two and a bit, dominated entirely outside South Africa, and financed by capital obtained outside South Africa, and consider the country in which they are domiciled first, and South Africa second, I consider that an unhealthy state of affairs. When I heard that the National Bank had been taken over by an overseas institution, I felt that the cry in favour of taking over a State bank had been doubled in force. I do not view the project of a State bank with favour because it is a State bank, but in this particular instance I want to say, particularly to my own friends on these benches, that we are rapidly being forced in the direction where we can utilize the opportunities and funds of the State in the direction of a State bank. It is said that the State bank will be the plaything of party politics. We have the Land Bank, and I have never heard that, under the South African party or the present regime, any party politics entered. We have the Reserve Bank, and we take special care to see that it does not become the plaything of party politics. I do think that the Government should go thus far—that it should admit that there is a case for enquiry. The present state of affairs, under which our banking affairs are entirely domiciled oversea, is unsatisfactory and, if necessary, we should provide the capital for a third bank or take the plunge and follow the example of the Commonwealth of Australia. Australia is torn by party politics, and they have not been too clean, but the Commonwealth Bank is an institution of which every Australian is proud. I think there is a case for enquiry. I look at the matter from a different angle from the hon.member for Troyeville, as I am not a socialist, but I am not prepared to condemn that form of State enterprise or any other simply because it is State enterprise. I now want to take advantage of the rare occasion that I see the Prime Minister being present to allude to a subject to which I referred some weeks ago. In my reading of history, I read that the old kings of France employed men to carry on the business of the State called “Mayors of the Palace,” who assumed, in course of time, all the reins of Government and, in the course of time, they kicked out the old kings and founded a new dynasty. A somewhat similar process took place in Japan, where there were two emperors—a real and a titular. I have been asking myself with increasing force during the last two or three months whether we are not undergoing a similar process, and whether we have not a titular, as well as a real Prime Minister, so far as this House is concerned. The Prime Minister is the titular one. May I remind lion, members that whatever defects the right lion, member for Standerton had as Prime Minister he had this cardinal virtue that he was there in his place to face the music.

No; very seldom. We had to send for him.

Did he ever refuse to face the music ?

No.

When the hon. member for Bloemfontein and others were attacking him as they did in 1922, did he face the music ?

Yes.

And he did not wait to ask whether the person attacking him was a back-bencher or not. The other day I told the House that for weeks I had been trying to come face to face with the Prime Minister in the House to put certain questions to him in regard to the position he holds in this House and certain promises he made last year. I was not allowed to go any further, because I moved the adjournment of the House in order to call attention to that absence and, having done that, my speech came to an end, and I could not continue ; but, on an amendment by another member, I was able to say that I had wanted to ask the Prime Minister whether promises made by him in this House were worth 20s. in the £. What did he do ? Did he speak? No, he walked out like a little school girl in a huff.

Quite right.

My question might have been right or wrong, but whether a backbencher or not. I have a right to put questions to the Prime Minister which concern myself. The Minister of Labour, when the matter was raised, said—

What a priceless piece of snobbery! Of all snobs, I should say a Labour snob is the worst. I may not have his outstanding abilities, but I have the right to put questions to any Minister when I put them seriously, as I did. Taking advantage of the presence of the Prime Minister, and hoping to awake him from the sleep in which he now seems to be indulging, I put the points: Are we entitled to expect from the Prime Minister that, when at the close of a debate, he makes a declaration of policy, that policy will be carried out by his subordinate Ministers ? The hon. member for Pretoria (West) (Mr. Hay) laughs, and he is not the only person who has been laughing at the Prime Minister, who gave definite assurances which are laughed at and flouted, not only by the hon. member, but by the subordinate Ministers. The matter may not have been one of first-rate importance, but we got a statement of policy from the Prime Minister. He will not deny it, delphic and cloudy as his public statements sometimes are. It was to the effect that, in appointing commissions, he would cease, as far as possible, appointing member's of Parliament, and that adequate consideration would be given to the just claims of the Opposition. That policy has not been carried out by the Government or Ministers. When I raised the question some six weeks ago, in his absence, what did the Ministers of Finance and Justice say? They said: We have the power ; we will put on commissions whom we like. I can understand that, but it is not the policy outlined by the Prime Minister last year. I have been waiting since the session started to get this off my chest. I do not know whether I will get any reply, but I think it is a point I was entitled to put in the House.

You need not have been supercilious.

If I was supercilious then I am so now. I am speaking of matters which I feel strongly. Who is to be the judge as to whether I am supercilious ? Is the Minister an authority on that matter ? And he put one of his followers up to say that, because I had just got back into the House, I should not raise it. I had got back not after 10 days or a week’s absence, as stated by the hon. member for Maritzburg (North) (Mr. Strachan), but, after three days’ absence, and when I got back the Part Appropriation Bill was under discussion, and that was the only opportunity I had to raise the point. I asked for an assurance that the Prime Minister would be sent for, and that was refused, and I was told it was an impertinence on my part to ask for it. I have a function to perform as a member of the Opposition, and no amount of offensive remarks from the Minister of Labour will deter me. I want to say now that I dissent from a point made by the hon. member for Cape Town (Central) (Mr. Jagger), who condemned the Conciliation Act and all its works. I cannot let that pass, because that Act is a child of the South African party, and we have every right to be proud of it. The principle of it is that the fair employer, who fairly bargains with his employees and fixes a wage, shall not be penalized by the scab employer or employee. The hon. member said: What protection have the community ? But what protection have the community from the wholesale merchants or shopkeepers or anyone else ? When you overstep the mark, economic consequences will bring their own punishment. The working man’s wages are not too high, provided efficient service is given. The hon. member for Hospital (Mr. Papenfus) told us he had turned farmer, but I would remind him that he represents an urban constituency. The Factory Act, the operations of which he condemns, was put through by the South African party Government, and I am proud of it. It makes no difference whether a factory is on or off a farm. If the work is that generally done by a factory. It is right that the Act should apply. He thinks it an enormity that people should not be allowed to work more than 9½ hours a day in that factory. I am for eight hours a day when hard work has to be done.

As only one Labour member has had an opportunity of speaking on the budget, it is rather ungentlemanly for the hon. member for Bezuidenhout to suggest that the Labour members are burking participation in the debate.

I wish to deal mainly with railway matters; but I agree with the hon. member that the raising of the exemption of the income tax will not affect poorly paid men, but it will benefit 10,000persons who hitherto have had to pay on low incomes. I wish to know whether the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) spoke last night for the South African party when he made his attack on the civilized labour policy of the Pact Government. Not having received a reply from the hon. member I presume that he did speak for his party. In my opinion, that policy is the greatest step forward that has been taken for many years, and the Government deserve well of the country for tackling the poor white and unemployment questions. The hon. member (Maj. G. B. van Zyl) has taken a very serious risk in attacking the Government over this matter ; he pleaded that more consideration should be shown to the users of the railway. As a matter of fact they have received very fair consideration indeed from the present Government. The late Minister of Railways was in office for about three years, and during that time he effected rate reductions to the extent of about £2½ millions.

Four millions.

So far as I know it was nearer £2,500,000. The new Government has not been long in office and in 14 months has reduced rates by over one million pounds.

Twenty-one months.

Substantial reductions have been made all round ; the commercial community has been studied, and fares have been reduced. There is really very little to complain about in regard to rate reductions. The hon. member suggested that the extra cost of employing civilized labour prevents further reductions in rates. In my opinion, however, it is infinitely better that the rates should remain as they are in order to carry out the experiment of employing thousands of men— many of them decent, educated men who were practically destitute and who have hitherto been unemployed or engaged on relief works. That is a better investment than reducing rates, from which really the poor man receives little benefit. Nor do I see that there is anything wrong with the argument that each department should pay its share of the extra amount involved in the employment of civilized labour. If the hon. member was speaking for his party when he attacked the Government’s civilized labour policy, then he has rendered his party a disservice. The hon. member suggested that evidence would be forthcoming to show that certain Railway officials were not in favour of this civilized labour policy. I am looking forward to that evidence, for I understood that civil servants had nothing to do with policy at all, but simply had to do their job. We must assume that they are unsympathetic and therefore not doing their best to carry out the Government’s policy ; in that case they are not worthy of the position they hold, and the matter requires close investigation. If the hon. member’s allegations are correct the sooner these officials are brought to book the better.

Your deductions are very poor ones.

Civil servants should have nothing to say about policy, but should carry out the orders of their chiefs. The hon.member (Maj. G. B. van Zyl) suggested very clearly that the General Manager himself was not favourably disposed towards civilized labour, simply because Sir William Hoy, in his annual report, drew attention to difficulties in the way of applying the policy. Naturally, if you take a large number of civilized men who have been out of work for a long period, and are ill-fed and badly clothed, and put them on to railway construction, and other labouring work, it will take them some time to get fit and to learn their job. To condemn the Government for giving these people a chance to rehabilitate themselves is a very risky procedure, and is not very creditable to any political party, and will be remembered by the public. It seems to me also that some of our officials belong to extremely old-fashioned Manchester school of economics, which believes in buying in the cheapest and selling in the dearest market, and regards (labour simply as a commodity to be bought and sold. The Auditor-General, for instance, in his Annual Report for 1924-’25, page 68, refers to what he is pleased to term “Non-Economic White Labour,” and states inter alia that—

What is termed the “economic wage” Is simply the lowest possible wage that an unorganized native is prepared to work for, without regard to the civilized standard that the Government wishes to maintain. This policy may cost more it is true, but we have to bear in mind that when you take men off relief works where they have been getting 3s. or 4s. a day and place them on railway work at 5s. or 6s. a day, the money they earn is not placed in a money-box or on fixed deposit, but it is spent on rent, food and clothing, and I maintain that from a purely business point of view this policy is strictly in accordance with the Act of Union, even though it costs a little more than the old policy did. It is good business for the country. I think the hon. member for Cape Town (Har-our) (Maj. G. B. van Zyl) is on wrong lines altogether in attacking the civilized labour policy. The hon. member spoke of the position of the general manager and suggested that he was not a big enough man for the job or that the job was too big for the general manager. Everyone who sits on the Railway Committee, as I have done for several years, recognizes the extraordinary ability of the present general manager of railways. We know that he has got a big job on, but, as the hon. member is aware, there are also four assistant general managers. If the general manager takes on work which he should perhaps delegate to the assistant general managers, that is his business, but in my opinion a competent general manager making full use of his staff of assistant general managers, and having the assistance of the railway board and incidentally the Minister, ought to be able to do the job. The hon. member (Maj. G. B. van Zyl) seems rather indignant at the way in which I have construed his remarks, but he certainly suggested that the job was too big for one man. I contend that if the general manager delegated sufficient work to the assistant general managers, and other officials, it is a job that is not beyond the powers of one man, and we all know that in the present occupant of the post we have a very able general manager. There is one aspect of railway matters which has struck me very forcibly of late and that is that there seems to be something wrong in regard to the staff generally. There appears to be a lack of co-operation amongst the various branches of the service, some lack of understanding, which is rather a serious thing for the country. One cannot go into the details now, but it seems to me that the time has come, in view of recent happenings on certain work which has been done in this country, when there should be more consultation between the heads of departments and the Railway Administration. Certain high officials seem to be at loggerheads with other high officials in regard to important matters and I think an inquiry into the super vision that goes on in the railway would be rather fruitful. The hon. member for Cape Town (Harbour) also dealt with the vexed question of the renewals fund. I agree that to a certain extent there is something wrong with the method of building up this huge fund, that such large sums should be taken from revenue and placed to the credit of this fund, but I think he is not quite fair in certain of his remarks concerning this fund. He knows that the administration claims that where you have a large sum of money in the renewals fund, which really exists for depreciation purposes, and you require rolling stock it would be perfectly absurd to go outside and borrow money by means of loans on which you have to pay large sums of interest, when you have these large amounts in your renewals fund, which are lying idle. Therefore. I think the Administration is justified in these circumstances in taking money from the renewals fund to purchase new rolling stock. On the subject of rates, there is one particular set of rates in regard to coastal towns which always strikes me as very peculiar, and that is the rates on coal. Take the rates on bunker coal from Witbank to Cape Town. I think it is something like 17s. The rate on export coal is 14s. 5d., whereas the rate on coal for domestic purposes is 20s. I want the Minister to try and realize what an important bearing this has on the cost of living, as far as the coastal towns are concerned. I want to ask him to give some consideration to file poor, man in the coastal towns in the Cape. If you can carry coal at 14s. 5d. for export and make a profit, why cannot the same rate be applied to coal for domestic purposes? If the Minister could see his way clear to make that rate uniform it would certainly reduce the price of coal and give a good many poor persons the opportunity of buying coal, or more coal, during the winter season. Hon. members may be surprised to know that the price of coal is so high down here that many poor people are unable to use it. Anything which tends to cheapen coal for domestic purposes will be very much appreciated. I hope the Minister will be able to make that small reduction. I do not think he will lose any money at all, because I am perfectly certain there will be increased traffic. On the question of civilized labour, I want again to appeal to the Minister to see whether some scheme could not be devised whereby civilized labour in the urban areas, where rent and the cost of living are higher, could receive some consideration in view of that fact. It seems to me that a flat rate does not entirely meet the case. It seems to me very hard indeed for a married man to try and live on the pay which is given to civilized labour, say at the Salt River works. If such a man were given work in a country district, where rent and cost of living are lower, he might be able to come out well. I certainly think the remuneration should be more for a married man. Many men tell me that they work a week for £1 16s., and to attempt to pay rent and buy clothes and food on that is a sorry state of affairs. I want to see all these men getting a civilized wage, so as to enable them to live as civilized beings should. I would like to know whether the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl), or any other member on those benches, thinks that any further rate reduction should take place, until every servant receives a living wage. I maintain there is still a very large percentage of railway servants who are not paid a living wage or salary. It is not limited to manual workers. There are very large numbers of men on the clerical staff who are not receiving a salary to enable them to keep up a position as decent officials. I want the Minister to refuse to attempt any further rate reduction while these men are receiving these rates of pay. We are not asking for luxury, but we are entitled to claim that these men should be paid a living wage in the real sense of the term, and until that is done it would be wrong and improper to make any further rate reduction. The average user of the railway would not grumble at no further reduction if he knew that it would assist these men. I hope the Minister will stick to that, and not give way. I would like to deal briefly with the question of the eight-hour day. I want to ask the Minister to see if it is possible to apply the eight-hour day to the remaining section of the staff. He gave certain figures showing that if it were applied as regards ticket examiners, it would cost £40,000 a year. There are several thousands of these men, so that per head it does not amount to very much. The Minister would be surprised to know how that would be welcomed, and what a gain there would be in contentment and efficiency. The men’s representatives made many concessions in order to secure the eight-hour day, and they feel very sore at the fact that the Administration has helped itself to these concessions without giving the eight-hour day in return, if the Minister could realize the extra amount of contentment and efficiency which would result if he gave way on this point, he would reconsider his decision. He would certainly get very full value in return. Take the average crew of a train—you have the driver and the fireman working eight hours a day, and you have the guard and the ticket examiner working nine hours. The average train guard’s duties are just as strenuous as the engine-driver’s, if not more so. No man who has travelled on the mail trains but must know that the ticket examiner’s job is a continual grind to do his work properly, and he is responsible for large sums of money sometimes. Then there is the hardy annual of the two rates of pay, which I would like to mention. The Minister, of course, has made a definite statement that he cannot remove this anomaly, but I want him to consider the position of a man who goes to work and is, let us say, a first-class carpenter or fitter, and he discovers that whereas he gets 18s, a day, another man doing the same job who has been in the service before a certain date is receiving 1. In the Minister’s own profession that would not be allowed; there you have one scale of charges. Any man who breaks that schedule is subjected to divers penalties— whether he is sent to prison or not, I do not know. The introduction of this double rate of pay system is much resented by the men. It leads to friction, and does not lead to efficiency. I hope the Minister will go into this matter, and see whether he cannot level up. Right through the railway service you have too many sections, classes and grades of servants altogether. In the clerical division alone, the number of grades is beyond comprehension. There are a number of men who joined the service young, and no matter how long they stay in the service, they cannot pass beyond a certain barrier. I hope that the Minister will see that these barriers are removed to a certain extent. I want to see these barriers, or some of them, made lower, so as to give the men better prospects for the future. If you go through the staff regulations, you will find literally scores of classes of men entitled to different leave privileges. Take a first-class fitter who has perhaps worked 25 years on the railway, and is entitled to 12 days’ leave and a second-class pass. He may have a son who is a clerk on the railways, and because of that is entitled to 30 days’ leave and a first-class pass. They may want to go on a holiday together, and the father has to travel in one class while the son travels in another class. There should not be this distinction between the man who works with his hands and the man who works with his brain. The more simple the leave and privilege conditions are the better for the service and the better for the staff. Then there is this discrimination between men because of their colour. There are coloured men in the Cape Town goods yard who have been employed on the railways for 20 years or more, who are not entitled to sick leave, or holidays, or anything like the European employee. If there are to be privileges, I should think that they should be first of all for the men on the lower scale.

These men are entitled to four days’ leave.

Not if they are considered as casual employees. They would have to be classed as permanent. I want to see that the poorly paid man gets more consideration than he has got previously. The Minister has done an enormous amount of good work, and we give him full credit for that, but we want further things from him. There is the matter of the Fifth Report scales. The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) wants the users of the railway to receive more consideration, but the hon. member for Uitenhage (Mr. Bates) says he wants these scales adopted at once. I am more concerned with the lower paid men, and I trust the Minister will go into the question. I want to refer to the question of having work done in this country. It is bad policy to depend too much on outside people to do your work. In the case of the Durban elevator we went outside this country and got an expert, and an expert blunder occurred, which I do not want to see repeated. We have South Africans, if not here, certainly in other parts of the world, who could supervize such works as well as anybody. We are not making sufficient use of South African men or material. We have been depending upon experts who are not experts, and it has cost us thousands of pounds for blunders. A comparison between the Durban elevator and the Durban graving dock is a very odious one. The latter job was a credit to the country and the railway administration, but the elevator was a disgrace. The graving dock is an instance where the railway department showed that they could do the work depart mentally at less cost, and even the hon. member for Cape Town (Central), who is the high priest of private enterprise, “would at least admit that. We should see that we control our own works, and, as far as possible, employ South African men. I wish the Minister to go very carefully into that matter. In regard to the placing of contracts overseas, I want the Administration to go in, to a greater extent, for themselves tendering for these works. A very large amount of the work in connection with the Natal and Cape Town electrification schemes could have been done in this country ; for example, a certain amount of the structural overhead work could be made here, and our engineers inform me far more use could be made both of South African men and materials. I want the Government to embark upon a real national policy of construction, maintenance and manufacture of our own requirements, especially so far as the railways are concerned.

I do not think that the twisting of the words of the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) by the hon. member for Salt River (Mr. Snow), with regard to the general manager, needs any reply. What the hon.member for Cape Town (Harbour) conveyed to the House very distinctly was that the vast expansion of our railway system and all it involved was too much work for any one individual man, independent of what abilities that man possessed. There was no reflection at all on the capabilities of the present general manager, but quite the contrary, and the marvel is that one individual should have been able so successfully to undertake for such a long period of time such vast responsibility. As there are other speakers, I propose to confine myself to defence. No one knows better than the Minister of Defence that there is very considerable uneasiness in the country with regard to the citizen and other forces under his control, and I will not deny that his latest re-organization proposals have done very little to relieve that uneasiness. In fact, I understand that a conference of staff officers is now being held at Pretoria to consider whether these re-organization proposals are practicable. A great many of them have partially been put into effect, and it seems a pity that the Minister of Defence did not call this conference before he began to give effect to his re-organization proposals, because I am sure that the conference will not be able to endorse these proposals, as tending to efficiency and satisfaction in the forces. This conference would have been all the more valuable if it had included a number of senior citizen force officers—

What conference ?

The conference of district and other staff officers being held, or about to be held, in Pretoria.

No.

Well, I have been misinformed ; I understood that these officers had been summoned to Pretoria to go into the latest re-organization proposals.

A conference was held about ten days ago.

After the re-organization proposals had been put into effect?

Not to confer on the re-organization proposals; to start the thing going.

Had it anything to do with the re-organization ?

It had everything to do with the re-organization.

The Minister has not called any conference in regard to these reorganization proposals before putting them into effect.

Go on with your speech.

We will not pursue the matter any further, but I think before those proposals were put into operation the Minister should have sought the advice of experienced officers. The staff has no military experience behind it. The Minister is deliberately by the abolition of the permanent force, or the greater portion of it, cutting himself off from his further supply of staff officers and instructors. We will no longer be able to rely on any local supply of staff officers and instructors with experience, because the body from which they would be recruited has been disbanded. I hope the Minister will cancel the very absurd proposals for the splitting up of the artillery into training units. If that is done, who will instruct the instructors? The Minister has committed a very grave error, for these small units will mean only inefficiency. Above all, I would urge on the Minister to gradually build up a system of commands. It is absolutely necessary that there should be certain officers throughout the country undergoing training to exercise command in the field in the event of our forces ever being called upon to engage in war. People may say that, after the Great War, defence matters are not at all urgent. I have selected defence as the subject of my speech because I am persuaded of its utmost importance and great urgency. The policy of the Government is bringing us more and more into conflict with the outer world. I am not going to discuss the wisdom of certain recent and impending legislation, but to point out its effect from a military point of view. We have definitely thrown down the gauntlet to the black and the coloured races of the world. That is our policy—whether it is wise or not I am not discussing, but the only means of putting the policy into effect, if it is disputed by the others, is armed strength. The last word in diplomacy is war. We have in this country definitely entered on a policy of denying, or at all events delaying, the advancement of the black races. However you like to describe it, it is the policy of repression.

When have we done so ?

Through the colour bar Bill.

Nonsense.

The Wage Bill, the Electoral Bill and the Class Areas Bill.

Nonsense!

I am not entering into the wisdom or otherwise of these measures, but this Government has entered upon a policy of repression.

No, certainly not.

That is how the people most intimately concerned regard it—the natives and the Indians so regard it, and that is the thing that matters. We will not split straws over whether it is intended to be repression or not. Granted that it is necessary in the best interests of the natives themselves to have this policy, my point is that you can only enforce this policy if you had the necessary physical force behind you. That is the history of the world. There is another fact. The chancellories and the civilized people of Europe to-day are obsessed by the rise of race consciousness amongst the black and coloured races of the world. The supremacy of the white races no longer goes unchallenged in any part of the world. It may be that we may feel the first brunt of it. We are not alone dealing with 4,000,000 or 5,000,000 coloured and black people here—we must deal with Africa as a whole. There are 120,000,000 of the Bantu race in this continent and many of them are trained to arms. We are almost marching with the boundaries of certain European powers which have relied largely on trained natives for their military strength and very well trained they were. So we are not dealing alone with a handful of natives if 4,000,000 or 5,000,000 can be called a handful, but we must eventually deal with their backing of 120,000,000. Already emissaries from Central Africa are down here. What story will they take back ? I do not think it will be a story that will tend to the peace of Africa. If we are going to carry out a policy we must provide the necessary means. We have no armed force that would enable us to hold our own. I think that our military affairs have suffered in the past through too much attention I being paid to small or local matters. There has been no comprehensive grip of the whole thing. Unfortunately, we have not, in this country, a national defence league, which would embrace all parties irrespective of politics, race or anything else, and which would form a solid body of public opinion that would endeavour to keep defence matters and our security outside of party politics. The Minister himself complained that when he went into office he could find no document that informed him for what the defence force was organized, what duties it was intended to perform, and how those duties were to be effected. There is a bad start. The first step towards the solution of a problem is a clear statement of it, and I will venture, as the Minister has not produced it, to give a definition of the object of our defence force, and it would run something like this, which would practically meet the circumstances of our country, and enable us to build up a force based on the intentions that were lying behind the Government. That definition is that we desire to maintain, to organize and to establish a defence force to deal with any serious attempt to interrupt our civilization and our orderly progress and development, whether from inside or from outside. We have persuaded the public—and they have needed very little persuasion—willingly to provide an amount approaching a million a year with that object in view. At present it is a little less than a million. That is a premium of insurance. It means a capital of something like £17,000,000. Which might be devoted to the progress and development of this country, borrowed and with a sinking fund that would enable it to be paid off eventually. Let me say at once that the money is not a penny too much, that it is a very necessary sacrifice to make, that it is a very necessary premium of insurance to pay, but I want to know that the risk against which we insure is more or less covered by the measures that we are paying for. There is little to inform this House or the public as to what we are getting. The departmental reports are about two years old. We do not know what is happening. The figures in the defence estimates give us very little information indeed. I will be grateful to any hon. member who will tell me from these figures how many men are being trained. I hope that the Department of Defence will see their way before estimates are presented another year to have embodied in the estimates the number of men who are being trained. It is obvious then that we are not in a position, as regards our internal affairs, to look forward in absolute security to the future. When I say it is, perhaps, urgent that we should take stock of these matters, I would remind hon. members that it takes a minimum of ten years in order to effect any considerable re-organization scheme in military matters, and who can say that matters will be so peaceful in the continent of Africa for the next ten years that our military machine may not be severely tried ? Therefore, there is—I do not want to exaggerate—a very considerable amount of urgency in setting our affairs in order. I have pointed out more than once that we are getting mighty little value for this money in the form of trained men. As regards external interference with our progress, of course we have, and we rely on, whether we admit it or not, the powerful protection which has been afforded to us ever since we came into being as a nation by the British Navy. That protection, I hope, will continue to be afforded us for many years to come, and when the predominant section of the Pact talk of “independence,” I would like to know exactly what they mean. Independence of whom, or independence of what? What is meant? I much prefer that the word “independence” should be dropped, and the word “self-reliance” substituted. We cannot be independent, whether we wish it or not, and I cannot imagine any sane man who will study the globe for half-an-hour coming to any other conclusion than that arrived at by naval strategists, and that is that whoever holds the Cape has command of the seas, and that the converse is equally true that whoever commands the seas holds the Cape. What does Article IV of the constitution of that party really mean ? Is it eye-wash, or is it really meant? If hon. members will remember that it has been calculated that in time of war, if the Suez Canal were closed, as it easily would be a British ship would pass the Cape once every half-hour, they will see the supreme importance of the Cape of Good Hope. If hon. members will see that, after all, this is a centre that will only fall to the most powerful nation at sea, they will recognize that there can be no such thing as independence. If we follow this to its logical conclusion, it means that South Africa cannot be independent until South Africa commands the seas of the world, and I think that is a long time distant. I advise hon. members to drop that idea and to substitute “self-reliance” for it, and to put independence on the same plane as the other wing puts socialism—something very desirable perhaps, but not practicable. While our first line of defence is, and must be, the British navy for a long time to come, it does not follow that we should not do our share in maintaining our position in the world. Ships have to come into port from time to time, and it is necessary that we should provide the facilities for them. There is nothing to prevent the most contemptibly small war vessel owned by the smallest nation in the world from coming in and damaging the great port of Durban and the people there. When we consider we have there the second largest graving dock in the world in full operation, and when we consider that we are about to establish a power station to electrify not only Durban, but to furnish power for the South African railways as far as Pietermaritzburg, and that all this is entirely unprotected, it must give us food for thought, and we must wonder whether the vast sums we have been voting every year for defence have been most wisely expended. We might ask on what grounds could we have aggression from outside. Well, on the ground of human nature. We are a small community ; we occupy land to a vast extent and of wonderful riches. In many parts of the world the people are overcrowded, and must find room. Take that quarter of the globe between India and Japan, where nearly two-thirds of the world’s population are congregated. There must be eventually an overspill. Here in South Africa we have a white population with a density of 3.2 to the square mile, coupled with a native population of 11.4, making 14.6 people to the square mile. The white population is a little over a million and a half. Take a country like Japan, with which I hope we shall always have the most friendly relations. There is a country with a population of 77 millions and a density of 370 to the square mile, a country that is naturally poorer than South Africa, and whose inhabitants are hard put to it to find a means of making a living. There are China and the Malay States also suffering from over-population ; and it is possible, unless we can hold what we have effectively, both by means of defence and, above all, by increasing the white population, we may be called upon to hold this country against those who desire to take advantage of it. These are all general reasons to show that at all events we cannot do without our defence force. That force must represent the spirit of the people ; it must be well trained and able to carry out what is expected of it by the people. We are neglecting a great opportunity of organizing an effective and economical defence by not making use of our airmen and the conditions here that are so favourable to flying. We must have been impressed by the fact that Cairo is only 62 flying hours away. All this tends to show that Africa is shrinking in regard to dimensions so far as it affects the transit of people and commodities. We have the unstinted testimony, not only to the skill of our airmen, but that South Africa is specially adapted for the development of aircraft. It might be that, instead of developing a local navy, we will find our safety more largely consisting in the development of aircraft, both for our own immediate defence and as assistance to the Royal navy in protecting us from oversea aggression. I think the Minister has at all events made one step in the right direction in increasing the Vote for the air force, and I hope he will not be deterred from asking for more funds, if necessary, to bring it to a state of efficiency. I do not see how we can possibly hold this country unless we go in for a real, organized and effective system of universal training. While we cannot afford to have large numbers of men withdrawn to undergo the necessary training, yet we can lay the foundations of an effective force by means of a cadet system. It will cause no dislocation, and it will have a very marked effect on the character of the boys. At all events, it cannot fail to have a building-up effect, not only on their character, but on their physique and on their mentality; and we must remember that these are the boys who are going to make the nation in the future. It is not generally understood how much we are going back in the physique of our people. In the return I asked the Minister of Defence for, I found that the number of recruits for the permanent force who were rejected as being medically unfit reached an extraordinarily large percentage. There applied for enlistment 1,981 ; of these 1,486 were not sent forward for medical examination, for two reasons. In some cases there were no vacancies, and in other cases it was obviously a waste of time and money to send men who were obviously physically unfit. Of the 485 men who went forward, no fewer than 131, or 46.6 per cent., were found to be medically unfit, that is, men who had passed the eagle eye of the recruiting sergeant. We know that the percentage of recruits for the active citizen force found to be medically unfit is a large one. Now, cadet training would obviate many of these defects, and would be beneficial to their health, and be the means of discovering latent defects, and preventing their development. This country would he wise to adopt compulsory cadet training. Look what the north has done—a Bill in Rhodesia provides that boys at school, on attaining the age of 12 years, must be members of a cadet corps. That is a practice that could be carried out at very little expense. The number of boys who attained cadet age, which I should put at 14, is 20,000 every year, and, making a liberal allowance for all causes, such as ill-health, inability to attend drills, and the like, we may say that 10,000 will be found capable and fit to undergo military training. In 10 years’ time we would have 50,000 ex-cadets who presumably would have had a good military training, and enable them to be turned readily into soldiers. We would have 50,000 ex-cadets for replacement purposes if the country were at war. Before very long we would have the material in the partly prepared state to put up an army. In the meantime we must develop our air force, air sense and airmen to the greatest extent possible, and I would suggest that we adopt the system which has been found very suitable in Australia—university students between the ages of 18 and 23 are given free instruction in flying, provided they remain on the reserve for seven years afterwards. It would furnish us with a very large reserve of flying men, and we know that after a month of war no fewer than 80 per cent, per month, or 1,000 per cent, per annum, fall out. One of the reasons of Germany’s sudden collapse at the end of the great war was that she found herself deficient in airmen with the necessary experience and nerve to enable them to go on the long bombing expeditions which caused so much destruction, and had such influence on the course of the war. At the time of the armistice, two aeroplanes were being prepared to proceed from England to Berlin to bombard that place —they hoped to do so and return with safety. I had the privilege, some ten days ago, of talking with a young airman who had been selected for the job, and perhaps he had been personally disappointed that they did not go. I do hope that some movement will take place in this country—something similar to the Navy League in England and the National Defence League in Australia—which would tend to take national defence from party politics and make it local, and not general, so as to add to the security of the defence of the country.

I am certain the Opposition is disappointed over the Budget debate. If we on this side go by the spirit with which the Opposition was inspired in its attack, we must come to the conclusion that there is not only little, but absolutely no enthusiasm on the part of hon. members of the South African party. It appeared from one of the speeches delivered by an hon. member opposite that he felt hurt when the Minister of Finance on the introduction of his Budget said that the decks were cleared for action, and when the Minister indicated that he was not afraid of the action. Judging by the speeches of hon. members from the other side, the Minister was right. The attack is disappointing if we are to judge by the speeches delivered by the Opposition’s heavy artillery. We expected that a more constructive attack would be made by the leading members of the Opposition. In criticizing the estimates we expect constructive criticism. Among the critics there are men who have had the responsibility of being Ministers, and one expects that they will deliver constructive criticism, and will contribute something which would be of advantage to the general progress of the land. We are disappointed. It appeared that there were two of the Ministers who took the wind out of their sails, Ministers who were the occasion of a storm in the House last year. Nothing is now said about the dip regulations or about the dual languages. These are subjects on which the Opposition can contribute a good deal, and can arouse much excitement among hon. members opposite, so much so that last year some hon. members spoke not once but ten times. The Opposition laid stress particularly on two matters, viz.: on protection and on the civilized labour policy of the Government. I hope to come back to that shortly and to answer their argument as far as possible. As to protection, too much weight cannot be attached to the argument that this may be injurious to South Africa. Speakers opposite give me the impression of having made a barren study of the figures. The figures have been made use of without considering the progress of the country, and the figures are merely for show. Prominent members of the Opposition used the Budget figures in a manner not wholly correct, and which amounts t) a misrepresentation of the facts. They do not give us a correct impression of the actual position, as the matter is presented from the one side only. Speakers on the side of the Opposition gave the impression that they were remarkably half-hearted. What I require of them in their treatment of the Estimates is, that the figures which they mention, and on which they build their arguments, should have a relative bearing on the progress of the country and likewise take into account the material prosperity and happiness of the people. In this respect the Estimates indicate surprising facts, and it is our privilege to consider their true significance. What is ultimately required is the happiness and welfare of the people, and we expect the Opposition to help. I am sorry the hon. member for Caledon (Mr. Krige) is not in the House, because I want to refer to something he said which does not Coincide with the truth. It is not in his interest and it does not further his case if he and other hon. members of the Opposition represent matters differently from what they are. His attack is similar to that of Don Quixote on the windmills, and is absolutely ineffective. I expect from hon. members of the Opposition that they will not forget the inheritance left us by the late Government (the damnosa hereditas) because another £128,000 had now again to be voted to the Transvaal administrative and clerical pension fund which in the past was neglected. We must rectify what our predecessors left undone, with a sense of responsibility for the future. We would like to declare to the country that we have a feeling of responsibility, and expect that the matter will not be discussed in a frivolous manner. We would like attention to be given here to the fundamentals which are an indication of the country’s progress. The Estimates contain views and facts which gladden us, because we see that there has indeed been great progress in connection with the use of our tobacco, and in connection with the revenue from the postal services. The Minister said with reference to the post office that £159,000 more than his estimate of revenue had come in, principally due to the extension of telephones. I wish, as a representative of the platteland and of districts for a field which are the sentinels of our civilization, to render thanks on behalf of the people to the department and to the Minister of Posts and Telegraphs, particularly to the Minister who has now gone over to another department, for the services that have been rendered to people of the outlying districts, in bringing them into touch with the larger centres. The extension of telephones has not only increased the comforts and rendered the social position of the platteland more pleasant, but the farmer, who is the producer, has come into direct touch with the markets. I think we do not value sufficiently the services rendered during the last twelve months by the Department of Posts through the extension of telephones. I have not got the figures, and I should like to know how many miles have been built. Further, I would like to say a few words about the services which have been rendered in the past year by the Department of Railways. I think that we do not sufficiently appreciate the services which that department, from the Minister down to the humblest servant, has rendered to the country in connection with the carriage of the unusually large mealie crop of last year. If we want to know what this means we can compare with the year 1921. Then the crop was not nearly so large and in order to obtain a good price it was necessary to deliver it to the overseas market in the shortest possible time. Contrary to the expectations of the country and the farmers, the forwarding took a long time, and the produce arrived in Europe when prices had fallen, to the great disappointment of the farmers. Last year this record harvest was exported in a very short time. Not only do the Estimates give an insight into the progress of the country, but they are an indication of the prosperity which we may expect in the coming year. The past year was particularly favourable in many respects. We do not attribute this to the Government, but we appreciate the fact that the Government did its best to foster production. The overseas market improved, and this is proof that the Government has the best intentions and carries them into practice. If we take into account the improved outlook shown by the Estimates, then we are reminded in the first place of the reduction of tax on tax-able incomes. The statement of the hon. member for Bezuidenhout (Mr. Blackwell) that that would affect no one, causes amazement. He makes this statement in spite of the assertion of the Minister of Finance that no less than ten thousand households (I do not know how many individuals) will as a result be taken off the list of income tax payers. We feel that this will further the happiness of these people and we hope it will not all be spent. Last year the Minister of Finance expressed his concern at the absence of thrift, and appointed a commission, and he also established other institutions to encourage thrift. We cannot lay sufficient stress on the value of thrift. Further I am reminded of the protection of our grain farmers. The speech of the hon. member for Bezuidenhout was very disappointing. With a total absence of knowledge he spoke of the sacrifices made) by farmers. The wheat farmer is one of the most independent and necessary elements of (the community, and if he can exist then we also can make a living. If we go into the figures of the report of 1925 of the Cost of Living Commission, in which figures are given in connection with our inland produce, our consumption and export, we see that our production of wheat amounts to about two million bags a year. This is an average figure which naturally varies from year to year. Our requirements are about three million bags per year. So that if we encourage the production of wheat and protect the market for the wheat farmer so that he can dispose of it profitably, then the production will increase. This will not increase the price of bread for the poor consumer. The public press in which the opinions of persons who know are also expressed, acknowledges this. The assertions of the Opposition again show us that in spite of their denials they have not got the interests of the people at heart. The hon. members for Paarl (Dr. de Jager), Stellenbosch (Mr. J. P. Louw) and Worcester (Mr. Heatlie) attach more importance to the protection of the wine industry. For years past it has been felt that injustice has been done to the wine industry in South Africa. For several years the producers had to destroy a large part of their produce, and the wine farmers could not get £3 per leaguer for their wine. Notwithstanding this the previous Government allowed the importation of between £500,000 and £800,000 worth of liquor per year.

We proposed to make a change.

Yes, it is true that certain supporters of the Opposition proposed an increase in the excise, but when that was done by an organized body (because the movement came from that source) the members of the co-operative society, supporters of the South African party, raised objections.

Business suspended at 6 p.m. and resumed at 8.10 p.m.

When the House adjourned this afternoon I was discussing the increase of the excise. It is of special interest to the wine industry that the Government has come to the assistance of the wine farmers by increasing the excise duty. I mentioned the fact that the Government was, on several occasions, approached for an increase. The request was not granted for two reasons, viz.: It was desired to cater for the fine taste of certain persons and to supply £500,000 per annum to the Treasury. But I also alleged that, in spite of the application by the wine producers and by the Co-operative Wine Producers’ Association we, nevertheless, had the strange occurrence of one hon. member, who had made application on behalf of the Co-operative Wine Producers’ Association for an increased excise, when the practical moment arrived, changed his views and stood on the side of the Government instead of on the side of the wine producers. After that he kicked dust in the eyes of the wine farmers. Now I expect that the hon. members for Paarl (Dr. de Jager), for Worcester (Mr. Heatlie) and for Stellenbosch (Mr. J. P. Louw) will remain firm and will vote against the increase of the excise. We assume that the hon.members had good ground for their attitude on the previous occasion. The wine farmer is now able, not only to make an honest living and to contribute to the progress of civilization and education in South Africa as he did in the past, but he is also given the opportunity to produce an article for export and to deliver the best article. Under the protection which he receives from the Government he is now able to do this. I can also make mention of what the farmers in the south-western districts obtained, but I will leave it to the hon.member for Riversdale (Mr. Badenhorst) to speak about that. The criticism of the Opposition contained two outstanding features, viz., the protection policy and the civilized labour policy of the Government. It seems almost impossible that the Opposition have failed to convince themselves that these are planks in the Government policy, and that it will be to the advantage of the country if industries are protected. We know the Opposition is hopelessly divided, but the speakers who carry weight are against protection. If protection is good for all other civilized countries in the world, where a policy of protection is applied in the interest of their industries, why then is it not sound for South Africa, which is a young country and moreover, a country possessing the raw materials? Why cannot the raw materials be worked here, so that we can provide work for our unemployed, and place them in a position to make a living? We do not doubt the honesty of the hon. member for Cape Town (Central) (Mr. Jagger). We know he honestly means what he says, but we cannot get away from the thought that imperialism is still at the back of his argument, and that he fears the limitation of imports from overseas. All are agreed, the Opposition agree, that protection must necessarily lead to an increase in the cost of living. In considering the matter, two questions arise: Has protection had any favourable consequences for South Africa; what portion of the increase of the cost of living must be attributed to protection ? I do not wish to pose as one who knows the tariff system, but I can say that there is no doubt about the progress of industries as a consequence of that policy, and that the industries in our country have developed a great deal. The Minister has already given the figures. Thus, in a limited time of about twelve months, 343 new industries have developed and, although I have not the figures to show how many labourers were employed, it may be assumed that many more were actually employed. Then I want to point out a case which was made use of by the hon. member for Cape Town (Central) as an argument against the protection which was granted to the makers of bodies for steam engines. The hon. member made a big argument yesterday, but we find a similar case was considered last year. The argument, which he advances this year in the case of the steam engines, can also be applied to the protection which was last year granted to the makers of bodies for motor-cars. As a consequence of protection, not a single finished motor lorry was imported into the Union last year. In 1924 finished motor-lorries to the value of £180,000 were imported, but in 1925 not one. The chassis was imported, but the bodies were built here. This is proof to anybody who takes the slightest interest in South Africa that this protection is a good thing if, as a consequence, the bodies are built here. Last year steam-wagons of the value of £160,000 were imported. That means that the increased revenue will amount to £6,000. Now the hon. member is opposed to this as, I assume, on behalf of his party. He makes a great point of it on the ground that the wagons are used in the service of the public because it is the public bodies who use them. This is not so, because it is not only public bodies who make use of them. Upon enquiry we find that it is an antiquated article which is no longer fashionable, but simply because we had no protection policy, these steam-wagons were imported last year. If it was to the advantage of the country that builders of motor-bodies should enjoy protection, then it is also the case here. This argument of the hon. member must, therefore, fail. I also want to take another point. When the Opposition state that the cost of living has been increased, they should produce proof.

The facts are there.

It has not yet been proved. I quote the figures. The index-figure for food during March, 1925, is 1,390, whilst for February, 1926, it stood at 1,344. We, therefore, expect that the Opposition will admit that there was no increase, but a decrease. The figure for the general cost of living for March, 1925, was 1,453, as against 1,431 for February, 1926, which also shows a decrease. This is the case in spite of the allegations of the Opposition, and we now expect that such charges will now cease. I also want to say a few words to the House in connection with a subject so much stressed by the Opposition, viz., the civilized labour policy. Their argument is the old one of big capital—so much capital, so much interest and profit must be put into the pockets of the capitalists. This is not surprising, and I expected it from the Opposition, because the great magnates are the speakers on that side of the House. One cannot, therefore, expect anything else. When they predict a calamity for South Africa as a consequence of the Government policy, we expect better proof from them. The South African party is in reality nothing but the Unionist party. They follow the old policy and ask that the cheapest labour be brought on the market, leaving out of account how many people can make a living. They have been following that policy consistently for twenty-five years. Not so long ago we had sad things in the Transvaal in consequence of the policy that, for economical reasons, Chinese labourers were imported. That was done by the same party, though under a different name. The object of the capitalists is merely to pocket as much interest as possible. They are also the same supporters of the South African party who insist on the importation of more Kaffirs from Portuguese East Africa in spite of the fact that we have a native population of about five to six millions. They are the same supporters of that party who put down the decrease in their incomes to the fact that they could not import more natives. I do not doubt this, but we must consider the interests of country and people as a whole, and the sooner the people are enlightened in this regard the better, for then they will probably realize their responsibilities. It is also the Same party which, under the Jagger regime, replaced the white labourer on the railways by natives. They used the same arguments. It is the same party which shrugged its shoulders in indifference in 1922, when a large number of people became unemployed. It is unpleasant to hear these things, but there are the facts. The same party knew in the past that every year about 8,000 boys leave our schools without being able to find employment, and they were not concerned. To-day, in our great cities, there are conditions which do not receive the slightest attention from those members. This makes me think of the evidence before the Economic Commission concerning wages earned by women in the large towns, and when a Government allows a responsible party to continue such conditions, it is tantamount to an acknowledgment of indifference. If they are indifferent towards our women and our young girls, who have to work for a living, then I say they deserve condemnation. If it only remained at that, if it was merely a question of economics, then it would not have been so bad, but, unfortunately, we saw not so long ago on the Rand what their attitude led to. When the Government does its best to find work for the unemployed and introduces a policy of civilized labour, we expect from a responsible party something else than condemnation and indifference. We not only have to do with £ s. do, but we are concerned with households, and nobody is justified in looking solely at the financial side of the question and letting the rest slide. This is the feeling we obtain from the report of the auditor-general, which has been so much praised. I do not want to dwell on the question any more, but an announcement that an economic wage means the cheapest labour possible is especially dangerous in South Africa. It endangers our civilization and, if that party should again come into power, the inevitable result will be to put an end to our civilization. We feel that the opinion expressed by the leaders of the South African party and by members of the Economic Commission is dangerous for our civilization. May I use this opportunity to express the hope that the Nationalist Government has for good and all seen the folly of the importation of officials to solve our problems. I want to point out what has already been accomplished by the policy of civilized labour. The railways have already employed more than 12,000 whites. I understood the hon. member for Cape Town (Central) (Mr. Jagger) to say yesterday that this is the only department where, according to him, this uneconomic policy has been applied, but that is not so. For the laying of telephone lines there were employed in the middle of 1924 only 452 whites and in 1925 fully 1,300.

In 1924 about 900 natives were employed on this work and in November, 1925, only 200. Moreover, the Department of Labour has, by means of Juvenile Boards, performed a great work, and many boys have been placed in this manner. Everything possible is also being done to place young people on the farms. It is sad that only about 50 per cent, of them remain on the farms, and I hope the Minister of Labour, who feels deeply on this subject, will succeed in keeping more young people on the farms, so that they may contribute to the increase of production in our country. The committee for technical education has also done very good work. We must also not only consider what the Government has done in a direct manner, but the example it sets is of great importance. If it persists in the policy of civilized labour, then other employers will in future follow. In saying this, I have in mind, not only employers in industries, but farmers also. A keener sense of responsibility towards civilization in South Africa must be cultivated among the labouring classes. Then we can face the future with equanimity. I close with the thought that if white civilization in South Africa is to depend on the policy of the South African party, as stated in this House, then the day when that party comes into power again will, indeed, be a black day for South Africa.

There has been a deal of talk in this debate about the establishment of a State bank and South Africa still climbing the ladder of prosperity. I would ask the Government why it is that there is at the present time such an acute financial stringency amongst the farmers of the Union. Never since 1919 has this financial stringency been so acute as at the present time. Why is farming land depreciating in value ? It is all over the Union, except sheep land, and that is depreciating, but not to the same extent as land for general farming. Farmers, to get out of their difficulties, are attempting to sell their land, and there is more farm land for sale than ever before. Then, again, I would like to ask the Government why for the last 20 months, since they have been in office, small farmers are abandoning their farms and seeking jobs on the railways and in the towns. On the electrification works in Natal, half of the men are small farmers who have left their farms. This condition exists in spite of the bumper maize crop of last year which brought into circulation £6,000,000, and the £15,000,000 wool cheque. I will tell the Government why this financial stringency exists, and it is because the principal branch of agriculture, in which £100,000,000 is invested, is in a stagnant position. What is the use of farmers buying land if it is not a payable proposition? The value of a farm is governed by its production. Take cattle farming—we are disposing of only one-third of our annual increase, and the other two-thirds is a frozen asset. Of that one-third, we alone do not enjoy the whole market, and we have to share it with Rhodesia. The embargo the Government promised they would place on is not an embargo. For the last six months of 1925 Rhodesia sold in the Union 19,250 head of cattle, representing roughly £200,000. There were 5,800,000 head of cattle in the Union in 1911, and 10,000,000 in 1925, and 900,000 is the annual increase from that 10,000. 000. If you deduct 300,000 sold here, according to the Minister’s budget speech we exported 105,000 quarters of beef, 25,000 head of cattle, or £200,000 in value. Rhodesia, with 2,000,000 head of cattle, in the same time exported 30,000 head. That is a very serious reflection on this Union, with the powerful Government that we have, which claims to be a farmers’ Government, that an adjoining neighbour can export 30,000 head of their scrub cattle, and we are able to export only 28,000. I would like to know from the Minister of Agriculture what our trade commissioners are doing in Europe. There was a great advertisement when the Trade Commissioner was sent to Austria and Italy. We have overcome every cattle disease, until to-day there is no disease we cannot check and cure. The result is, cattle has increased in every direction, and the toll of east coast fever and other diseases has almost entirely disappeared. Cattle farmers are trembling as to what is going to result to their cattle in the winter. The country is going to lose thousands of cattle as a result of the drought, and the position is very acute and serious. From Cape Agulhas to the Zambesi you can breed cattle, and there is no country in the world where cattle can be raised so cheaply as South Africa, and the position of the cattle farmer is going to seriously reflect itself on the country. The cattle farmer cannot switch on to sheep, because sheep land is limited. Some fifteen or twenty years ago, South African wool was a byword in the European market, but, thanks to the late Government, it stands second to none in the world to-day. In 1911 there were 21,000,000 sheep in the Union, and the amount of wool yield was 4¼ lbs. per sheep, the sterling value being £5,500,000, whereas in 1924 there are 27,000. 000, the wool being 6£ lbs. per sheep, and the value £15,000,000. We have as good cattle in South Africa as any in the world. It is a well-known fact that James Foster’s South Devon herd in Natal is the finest in the world, and my hon. friend, the member for Queenstown (Mr. Moffat), breeds as good shorthorns as any in the world. What magnificent prices were paid in Europe for the Frieslands we exported on account of their quality! Farmers have vainly tried to cope with this question, and have tried to form companies to deal with this surplus, and have failed. I think the reason was that the spirit of co-operation has not sufficiently matured. This is a national question, and it is holding up South Africa. It is a question the Government should undertake, I do not want to criticize the Government and not suggest a remedy. I would point out to the Minister of Agriculture that he has a fine field here to do the country and the farmers an immense amount of good, and in many cases save farmers from bankruptcy.

The hon. member for Liesbeek (Mr. Pearce) will do it.

I am glad to see the hon. member, and I recognize that his gigantic intellect will solve the problem. I want to call the Minister's attention to the export of cattle from South-West Africa on the hoof, and that the cattle did not lose in condition on the voyage through the tropics, and arrived in prime condition in the United Kingdom. The drawback was the high freight of 10 per head, and the loss en route was not to be considered, as it was so small. If the Government will take this matter up, we will find excellent markets in Europe for young beef, and we know that the United Kingdom has a magnificent market for beef. There, periodically, they have foot and mouth disease. They demarcate a district and slaughter all the cattle in it, and the toll there is immense. On the Continent they have that disease too, but take no restrictive measures ; the disease there is endemic, and the cattle pay their annual toll. I am sure that, if the Government will seriously enter into negotiations with the shipping companies we could successfully carry on an export trade of cattle on the hoof. Then we have to remember that another advantage is that we would have the benefit of Dominion preference. The late Government, realizing the situation, made a beginning and offered a beef bounty, but the Government went out of office a few months after introducing this measure. That bounty, in principle, is all right, but the amount fixed per pound is too small. If it were doubled on frozen meat, it would assist very materially. The money expended in that direction is only advertising South African beef in the European markets, and only those who know anything about the export of beef know how Australia and Argentina have the market in their hands, in regard to frozen beef, and any new competitor has all sorts of difficulties to contend with before he can get into that market. I think that is sufficient reason for doubling the bounty, which I am sure the House would regard as a form of advertising our frozen meat. A third suggestion I make to the Government is that they subsidize any canning factories started here. The seriousness of the position is such as to warrant it. With that I would suggest to the Minister of Agriculture that he take up this cattle question seriously, and eliminate the scrub bull. By doing that we could improve our cattle in three or four years. Once we have established our connection with Europe, we should set about improving the grade of our cattle. The remedy is at our door. We have sufficient stock herds in this country to supply the needs of the country. I am not so foolish as to advocate putting shorthorn cattle in the low country, but Ayrshires and South Devons would suit. That is a far greater matter than the Government think, and if no action is taken they are going to bring about their heads their downfall, as sure as I am speaking to-night.

I congratulate the Minister on his Estimates. The poor opposition offered against is proof that they are sound. Not long ago the hon. members for Paarl (Dr. de Jager) and Swellendam (Mr. Buirski) travelled about and told the country that it must watch the Estimates. They said that £25,000,000 had been borrowed to meet increased debt, but the Minister has said here that it is only £14,000,000. Let these hon. members now come forward and deny it. The hon. member for Paarl said that we would not be able to borrow money in England so long as Gen. Smuts did not lend a hand. He told this to the farmers in my district, and the hon. member for Swellendam said “amen” to it. They also said that as a result of the Loan Act, many people were discharged in Pietermaritzburg last August. That was before the Loan Act had been put into operation. The hon. member for Paarl appears now to doubt whether he did say it. He spoke also of a surplus of £3,000,000 which the previous Government was going to have, but instead of that they had a deficit of £1,600,000. When I spoke to him about this he said he had made a mistake. I fear that hon. members on the opposite side are often mistaken.

Tell us about the dinner party.

Hon. members Opposite resemble the friends who came to Lot, who wanted to attack him, and were all struck blind. They entered by the door and bumped against the wall. It seems to me that hon. members bump against every corner of the wall, and receive black eyes. The hon. member for Cape Town (Central) (Mr. Jagger in attacking the industrial policy, bumped his head and got a black eye. For the industrial policy is one of the things which is killing his party. The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) opposed the policy of the employment of whites on the railways, and I think that this also will tend to kill his party. And I am glad this is so. Now hon. members Say that we must not allow the whites to work for 5s. 6d. I wonder whether the thirteen thousand whites whom we employed should have been allowed to die of hunger. Is it not better to put them in a position to live on 5s. 6d. rather than to let them die on nothing? There are still eight thousand applications and our Government intends to give them all work. No, the Estimates are sound. If one goes to a tradesman to-day and talks to him about the relief given in connection with licences, then he smiles. The chemist, too, who sells medicines has also been relieved by the Nationalist party.

Where does the civilized labour policy come in ?

If the hon. member worked a little more it would do him good. If we go to the people who pay turnover tax, then we find that they have had relief, and if we go to the farmers, we find the same thing. At Riversdale two bridges have, been built as a result of the relief given by the Nationalist Government to the Provincial Council. Yes, and if we come to the tobaccotax, then the man who smokes feels the benefit. If one comes to the reversion to penny postage, then, also, we find that the man who writes a letter can send it away at half the price, again an instance of the relief afforded by the Nationalist party. If I were to mention everything it would become very late.

Are there so many ?

If the hon. member takes the income tax, he will find that he now pays less. The Opposition is most ungrateful. The effect of the relief afforded is seen everywhere, and one can go where one likes through the country, and see that the people are satisfied. Hon. members opposite, however, have sad faces, and it looks as if they are sad because the Estimates are satisfactory. Is it not a shame ? Instead of crying out “Hosannah,” they are weeping. The hon. member for Bezuidenhout (Mr. Blackwell) had an opportunity this afternoon of expressing his dissatisfaction, and it is to be hoped that if he, by chance, ever becomes Minister of Finance, he will not make such a mess of the finances as the previous Minister did.

There are many aspects of this budget which require criticism, and those points have been brought out by many members on this side. But the outstanding fact, I think, is that during times of considerable prosperity there is increasing expenditure and it is bound to lead to catastrophe when these prosperous times cease to continue. The increase of expenditure this year is something in the neighbourhood of a million pounds, if one includes both the Union and provincial expenditure, and I think that that accounts for what one might call the pathetic peroration of the Minister of Finance when he finished his speech. One felt then that he was trying to hold in a team which had the bit between their teeth, and he was afraid and felt that the reins were gradually slipping through his hands. One felt that he had lost, and that the Treasury have lost control of his colleagues, and that he recognizes, as much as anybody on this side of the House, the very dangerous position this country is going to be in if the reckless extravagance of the Ministers with him, and the members behind him, continues. We have had an extremely prosperous year, and I think the general body of consumers imagined that they were going to get some alleviation of taxation ; but while, say 3 per cent, of the European consumers have received a small abatement in the way of exemption under the income tax, 97 per rent, of the European and 100 per cent, of the non-Europeans have received nothing whatever in the way of reduction in the Cost of living this year. They have no reduction in the price of their bread, an increase in the price of their sugar and an increase in the price of their clothing. That seems to me very poor consolation for the consumers of this country. When they recognize that this is all they are going to get in days of prosperity, what are they likely to get when the pendulum starts swinging the other way, and the revenue is not buoyant as it is to-day ? I sympathize with the Minister when he listens to the speeches from the cross-benches, particularly to the speeches from the hon. member for Troyeville (Mr. Kentridge). I do not share that gentleman’s views on economic subjects. He mentioned various concerns that had gone through the bankruptcy court during the last few months in Europe. I will refer to the British Dyestuffs Corporation which has been reconstructed during the last few weeks. This concern was after the hon. member’s own, heart. It was carried on under Government control, but it applied to the courts for that control to be eliminated and for permission to write off about £1,000,000 of the British taxpayers’ money. Mr. Justice Eve, before whom the application was made, pointed out that the loss amounted to 1d. in the £ on the English income tax, and he asked why it was desired that Government control should be eliminated. The reply was that it was impossible to carry on the business under Government control. One thing which militated against the success of the company was that everything had to be referred to the Board of Trade. One can imagine what would happen if the Union Government had control, say, of the sugar industry. Should it be necessary to alter the price the matter would have to be referred to the Government, and by the time a reply would be received the market would have disappeared. Probably hon. members on the cross benches will never appreciate that however good and hard-working the general body of workers are in any big concern, the only factor that makes a success of it are the brains that control it. Provided they have the brains there is no reason why everybody should not be a Ford or a Leverhulme. It is impossible to get these brains to run Government departments, and if you did there are many people without brains to hinder them No industry under Government control can compete with private enterprise.

What about our railways?

In the country which has the most progressive railways—the United States—there are no Government lines. There are reasons why the post office and railways should be run by the State, because they require legislative powers to enable them to function, but it is only because of that that it is found advisable to have State enterprises. The railways, telegraphs and telephones which are run in America by companies are more efficient and give a better service than the Government would. It is quite an open question whether Government-owned railways are the best method. We are all glad the Minister has rescued half his surplus from the eager maws of his supporters, and that he has put a quarter of a million to strengthen the pension fund.

The law says it belongs to the Public Debt Commissioners.

I would like to refer to the non-productive debt. That should be written off on a percentage basis so that, should any increase occur at any time in the amount of the debt, the sum to be written off would be increased.

And if the debt decreased ?

The amount written off would be decreased.

I am quite prepared to accept that.

On the basis that the funds will realize 5 per cent, for 33 years, a sinking of ¼ per cent, will pay off the whole indebtedness in 33 years. In my opinion 33 years are quite long enough to keep on your books assets which have no tangible value. We have an unproductive debt for such things as repatriation loans and war expenditure and so on, amounting to £55,000,000. If we take more than 33 years to pay that off we are not treating coming generations fairly. We are not likely to go on for another 33 years without having some other big catastrophe which will mean another addition to the unproductive debt. The least we should do is to pay for the cost of our own troubles, and not leave it to our children to discharge the obligation. In addition to our unproductive debt, we have debts amounting to about £160,000,000, for which we make no provision, except that we hope that we are keeping up the value of the assets by maintenance. I am now referring to the Railways and Harbours Administration. Provided all the money spent on maintenance was utilized in the most economic way, there would be some reason for not making arrangements for paying off that indebtedness, but to-day, under the Government’s white labour policy, we are giving more for a specified asset than we need pay for it. For instance, we put down a railway and use white labour on it, but that line is only worth actually the lowest price for which it can be constructed—that is by native labour.

Or Chinamen.

I suggest to my hon. friend that if we employ white labour at an enhanced figure to construct a railway, we ought to have the pluck to pay for it ourselves, and not expect our children to pay for it. My criticism does not affect the question whether white labour should be employed or not. But it is not very heroic of this House to say that we are going to employ white labour and pat our chests appreciatively and then leave our children to pay the piper. I would suggest that, in addition to paying off the unproductive debt of £55,000,000, any amount incurred by this policy not paid for out of revenue should be added to the unproductive debt, and that we should automatically increase the provision annually made for that unproductive debt. The Minister should see that as long as he is in office he should pay the £650,000, which, in my estimate, is too low, he should pay any other unforeseen expenditure, and not debit it to loan account, but debit it to revenue, and, in addition to that, he should take out all additional sums paid for white labour on loan works, and charge those to the unproductive debt account, and automatically increase the amount of redemption as that account increases. I should like to make a few remarks on the delicate subject of free trade. Personally, it seems to me that all discussions as to the relative merits of free trade and protection in this country are rather academic, because it is perfectly certain that, as a matter of practical politics, we in this country have a predilection for indirect taxation, and under those circumstances we are bound to have taxation through the customs. Therefore, it seems to me to resolve itself into a question as to whether we should put on those customs in such a way that they aid development, or put them on in a haphazard way. I consider that it is best to use the customs in order to aid the development of industries rather than simply treat the matter as one of revenue, but there are certain essentials in dealing with this question which I rather feel the Minister of Finance has lost sight of. The first essential is that any protection that is put on should not hamper established industries. We are rather handicapped in dealing with this question, because the Minister suggested, I think, in a remark he made yesterday, that he had only told us half the tale, that is, that he has the other half yet to tell us. We have to criticize one half, and he has the other half in his pocket.

That is, unfortunately, due to the rules of the House. The remissions can only come later on when we deal with the Bill.

It is a most unsatisfactory matter to discuss the programme of alterations in a customs schedule, when one only knows the increases, but from the increases given on page 490 of the Votes and Proceedings it does look as if we are deliberately hampering the mining industry and, though I am in the unfortunate position of not having any monetary interest in the mining industry, I do recognize that anything happening to the mining industry in this country affects every individual living in South Africa.

And outside South Africa, too.

I am glad you recognize the enormous value of the mining industry to South Africa, and the very great danger that it is to the interests of South Africa to criticize it unfairly. The next essential should be that we develop the industries that provide the largest ratio of South African employment. Looking at this schedule of increases, we seem to me to be getting very meticulous in the way we are dealing with the whole of these small classes of goods. For instance, here is an increase on enamelled lampshades, barrels for miniature rifles, macaroni and all kinds of little things. It seems to me we are going through the whole thing with a toothcomb instead of dealing with it on any broad lines, and when one reads this it looks as if the small people who are starting manufacturing some tiny thing of very little value to the country have only to get the ear of the Board of Trade, and immediately there is a duty put on. It does not seem to me, speaking as a protectionist, at all a scientific method of handling the question of protection, if we are going to get the utmost value out of our protectionist policy. There is another essential, to my mind, and that is that one does find that, in order to protect certain industries, you are almost certain to put burdens, directly or indirectly, upon some primary industry, and it is a very great detriment to the protectionist idea that that is so. The only way to handle that subject, to my mind, is that, in putting any burden upon a primary industry, you must relieve it in some other form so as not to put it in a worse position than it was before to compete with the outside markets of the world. When it is necessary to hit the farmer or the miner, the Minister should at the same time relieve him in some other way, and not put him in a worse position than he was before. I am afraid the Government is not going the right way to put the farmer or the miner in that position, because when your expenditure is a million more, as it is this year, that has got to come out of the earning capacity of the country. What we want to do is to stop the expenditure, and then, automatically, the burdens on these industries can be decreased.

Why introduce the provincial expenditure here ?

Unfortunately, when you come to your bank account, you find, whether it is provincial expenditure or Union expenditure, you have got to draw your cheques and find the cash, and it is immaterial from the practical point of view what tax collector comes to get it when you have to hand it out. I quite agree that we have to educate the provincial council up to economy in the same way as we have to educate the Government. It seems to me a fallacy to say “it is not really so bad as all that, the provincial council are spending our money.” It is a very unsatisfactory position that we are going on increasing expenditure year after year, and the whole of the money is coming out of the productive power of this country. The hon. member for Cape Town (Central) (Mr. Jagger) objects to this scale of duties from the point of view of the free trader. From the point of view of a protectionist, I can see little to commend them, but perhaps, when we see the whole picture, we shall see how the lines which the Minister sketched for us will fit in. The Minister has told us nothing about income tax. He has done something for the people with incomes in the neighbourhood of £400 per year, but, as has been pointed out, it won’t do any good to the working man. I do not know whether the Minister suggests doing anything in regard to the taxation of companies. I do not want to labour this question this year, but unfortunately, if I may say so, the Minister last year eventually went off the deep end altogether. He first of all committed the gross injustice of taxing the small investor at the same rate per £ as a multimillionaire. That is the negation of all fairness as far as income tax procedure is concerned. That was bad enough, but then he proceeded a step further. He put the whole of the tax on the ordinary shareholder, and exempted the preference shareholder entirely from all normal tax. So, therefore, if we take one of the big companies like De Beers, for instance, a man with very small means has to pay his share not only of the tax on his own income, but on the income of a multimillionaire who holds preference shares in that company. It seems to me that it is impossible to argue fairness in such a procedure. I did think, at any rate, that the Minister would try to alter the incidence in some way. The Minister says the point is that he is taxing the company. I would tell the Minister that as long as he continues to consider the company—in many instances composed of thousands of individuals—as a single unit, it is only going to lead to injustice. You cannot say that 5,000 or 10,000 people joining together in a company should be taxed in the same way and at the same rate as one man earning the whole of a similar profit as a company containing thousands of shareholders. I suggest to the Minister, if he is going to pursue this very unjust policy he should provide some method of repayment to small investors of the tax with which they are unjustly charged. That is really the position. In view of the coming imperial conference, I should rather like a statement from the Minister of Finance with regard to the double death duties. There is a tendency, I think, to rather overlook the necessity of dealing with this subject. There is a tendency to feel that the South African overseas can look after himself, that he ought not to be overseas. There is also a tendency to overlook the value of having a good money market overseas for the provision of capital for this country. South Africans overseas, particularly in England, are performing a very necessary function for South Africa. They are looking after the interests of South Africa, and they form a body of valuable opinion. At the present moment there are indications that persons overseas are prepared to invest their capital in South Africa. One reason is, I think, that there are many moneyed people in England to-day who are rather afraid of what one might call the socialistic tendency of English government, even the most conservative of governments. They would like to invest their money in the dominions, and we should be in a position to attract that capital. The position to-day is this, that if you take an estimate, say, of £50,000 invested in South Africa, the South African death duty on that would be £3,185, and the English duty £6,554. That is a total of £9,739. If that investor had invested all his money in England, the estate would only have to pay £7,000. The capitalist who is investing his money in South Africa is penalized to the extent of £2,739. That is bad, but you may say “What does it matter what he pays; the man has £50,000.” But I will give an actual instance of a very small estate that came to my notice. The gross amount of the estate was only £413, and the approximate value in South Africa was £210. The United Kingdom charges were £3 10s. on the whole estate, and the South African charges on half the estate were £4 9s. 2d. These amounts were paid, and a complaint was made to the High Commissioner’s office objecting to the cost of giving administration to the estate. These are the total costs of giving possession of the assets.

I thought you were speaking about death duties,

This is what has to be paid if you invest in South Africa. That is my point.

That estate is not liable to death duty here.

There was another case of a lady who was technically resident in England. But the whole of her estate was in this country. She had £100 assets in England. It paid the executor not to claim the English estate at all, and to abandon the £100, because if he had proved the estate in England, he would have had to pay the English Treasury £1,000 in death duties. That gives you an idea of the anomalies that occur owing to the double death duties arrangement.

You do not blame us for that ?

Under the United Kingdom Finance Act of 1894, practically all the other dominions and colonies have escaped from this position. They have an arrangement with England that they are allowed to deduct from the English duty the total amount of the duty paid in the Dominions. That is the position in Canada, Australia with the exception of Queensland, and New Zealand, Rhodesia, in all thirty-five (35) dominions and colonies. Now, the Minister of Finance will remember that at the 1911 Imperial Conference that matter was taken up by General Botha, who suggested one of two compromises, which were not accepted, and really the whole case broke down because the Chancellor of the Exchequer in England said it would make two-and-a-quarter millions difference in his revenue. It seems to me that the estimate was entirely wrong, and it could be proved from the Treasury here what the exact figure was every year, because these estates come there from South Africa, and if the Minister were to give that information, it seems possible he could come to some compromise with the British Treasury, and we could be put on much the same lines as any other British colony. The real difficulty is with the mining shares—there are big holdings in England. I would suggest to the Minister that he should get the whole thing arranged under the same conditions as apply to the other dominions, but if he cannot do that he might come to some compromise on the question of these mining shares. I feel certain that if he proved to the British Treasury that the amount is nearer £200,000 or £300,000, and he is prepared to suggest some compromise on the question of mining shares in companies which have share registers in England, with his native tact he will succeed in getting the British authorities to give way on this important point, for it is an important point, because we are penalized.

On a previous occasion when the debate on the budget was before the House, I dealt with a matter, which I would again like to bring to the Minister’s notice. If ever there was a period, in the world’s history, of specialization, it is the age of to-day when science has developed to such an extraordinary degree. We know that the control of our harbours requires very high specialization, and to get the maximum efficiency out of our harbour administration it is, in my opinion, the duty of the Government to aim at the ultimate separation of the harbours from the railways. There are many difficulties in the way, and it would not be in the interests of the country to consider an immediate divorce of the harbours from the railways ; but I do feel it is an object to be aimed at. In consulting various shippers, as I have done, I will not say that they are dissatisfied with the actual control, but they are certainly not satisfied with the railway control of the harbours, and it is the duty of the Government to give consideration to the views and the request of this section of the public. We also find that the staff itself is dissatisfied with the present method of control. In enquiring into the administration of ports throughout the world, we find that several English railways own ports, such as the Southern Railway and the Great Western Railway ; and Southampton, which is controlled by the Southern Railway, is one of the biggest ports of the world. They have found it desirable that the port administration should be separated from the railway, and they find it gives better efficiency ; and so we find it throughout the world. But South Africa is the only country, as far as I know, where its harbours are directly administered by the Railway Administration That this discriminating action on the part of railway companies is characteristic of American practice, is evident from the following extract from a paper on National Port Problems by Major-General Lansing Beach, at the time Chief of Engineers, U.S.A.—

Brysson Cunningham, in his book, also refers in no complimentary manner to the system in vogue in South Africa, and in referring to a paper, read by the general manager in 1924, he points out that there is no reference to the administration of the harbours, at which he expresses surprise. I want to refer to the statement which the Minister of Posts and Telegraphs made this afternoon in respect of civil aviation. It is regrettable that the scheme has fallen through ; because there is a possible danger, in view of the statement made by the Minister, that the various companies in different parts of the world may not be able to put forward schemes for the development of civil aviation in South Africa. The Minister stated that the Government was prepared to consider tenders, but not prepared to go beyond a subsidy of £8,000.

Not to consider tenders; but to consider proposals.

I quite agree with the Minister when he mentioned that his department did not require aviation and that even an expenditure of £8,000 was not warranted so far as his department is concerned ; but the Minister of Defence could, with very great benefit to his department, consider the question of the development of aviation from the point of view of national defence. The flight of Alan Cobham, who is, to my mind, the greatest civil aviator in the world to-day, and the air force flight from Cairo have demonstrated the possibilities of aviation, but they have gone further—they have shown that if any country presents possibilities for the development of aviation South Africa does. We have the basis of the finest manhood for the development of pilots of any country in the world. That has been proved in the past during and subsequent to the war, and the facilities which our country offers from the climatic point of view are second to none. The bringing together of various points of the Union would materially assist in bringing about the unification of the peoples of this country. Do you not think, therefore, that the time has come when he Government should very seriously consider the development of aviation ? The subsidy of £8,000 is a mere flea-bite compared with the large expenditure which the country will be called upon to make in replacing aircraft for the air force. Would it not be to the Government’s advantage to consider the development of aviation as a national defence? Should occasion demand that our small striking force should be stationed at the coast, the whole of the air force organization would have to be brought down to the seat of operations, but if you were to develop civil air routes, all that would be required in the case of necessity would already be established and operating at the time. I regret to find that the Minister of Defence last year stated that civil aviation did not assist in any way at all in the training of a pilot from a military point of view. I differ from the Minister’s opinion. The British Navy, in its initial stages, was not developed as a fighting force. The British Navy was developed by subsidizing the British mercantile marine in such a way that Great Britain was able to produce the finest seamen in the world, which stands to-day. The same applies to-day. No country can afford to lavish large sums on developing an air force ; but countries are developing their civil services as an adjunct to the defence of their countries. And that is being done all over the world. But South Africa is not doing it. The Minister of Defence said it was of no value, but if you come to think of the cavalrymen as a striking force, the man who can ride and manage his horse is of greater value than the man who is indifferent to the handling of his steed, and a man who can navigate a ship from a naval point of view is of more use than a man who cannot, and the same applies to flying. The more you can keep your pilots engaged the more valuable are they from an aerial point of view. For the proper handling of your aeroplane you have to see that your pilot is continually flying and getting to know the climatic conditions and the lie of the country over which he would have to operate in case of necessity. But that is not being done to-day. I admit that, owing to the small amount of money the country can afford, to develop the air force, they are not having the opportunity of doing that. They are centred in Pretoria and only occasionally they are able to do flights round about the country. The air service inaugurated by the present Minister of Labour was, to my mind, of the greatest value from a purely flying point of view. The men were continually flying over the route between Durban and Cape Town and getting to know the conditions, and these men are of far greater value to us to-day as a fighting unit than before the inauguration of that service. If that experience is to be lost to this country, I sincerely trust the Government will take very seriously to heart that they have neglected their duty in neglecting aviation in this country as a national asset. South Africa has the finest flying personnel in the world to-day, and I sincerely hope the Government will see its way clear to develop civil aviation from a national point of view, and to see that South Africa becomes the premier aviation country in the world and, although we may be the last in the field, we shall not be least in importance in future years.

What concerns me particularly is the annual increase in expenditure. Last year it was about £2,200,000, and for the year 1926-’27 the Minister estimates that the increase will be about £400,000. It was indeed one of the principal cries of the Nationalist party that we must economize. But where do we stand to-day ? A large number of commissions have been appointed and much money is being spent in all sorts of ways. It would be a good thing if the Government would think a little of economy and follow the course that it promised to follow. Now I want to say a few words in connection with the economic policy of the Government, and more particularly in connection with civilized labour. I think that the intention of the Government is good, but the working out of it will be unsound. The Government says it is trying to solve the problem of unemployment. But what is happening? The Government is not opening channels by which persons can be provided with work in private undertakings, but everybody is being given work in Government institutions. This cannot be sound. The first effect on the people will be a feeling of a loss of independence. They are being taught in times of difficulty to expect help from the Government. This will have an unhealthy effect. The Government is placing so many people on the railways, and I would like to know whether these are really out-of-works, or whether they are people who have left other jobs in the lurch? I feel that people who are on the platteland and who work on the farms are being induced by a little more pay to go and work on the railways and in other quarters, and so will be lost to agriculture, as the Auditor-General points out they perform uneconomic labour. I would like the Minister of Railways and Harbours to make it clear in his reply whether these persons who are appointed were really out of work or not. Farm wages are not high, but a large portion of the pay consists in other advantages. The people are induced by a wage of 5s. 6d. or 7s. to leave the farms and they find that having to pay house rent in the towns or villages, their position is really worse than it was before. The Minister of Railways declares in this connection that this is his accepted policy. I would like to relate what the Auditor-General said when he was asked by the select committee to report on the result of the civilized labour policy. He says that in his opinion it does not appear to be economic labour, but uneconomic, and he defines uneconomic labour thus—

This is what we are doing. The Minister of Agriculture, according to the report, said it was not possible to take white labour into his department in connection with forestry. But that is just where in my opinion civilized labour must be put to the test, because farming is the backbone of the country. I am convinced that civilized labour is not necessary for pick and shovel work, and that it is better to provide other channels of labour for such people. The Auditor-General says in connection with the Department of Agriculture, it has been stated that 462 natives are employed in the schools who could be replaced by 350 whites, but that that would mean an additional expenditure of £21,406 in wages, and £26,250 in capital expenditure, and that there were no funds available for this purpose. The Government says that the farmers must take these people on the farms, and they say they themselves find it is impossible, and that the expenses are too high to use this labour on their experimental farms. Would it not be desirable to make such a test ? I would like to make it a request to the Minister of Agriculture. Why does he not make a start with that? He must use these people on the farms connected with the agricultural schools. If they work in the agricultural schools they will have a chance of getting an agricultural training, with the result that they will be in a position to obtain better posts with the farmers. The difficulty that we feel is that they cannot be paid high wages on the farms because they are not sufficiently capable of managing them. The Minister can employ 358 young lads on the experimental farms, and if they leave later they will be in a position to obtain better salaries from the farmers. In connection with the Forestry Department, the Auditor-General says that as a result of the supplanting of uncivilized labour by white workers expenses will be incurred which will endanger the production. The Minister wishes to keep forestry on a sound financial basis. If he wishes to run the department on sound financial lines why then must the Minister of Railways put all the burdens on the Railway Department ? The report of the Auditor-General says further that the substitution of white labour for uncivilized labour will increase the cost of production to such an extent that the department will not be able to compete with private planters.

Who is talking now ?

This is the report of the Auditor-General made after he had obtained information from the Department of Agriculture. The hon. member knows that the Minister of Agriculture refused to employ white labour in his department, and I say that that is wrong. There is undoubtedly the opportunity of providing work for the people, and not only of that, but of putting them in a position of being trained in such a way that when they leave they will be of more value on the farms. The report says further that this policy will damage the sale of mining props, timber and spars, and under these circumstances the Minister cannot put white labour in place of uncivilized labour. That is in connection with forestry. We must keep these people on the farms, where we can enable them to assist us in increasing production. Now they are being taken off the land in order to work in dead channels where they will not have any chance for the future. Now the Government says: We have given so many thousands and thousands of persons work, but the question arises in my mind now many are being provided with work by private individuals. Are channels of work being opened outside Government departments ? I am not in favour of providing work by the Government only.

Go to the Juvenile Board, and there you will see—

I feel that what we want in the country is agricultural development, and if we get that there is no doubt we shall solve most of our problems.

You must add some rain.

The hon. member must not talk of providing rain. We live in South Africa and must do our duty, and not merely look for the clouds. The hon. member reminded me that I should work more and that I would then be healthier, but that is a case of the not calling the kettle black and I would advise him to follow his own advice. There is one thing about which I feel strongly and that is the erosion of the soil. This is a national problem and one that should be tackled by the Government. The Government should go in for propaganda work because some people are neglectful. That is the root of the evil. When it rains we allow the water to run away in furrows instead of storing it.

Did the previous Government make a beginning with that ?

I am surprised at the hon. member. We must look a little further. I am not offering criticism, but I wish to make a request of the Government. As a member of the farmers’ association, I have always striven for that. I do not want to benefit myself alone, but my neighbour as well, and so I mention this matter. In connection with agricultural development I feel that we must try harder to foster agriculture, and put more people on the land. The young people who work on the railways surely have more ambition. Is there no chance of putting them on land which is unoccupied ? There should be better opportunities for them there. There is another difficulty. We find that we want to encourage the farmers to produce more, and there is the difficulty of carrying their produce to the market. This retards the development of agriculture, and I want to advise the Minister of Railways to do what he can to reduce the railway rates so that the farmers can have a chance of getting their produce to market in the cheapest way possible. It happens that a farmer must pay as much for the carriage of his produce, for example, from where I live to Johannesburg, as represents his profits. It is discouraging for a man who has worked hard to have his profits swallowed up by high tariffs. We heard so much before the Nationalists came into power—and the Minister of Railways was one who said it often—that the mines should be taxed more and the farmers less. And what is the position? We find in last year’s taxation proposals that the income tax on mines was about 3s. in the £. and on private companies 2s. 6d., that is, 6d. less. In our province there are many boards of executors and other companies, e.g. the Woolbuyers’ Association at East London, etc. These all fall under the same tax of 2s. 6d., 6d. less than the mines. Thus the farmers, because the boards of executors can really be regarded as farmers’ businesses, pay only 6d. less than the mines.

Must we tax the mines more heavily?

Hon. members on the opposite side have always said that the mines are not taxed, but that the farmers alone bear the burden. We have heard so much about what the Government would do for the farmers. As to income tax, the Minister said that he got £178,000 less than he estimated. On diamonds he got £75,000 less, but on general taxation £115,000 more. He says—

The farmers assisted the Minister to fill the Treasury. As to income tax, I want to say to the Minister that the tax itself is not unpopular with the farmers, but what makes it unpopular is the number of questions and little things which the officials come along with. Yet, when later a mistake is made in the tax form, the officials are there to make one pay a fine. I would like to warn the Minister. Instead of causing people to be afraid of the officials, it would be better if people went to them more often for advice. I think the Minister will get more revenue if he lets the farmers fill in the forms themselves. Then I would like to ask the Minister whether it is not possible to give taxpayers the right to deduct from the taxable income expenses in connection with the erection of fences? The Minister may lose thereby for the first year or two, but it will pay in the end, because we know that farmers’ incomes are increased through fencing. I notice that the hon. member for Graaff Reinet (Mr. I. P. van Heerden) laughs. I would like to know his views. Does he not want to relieve the farmers in this direction ?

The hon. member is himself laughing at what he says.

I feel that in an indirect way this will flow back to the Treasury again. Will not the Minister allow for depreciation of the fences ? Another point is insurance. According to law, insurance premiums up to £50 only are free and may be deducted. I would like to ask the Minister if it will not be possible to allow the deduction of insurance premiums beyond £50. Insurance is an excellent thing, particularly for salaried people. I want to touch on another point which is burdensome to us in the Eastern Province, viz., the poll tax on natives working on the farms; this gives the farmer a lot of trouble. I would like to have the attention of the Minister, because this matter will occasion a lot of trouble in the future. The farmers are notified that they must make a list of the natives working for them, and that has an undesirable effect. The natives begin to think that the farmers are at the back of the whole thing. We find that it is not so easy to obtain native labour in the Eastern Province, and if the natives turn against the farmers it will have a prejudicial effect on agriculture. This tax is really nothing but an indirect tax on the farmers. I myself have paid the tax for my labourers. They want to go to the villages every day. One must understand their temperament. The method of collecting the tax leaves much to be desired. I hope the Minister will direct his attention to the points I have raised in connection with the native tax and the income tax.

I believe that throughout the length and breadth of the country, during the election, the cry was, if you return the Pact with a sufficient majority to rule, money will cease to come into South Africa, The hon. member for Newlands (Mr. Stuttaford) told us that a very large amount of money was coming to South Africa. We ought also to realize the tremendous building boom there is in the Union at the present time. We find, in the centre of Cape Town, enormous buildings being erected. Does not that testify to the confidence investors have in the present Government of South Africa ? We were told that not only would money cease to come to South Africa, but that there would be an exodus of the European population, but that has not happened, as it did under the regime of the last Government, where you had more Europeans leaving than coming in.

They are doing that to-day.

They also told us that if the fact Government were elected you would see no industries in South Africa. I believe the last Government imported into this country 67 per cent, of the value of its manufactured goods. The amount has now diminished to 48 per cent., and the difference has produced a considerable amount of employment in this country. The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) referred to the increased expense of running our railways ; it is not only a question of finding employment for a certain number of artizans, but naturally an increased pay-roll ; if you manufacture your commodities in South Africa, the increased circulation of money which results therefrom reacts beneficially on the general community. A great deal has been said about the report made by Prof. Clay and Mr. Martin. I believe the former admits that 50 per cent, of the value of a finished article represents wages and profits and 50 per cent, raw material. Obviously, if we manufacture our requirements here, not only do we provide work for more people, but we increase the amount of money in circulation. The railways purchased commodities in 1923 to the value of £3,000,000 from overseas which could have been manufacturered here. Taking 50 per cent, as representing wages and profits, and considering that money thus paid changes hands 20 times, the result would have been that if we had made the articles in this country, we should have increased the money in circulation in the Union by £30,000,000. That would not only benefit the workman and the business man, but the farming community to a very great extent. By manufacturing our own requirements, we shall not only increase the amount of money in circulation, but attract immigrants from overseas. Statements have been made in this House that under the present tariff proposals of the Government, the price of bread to the consumers will be increased. Certain newspapers in this country have stated that an increased amount of £60,000 per year will be taken from the consumers. That is wrong. They forget that the Government are doing away with the dumping charge which was at the rate qf 7d. per 100 lbs. on flour from Australia. If we take the duty which was charged on Canadian flour at 2s. 11d., and on Australian flour at 2s. 11d., plus 7d. dumping charges per 100 lbs., and average the total amount imported, and add the dumping charges to the amount which you charge, it works out at 3s. 4d. instead of 3s. 6d. on Australian flour and 2s. 11d. on Canadian flour, at 3s. 4d. per 100 lbs., which on the average is 2d. per 100 lbs. less than it was during the preceding year. I contend, therefore, that the allegation that the increased duty on flour will increase the cost of bread is ridiculous in the extreme. The Minister made it quite clear that he was doing away with the dumping charges on Australian flour, and if that is taken into consideration, the average duty will be 3s. 4d. per 100 lbs., or an increase of 5d. per 100 lbs. on Canadian flour, and a decrease of 2d. on Australian flour.

On the motion of Mr. Pearce, debate adjourned ; to be resumed to-morrow.