as Chairman brought up the first report of the Select Committee on Native Affairs.

Report to be printed and considered in committee of the whole House on 9th March.

I move—

seconded.

Steam-roller

On a point of order, do I understand it is against the rules of the House to discuss a resolution of this sort before voting, no matter how great its importance ?

The rule is that a motion of this nature has to he put without amendment or debate.

I am exceedingly sorry that the Government have adopted the method of trying to force this Bill through the House on the third day. In such an important matter as this, where so little light and information has been given to the country, I think it is an exceedingly ill-advised motion on the part of the Government particularly in view of the fact that practically the whole of those who have spoken on this side have agreed with the purpose of the Bill, to establish an iron and steel industry. They march with the Government along that road, and the only difference is the difference in method by which we are to arrive at that goal. I feel it comes very ill indeed from the Government in these early days of possibly a long session to attempt to stifle discussion in the manner they have done. We, on this side, have long arrived at the opinion that the bounty of the past which was established by the late Government for the purpose of fostering the industry has been totally inadequate to establish that industry, and it was because they did recognize this that the right hon. leader of this party induced the German experts to come out to this country to consider the whole matter afresh. The position we have arrived at this day has been arrived at very largely by previous action on this side of the House. I think that if this party had been in power to-day it would have to take action on the report.

Would it have taken that action ?

The objection many hon. members have in their minds is not an objection to the steel industry as such, but the fear, and the lively fear in the mind of the most ardent protectionists, that Government control is going to frustrate those necessary disciplinary and industrial measures which are necessary to the successful establishment of industry. I have in view the ill-informed condition of this House, only a few copies of the report in English being available, and that the Government has shown very little consideration at all for the opinions that may be expressed on their own proposals. We have had a stream of criticism from the press in this country very largely ill-informed and misdirected, and the reason is that the Government has not given the information it should have given. The House has no knowledge as to the contracts it is proposed to enter into, the railway lines to be built, machinery, plant, and whether the report of the Germans is to be carried out or not. No one has a glimmering of an idea whether the conclusions in that report are to be adopted by the company. The Government had everything to gain by the fullest enquiry, and if it was soundly desirous of setting up an industry which would be a source of economic wealth to this country, it would have welcomed the utmost criticism from all sides of the House. There was no need to think that there would be any loss of time in that proceeding, and the assurance could have been got from this side that if the Bill had gone to a Select Committee before the second reading, it would have taken no longer time than if it had been referred to the Select Committee after the second reading. After the brilliant criticism of the hon. member for Kimberley (Sir Ernest Oppenheimer) yesterday, the Government shows they are babes in the woods as far as high finance is concerned.

Give us honest finance ?

The Bill proposes to go into high finance. The hon. member for Kimberley has agreed he will take them into the Committee and enlighten them in the high finance about which they know so little—that is, if they want to go in for company promotion. My view on this iron and steel industry has been expressed in this House on many occasions, and I agree that its establishment is vitally necessary in the interests of the country. I have stated on numerous occasions that a subsidy ought to be given towards its establishment. There is a tendency to exaggerate the value of the industry, as such, economically to the country—in its immediate effects. I do not mean its ultimate effects. After the industry is in full working order it will only be creating the wealth of three of our largest sugar mills in Natal.

It will employ more Europeans.

It will employ 4,000 Europeans and natives altogether, and the Government would get more profit out of one gold mine on the Rand than the total wealth which would be created by this industry, as such, each year; but it is for other reasons than that that. I support the industry. I support it because it is the basis for all other industries, and is as necessary to the manufacturing production of this country as water, for instance, is necessary for the cultivation of crops on irrigated areas. South Africa is extraordinarily rich in the metals which go towards hardening steel—wolfram, tungsten and chrome ore, which are lying useless because there is no use for them. There is a new theory growing up—that a country which exports these may export them at a national loss, and that the country is richest in exports which exports those commodities on which the greatest amount of labour has been expended. It is better to export machinery than ore. These ores are being; sought for by the whole of the world, and we have them here in abundance to produce that particular kind of steel which, after all, the world is seeking for. The only real basis for the establishment of an iron and steel industry in this country at all, and there is no other reason, is that iron and steel must be cheap. If steel is not cheap this industry will be useless for the country. The hon. member tor Kimberley has expressed the fear that if the industry grows up as proposed, it will be a menace to the whole farming community, and a handicap to the mines and the remainder of the country. To me that is unthinkable. If iron and steel is going to cost a lot of money to produce, or if it is carried on a basis which will not allow other industries to function, it had better be left alone. If it is to be looked at solely as a source of profit for those who are taking shares it will be useless to the country. I want to point out what I have pointed out before, that our national policy should be one of cheap steel. This country of ours, and it is time to face it, is never going to be a great agricultural country. We have not the great agricultural belt which exists in Australia, America, New Zealand and other parts of the world. We have nothing comparable with those belts. It is very largely a pastoral country, and on this basis we are on a worse footing than other pastoral countries like Australia. We have nothing comparable with Australia, with its sheep stations of from 20,000 to 120,000 head, where they are tended with the minimum amount of labour with extraordinary low rentals. The sheep there are put into huge paddocks, mustered only twice a year during lambing and shearing. They live under the most natural conditions with practically no care and attention and with practically no disease and with no need for compulsory dipping. The sheep-owners of Australia are not pestered with sheep thieves or troubled with vermin, and their production of wool is carried on under very different conditions to ours. We have, therefore, not the favourable conditions even for pastoral production which exist in Australia, New Zealand or the Americas. Without the establishment of industries in South Africa there is no hope of increasing our agricultural productions. In 1922 we exported £65,000,000 worth of commodities—£19,395,000 or 30 per cent. of this came from the land, but only £4,547,000 came from agriculture. So the products of the soil represented about 7 per cent. In 1923 we exported £81,360,000 worth of products, the combined agricultural and pastoral produce representing £22,613,000 or 27 per cent., and only £6,000,000 or just over 7 per cent, were represented by products of the soil. These figures conclusively show that agriculture depends entirely on the home markets, and if we are to depend on the exports of the products of the soil, we would have a very poor living indeed. We produce £186,000,000 of national income a year, £47,000,000 being from agriculture, £37,000,000 from mining, and £31,000,000 from manufactures. If we could double that £31,000,000 which we obtain from manufactures the whole outlook would be immeasurably altered. We immediately create a market for our agriculture and we have thus a double increase of national income. This is all very elementary, but it is necessary to remember this in considering the establishment of a key iron and steel industry. Without the establishment of this industry we are without the raw material for other industries. The whole point of my remark is that if we develop our production we immediately give employment to those who are to-day non-producers and a burden on the State. The development of agriculture depends on an increase in the home market, the increase in the home market depends entirely on the increase in the purchasing power, and that again depends entirely on increased production. Increased production depends on the creation of industries and the consequent employment of those thousands who are to-day engaged in unproductive work. One-half the white population of this country is living parasitically on the other half. No quicker way of improving that position can be found than by providing the essential raw material of all manufacturing industry, viz., cheap steel. To come to the question of the iron and steel industry itself, there are certain interests which have criticized the reliability of the report by the German experts. I want to read to the House the remarks of Dr. Meyer, the chemical engineer, which are published in the report of the Trade and Industries Commission. He is one of our most brilliant South Africans, who ii doing splendid work in the industrial development of the Union. I have had experience of his work in the sugar industry, which he visited as a stranger, but as one equipped with technical knowledge gained in the chemical and iron and steel industries of Germany and other countries; he was particularly qualified to deal with our chemical and engineering problems. He wrote a report which has won the admiration of every expert in the sugar industry, and he has given the industry very sound advice. This is what he states about this report—

We have also the testimony of Mr. Bury, an expert of international standing, whose name has been mentioned so often, who states—

Efforts have been made to discredit these reports, and I feel sure the Government would have been on infinitely safer ground if they had made these reports public long before this debate took place. In stifling discussion the Government are giving no guide to public opinion as to certain schemes, and the doubts which have been aroused would have been dispelled altogther if longer time had been allowed for consideration of the report. No impartial man could go through these reports and not agree that the time had arrived for immediate action. A good deal of criticism has naturally fallen from existing concerns. I do not want to say anything against them, but in expressing my opinion I am guided more by the national good than by private interests. I am not going to allow provincialism to interfere with my national economic outlook. The whole purpose of the Union Steel Corporation is to make their steel from scrap. They have admitted this in a report which they have sent to every member of the House. Somebody said yesterday the Union Steel Corporation had no protection. I wonder what greater protection could have been given than the protection of purchasing its materials at £1 per ton. On page 11 of the Union Steel Corporation’s pamphlet they say—

There is a confession—

I cannot see any iron and steel concern blossoming into a real key industry which has scrap as the basis of its production. If we are going to build up an industry it follows we must do it from the raw material from the ores which we have in the ground, and not from the diminishing amount of scrap which yearly becomes available. The greatest expense in iron and steel manufacture is the fuel bill. In the case of Newcastle and Vereeniging you have to go to the double expense of melting your iron, converting the ore to pig iron, letting it cool, putting it in trucks and sending it to the mills at Vereeniging. There it is taken from the trucks, another handling, and remelted, with an unnecessary expenditure of fuel, with additional cost which has to be borne by all subsidiary industries. The Union Corporation have seen that in order to put their industry on an economic footing amalgamation with the Pretoria works is necessary, and for over two years an attempt was made to bring about amalgamation. They tried to obtain the money to effect this amalgamation on the world’s markets, but it was impossible to obtain it. It is always impossible to obtain money to establish a new industry, because such an industry does not give the return the money market looks for. To establish a new industry to-day and to allow it, in the face of the world’s competition, to give that reward which financiers are looking for, is an impossibility. Industries have everywhere grown up from small beginnings. They do not spring up fully grown with the aid of the money market. The whole scheme, as proposed at Pretoria, is that it shall be on an economic basis. Its rolling mills are adjacent to its blast furnaces, the ore going into the blast furnace will come out as pig iron and will run without loss of heat into the mill and the energy thus created will not be lost. The home markets have been relied upon entirely by the German committee in coming to their conclusion, but the sole object of this industry is to create further home markets. To argue, as has been done throughout the debate, that the market of the future is the market which exists at present is to rule out the idea for which this industry has been established. The whole object of the industry should be to provide cheap steel of good quality, and if it does that it will inevitably increase its home market. It is the building up of this home market we should be looking for. Now the home market as existing as the moment has been referred to in the House, but I think it might be emphasized that it consists of only seven articles, heavy rails, light rails, sections and fencing posts, rod irons, wire, and sheet iron. These are all the raw materials of other industries. If they can be produced as cheap or cheaper than anywhere else in the world, then we have the necessary raw materials for the other industries. If it cannot be done, there is no point in its being established. The home market take 180,000 tons, so that the 132,000 tons aimed at will be consumed in the immediate neighbourhood of production. Of this amount the Government, I think, itself takes something like 19 per cent. by value and 25 per cent. by weight, and the mines consume 32.4 per cent., so that the chief markets of distribution are adjacent to the work. The best friends of the Union Steel Corporation should have argued for their incorporation into these works, because the establishment of these works does not mean any injury to the productive capacity of Vereeniging or Newcastle as I understand it. Mr. Bury, on the Union Steel Corporation, says—

To-day manganese has been found in this country and, therefore, the cost of transporting this from abroad has gone. Further, phosphates which were necessary have also been discovered here in suitable quantities, and the cost of obtaining the limestone and other articles is considerably less, owing to the lower prices, than it was when this report was made. So the cost of production is even lower than it was shown by these experts at that time, and the experts estimated that the cost of pig iron was lower here then than anywhere else in the world. The only fear we have, and I have, too, is whether this industry is to be political or economic. Obviously, the German engineers based their conclusions upon economic working; they did not base their conclusions upon any political interference. Anyone knows that, particularly in a country like South Africa, where our industrial sense has not been developed as yet, if there is to be a lack of that necessary discipline and efficiency which should obtain in the industrial world, then these figures are not worth the paper they are written upon. It all comes down now to a question of efficient management and control. If that efficient management and control is going to be absent, if there is going to be any political interference whatsoever in this industry, then, obviously, the conditions which the Germans thought would obtain when they made their report would be very largely absent. It is reported—I do not know upon what authority—that the general manager of railways, the chairman of the Electricity Commission, the Government Mining Engineer, and a managing director, who is to be brought from overseas, I understand, at a fairly high salary, and a business man to be chairman, are to be the board. I do not know whether that is right or whether it is wrong, but that is the rumour. Many may have perfect confidence in these gentlemen serving upon that board, but there is nothing whatsoever in this Bill to show that people of that calibre are likely to be placed on that board. We might have the hon. member for Bloemfontein (North) (Mr. Barlow) and then, obviously, things might be very different.

He would make a better show of it than you have done with your sugar mills.

I wonder.

You have got £150,000 from the Government, and you are losing about £10,000 a year.

I have for many years in this House urged the Government, the late Government and the present Government, to take the step which they are taking now, to establish the industry, and I stand by every word I have said on the matter. I believe that it is an absolutely necessary industry, and I believe that, unless it is established, the conditions in this country will become gradually worse than they are to-day. I do not know what on earth will happen in this country if the alluvial diggings were suddenly to fail by reason of a slump in the diamond market, and large numbers of people are without employment. I believe that the only possibility of securing prosperity for all is to put this primary industry, this fertilizing furrow, we may say, of industry, on a perfectly sound basis. If we can produce, as I say, cheap steel and good steel in this country, I do not think South Africa has anything to fear. We are at the base end of one of the greatest markets of the world. I am certain that if this industry is placed on an economic footing and is carried on with efficiency and discipline, the country has nothing to fear, but I do think that the Government would have been on safer grounds, and have gained greater public confidence, and would have had the assistance of people who are competent and able to give them advice, if they had allowed this matter to be thrashed out in a select committee.

It is seldom that any measure of such importance as this has found so many points of agreement in this House, and it is seldom that we have had a discussion of this magnitude carried on at such a high level. What has surprised one is that, taking the lead from the leader of the Opposition, all the speakers on that side have been urging for delay. Right from the beginning we have had this call for delay in connection with this Bill. Now the question under debate is not a new question. It has been before the country for a number of years, in fact some seven years ago the urgency of it was recognized in this House. The present leader of the Opposition then said that—

So that seven years ago the question was an urgent matter before the House, and since that time it has become still more urgent that we should have established in this country and in the best possible place an iron and steel industry. There are several small engineering concerns in this country which only a few years ago were nearly brought to a standstill because they could not get the required raw material. The position became so serious that I accompanied more than one deputation to representatives of the Government to point out the grave difficulties which these concerns were experiencing owing to the absence of pig iron and other raw materials which they required. At that time a number of mines were closing down on the Rand and there was some machinery on those mines which was good for recasting, and which might have been of use to these engineering firms; but a ring was immediately formed and they bought this material in larger quantities than these small engineering firms could do. When the engineering firms wanted to get this material the ring charged a figure of not less than £7 10s. a ton for scrap.

Who charged that ?

The ring that was formed. I think the Minister will remember the deputation that called upon him and also the Minister of Railways. A ring was formed and they paid a price of £30,000 or £40,000 and took everything, buildings and commodities that the engineering firms did not require, and then sold this material piecemeal. For their scrap cast iron they were asking £7 10s. a ton from engineering firms on the Rand. The Minister of Railways came to their assistance. At that time pig iron was being landed at Durban from India at £5 per ton f.o.b. and the Minister of Railways met the engineering firms on the Rand by reducing the railage from Durban to the Rand from £4 8s. 6d. to £2 8s. 6d. per ton. About this time, in 1925, I believe, the Newcastle company, then under Mr. Eaton, was making a big struggle to come into existence, and appeals were made to the then Government to give them assistance. I think the whole weight of the then Government was thrown against the establishing of an industry in Newcastle on the ground that the iron ore, the native ore in the ground, was not sufficient for a number of years to establish a large industry on. The Government of that time took up the question and it was only when it was hinted or rumoured that the present Government intended doing something to set up works at Pretoria that the Union Steel Corporation came in and took a hand in the pie with Newcastle. Newcastle is producing pig iron to-day of very good quality indeed. Their No. 1 grade is equal to English made No. 1 grade, and it is almost equal to No. 2 Gertcherrie Scotch, which is the best foundry pig iron in the world. They are meeting the requirements here at the present moment, but when one peruses the report which has been placed on the Table and one can see the development that is going to take place in this country, then we must leave off the small concerns and establish the industry on a very large and very solid basis. Another point made here, and I think the principal one, is that the Government is going to have control. I think that is one of the most important provisions in this Bill, that the Government in this country should have control of the production of iron and steel. The history of this industry is a remarkable one. In Great Britain for a great number of years there have been iron and steel producers, and it was the proud boast of these manufacturers at one time that they knew every individual workman in their works. But that time is past and gone. There came into force the joint stock company and after that the manufacturing group, and then they formed themselves into associations for the purpose of controlling the prices. Lord Furness, in an address at a meeting of South Durham producers on November 29, 1922, advocated an amalgamation of at least 50 per cent. of the producers in the country and said this would enable the prices to be stabilized at a reasonable figure, and one of the objects would be to do away with the waste in industry and to bring down the cost of production. In the intervening years since 1922 the ironmasters of Britain and the U.S.A. and also on the Continent of Europe have been building an iron fence around South Africa. Even the great Metropolitan Carriage Works, from which we get a large amount of our rolling stock, has been brought into the ring. In Great Britain they control the prices. I do not think the Union Steel Corporation is in the steel ring, but they would like to be. There has also been something going on the Continent of Europe. A meeting took place between Germany, Belgium, Luxemburg, France and the Saar Valley producers, and they came to an understanding with regard to the prices to be charged to consumers. They also agreed that they would prevent production responding fully to expansion in demand. They have been surrounding us with these steel rings; they have been putting South Africa in a position in which we will not be able to get iron and steel at all except under the conditions laid down by the ring. The hon. member for Kimberley (Sir Ernest Oppenheimer) in his speech yesterday could have told you that one of the first countries in the world to feel the effect of the ring in Great Britain was South Africa, and the first industry in this country to feel the effect was the gold mining industry on the Witwatersrand. They spent fabulous sums every year for steel wire ropes, and within a few months of the formation of these groups and rings the price was put up to a figure beyond the capacity of the mines to pay. The gold mining companies had to form a company, and they have established works in the Transvaal where they are making their own steel wire ropes, but even so the special class of steel necessary for these cables has still to be imported from overseas. It is in the interests of the great mining industry that this special steel should be made in this country. Another point is this, that as South Africa was one of the first countries to feel the effect of the iron and steel ring so it should be in the forefront of making itself independent of that ring, and not only this country but every country in the world. Governments must sit up and take notice of the production of iron and steel; it is their life blood. It matters not what Government is in power. They must recognize this fact, that the life blood of the nation is having control in their own hands of the production of iron and steel. It is not only iron and steel; we have been shut in here in many ways. We know of the shipping rings that have been formed. A country must control the credit of the country, iron and steel, communications, shipping, railways and wireless, and they must control oil. The country which fails to do that is going to be placed under the iron heel of these rings, which are formed not only for the purpose of controlling prices but to keep production under control. Another thing about these rings is that they are unscrupulous.

I would like to take one outstanding illustration of the oil ring—and this applies to the other rings. There is the armament control ring; armaments must be taken control of by the Government and oil must be controlled by the Government. Last session we had Sir Alan Cobham here. After that he flew from England to Australia. I want to quote from the Commonwealth Hansard, page 1,475. Mr. Marks asked—

Mr. Bruce replied—

It simply means that the ring had got to work, and I am quoting this as an illustration of what the iron and steel ring will do. These rings that are being formed make it imperative for the South African Government and every other government to waken up and the key industries of a country must no longer be allowed to remain in the hands of people who abuse them, but must be controlled by the Government for the people.

I shall not take up much time with reference to what the last speaker has said. It is clear that according to his economic views—which are now setting the fashion in South Africa—everything must come into the hands of the State in the long run. With regard to this debate, I think it has assisted in educating the people, and to clear up the matter outside the House, which is a very necessary thing, because this is a matter of tremendously great importance. I must say that if anything has contributed to enlightening the people, then it was the speeches made by the Opposition. The Minister of Mines and Industries said sneeringly that it was now time for the Opposition to prove that it was worth its salt. The Opposition has taken such strong measures with regard to the Bill that the Government has to-day been obliged to run away from the criticisms of the Opposition, and attempts have been made to limit the criticism by means of the rules of the House. The Minister said: Show that you are worth your salt. The speeches from the Opposition benches further showed that the members on this side, as regards technical and business knowledge, are far superior to those sitting on the Government benches and behind them.

Blowing your own trumpet.

It is necessary to thoroughly enlighten the people, as ultimately if things go wrong the people of South Africa will have to bear the further burden. The Minister of Mines and Industries plainly said yesterday that, as regards the Government, the State was prepared to take full responsibility for the scheme upon itself. The outside public has a very large direct interest in the matter, and I am sorry that more information has not been given. The State is not only asked in the Bill to develop iron mines, to go in for practical mining business, but also to develop and exploit in addition the iron and steel industry. A Bill with this important object has been laid on the Table, but what information have the people received? According to the Government the scheme is based on the Dutch-German report. The Opposition from the moment Parliament opened asked for information and for the report on the matter. The Minister practically refused to furnish the report. He said—

I ask if this is the way a responsible Parliament should be treated by a Minister? The people are asked to assume responsibility for millions which are to be invested in State industries. Is that the way to treat them ? The Government actually refuses to give information and says: Wait till a certain date, then we will give the information, and not before. The Bill does not only demand millions of public money for the undertaking, but it is probable that vested rights involving private capital will be ruined. We, therefore, have to do with a serious matter, and I again ask what information is given to us with regard to the Dutch-German report. The report in German has been laid on the Table with an English translation annexed, which is available for 135 members of this House, and that Dutch-German report is the foundation of the scheme. Our Afrikaans-speaking members have not the privilege of reading the report. This is the Government which says all the time: We stand for the rights of the people. They blazon it forth every day that they stand for bilingualism, and here we have a report which the Government has been in possession of for two years, and Afrikaans-speaking members of the House are prevented from seeing it. Now it is said that this is done to economize. The Minister of the Interior in the current year is spending more than £300,000 for printing, and does he want to tell us that there are not a few thousand pounds available to print a report about an undertaking for which millions of pounds are to be used ? The report which has been laid on the Table is a privileged one. No member dare give it to the press for publication. The report remains secret until the Government publishes it. The outside public know nothing of the practical side of the matter about which data appears in the report, and yet the public are responsible for the money. We, as an Opposition, are doing our duty to call attention to facts which the outside public ought to know, and it is said: You may talk so far and no further. What haste is there in connection with the passing of this Bill?

Are you against the Bill?

I said I was against the method.

I think you are merely opposing it.

The Prime Minister knows well enough that we are not lightly condemning the Bill. Our criticism is constructive and not destractive. When the economic life of South Africa is being interfered with in a new way, and under a new basis, the people have the right, through their members of Parliament, of criticizing the methods on which the Bill is based. The Government is determined to carry out those methods. There are two great principles in the Bill. One is that there shall be an iron and steel industry in South Africa, and the second is that it shall be a State undertaking. It is the second important principle which we are chiefly concerned with. As we wish to give our attention to this matter, we have to be pushed into the night, although we are engaged in maintaining the rights of the people. As for information about the matter, the Government has not justly treated the Parliament and the people. There is another extraordinary thing which has clearly trickled through the discussion, viz., the cold-blooded and indifferent manner in which the investment of private capital in businesses is looked down upon. According to the words of the Minister of Mines and Industries, it appears to be a crime for private capital to be invested in the development of the country. I must say that the attitude towards established business rights in South Africa, which has been exhibited in the discussion and in the Bill, is something unknown and new in Parliament, and in public life. The Minister of Mines and Industries frankly admits that the passing of the Bill may have the result that the undertakings at Newcastle and Vereeniging will be crushed. I made some notes of his words about the matter, and I want to quote a few extracts from what he said. The Minister said—

He said further—

He also says—

The Minister, therefore, admits that there will be a big storm if the Bill is passed. He adds—

There is not a word of appreciation of the money spent for the development of the country, and not a word of regret that the Bill may result in the two industries in which more than £1,000,000 has been privately invested, being blotted out. The hon. Minister says that there will be no further bonus to be paid if Vereeniging and Newcastle close down. Has not this Parliament passed a law by which the bonus was introduced? I want it to be noted that the bonus system was brought into force in 1922, and that the present Government last year (in 1926) extended the bonus system one year after it was already in possession of the Dutch-German report. By last year’s Act, Vereeniging and Newcastle were encouraged to spend more money and to develop further. I want to know what was in the mind of the Government last year when the bonus system was fixed and further extended. Why was that done? Did the Government then feel that this Bill was going to be introduced ? That is an important question. What happened in the mean-time? In 1926 the bonus system was confirmed, notwithstanding that the Government had for more than a year been in possession of the Dutch-German report. After the Government last year encouraged those private undertakings, it comes now with this Bill, intended to create a State industry, and the Minister said that this may possibly have the result of ruining both undertakings, at Newcastle and Vereeniging. I want to ask the House, which is responsible to the people and to the whole business world, if this should not be regarded as a breach of faith. Is it not a breach of faith towards people who have invested more than £1 000 000 in the country for the Government now to want to create a State industry and to be indifferent whether the private industries are crushed or not ?

Must we abandon it for the sake of Vereeniging? Answer.

I am not in a court of justice to answer yes or no. I will answer the Prime Minister and say that if the industry is developed on a sound basis, apart from the State, then it cannot be helped if Vereeniging and Newcastle become insolvent. Then it is done by private capital. Here, however public money is required to crush private and established industries.

Therefore, on account, of Vereeniging we must not go on ?

I am opposed—

Am I to understand that we must not go on giving State support for the sake of Vereeniging?

I think we can do so in another way by giving some guarantee without backing it with the full credit of the country, as the Minister said.

What is the difference morally ?

The result will be a limited interest in place of the full financial responsibility This Bill puts the full power of the State behind the industry. Of course, the Prime Minister knows just as well as I, and that is why he is becoming so restless, that the criticism is killing, because if the whole prestige of the country is behind the industry, then the State must bear the responsibility of the suppression of the undertakings at Newcastle and Vereeniging.

Do not talk so much nonsense.

I know that the Bill does not originate with the Prime Minister. It has been argued that the matter is like the railways and other undertakings. What did the State do with the New Cape Central Railway ? Let us make an accurate comparison of the policy which the Government itself followed in taking over that railway. In the Cape Province there was a private company which had invested more than £1,000,000 on its line. We always had the opportunity of killing this private railway by extending the railway from Caledon to Swellendam. The former Minister of Railways and Harbours, as also the responsible Minister in the Cape before Union, absolutely refused to do so, and said that the company had invested private capital to develop the country, and it would not be permitted for the railway to be smothered to death. That was acting honourably, and the company was paid out according to the agreement made. The private railway was taken over in that way. I hat was the policy of the State in the past, but here the Government comes with a new idea that vested rights and existing businesses which have invested more than £1,000,000 can go to ruin. The State holds down its thumbs and says: “ Kill him,” irrespective of the people who have invested the capital. We may ask and business people throughout the whole civilized world will ask what will happen in future if this new doctrine is applied. They will ask whether any vested rights and private businesses in South Africa will be safe. Every financier and business man in England, Europe and America will ask whether they can venture to invest money in South African industries if the State is thereafter to come with its lull power to kill the private undertakings apart from private capital. I say straightforwardly that I think this Bill is a clear threat against all private initiative and investment of money in South Africa in the future. The Bill is defended by pointing out that the railways and post office and the electricity supply are also in the hands of the Government. Such an argument is frivolous. It is well known that in young countries throughout the world transport is in the hands of the State. The railway and post office are in the hands of the State and the Electricity Commission was established because Parliament decided to electrify the railways and just as a town dweller has to pay for his electricity so the consumer who goes to the Electricity Commission for power has to pay. There is a great difference, an economic difference between those industries, where there is no competition of international trusts, and of which the State has a monopoly, and this iron industry which will be exposed to a competition of large combines and trusts. I do not wish to enlarge upon the financial side of the matter, but just to mention one point in the German report. The profit mentioned in that report is based on the price of pig iron in 1924. It was then £10 10s. per ton. To-day it is £6 5s. This is only one important point in connection with the financial side of the matter. The Minister of Mines and Industries said that we need not allow ourselves to be led by precedents, in other words, public money is here being used to create a new precedent, i.e., the establishment of a new industry. We can apparently do this with public money irrespective of the consequences! The hon. member for Kimberley (Sir Ernest Oppenheimer) we hope, induced the Government yesterday to think a little about what was taking place. I just want to give another reason why I am strongly in favour of the amendment of the hon. member for Standerton (Gen. Smuts). It is that from a parliamentary point of view it is desirable to send the Bill before the second reading to a select committee, because if that is done after the second reading the select committee will be bound by the two big principles, viz., that there shall be a national industry—on this point there is no difference between us and the Government—but also that the select committee will be bound to the principle of the industry being under State control. The select committee will be able to make amendments, but will be bound by the principles, and we know what the moral effect of the adoption of the principles at the second reading will have on the select committee. The party whips will crack and the members of the committee will not dare to depart from what was decided about the principles at the second reading. If the Bill is sent to the select committee before the second reading, the country and the people are not bound by any principle, and the matter can be decided without any prejudice. While, therefore, I am not opposed to the establishment of a national iron and steel industry in South Africa, we are opposed to the principle of the State having full control over the industry, and that we cannot even deliberate upon that principle in select committee before the second reading is taken.

When the hon. member for Zoutpansberg (Mr. Pirow) favoured this House with his address on Monday last he condemned in severe terms the conditions and the prospects of the Vereeniging and the Newcastle concerns, and praised up to the skies the prospects of Pretoria for the establishment of an iron and steel industry. And when one goes into the matter one will find that the Vereeniging company has paid dividends for the last seven years and that Newcastle is alive and is hoping to pay a dividend in the near future, but the Pretoria company has gone to the dogs. Then the hon. member, in very solemn and measured tones, threatened members on this side of the House with extinction at the next general election if we did not vote for this Bill. I was so frightened I almost fainted, and the hon. member for Natal Coast (General Arnott) and myself had to rush from the House and imbibe stimulants. I think it will be conceded that the hon. member for Kimberley (Sir Ernest Oppenheimer), whether we agree or not with him, made a very able speech, to which he must have given a lot of time and thought. The hon. member for Vredefort (Mr. Munnik) replied to that—well, he didn’t reply, but he thought he replied, and it was nothing but pure abuse from beginning to end, and in that he is a past master and an expert, and, to the credit of his own party, he had little sympathy from his own side of the House. I advise the Minister not to place too much reliance on the report of experts. I have come across a good many experts in my time with technical knowledge and little practical experience. This country has had a bitter experience of experts. Take the railway electrification, Colenso, locomotives, yes, and grain elevators. I should advise the Minister in common parlance not to “ go nap ” on the advice of experts. The Minister of Defence made an interesting speech in introducing the second reading of this Bill and went deeply into the technicalities, which I expected from him in his professional knowledge of mining, but there was an absence of business details. Under the scheme this will be a Government concern entirely, the taxpayers being the shareholders. It was not possible for the House to properly study the papers laid on the Table. The Government should have summarized the information, and it should have been in the hands of hon. members the first week of the session, so as to enable them to form an opinion upon its business aspects, apart from its socialistic tendencies. I shall be very plain about this business. I am opposed to any State embarking on competitive concerns because they cannot run them on business lines the same as a firm or any ordinary company. I do not mean this Government particularly, but all governments. All governments have hangers-on, and cannot resist the powerful political influences brought to bear upon them. Look at the railways. There, under political pressure, they are employing a considerable number of uneconomical labourers. I am only mentioning the fact. I do not disapprove of it. I think it better for the Government to employ a large number of white men on the works than that they should be walking about starving with no means of supporting themselves or their families. I am only trying to show that the Government cannot work any industry on purely business lines. Take the Civil Service. You have a lot of redundant officials with an enormous pensions list which is becoming very alarming, and I am not a pessimist. Some countries have wiped the pension list out altogether, and if our list goes on increasing to the same extent it has done in the last four years, the country will say, “ Hold, enough,” and there will be no more pensions for civil servants and others. It does not follow because the State runs railways, posts, telegraphs and telephones, that it can successfully manage a highly technical steel and iron industry. Railways, posts, telegraphs and telephones are a monopoly. There is no competition. If there is a deficiency in the revenue of the railways, if its revenue does not meet the expenditure, then it raises the rates, and that is frequently done in the Union. We raised the postage to 2d. and telegrams from 1s. for 12 words to 1s. 3d. for 12 words, and that rate is still there to-day, and it is about the most expensive telegraph industry in the whole of the Empire. The Government can raise railway rates, posts, telegrams and telephone charges, because there is no competition, but I do say it cannot control or influence the world’s price of steel. The members of this House are the custodians of the taxpayers’ money, and should exercize the greatest caution in embarking on schemes of this nature, involving the expenditure of probably £5,000,000 of public money. The Government should have issued a memorandum in the shape of a prospectus like other companies and should have enumerated the allocation of the capital, overhead charges, interest to be provided during construction, cost of buying out existing concerns, full details of the manufacturing of articles, prices that can be realized in South Africa, the total consumption of the different articles in South Africa, trade prospects, what effect the concern will have upon existing iron and steel companies, and on what basis the annual profits are calculated or estimated. Unless we are in the fullest possession of these details, how can we form a correct judgment of the advisability of voting millions of money for this undertaking and embarking on a highly technical business. I suppose they will have to pay 10 per cent. more than the cost of the same article imported. That will increase the cost of mining and the railways.

We are giving that preference to-day.

Then we are not running the railways on business lines. When this industry is in operation the Government will naturally buy as much as possible of its requirements from this concern. The less bought by the public the more will the Government purchase, either to show a profit or to cover up losses. I would now refer to the financial part of this scheme. According to the Bill the capital to be provided amounts to £4,750,000. In my opinion that is insufficient, because apart from rails, the Government will have to make numerous articles to capture even half the South African trade. The English manufacturers have their own specialities in certain articles, such as trucks, wire fencing, corrugated iron, bridging materials, head gears, all kinds of wheels, sheet iron, iron pipes, machinery and other things too numerous to mention. The combined capital of these firms amounts to hundreds of millions, and yet— and I speak from experience as a director of two big mining concerns and having purchased a large amount of machinery and other requisites in England—we are compelled to buy certain things from one firm who specialize in this class of machinery, and we know from long experience that it is better for us to pay 10 or 15 per cent. more initially than to buy the cheaper articles that are on the market. If the Government intends making all South Africa’s requirements in steel and iron, it will require a piece of land quite as large as the whole of Pretoria to make even our limited requirements. In my calculations, I would leave out altogether the ordinary shares, which amount I think, to £1,500,000, and take into account only the debentures and preference shares. On the cumulative preference shares it is proposed to give a return of 7½ per cent. per annum and 5½ per cent. per annum on the guaranteed debentures, as to interest and capital, those debentures are being guaranteed by the Government. I do not know why they should pay 5½ per cent., because these debentures will be quite as good as Union 5 per cent Loan. The country assures the Union Loan and they have the same class of security as these debentures. I do not think they should pay more than 5 per cent. I hope they will pay 5½ per cent., because, if they do, I shall be inclined to go in for some of these debentures. These two classes, that is the debentures and the preference shares, will together average 6½ per cent. per annum in interest, that is on £3,000,000. Let us take the most favourable view and I think it will take five years before this industry reaches the profit stage. Now we shall not require this amount of £3,000,000 at the very start of the concern, but this sum of money will have to be provided over a period of five years, and I think this is a fair and equitable calculation—I believe it is what is generally done—then the interest should be calculated over half that period, two and a half years. That amounts to £195,000 per annum. Therefore, the Government commences operations with a dead weight of £487,500, to say nothing of the £200,000 you are giving to the present Pretoria concern. I do not know whether this £200,000 is good business or not. We have no information before us.

How do you arrive at the figure of £487,500?

I have taken two and a half years at £195,000 per year. I am not taking the five years’ interest, because you would not spend the money in the first year of the company. The whole £3,000,000 would be spread over the five years from the first to the last day.

Part of the interest is being taken out of capital from the start.

You must either debit the interest to profit and loss or take it out of capital or increase your capital, but it comes to the same thing in the end.

But it makes a difference to the chance of the ordinary shareholder.

Unless you increase your capital by ordinary shares. Then I admit it does make a difference. The Pretoria concern, of which the hon. member for Zoutpansberg (Mr. Pirow) spoke with such enthusiasm, is, I believe, defunct. I believe it is in a state of insolvency. The company owe a large amount of money that they cannot pay—I think it is nearly £100,000—and I do not know whether they have anything to offer the new company but the goodwill. I think that information should have been given to the House. It may be good business, but we do not know. I agree in a great measure with what has fallen from the hon. member for Kimberley (Sir Ernest Oppenheimer). I think the Government, in the first instance, should take up all the ordinary shares, secondly, they should take up the preference shares, and, lastly, they should issue the debentures. If the venture is likely to prove a success, the public should then be invited to subscribe the preference and ordinary shares. I do not think the Government should adopt the same methods as an ordinary company promoter in this undertaking. The late Government some years ago floated the Reserve Rank in this country. I know there was a lot of opposition to it, the same as we are opposing the iron and steel corporation that the present Government are going to float Hon. members on the other side opposed the Reserve Bank, which has been a success. We are opposing the new iron and steel concern, which I think will not be a success for the reasons I have given, but which I hope will be a success in the interests of the country. I have given you my reasons for thinking that with Government control it will not be a success, but, if run by a company or an individual with vast experience, I think it would be a success.

Is your attitude that we must leave it entirely a private enterprize ?

I say you should have given them some encouragement. You should have continued the bounty. I dare say you could have come to some arrangement with an English or other steel and iron company if you had given them some financial encouragement.

Without any control ?

I do not mind the Government having control, if they have got a monopoly. They cannot compete in a scientific and highly industrial concern with a firm or company. If the Government scheme turns out a failure all the money will be lost. Why, also, land the public in a loss, in addition to the great losses which in my opinion, will be sustained by the taxpayer ? The Government should protect the public. It should therefore bear the entire loss, which would be more creditable and dignified, to my mind, than risking the public money.

This Bill has been described by various speakers as providing for the establishment of a key industry of vital importance to the country, and so on. I agree with all these metaphors, mixed or otherwise, that attempt to describe the importance of the measure, but it is strange that a measure of such vast importance should have aroused such little interest amongst the supporters of the Government.

What about your benches last night?

I was not here, and I am not able to say. It is quite a different matter. If the supporters of the Government realized what is at stake in this measure, I think they would have shown more interest. I would like to point out to them that mining always precedes agriculture. Ore for making a spade or a hoe must be mined and treated before ground con be tilled. It may be that the measures the Government are taking with regard to manufactures and mining, would be followed by some similar action in regard to the great industry of agriculture. When the hon. member for Germiston (Mr. G. Brown), in his well-expressed and vigorous speech, addressed himself to the nationalization of industries, I was hoping he would go a little further and explain how nationalization would affect the greatest industry of all, that is the farming and agricultural industry. We find that the speeches of nearly all the supporters of this measure have been devoted to explaining what is agreed upon, the importance and necessity of this industry. That was never in dispute. They have been killing the slain all the time, but they have evaded, to a large extent, the great objection to this measure as it stands in the Bill before us, and it is very surprising that more hon. members did not support, by speech or otherwise, the demand that we have made from this side of the House to have this matter referred to a select committee. It is a very complicated matter, and, although the Minister was good enough to invite constructive suggestions from the House, yet it is not fair to expect us to amend his Bill without having an opportunity of going into all the facts. He certainly has had most constructive suggestions as regards finance from two members of the Opposition who happen to be au fait with that particular line of thought, but it is not fair to expect suggestions on a very highly technical matter, apart from finance, from hon. members who have had no opportunity of studying the important matters involved. Only this afternoon was I able to get this report we have heard so much about—in ten volumes. I have barely had time to read the index. The demand that we should have all this information and a great deal more at our disposal before coming to a decision, I think should have been acceeded to. When we remember that not only does this measure involve us in a vast expenditure, but also that it connotes a very vast change in our methods in. South Africa, in our social structure, that is an additional reason why more time should be given for consideration. At a glance, as far as we have been able to study the Bill, it seems to me to ignore all commercial experience on the one side and also to ignore all the experience of State ventures somewhat similar to this in other parts of the world. That is an important matter; the experience of other countries which have undertaken industrial ventures would be most valuable to us, and in committee we should certainly have called for papers on such matters. I would like, very briefly, to give some instances of what, unfortunately, I have to call State failures. The United States, for many years, have been trying by the vast expenditure of money and energy, to establish State shipping. In 1925, after many years of experience of working, they lost no less than £6,000,000 sterling. That is the difference between their receipts and their expenditure for that year without allowing for depreciation or many of the ordinary charges. Australia, too, for many years tried the same experiment, and in 1925 their net loss on the year was no less than £200,000. Their accumulated loss was no less than £11,000,000. These figures ought to be well weighed before we pass the Bill in its present form. Is it any wonder that Great Britain, that may be said to be the parent of shipping and is better equipped to carry out that business than any other country, when the Government found itself in possession of 689 ships, consisting of enemy prizes, standard ships and others, sold the lot, and wisely so, because they knew that their possession would not be a source of income, but of loss.

Their revenue was greater than their expenditure.

We find that New South Wales, in sixteen different undertakings, between 1911 and 1917, found that they all showed a loss in working, in spite of many local advantages, as the Government had monopolies in certain commodities. In Queensland the Auditor-General in 1925 reported that £808,000 had to be written off these ventures as an irrecoverable loss. When the Minister of Finance, in reply to the hon. member for Cape Town (Central) (Mr. Jagger), said—

he possibly had other objections, and viewed with alarm, as custodian of the public purse, the great increase of public expenditure—a great deal of which is due to our increasing public service. We find to-day that there are no fewer than 90,000 Europeans employed in the civil service, of whom 30,000 are employed in the public service and 60,000 in the railways and harbours; in addition to that there are 80,000 natives and coloured people. The voters’ list amounts to 413,000 according to the latest figures. Assuming the ladies in the public service, who have no votes, are counter-balanced by the coloured and native voters, 22 per cent. of the electorate are public servants, which is a serious matter, and the proportion is growing. The Minister of Finance may well view with apprehension the addition of these people in the iron and steel works. The Government must take control of the concern in which so much of their money is embarked that they will be responsible for the conditions in that industry. Times may arise when a Minister will be compelled to give concessions that will lead to inefficiency and uneconomical working. Whatever party is in power, it will be subject to that pressure, and I do not say which party will be more likely to lead to that pressure being exercised than another. Let us look upon this, not as a debating point, but as to its affecting the interest of the country as a whole. Is it any wonder that a late Prime Minister of New South Wales, who had ample opportunity of watching State experiments of this nature, said that discipline and efficiency had been the exception rather than the rule.

We are not going in for ministerial control.

If so, it has not been made clear to us.

Oh, yes.

If the Minister replies he will, I hope, make it more clear than he has done up to the present. Questions in Parliament will bring about that ministerial interference with labour that we so much fear. I hope the Minister is right, and that steps maybe taken to obviate to a large extent that real danger. There may be an explanation, but it has not yet reached us on the facts as disclosed in the Bill; and as we know them there is this distinct danger.

The Minister of Defence was quite emphatic on that point.

At all events, it has been found in other countries where there were State-aided or State-controlled industries, that these evils occurred. We know the temptation of employees who can get the ear of the Minister, or failing him, that of their representative in Parliament, to fix their own conditions of pay, hours, and so on, and they will naturally emphasize their own point of view— it is only to be expected. It will be difficult to resist giving concessions to employees which may not be for the general welfare of the whole community. I wish one had the words to emphasize how much we value the importance of the iron and steel industry. I agree with all that has been said on that, and I believe that the future of South Africa lies in the development and exploitation of its base metals rather than of its precious metals. We know that gold and diamonds are wasting assets, and that there are base metals to an illimitable extent, and we can make good the deficiency in future caused by falling off in production from the gold and diamond mines. But the proposals for State control do not commend themselves to us from any point of view, The Minister has given us to understand that the industry will not be under Government control, and we hope that the necessary alterations will be made in the Bill to give effect to that statement. When we come to the financial proposals, it seems to me that they are the result of a lot of amateurs trying to do something they don’t understand, for I cannot conceive of any financier being satisfied to be considered responsible for the proposals in the Bill. The Minister, however, seemed very confident that these proposals would recommend themselves to the public. I have made enquiries on the point from some of the South African stock exchanges, and the replies show that it is thought to be “ very doubtful ” (those are the words) whether the public will be attracted by these proposals.

No, they prefer platinum booms.

I am assured that financially this is a very doubtful proposition, and, therefore, no honest broker who so thinks will recommend it to his clients.

There is nothing in it for the financiers to rake over.

If that were the objection, it would be very easy to allow the usual brokerage. As to the debentures, I might describe them as—

it may be for years and it may be for ever before they are redeemed. There are many stocks, particularly in older countries, which are irredeemable, but this form of debenture is not fashionable in South Africa, and is not attractive.

People have been falling over each other to come in.

On these proposals ?

Yes.

You don’t propose to alter them ?

No.

How is the Minister going to evade Government control, for the chairman and the managing director are to be the nominees of the Government and liable to be dismissed by the Government ? The other day I asked the Minister of Defence if these two gentlemen had to be bilingual, and he rather sneered at the question. I understood him to lay it down that it was not necessary for the chairman to be an expert in that particular form of manufacture. But if there is one industry which has been built up on centuries of experience, it is the iron and steel industry. I doubt if there is another industry in which there are so many trade secrets; hence, to have a chairman who is selected for other reasons than his knowledge and ability would not be a bull point with the investors, at all events. It is obvious that the Government’s supporters have been instructed not to speak on this matter, so I suppose we shall see little or nothing of them until the division bell rings. However, I welcome the statement made by the Minister of Mines that he has an open mind for suggestions—I hope that will embrace financial suggestions, and that the Bill, when it returns from the select committee, will be in a very different form from what it is now.

I am certain that the working classes of Salt River and Woodstock, and of the country generally, particularly those engaged in the iron and steel trades, will welcome this attempt to place one of the key industries on a proper foundation—that is under State control. Hon. members on the Opposition side of the House have tried to give the impression that they are speaking as representatives of the people. Most of the speeches they have delivered, however, do not, in my opinion, represent the views of the people who sent those members to Parliament, but rather that of the private interests they are engaged in. The hon. member for Cape Town (Gardens) (Mr. Coulter) said he spoke as a back bencher, but although he sits on a back bench he is regarded by his party as being very much of a front bencher, for he always speak’s in a very able manner and masters his subject. Therefore, I would regard his views as being exceedingly important. But, in my opinion, he did not speak as a back-bencher, or as the representative of his Gardens constituents, but from the point of view of what Jack London describes as—

that is to say, a gentleman whose abilities are used to bolster up what is called private enterprize especially in the form of trusts and trade combinations. Hon. members on the Opposition benches get up and tell us they are quite impartial and that they are not interested to the extent of sixpence in this business, and I ask myself what is the real fly in the ointment ? What is causing the trouble ? Why all this objection ? It is because the Government of the country proposes to interfere with the sacred rights of private enterprise. There would have been no such speeches if a rival concern, a private corporation, had undertaken this work. They would have brought the groups together ultimately and would have formed an iron and steel ring in South Africa. That is the real cause of the trouble. They know perfectly well that when the Government establishes an industry it will be impossible for any huge trust or overseas combine to get hold of this industry. We congratulate the Government on making a start in the controlling of the huge capitalistic system which means the running of an industry to extract as much profit out of it as possible, and not for the benefit of the country. This thing is outside the family circle and they are unable to ask themselves—

for our little group. The Government is going into this business and that is the cause of the trouble. This is State enterprize and they hate it like poison. I do not regard this as socialism and I might say the Labour party has not been consulted on the question or policy. I repeat I do not regard it as socialism. It is a form of State capitalism, but it is a vast improvement, in that the Government of the country can control a key industry in the interests of the people of the country rather than that it should be controlled by private people running it for the sake of profit only. After the experience of the great war, most countries realized that it was necessary for the State to control its own basic industries. The word “ State ” enterprize is used. I want to ask who is the State. Is it a nebulous body which exists in the imagination ? No, the State is ourselves, and if the State runs a business badly, we have the right to say we will not allow it to carry on as any ordinary business would do. Nobody would suggest that the railways of this country are not well run, and that they are not a good business proposition. Because the State runs a thing it does not follow that it is badly run. It is a reflection both on ourselves and the Government itself to suggest it. I have been reading a leaflet lately issued by the Labour party in England about the operations of big trusts. It is entitled “ Facts about Combines.” I want to point out to the Government the danger of these combines. They begin with a certain industry and branch into others until it is difficult to say who is at the back of the big industries of the world. Take, for instance, the firm of Nobel Industries, Ltd., with a paid-up capital of seventeen and a half millions. So far as I can gather this firm controls the manufacture of explosives and fertilizers in South Africa. For years we thought that belonged to De Beers and Kynochs. But we find now that it is really this big international combine that controls it in this country, and not De Beers and Kynochs at all. Everybody knows such combines are very often responsible for the outbreak of hostilities by the control they have of their press, and the products they manufacture. They use their position to off-load war material if there is a war on, or to create war scares if there is not a war on. They are absolutely international. One paragraph strikes me as being particularly illuminating. It says that it is not the individual capitalist firm which controls the industry. If a kettle goes up in price it is not the firm who makes the kettle which puts up the price. It is the combine controlling the industry which is international, and if they can control the price of a small thing like a kettle they can also control the bigger productions. I had a book lent to me entitled “ Democracy after the War,” by J. A. Hobson, and this has some illuminating paragraphs about the manufacture of armaments. An extract is taken from a book written by Mr. Walton Newbolt entitled “ How Europe armed for War,” and it goes into the operations of the Harvey Steel Trust and gives two illustrations of international capitalism in the armaments industry. In one of these combines there was represented British, German, French and Italian interests. On page 46 appears the following—

Further—

In this huge international combine for the manufacture of Harvey steel plate you have some idea of the danger to this country, when you have these great firms of armament manufacturers combined internationally for profit making purposes and sharing the plunder. That is the greatest menace to civilization that could exist. We have also heard a lot about what is happening in Australia, and one of the Opposition members has drawn a very doleful picture in regard to the state of things in Queensland under the system of State enterprises. Where the hon. member got his figures from I do not know. We have figures issued by the Commonwealth of Australia which show that in practically every form of State enterprise either a direct or indirect profit is made. What really happened was that there was a gain to the consumer, even if a particular enterprise showed an apparent loss. As far as I can see, objection is raised that this is an interference with the sacred rights of private enterprise. Hon. members on the Opposition side seem to forget that we are at the dawn of a new era in this country. We are a huge country with a small European population and wonderful possibilities. The resources of this country are unlimited. What we require is more vision to see that we are at the threshold of a new era, and what better time could be selected for getting in on the ground floor with what is going to be a big industry in years to come ? We are not building for to-day only, we have got to visualize what is going to happen in the next 50 years. The hon. member for Cape Town (Gardens) (Mr. Coulter) made some point as to the possible difficulty of obtaining good coking coal. I should say that this is the time to get hold of the coal propositions of this country and see that the State controls the coal industry as well as the steel industry. I would go further and say that we should go into the cement business also. It seems to me, as a practical man, that this is a concrete age and a steel age. The day has gone past for wood and ordinary construction methods, and we have got to the steel age of construction and the concrete age. Three essentials are requisite— coal, iron and steel, and cement. I think those three industries should be taken over by the Government; the Government should step in on the ground floor and prevent the further exploitation of the mineral resources of this country by a few people who have no real interest in this country, and who are simply out to make profits for themselves and their friends. I am perfectly certain that my constituents will be very pleased when the Government make a start with this industry, and they wish it all success. We have to see that this country is not exploited by a few individuals for their own purposes, but that it is developed, not only for the people of the country at the present time, but also for those who are to come afterwards.

Let me say at once, as far as I am personally concerned, that I know very little about the steel business or anything to do with any industrial concern, and I think when I have said that I have placed myself in the category of the speakers whom we have heard this afternoon. It is extremely difficult for me to follow as to where the Opposition are standing on this particular Bill. I have not had the pleasure of being in the House for the last two or three days, and I have read the reports as they appeared in the “ Cape Times.” I have read the speech of the right hon. the leader of the Opposition, and, as far as I can see, he has got one foot in Pretoria and one in the Steel Bill. He does not quite know how to lead. The hon. member for Newcastle (Mr. Nel) who has spoken, has his eye glued on Newcastle. The hon. member for Kimberley (Sir Ernest Oppenheimer), who has spoken, appears to me to be sorry that he did not get in first. That is how his speech read to me. As far as I can judge, the South African party have two objections to the Bill. I speak under correction. The first is that the State retains a certain amount of control. The second is that shares should be issued first and debentures second, and on this flimsy foundation they have endeavoured with the assistance of their newspapers, which are controlled by the same class of people, to oppose this measure. Take the hon. member for East London (North) (Brig.-Gen. Byron). He tells the House he has not read the ten volumes. He need not have told us that; his speech showed it; we could tell he knew nothing at all about it. He was the managing director of the first socialistic company. He and others came to the Government and said: “You have got to go in for this new form of socialism; you have to put up money for this creamery.” The whole of the Free State held up their hands in horror. He said—

To-day we are turning out more butter in the creameries than anyone else. Then he went on to say—

My information is they are buying now, and they are coming all the way from England to do it. Some are going back for more capital. But if the stock exchange said that, is that anything wonderful ? The stock exchange turned down the Reserve Bank. They told the public—

The shares now stand at £170, and I would like to know how many the hon. member for Cape Town (Central) (Mr. Jagger) owns. If he had put his money in that concern rather than in many of the private concerns he has put his money in, he would have made far more money. Now we come to the darling of the gods, the hon. member for Kimberley (Sir Ernest Oppenheimer) who, we are told by the “ Cape Times ” and other papers, made a brilliant financial speech—one of the links of Empire—a speech that left the Government cold. I came to the conclusion that it was rather a stupid speech, and the hon. member could make better speeches. I thought it was written by Professor Fremantle What does this honourable and gallant knight tell us ? I wanted to study the speech, and I asked him for “ Hansard,” but he said he had not got it yet. I am sorry he is not here. He says that Sir William Hoy would say that the South African railways would be better run by private enterprise. This comes rather strange from one who has had a good deal to do with Rhodesia lately, where they have just taken over the railways of Rhodesia. The control will be in the hands of the Rhodesian Government. The hon. member for South Peninsula (Sir Drummond Chaplin) says I am quite wrong. I must accept that because I believe what he says. But anyhow, in Rhodesia they endeavoured to take over the railways, and the hon. member and his friends were in favour of doing so. We know that the hon. member with some of his friends has bought the whole of the mineral rights of Northern Rhodesia. He told me so himself, and he, with his friends, is trying to buy up the loose ground of the Chartered Company in Northern Rhodesia. I hope the hon. member for Albany (Mr. Struben) will agree with me—his constituents will if he will not; I know he is out of touch with his constituents. When I say that the railway running from Kowie to Grahamstown—

I do not agree with using private conversations in this House.

I am not using private conversations at all. I know that the hon. member and his predecessor pushed for a railway from Kowie to Grahamstown. The people could not travel on it and those who were foolhardy enough to do so went over the Blauwkrantz bridge. It was one of the most dangerous railways in the British Empire—run by a private company.

The accident at Salt River station—was that on a privately-owned line ?

It was a different class of accident altogether. Then there is the New Cape Central Railway, which the hon. member for Cape Town (Central) (Mr. Jagger) wanted to buy, although he is so much against State control. What condition was it in ? It was in a dangerous condition and the rates were far higher than the rates of the present railway to-day. Here you have the railways of South Africa under State control. Let us take the old Z.A.S.M. railway of the Transvaal. Our friends, the hon. members for Beaconsfield (Col. Sir David. Harris), Cape Town (Central) (Mr. Jagger) and South Peninsula (Sir Drummond Chaplin) went to war about the Z.A.S.M. They said—

We know how the “ Star ” used to grumble over that railway. The hon. member for Beaconsfield said the railways are a monopoly. But are they to-day? They are running motor-buses, and anybody can compete. Will anybody in the Opposition vote against these motor cars of the railways ? That is practical socialism. The hon. member for Beaconsfield said that the prices of telegrams and letters went up, but so did the prices of diamonds, of clothes, of members of Parliament—everything has gone up. Let me take my two hon. friends here who are sober when they are in the House, and let me refer to the colonial wine buffet, where you can get the best South African wines in the country at half the price you pay to a privately-controlled concern in the streets. The old Cape Government did it, and the right hon. the member for Fort Beaufort (Sir Thomas Smartt) fought that Bill. To-day he would not fight it. To-day he is one of its best supporters. Let us go a little bit further and take the National Bank of the Orange Free State. After Great Britain had taken over the diamond fields from the old Free State Government—we need not go into the why and wherefore—a sum of £100,000 was given to the republic, which they put into the bank, and they had four directors. There were three directors of the shareholders who had put their money into it, and it was an enormous success. Any business man will admit that, and it was run on the very same lines as the Minister of Mines and Industries to-day is going to run this iron and steel industry. The Government directors on that bank voted as private individuals, and not once was there Government policy coming in. What is the most efficient thing in the world to-day, according to our hon. friends on the right ? It is the British navy. If it is not efficient, why do we not sell it out to some capitalist? “It is time we sold out to some capitalist!” What did the hon. member for Cape Town (Central) do only the other day ? When he was a member of the Cabinet he said that the Government printing offices were the right thing. Was the hon. member against them ? Why, when he was a member of the Cabinet, did he vote another £100,000 to extend them ?

Pure imagination.

He knows that under the South African party Government a new wing was put up. If he did not hack up the Cabinet of which he was a member, there were more differences than we thought there were. We knew there were a lot. It is a purely socialistic concern doing excellent work—these printing works. Then we come to the hon. member, the brilliant speaker who said we must restrict dividends.

We must not.

Would the hon. member not restrict dividends to build up a reserve fund ? The whole world knows that when the big crash came it did not reach one firm, because he restricted his dividends. The hon. member for Kimberley (Sir Ernest Oppenheimer) said—

Is it true economy ? Is it true of De Beers, I ask the hon. member for Beaconsfield (Col. Sir David Harris) ? De Beers have restricted their dividends for many years. I know—I have one share. They have built up such an enormous reserve fund that to-day, although they are attacked by the alluvial diggings, one section of their shares is absolutely safe. The man who restricts his dividends and puts a good deal of his profits into reserve is the man who can make experiments, build additional blast furnaces or erect improved machinery. The Government is quite right to restrict dividends. The hon. member for Kimberley (Sir Ernest Oppenheimer) says that if the dividends are restricted the output cannot be great. He is wrong. He meant if you restrict your profits, but you can make an enormous profit and still pay small dividends. So that brilliant piece of finance goes by the board. It is stock exchange finance and there is nothing very deep in it. It is a bubble which can be pricked very easily. The hon. member talked about cheap steel, but that is the outcome of large production. I know nothing about steel and don’t pretend to, but I do know that a big works can turn out steel at a cheaper rate than a small works can. Had the South African party been in power would it have gone on with this project ? No. They would have talked about it like they talk about the Asiatic question, the native question and the higher status. They would have talked and we would have got no further. The hon. member for Pretoria (East) (Mr. Giovanetti) is going to vote for this Bill because he thinks that he is going to retain his seat. But he is not, because it is going to be jumped by the hon. member for Standerton (Gen. Smuts). The farmers are said to be afraid of socialism. The hon. member for Fort Beaufort (Sir Thomas Smartt) has always urged that farmers should be helped by the building of agricultural colleges. Does he realize that these colleges are competing with the hon. member for Cape Town (Central) (Mr. Jagger), with me and with other people because they sell bulls, sheep, rams and pigs ? If the Government can sell pigs surely it can sell pig iron—I don’t see very much difference in the principle. Of course that is socialism.

The Government lose money over it.

The Government lose money on the agricultural schools but not on that particular portion of their operations. The hon. member does not disagree with it because the Government are losing money, but because it is socialism. If the business paid would he agree with it ?

I don’t say I would.

South Africa is going to have an enormous advance in industry, as numbers of companies are coming out, which will use steel and pig iron. Before long our agricultural machinery will be made here.

You will have to pay more for them.

What does it matter if we do ? The South African party says—

but the Pact says—

That is why I cannot understand the hon. member for Zululand (Mr. Nicholls) being a member of the South African party. Railway material can be made here and fencing materials for which we have to pay a good deal to-day.

You will have to pay still more.

It does not matter—the money will stay in the country. Why should not the companies which make these things take shares in this concern ? I don’t often congratulate the Government, but I would like to congratulate them and my leader on the able line the Pact Government has taken. The Government is going on with a forward policy. Wherever I have been—I have not been very far lately, only to Durban—I find that people may be against us on some questions, but not on this one. The South African party are only fighting this Bill because they are protecting certain private interests.

You are wrong.

Hon. members who do this are as honest as other people, but they are protecting private interests, they stand for private interests. That is the dividing line which is coming—one side wanting everything to be in the hands of trusts and the other side desiring Government to have the key industries.

Nationalizing industry all round or private enterprize ?

This is not socialism. From a socialistic point of view this is a joke, but at any rate it is a beginning. It is a pity that the principle was not extended to our gold, diamond and coal mines and also to the land. As a matter of fact we have it so far as the land in the Free State is concerned, as the farmers there pay quit rent which can be doubled to-morrow if Parliament so desires. I am glad the Government have done this, because it has laid down a principle, once and for all, which will never be departed from even if the South African party get back to power, which God forbid. Whatever happens, the people will see that key industries are held by the Government. No more than we should relinquish the post, railways and telegraphs, shall we relinquish the key industries. They have struck a new note in the British empire that will ring down the corridors of history. This is going to be a great success. We are going into it to make a success. We shall not go into it weeping like Jeremiahs, like the South African party, always crying that the land is going to pieces and that the country is going backwards. It is not going backwards, it is going forward. I congratulate the Government, and hope they will stick to their guns. If the South African party voted as their hearts told them many of them would vote for this measure, but if they voted as their heads tell them—well, I don’t know how they would vote. Certain interests have put up the finance for the South African party. The cry has gone up that you have to toe the line. You cannot fight against your press and your press cannot fight against the big trusts.

Every member in this House has a great admiration for the hon. member for Bloemfontein (North) (Mr. Barlow) in his capacity as a complete letter writer. The significance of the now famous letter to which I refer is only now beginning to fully dawn on us. He commenced his remarks by saying that he knew nothing about the subject under discussion. That was obvious not only from his remarks but from his deductions. We have often for instance heard him boasting of being a leading farmer, but to-night he asks us what is the difference between a pig and a pig iron. Now in that letter to which I have referred, the hon. member said that he had always been put up when the Government were in a hole. Are we to understand that the Government have put up the hon. member to speak to-night, if so then they must indeed be in a hole. Here is a Government measure introduced not by the Minister of Mines, but by the socialist leader of the Pact wing of the Government.

That is very threadbare.

Not all, it’s a fact and a very significant fact. We find they have to fall back on every member of the socialist benches to support them. There has not only been a deadly silence on the Government benches behind them that are expressions of the gravest anxiety on the faces of their supporters. Where is this sort of legislation going to lead us to. We hope the speech of the hon. member for Bloemfontein (North) has assisted the Government, but it appears to me to have given the whole show away. Like the hon. member, I confess I do not know anything about the iron and steel industry. I confess to nothing more than being an agricultural labourer, but I realise that here is a measure being forced through this House to-night under conditions which I consider a little short of disgraceful, a little short of an outrage that a measure of this importance should be forced through, steamrollered without ample discussion.

The hon. member must not speak in that way with regard to a resolution of the House.

I accept your correction Mr. Speaker, but I do think it was unfortunate that it should have been necessary that a measure of this importance should have to be forced through in this way, and that discussion should have to be restricted. May I say that? I ask why is the Minister of Defence in command of this Bill. We are told frankly, he knows more about it. But it appears to be very like the old case of cause and effect. The story of the hen and the egg. Which Minister represents the egg and which the hen ? I don’t know.

Business suspended at 6 p.m. and resumed at 8.8 p.m.

When the House adjourned I was asking what is the reason of the occupants of the Labour benches being so keen on this measure.

Because it is wanted by the industrial section.

Because it is a sound measure.

No. The real reason is that the occupants of the Labour benches regard this as a first victory—and a great victory it is—in the carrying out of their avowed policy This is their first great success. They have had other and other smaller successes but this is their first big one. If that is the reason why the occupants of the Labour benches are so much in favour of this Bill, why is it that the occupants of the Nationalist benches, who are responsible men on the land, men who are deeply concerned with the welfare and stability of this country, are sitting absolutely silent while this debate is going on ? No support has been given to Ministers from those sitting behind them; they have had to look for their support entirely to their friends on my left. I have no doubt that the vote will go with them all the same, but it is going to be in the nature of a Pyrrhic victory. One remembers when my hon. friend the Minister of Posts and Telegraphs first announced his appointment to Cabinet rank, that he was reported to have said to a gathering of a few friends that they must remember that he was an extremist, that he always had been and that he always would be. He added to that that he was going into the Cabinet to “ speed up ” matters. Things had been working far too slowly for him. I know he felt that very strongly. I suppose we can take this Bill as the first evidence of the speeding-up process.

You are behind the times.

If this is the first evidence of the speeding-up process, no doubt he intends that there is to be more to follow. The silence on the benches opposite is, I think, most significant, and it is not to be wondered at that this debate is being brought arbitrarily to a close, because what is the use of continuing a debate when you cannot get your friends behind you to get up and speak ?—I am sorry that the hon. member for Ficksburg (Mr. Keyter) is not in his seat to-night. One would like to see him get up in his place and give a Bill of this sort his blessing, it’s going to affect him sooner or later.

What about Pretoria East ?

Yes. I admit that Pretoria is going to do very well indeed in connection with this matter. Pretoria always does do very well for itself. I except Pretoria. Then there is our old friend opposite, the hon. member for Harrismith (Mr. Cilliers). What has he got to say about it. Doesn’t he know as well as we know what this sort of thing is leading to ? Doesn’t he know that the nationalization of industries will inevitably lead to heavy taxation ? Doesn’t he know that taxation first of all and last of all, affects the farmer ? The man on the land. He is the first man to be affected and the last man to recover from any form of depression. Now I rather welcome this measure, for one great reason, and I think South Africa will have reason to welcome it, because, if our friends on my left are capable of taking notice of the trend of events they must realize that legislation of this sort is going to divide the country on entirely different lines from what it is divided on to-day. This country is sick of the purely artificial division on racial lines. The division which is going to take place between the people of South Africa is going to take place on economic lines nationalization of industries and socialism generally and that is going to bring those on the opposite side and those on this side, who indeed have the interests of the country at heart, together and cause them to fight a policy which, if it is pursued and persisted in, as the Labour wing are determined will bring ruin to this country. I know my hon. friends on the left think they are rushing the Nationalist party for the time being. So they are. But it cannot go on much longer. One has only got to look at the expression on the faces of hon. members opposite. We are not going into this matter blindfolded. We know exactly how it will work out, if persisted in. We have got the experience of other countries where nationalization has been tried and socialism has been carried out and to-day we have got the results, for those to read who run. I will take first the case of Russia. Socialism was brought about in Russia by violent means. The modern socialists say they will bring about the change by gradual means which, in the estimation of these gentlemen, is the nationalization of industries, the taxation of capital and the general discouragement in every way of thrift. What has been the result of the policy in Russia ? I am speaking now of the effects of the policy, particularly on the farming community. The output of grain of every description in Russia has fallen exactly 50 per cent. There is today in Russia just half the amount of land in cultivation that there was in 1914—that has been the effect on agriculture. So far as exports are concerned, in 1914 they were just 15 times what they are to-day. Just think of that! That represents a loss in national income of 950,000,000 roubles. Historians state that no country in the world has suffered such devastation except Germany during the 30 years’ war.

At whose hands ?

So far as Russia is concerned at the hands of the socialists. That is socialism by confiscation and brute force. Now take the up-to-date modern form of socialism introduced in Queensland, that is socialism by the nationalization of industries and by taxation. I have here a letter which I have taken from the “ Newcastle Weekly Chronicle ” of October 9th last. The writer signs his name and gives his address—Thomas Willis, Campbell Street, Brisbane. It is an indictment of the socialistic Government of Queensland.

What is his name ?

Mr. Thomas Willis of Brisbane.

Well, who is he?

He is the writer of this letter and this is what he says—

Then he goes on to say that the corruption in public life is permeating society. That is a letter from a Queensland man on Queensland. After reading that letter I think we can boast that we have made a fairly good start in this country. We have already voted ourselves an increase in pay, loaded the public service with political supporters, got appointed to useless commissions to double our emoluments and many other things in the same direction. Now we are starting on the real big thing, that is nationalization of industry; we are going to establish this tremendous industry knowing perfectly well that it cannot pay, and if that is right, the taxpayers have to pay for it and who are they but the landowners and farmers to a great extent. Once the country has lost these millions it must go on pouring millions on top of those that have been lost to save those already spent. The effect of this is going to be to lead to a similar state of affairs here which has brought Queensland to its ruin.

We find that the chief arguments raised by the Opposition against the Bill are firstly, that the Bill is socialistic and secondly, that if it is passed as drawn then we shall have both the bonus—and the guarantee system in the country. They regard that as unsound and in addition they have the third objection that the financial scheme is unsound. As regards the argument that it is socialistic legislation, I think myself that they have clearly proved to us that the argument is not serious. Even the hon. member for Standerton (Gen. Smuts) acknowledged that he supports the main idea contained in the Bill, although at the end of his speech, on account of the influence which he has on the countryside—if he still has any influence there—he stated that the Bill had been introduced under pressure from the cross benches. Even the “ Cape Times ” had to admit that we were all socialists to-day. This argument on socialism does not come very well from members of the South African party, because the S.A.P. Government showed by its legislation that it sometimes adopted socialistic principles where it suited them. We have two outstanding cases of such legislation, viz., the Acts about the Electricity Commission and the Reserve Bank. The hon. member for Standerton now makes a distinction by saying that it is not quite right to compare the Electricity Commission Act with this Bill, because the former is of a monopolistic nature, while this undertaking is exposed to competition. I cannot see how he can make this dictinction. I always thought that any legislation was regarded as socialistic when it was proved that the State controlled the industry. To actually judge whether the Bill is socialistic, we must investigate how far the State has control over the working of the industry. In those Acts we find that the State can have much more control than in this Bill. In the undertaking of the Electricity Commission the public have no share, nor have they any representatives on the board of directors. There we find complete State control. Legislation more socialistic than that of the Electricity Commission it is not possible to find. As regards the Reserve Bank, the Government can nominate eight out of eleven directors, while under this Bill it only has the right to nominate five out of nine. In the case of the Reserve Bank, the State has more control, and therefore that legislation by the S.A.P. Government is more socialistic than this Bill. I therefore think that the idea that this Bill should be regarded as more socialistic than the legislation of the previous Government completely falls away. I think that hon. members opposite did not push the argument too far because they were conscious of its hollowness. I can, however, imagine that when they get outside the House their chief argument against the Bill will be to that effect, in order to influence the people, who are not so well informed. I regret that the hon. member for Standerton in his speech made that accusation. As to the second objection of the Opposition, viz., that we will now have the system of bonus and guarantees in the country, I do not think it is of much weight. The hon. member for Standerton said that he is not against a guarantee system, and he also thinks that if the industry is to be successful, it will be necessary to apply the guarantee system according to the reports of the oversea experts. In such a case we must be guided by persons who have a thorough knowledge of the industry. The experts are clear on the point that the bonus system will not be completely successful, and therefore they recommend that the guarantee system should also be employed. We know that the industries now existing were given every opportunity of developing but hitherto they have clearly shown that they were not willing to make provision for the crying necessities of the country. It has been shown that Newcastle and Vereeniging cannot supply all the requirements of the country. The existing industries at Newcastle and Vereeniging have hitherto shown themselves disinclined to amalgamate with the Pretoria undertaking. Hon. members on the Select Committee for Railways and Harbours will remember how that committee one or two years ago instituted an enquiry into the undertakings at Newcastle, Vereeniging and Pretoria. The pertinent question was then asked of the representatives of the various interests why an amalgamation of the various undertakings was not agreed upon. Evidence was taken which clearly showed that the existing interests at Newcastle and Vereeniging were unwilling to join such an amalgamation. If it is realized to-day that they are not able in the areas where they are working, to fully satisfy the requirements of the country, and will not extend their operations to a more suitable place, viz., Pretoria, then the Government must not be blamed if it decides to assist the Pretoria undertaking with direct State support. We find that hon. members of the South African party are hopelessly divided. The hon. member for Standerton admitted that he was not opposed to the guarantee system. The hon. member for Cape Town (Central) (Mr. Jagger) speaking for himself was completely opposed to support of an industry, both according to the guarantee and the bonus system. On the other hand the hon. member for Peninsula (South) (Sir Drummond Chaplin) said that he was not opposed to the bonus system but strongly against the guarantee system. I have mentioned three of the chief leaders of the South African party, and each holds a different view. It is no wonder that the last Government could never come to any decision, because there were just as many schemes and views as there were leaders or members in the party. The Government feels that if the existing system is unsound and has shown that it does not answer to the needs of the country, then a strong attempt must be made to make provision for those requirements. The Government therefore has introduced this Bill to give what is required through the guarantee system. The third argument of hon. members opposite was that the financial stipulations are unsound, they tried to make capital out of this. The hon. member for Standerton first mentioned this and said that this undertaking was unsound, and that is was based on unsound financial provisions. Strangely enough the hon. member did not himself produce proofs. He only said that he thought that the general public would not immediately have the opportunity of applying for shares. I think that in his argument he condemned his own criticism, because if the scheme is financially unsound, then it will be more unsound for the public to take shares immediately and it will be better for them only to take them after three years, when the undertaking approaches its productive stage, and interest can reasonably be expected within a short time. The hon. member wishes the public to take up the ordinary shares at once, and he is opposed to them only doing so after three years. I say that that is no argument, and that it does not prove that the financial system is unsound. The hon. member for Kimberley (Sir Ernest Oppenheimer) has tried to show that this scheme is unsound, and he wanted to prove that the public would be unwilling to apply for shares in the company. He thinks that if ordinary shares are immediately issued to the public, and the interest on them guaranteed, the undertaking may be a success. Let us look into the two recommendations; firstly, as proposed in the Bill, and secondly, as proposed by the hon. member for Kimberley. That hon. member started from the hypothesis that the undertaking would be a success within five years, and that then, according to the report of the experts, a profit of £450,000 per annum could be depended on. The hon. member states that the Government scheme will result at the beginning of the fifth year in a large amount of accumulated interest. According to him, the accumulated interest will be obligations for the first four years of £1,500,000 at 5½ per cent. i.e. £330,000. For three years the accumulated interest on the accumulated preference shares viz.: £750,000 at per cent. interest, will be £168,000. The total arrear interest at the end of the fourth year he therefore calculates at £498,000 or in round figures £500,000. The profit at the end of the fifth year he puts at £450,000, but from that he says must be deducted the payment of obligations, an amount for the Pension Fund, an amount for Renewals and Depreciations, and other similar amounts, and that sum he puts at £100,000. Then he says income tax must be paid to an amount of £50,000, and according to him there must further be deducted their own interest on 5 per cent. debentures, which amounts to £82,500. In conclusion there has still to be deducted the interest on preference shares at 7½ per cent. which runs into £112,500. He therefore calculates that a profit of £450,000 must be reduced by the said amount which together amounts to £345,000. Thus at the end of the fifth year there remains profit of about £100,000, but he shows that at the end of the fifth year there is a deficit of £500,000 in accumulated interest on preference shares. Therefore the deficit will only be washed out after nine years according to him, because to the first four years must be added the five years in which each year £100,000 will have to be paid off to get rid of the deficit, The alternative scheme which he now suggests is that no preference shares should be issued, but that ordinary B shares should first be issued with guaranteed interest. If we make the same calculations with reference to that scheme, what will be the position at the beginning of the fifth year. There will then be an accumulated interest on the guaranteed shares, because during the first four years no interest will be paid. This will be £600,000 in accumulated interest, being 5 per cent. on £3,000,000 guaranteed shares. The profit will indeed be £450,000 after four years, but this must then be reduced by the redemption of debentures, the amount for the pension fund, for depreciation, income tax, and further guaranteed interest at £3,000,000. This works out at £382,500, which must be deducted. Therefore, the available profit to be paid out to shareholders of 5 per cent. shares is £450,000 less £382,500, or about £67,500. The accumulated deficit of £600,000 which I mentioned must be made up. That will take nine years at £67,500 per annum. Only at the end of the thirteenth year, therefore, will interest above the guaranteed 6 per cent. be paid under his scheme, and under the other scheme after nine years 12½ per cent, interest will be paid to holders of ordinary shades. How then can we test which of the two systems is the most beneficial to shareholders, the Government system or the other ? If anyone invests £100 in the Government scheme he will be able to draw interest on the £100 for three years, which at 5 per cent. will amount to £15. For the succeeding six years he will draw no interest, because then the profit will be employed in redeeming the accumulated interest. The four years after that he will draw 12½ per cent, interest four times, so that the person who invests £100 in the Government scheme will after thirteen years have drawn £65 on the £100. According to the scheme of the hon. member for Kimberley the person will in the first thirteen years draw annual interest at 5 per cent., and this also works out at £65. The two systems therefore give precisely the same results after thirteen years. If that is so, then the whole argument of the hon. member for Kimberley falls away, that the Government scheme is no encouragement to the public to apply for shares in the undertaking. It must, however, be remembered Mat the profits shown according to the Government scheme, have been calculated on a very conservative basis, because since the estimate was made a number of new factors have become of importance which will favourably influence the profits of the company. Since the experts enquired into the position large quantities of manganese have been discovered, and it is calculated that this will mean a saving of a further £30,000, while the discovery of coal for coke at Witbank will mean a further saving of about £50,000. (In the original estimates the hypothesis was taken that the half of that would come from Witbank and the other half from Newcastle). All these factors must now be taken into consideration, and then we see that the calculation of the experts was very conservative in putting the profit under the Government scheme at £450,000 in the first stage. I think that these figures entirely contradict the conclusions of the hon. member for Kimberley, that the public have no encouragement to apply for shares, and that the undertaking will not pay. If the public will actually investigate the matter they will discover that the thing will pay, and that it would be a good thing to apply for shares. The hon. member for Kimberley juggled very successfully with figures, but we are accustomed to that. Last year he did the same thing with the Estimates. Then we were also for a moment impressed by his speech, but when the figures were analysed, it was discovered that it was pure juggling, and I think I have clearly shown with these figures that this time again he has been juggling with figures. We feel, and I think the outside public feel, that we ought to be thankful to the Government for its manly step in advance to develop this most important key industry. The country has been waiting a long time for an iron and steel industry on a sound basis, and that industry in the future will remain of importance, not only for a few but for the whole of the people, and I think this step forward by the Government enjoys the support of the people outside, and whatever the terrifying stories of the members of the Opposition may be, I think that the public will again prove that its insight is often much clearer in business matters than that of the big men who criticize here. I am convinced that the Government is taking a right step. Nor do we, especially those on this side of the House, want the State to interfere too much with our industries, and we do not wish the Government to crush private undertakings, but as it appears in the case of this key industry that private ventures will not tackle it, the Government must intervene and say—

That is what the Government is doing. A number of amendments may possibly be made in select committee in one or other respect. I think, e.g., that in similar undertakings the control of the State in technical matters should be as little as possible. If it is possible therefore to limit this effectively by providing that as regards technical management the control will not be entirely in the hands of the Government, it will possibly be a good thing. As regards the general management I say it is a good thing that the Government provides it, so that, e.g., big principles such as that of civilized labour can be laid down, also that the Government can give a lead as regards the employment of our own engineers. The Government must have the control and give guidance, but as regards the technical management the Government will possibly be prepared to consider the advisability of interfering with it as little as possible.

The hon. member for Bloemfontein (North) (Mr. Barlow) stated this alter noon that they on his side of the House did not know where the South African party were in regard to the Bill, and all that we had endeavoured to do was to frighten the public against the scheme. I deny that. We are most anxious to see the industry started on sound lines, but what we fear is the socialistic side of the control. I think it has been admitted that the business brains of the House are on this side; of course, I am not forgetting the larger brains of the prince of company promotion, the hon. member for Liesbeek (Mr. Pearce) and also the hon. member for Bloemfontein (North), who recently, when in Durban, when asked if he was still desirous of a seat in the Cabinet said—

After his speech of this afternoon I am wondering whether that something far bigger ” than Cabinet rank has something to do with the direction of this new industry. I am sorry he is not in his seat, for his speech was full of inaccuracies. He stated that Tweespruit Dairy was State controlled. The fact is that it is a limited company run without any help from the Government. Hon. members on this side of the House who are endowed with business brains—and they have something to show for it—are offering their co-operation to the Government so as to ensure that the industry shall start on sound lines. One regrets the gibes which are made when we are anxious to co-operate and put the iron and steel industry on good lines. We want to avoid what occurred in Australia, the country which has been mentioned a good many times in this debate by those who think they know something about it, by those who quote the conditions in Australia twenty years ago. But a remarkable change has taken place in Australia since then. In Queensland particularly the figures quoted by my friend on my right are correct. I have been recently to Australia and travelled 15,000’ miles and saw every phase of industry and agriculture, and we did not go about with our eyes shut. The conditions of the industries in Australia, and particularly in Queensland, are appalling under State control. I am not speaking without, my book, and I hope the hon. member for Salt River (Mr. Snow) will take note of this, because I can prove everything I say. Queensland started State-controlled butchers shops, to the number of 80, six years ago. The number when I was across in Australia in November last was 45. They proved such a failure and such a drain on the State that they were getting rid of them, and the diminution of the numbers proves it. The Government also embarked on fish trawling. Their fish trawlers cost them £3,000, and after an experiment of three years these trawlers were sold for £400 each. Then they bought large stations of land to maintain their stocks for the butchers’ shops. The deal cost them £128,000, and in 1925 they sold the land with a two-third’s loss. Australia since 1920 has been very fortunate in having good seasons. She is a rich country, and had it not been for these two facts Australia would have faced blue ruin. What has been the result of these State-controlled industries in Australia ? They have increased the cost of living to three times that of South Africa, and they resulted in these industries having to be sacrificed as white elephants, resulting in additional taxation of the land, so that the small land-owner overtaxed has drifted into one towns, and that is why two-thirds of the population is in the towns.

They have still got a Labour Government.

Yes. And when men are down and out and drift into the towns and depend upon Government charity, they give their votes accordingly, and so no wonder the Labour Government was returned. The hon. member for Salt River guffawed the other evening when I gave him the prices of things. Well, I suppose every working man likes a chicken for his Sunday’s dinner. In Australia trussed chickens cost 12s. 6d. each. Very little is said in regard to the voortrekkers in this industry at Newcastle and Vereeniging. All honour must be paid to these pioneers who started the industry, and I feel assured consideration will be given to them, but we should like to hear a pronouncement on that subject. We are told that it will take some years for the Pretoria industry to reach a producing stage. Surely some method can be devised whereby these people can continue to work or receive compensation and credit for being voortrekkers of this industry. The hon. member for Kimberley (Sir Ernest Oppenheimer) made a clear and business-like statement. He is a brilliant financier, and what he says must carry weight. He has been trained in this particular business of his all his life, and is not speaking without his book, and it was rather amusing to hear the Minister of Defence interrupt him in a jeering manner. I remember when the Minister of Defence was in the gold mines of Johannesburg as a manager, and he tried an experiment to run a mine with white labour. I believe the Minister had his opportunity and made a failure of it.

You are quite wrong.

We have, therefore, the word of a man who was a failure and one who is a success. The agricultural community are anxious to see a steel industry started, and if it is to be successful steel must be cheap. Today our development is retarded through the high cost of fencing. In Australia the land producing the greatest wealth is not the rich wheat land of Victoria and New South Wales, but the dry land of the hinterland. Our Karoo is equally as rich, and I believe runs more sheep to the area than they do. We are not handicapped by water, we can always get water on the Karoo. Our trouble is the jackal, and if we can get wire materials at a cheaper late we are going to increase our wool production. It is wrong to say we are against the Bill. We are in favour of establishing this industry, but on the right lines. We do not want to start State control and have the same experience as Australia, a socialistic experiment which is killing that country.

South Africa is the richest mineral country in the world, both in diamonds and in gold, more than half of the yield of the world is produced here. The coal mines and the iron mines are also inexhaustible, yet on the whole the population is poor. I think there are more unemployed here in proportion to the population than in any other British possession. Why? Because in the past so little was done by the State to develop our natural sources, especially the mines, for the benefit of the people. Up to the present every time that there is a proposal in favour of protecting our own produce or developing our own minerals, opposition has arisen on the part of the big importers, of the mining capitalists, and of those who are afraid that Mother England will suffer by it. The less we require to import the less Mother England will be able to export to us. The cry of the Nationalist party remains South Africa first.” Our country requires factories. If private companies will not establish them, or if they cannot make a success of them, then it is the duty of the Government to plunge into the breach. A large iron industry will cause thousands, possibly ten thousand, who would otherwise have no means of subsistence, to obtain one. The reason why the Afrikander people is not multiplying so fast as formerly is because there are too few openings for its sons. We must create such openings as much as possible. The hon. member for Standerton (Gen. Smuts) wants us to spend millions of pounds per annum in importing settlers from overseas, so that the white population can remain strong. That is not necessary. We must only create prospects for our boys. They cannot all be farmers. The creation of industries will even provide for the increase of the white population. In that way much of the money which now leaves the country will remain in circulation here, and the farmers will have better markets for their produce. One of the objections against the measure is that the existing companies at Vereeniging and Newcastle will have to pay the piper. These companies have for many years had the opportunity of showing what they can do, and have made a failure of things. Must the iron ore remain constantly in the ground for the sake of those valueless companies ? A second objection is that the provision regarding the shares have an unsound basis. If that is the case then the select committee to which the Minister is going to refer the Bill can surely alter the provisions ?

Why not send it to select committee before the second reading ?

Because the general principles which it contains are good, and one member after another of the Opposition has admitted this. The Government would not send the measure for enquiry to a Select Committee on which the best talent of the various parties can serve if it were not prepared to adopt useful hints. What purpose otherwise would such a committee serve? Quite a number of members have severely criticised the details of the Bill-details, however, which are all capable of being amended by the committee. Wait until the report of the Select Committee is received before you condemn the measure. Another objection made by the Opposition is that the Government is going in for business. But then you might just as well object to the Government controlling our railways. In England all railways have been built by private companies. Is the railway system with us a failure? Would hon. members like to see our railways transferred to private companies? Not long ago the Government bought up the assets of the Cape Central Railways Limited-the railway between Worcester and Mossel Bay—were any objections made then by members of the Opposition ? If the Government has to find the money for iron industry, then it is no more than just that the Government should have the chief say in the control of it. How hon. members can object to that I cannot understand. They would be the first to reproach the Government with neglect of duty if anything went wrong with the industry, and the Government had allowed the control to slip out of its hands. The State itself will be the best client of the industry. Just think of all the sleepers, locomotives, wire and such things which the Government requires annually. The Government will, of course, take care that the persons placed at the head of the undertaking will be the very best. I do not doubt that the matter will prove a success. I only hope that it will be followed by a diamond cutting industry on a large scale, and similar necessary industries. Together with the hon. member for Oudtshoorn (Mr. le Roux) I thank the Government for introducing this Bill.

I do not intend holding up the debate, but I want to make a few remarks about what hon. members opposite have said about the Bill. I cannot understand how it is possible that they want to create the impression that the Opposition is against the establishment of an iron and steel industry. The speech of the hon. member for Standerton (Gen. Smuts) made it clear that the Opposition was in favour of it, but now we are expected to remain quiet and that the Bill should pass without criticizm. I do not think it is the duty of the Opposition to omit the criticizm of legislation. That is all we are doing in this case.

The Opposition must not condemn it.

We must judge the scheme as a scheme. I cannot permit the idea to be spread in the country that we, as an Opposition, are against the iron and steel industry.

The country will read what the Opposition said about the matter.

The hon. member is one of the greatest sinners when he goes on the countryside in saying what is not actually true. In the House, however, he will be contradicted, and therefore he has not the courage to get up and say it here. It is unnecessary for me to go into all the details of the Bill, but when one reads it traces of the Labour party can clearly be seen because the socialistic ideal comes from that party. I hope the Minister will see to it that many of the undesirable provisions are removed by the Select Committee. I want to go further into another matter to speak in favour of the Bill and I want to point out that it has always been our ideal in the past to develop the iron ore in our country. I have always supported it. It is asked why the industry was not established long ago. It is very easy to those who know the history of the matter and what the position was in the past and still is to-day, to answer that question. We need not think that we can to-day get the people of England, America or Germany to establish steel factories here. They have large steel factories in their own countries and why should they use their money in South Africa to kill their own markets ? I accept that proposition. I go further and say that if the Bill is passed and the public is unwilling to take up the shares then the Government must do so because it cannot be expected that the foreigners will cut their own throats to establish the industry in South Africa. A few of my hon. friends have mentioned the case of a State monopoly in Australia. I have had experience of it. In Newcastle, in New South Wales, there is one of the largest iron and steel factories, and if the State had not established it, then Australia would not have been able to manufacture its own agricultural machinery from its own iron. I met one of the largest manufacturers of agricultural machinery myself, and he said that he would come and make agricultural machinery here when the iron and steel industry had been put in order. We shall get all this if the Government goes so far as to manufacture our iron ore into pig iron. When it was decided at Vereeniging to make a beginning with scrap iron, I was opposed to it, because I thought that if that were permitted we should never get the length of smelting our own iron ore. It cannot therefore be alleged this evening that hon. members on this side are opposed to the Bill. It would be unfair to spread that on the countryside and to say that we are opposing the establishment of an iron and steel industry in Pretoria. I go further and say that when the factory is once established and it cannot maintain its head above water, it will be the moral duty of the House, and of the Government, to further assist the industry. What objection can there be to establishing this industry in Pretoria which has all the necessary conveniences. The geographical position is suitable because it is close to the nearest market, viz.: the mines and the railways. All the accessories are there, viz.: coal, and other things, and I cannot understand why a success cannot be made of it there. Of course it must be properly managed. Therefore it is necessary to so draft the Bill that the management of the undertaking should be so thorough that the undertaking will not collapse. If difficulties arise they must be overcome, because when once we have actually established the industry then it is the duty of the hole people to support it. If there is a deficit in such a matter, then it surely will not balance the advantages of it. The advantages will be so much greater than the disadvantages that we can safely consider further assistance to the industry. As drafted, the Bill in the opinion of this side of the House should be referred to a select committee before the second reading. The Government is opposed to that because it is thought that the Bill will be delayed there. There are, however, many points about which we have not full information. There are e.g. the two existing undertakings. If we knew the attitude of the Government with regard to them there would be much more satisfaction. I must honestly say that the establishment of State-aided factories will ruin those two undertakings, and it will be a pity if that is done, because private capital is invested in them. It will be a very good thing if the Government went so far as to allow the Select Committee to enquire into that matter. The hon. member for Oudtshoorn (Mr. le Roux) is one of those who has accused us of criticizing the Bill and opposing it. What has he done, however ? He criticized it himself, and is just as afraid of one of the provisions. He does not want the Government to interfere in the technical department, nor that everything in connection therewith should he brought under the control of the Government. This side of the House is not criticizing the Bill with the object of delaying it. We must keep a watchful eye on legislation, because hon. members on the Government benches do not take the trouble to go into them because they have faith in Ministers and the Government. They merely concur automatically. We, however, cannot do that because we are responsible to the people and it is our duty to go into this matter carefully. The hon. member for Piquetberg (Mr. de Waal) says the Opposition is made up of importers and capitalists. I do not know whether he meant importers or imported people, but if he meant imported people then I want to tell him that he must not make that charge against us. There are hon. members on the cross benches who are also imported people. I think that the Bill has been well debated and that the Opposition have indicated the objections. We are not against the undertaking in general, but we have tried to indicate several objections to the Government. As for me, I am inclined to support the matter through thick and thin if the Government supervises the building up of a great industry. If that is done I think the Government could not do anything better.

Some hon. members opposite said that hon. members on this side remained silent about the Bill, and the last speaker stated that the supporters of the Government sat here and took no interest in the Bill. I wonder if the members of the South African party did that and never bothered about Bills. That is not the reason why we are remaining quiet. There is an old farmer’s proverb—

One cannot speak on all kinds of subjects. There are people who are competent to speak about certain matters, and if only all spoke about matters with which they were acquainted and in which they were interested, then we should dispose of our work in Parliament much quicker. I do not intend to quote figures, but I only want to discuss farming interests in connection with this matter. Everyone in the House thinks that an iron and steel industry is necessary in the country, and if that is so, then it is high time that we started it. Who then is to commence ? That is the great matter. I say in my turn that it must certainly not be the farmers. My experience is that if the farmers meddle in private undertakings then it is a muddle from start to finish. The farmers of Harrismith felt that it was necessary to establish a wool factory, and farmers in Harrismith and the Free State and some from the Cape Province, I think, invested £200,000 in it, and lost everything, and what is so strange to me is that hon. members now speak about socialism so much. When the matter in Harrismith failed, the people came to the Government, first to the last Government, and then to the present one, asking for their kind intervention in taking over the factory, and they would to-day still be thankful if the Government had taken it over. And the funniest thing is that the hon. member for Paarl (Dr. de Jager) was in the same difficulty. There was a similar factory in the Paarl which did not pay, and the hon. member shortly after us came to find out how matters stood and whether Harrismith was assisted, because then he would also want help for the Paarl. There are many things which our farmers consider necessary. I also once upon a time—it was the only time—went into an undertaking. I bought shares in the Free State Cement Factory because we felt that it was necessary for us to have our own cement factory. I fortunately paid for the shares but never heard anything more about the matter, and that was ten years ago. We also saw that Schlesinger came to the Free State to establish large boards of executors. Our farmers then said, “ No, it will be our ruin,” and themselves established a large board of executors there, which they called the Border Board of Executors. The farmers are to-day still languishing under it. When we consider the necessity for establishing an iron industry, then we must answer the question who is to do so. The hon. member for Witwatersberg (Lt.-Col. N. J. Pretorius) said that he would not put any money into it because the Government had the control. Who then must establish it ? People in Europe will not invest money in it, and when our farmers have put their money in similar undertakings in the past they came off badly. Therefore the only thing is for the Government to undertake the matter and we ought to be thankful for it that it is creating the industry, because an abiding industry is of greater interest to our farmers than the gold and diamond industries in our country. Yesterday we were invited to the bioscope to see a film about farming in America. I want to ask hon. members if America would be able to work in that way if it had to pay the same high prices for its machinery as we have. We have to pay terribly high prices and we are suffering very much through it. What have we not to pay for plough shears, wire standards and droppers . . .

When the industry is established here you will have to pay still more.

How is it possible for the hon. member to say that when we have the raw materials and everything at hand and have no high transport costs to pay etc. ?

The trouble will arise with the work people.

If the wages are too high I want to assure hon. members that if there is anyone in the country in favour of the development of our industries, then it is I, and I think the farmers ought to support the Government in this undertaking. It is only the Government that can tackle this industry because we cannot get the money from Europe. As for the references to principles on the part of the Opposition I think it is merely gossip. All the little matters mentioned by the hon. member for Witwatersberg (Lt.-Col. N. J. Pretorius) can be put right by the Select Committee.

I want to assure hon. members that if there is one person in the country who is in favour of the development of our industries, it is I. It will be a great pleasure to me if I live to see the day when we have our industries here and can do without other countries. Many good points have been mentioned, but also others which are very unsound. Hon. members opposite have accused us of only wanting to make party capital out of this matter and nothing else. The motion of the hon. member for Standerton (Gen. Smuts) is not party politics, but only done to assist the Government to get a good Bill. It was therefore proposed to refer the Bill to a select committee before the second reading. The hon. member for Harrismith (Mr. Cilliers) mentioned that farmers had had very unfortunate experiences in the past with private undertakings. That is the very reason why I am so frightened of such great industries with large capital belonging to taxpayers. Therefore I am going to support the motion of the hon. member for Standerton, so that we should not do anything which we should afterwards greatly regret. I am afraid of the very thing that the hon. member for Harrismith mentioned. I think that the young members in this House can teach me nothing about experience in the country. I have much experience, and I have never yet seen anything established by the Government which was a complete success. There is always something that is too dear, or which is lacking, and which makes an undertaking impossible. We have very little information with regard to this industry. The Minister of Defence made a very short speech without making the matter clear. My objection is that the Government is controlling the matter solely as a Government. I am in favour of the Government having a certain share in the control, but it must not manage it alone, because then it will end in failure.

The Government will not manage it alone.

The hon. member has not read the Bill. The other shareholders are in a minority, and the Government has responsibility for the whole business. Why has not the Government itself undertaken gold mining? If it has no desire to do that why does it tackle this matter ? This also will not be a success. This is another of the results of the pact with the Labour party. The Nationalists have had to give in, and later on the Labour party will give in on something else. When we Saps, and Nats, were fighting together against the Labour party the latter always said that everything would have to come under State control, even the grain of the farmers, and I cannot concur in that principle. I think the Government ought to accept the motion of the hon. member for Standerton (Gen. Smuts). It is a fair motion.

Before I go on to other points, I am sorry the hon. member for Beaconsfield (Col. Sir David Harris) is not in his place, because he raised a point easily answered. He asked why, instead of issuing 5½ per cent. debentures, we didn’t simply raise a loan at 5 per cent. The answer is simple. It is simply a matter of taxation. The debenture tax is 2s. 6d. in the £ and the 5½ per cent. debentures would work out at £4 16s. 2d., as against ££4 15s. on the ordinary income tax. For men of great wealth, drawing £24,000 a year, it would be £4 10s. I don’t know whether any members opposite are going to put in to that great extent. But the explanation is that these debentures will be a trifle more attractive than the ordinary loans. There has been some criticism of the Prime Minister’s motion this afternoon, but I think that the event proves that the motion was no hardship on the Opposition.

It was unnecessary.

Well, it was; but members last night took so little interest in the debate that when one of their members was speaking there was only the speaker and one other supporter present. Frequently in Parliament one is reminded of those experiences which we have all had sitting round log fires recounting experiences in shooting or fishing. Someone will begin a story with the observation that—

In such cases one knows that one will have to tax one’s credulity and politeness very hard to believe it. I have the same feeling when the Opposition prelude a motion that the second reading be discharged with a statement that they are quite in favour of the Government’s proposal. The fact is, in this matter they are willing to wound, but yet afraid to strike.

They have made a hole in your Bill.

Before I have finished they will find the hole is their own imagination and not a reality. They know the country gives its cordial support to this Bill, which makes it unsafe for them to do what they would like to do on behalf of the interests they represent. You find their position betrayed by their argument. I will not deal with the earlier speakers; the Minister of Mines demolished entirely all the opposition of the earlier members in his speech. I will deal with the more recent speeches. We had the hon. member for Port Elizabeth (South) (Sir William Macintosh), and he took up the attitude that they, the South African party, want this industry established, in the worst possible way, and that, in fact, it was the efforts of the hon. member for Standerton (Gen. Smuts) which had succeeded, through the commission he was instrumental in bringing to this country, in establishing beyond doubt that not only was a steel industry an economically sound thing in this country, but that Pretoria was the place for it. He is an apt follower of his leader, who, I am sorry to see, is indisposed, and I hope he will soon be on his feet and well again. In their eyes everything this Government does wrings from the hon. member for Standerton precisely the same Jeremiad. Either we are doing the wrong thing, and he says nothing but disaster can come of it; or, if we are doing the right thing, he says we are doing it the wrong way and predicts terrible disasters. The hon. member for Port Elizabeth goes on in that strain and, having asserted that it is due to the right hon. gentleman having established the fact that an industry can be started, and Pretoria is the place for it, he is followed by the hon. member for Capetown (Gardens) (Mr. Coulter). That hon. member disagreed entirely with his leader and with the member for Port Elizabeth and with the hon. member for Kimberley (Sir Ernest Oppenheimer)—who is familiar with the outline of the report. I am sorry he is not here. The hon. member for Kimberley assured us he accepted the report of the German Commission. These hon. members who desire to put up an opposition and not be credited at the same time with opposing the Bill are apt to be led into strange places; that was their difficulty. The most convenient way to deal with the question in the reply to the debate will be to take the amendment before the House—the preamble to the resolution that the order for the second reading be discharged, proposed by the hon. member for Standerton. His first affirmation was that he and his party welcomed the establishment of an iron and steel industry of—

Then he went on to explain that we must on no account have Government control, to prevent it falling into the hands of people who had no interest in South Africa. To him the interests of outside trusts and rings are more important than the interests of the South African public. We must take no steps whatever to see that the owners and establishers of this iron and steel industry are not mere puppets in the hands of bigger interests outside this country. We must take no steps to ensure that the steel is placed at the disposal of consumers in this country at as cheap a cost as the conditions of this country allow. They do not really want any national iron and steel industry. What they would like is, no doubt, another opportunity to some of their friends who are the main support of that party to use this country and its resources for their own profit without much regard to the interests of the people of this country.

That is nonsense.

That is what this country is more and more realizing is the principal political vice of the party that sits opposite. The amendment goes on to say that—

If I understood the speeches of the responsible men on that side aright, they admit that direct Government assistance has got to be given to the establishment of this industry. They do not object to that. They do not object even to the financial credit of this country being brought to the assistance of that industry. But they propose a principle which everyone of those gentlemen on the opposite side who are competent to speak would very strenuously oppose if it had been applied to his own particular business. In their own business they would take care to have a measure of control in an enterprize in which they put large sums of money. But here they do not want control in any way. They say in effect—

The Government control that they talk about, what is it that we really contemplate in this Bill? A Government department run like the railways, run by the Government with a Minister responsible for the iron and steel industry and an iron and steel industry department? Nothing of the sort. It is the veriest bias of opposition to try and pretend that the Government contemplate anything of the kind.

Read Clause 16.

It was made perfectly clear in my speech in introducing the second reading and the Minister of Mines in his speech that it is a continuous reiteration of a parrot cry that under Clause 16 you are going to manage the whole thing and the shareholders have got no power. The Bill and our speeches and our expositions of our intentions show perfectly clearly that the Opposition are on the wrong tack. What we propose in this Bill is to establish a corporation which will manage its affairs just as any other business corporation does. It is true we nominate the chairman and the managing director and have a majority on the board. Is that a very unreasonable proposition ? I will refer to a financial institution in this country incorporated by an Act of Parliament for which the party opposite was responsible, the Reserve Bank of South Africa, in which we have not a penny of money, but the Government nominate and appoint the Governor, the deputy-governor and three other directors, that is five directors of a total board of six. We in this case with very heavy financial commitments propose to nominate the chairman and managing director and a sufficient number of directors to have a majority on the board of this corporation. Then the other directors are nominated by the members of the public who chose to subscribe for shares in this company, ordinary shares or participating preference shares. It has been said that the only power that the ordinary shareholder has is to elect auditors. Nothing of the sort. They have powers and if it is not sufficiently clear and explicit in the Bill, let me say, from what I have said and what my hon. friend the Minister of Mines has said, the Opposition will find when we come into committee that we are by no means averse to taking any reasonable suggestion which will make that more clear. The whole of our position in this matter is that what we desire to do is first of all by the direct action of the Government to put a stop to these long and continuous delays, and by our own direct action, to establish this corporation and contribute very largely of our own funds and the public credit to it. We propose to establish it as a corporation, and in its establishment we propose to get the best man we can as chairman of that company and the best man we can find as managing director of the company in a technical sense. And let me say this, that insofar as these important men are concerned we, as a Government, are quite aware that if you wish to obtain real efficiency you have to pay for it in this world. We wish to get the best men we can, who will manage it as efficiently and as well as other institutions of a business character are managed. It will be the business of this corporation to make its business arrangements, and very far from the impressions that appear to prevail on the other side of the House are the impressions that prevail in quarters which are better instructed. On the part of people interested in manufacturing the articles we import, and we have had various visits from persons who are greatly interested in these matters to ascertain what our intentions are. Some of them had been misled by the sort of impressions which hon. members opposite have been giving vent to to-day and which have been given vent to in the Press very largely, and we have assured them that this corporation will be able to deal with them on business lines and make such arrangements with them as in pursuance of the interests of that corporation seem desirable. Obviously, one of the things that corporation and those responsible for its direction will desire to see will be subsidiary industries developed in this country, who will be customers for the raw materials which will be proposed. I am afraid I must differ from the hon. member for Kimberley (Sir Ernest Oppenheimer), who said—

He proceeded to explain that this was arrived at by increasing the turnover. The whole crux of the matter is that this institution is being established not for export at present, but to cater for a comparatively limited market. On this Commission’s report, which the hon. member accepted, on that report and on the information we have, we believe it can be established and very profitably worked, and at the same time supply the South African consumers of steel and the subsidiary industries, which will produce many of the steel articles that we import, and supply them with the raw materials at a lower cost than the consumer is paying to-day. The next point in the amendment, that—

—there is no need of a select committee to investigate that. What sort of select committee would you have? What sort of proceedings would they indulge in ? Would you call evidence from all over the world ? Would you want to investigate whether every private enterprise has been successful—and there is abundant evidence to show it has not. The Government has made up its mind that apart from any general question of State enterprise or anything of that sort, that in relation to this key industry it is time that South Africa did develop her iron and steel resources, and for that purpose the Government will directly assist in the establishment of that, and by public credit and public funds the Government is going to arrange for that. The Opposition say in effect we do not mind your putting your money in and guaranteeing that, to me, absurd scheme of the hon. member for Kimberley (Sir Ernest, Oppenhiemer), but stand away and have no control whatever in the direction of that concern. We on our side say we are going to put public money and credit into it and take the ordinary precautions any ordinary, prudent business man takes to see that the concern in which his money is invested is prudently run. We are quite prepared as a matter of principle to let the country decide whether in taking the measures to see it is properly run we are or are not right, and we are prepared to deal with that as a matter of principle, and not as one to go before a select committee before second reading. The amendment goes on to say that the financial scheme proposed requires drastic alteration. That is not a matter for a select committee before second reading, and if there is reason to alter it, it can just as well, in my view, be done after the second reading. But I am bound to say that so far as this debate has gone we had this assertion by the right hon. gentleman that our scheme was ridiculous, and we have heard it spoken of in like terms by the financial pundits on the other side; and as last evening we saw from the speech from the hon. member for Kimberley—who is the real guide in financial matters on the opposite side. But he has not succeeded in convincing us that our plan is unsound or in showing that his plan is any sounder or as sound as the plan we put forward in this Bill. The objection he takes is that the public will not come in after the debentures have been issued and the preference shares have been issued and subscribed for, and subscribe for the ordinary shares just on the eve of production. And then in his subsequent remarks he based most of his criticism on this, that the public would not get interest for seven years after they subscribed. If he followed my exposition and what is clearly adumbrated in the Bill, he would see he first makes one assumption, and draws a deduction which comes from a totally different assumption. When an hon. member with the reputation that he has in high finance criticizes, one is inclined to treat with great respect any remarks he makes. But the hon. member is not the only person who has an acquaintance with these matters, and we have also taken advice. It was not done in a slapdash fashion, without considerable deliberation; but we obtained advice from persons who could give us good information. I agree to some extent that, if this corporation we are proposing to establish was of the type that the hon. member for Kimberley (Sir Ernest Oppenheimer) and others of his associates—who are, no doubt, adepts at the art of company promotion—favour, then he and I would not be talking on even terms. But I venture to think the essential feature of our proposal is that it is one in which there is no rake-off at all for the company promoter, whether in the shape of bonus shares or the prospect of being able to sell for £2 or £3 shares obtained at par. That, I venture to say, is an unaccustomed field for the hon. member for Kimberley. On that platform we can talk on perfectly even terms for leaving out the rake-off; these are terms; for, leaving out the rake-off, these are matters of commonsense and arithmetic. When I speak of rake-off, I will give you an instance of what I mean. In their endeavours to obtain financial assistance the Pretoria company had a number of experiences, but, as a type of the rake-off, their last experience was the most interesting and, I think, the most impudent. I am sorry the hon. member is absent; but his friends will call his attention to what I state, and I have no doubt he will be able to confirm most of the points. I understand his objection was to our guaranteeing debentures; but these men, who included persons of great reputation and not altogether unconnected with South Africa, proposed that the Government should guarantee £4,500,000 of 4½ per cent. debentures. There were, further, to be £4,500,000 in ordinary shares, of which the Government should be given about 1,125,000 as a little dounceur, and they would be willing to take 2,000,000 shares as a rake-off.” We will compare in terms of commonsense and arithmetic the hon. member’s scheme and ours, and I think hon. members will see that there was a good deal of fallacy in his scheme. Let me first correct him. In moving the second reading of this Bill I spoke of £4,000,000 cash to be provided, not £5,000,000. I clearly said that a £1,000,000 from preference shares was to be provided in establishing the undertaking as a going concern, leaving ordinary shares to be issued the latest. I said that £1,000,000 would be raised by the issue of preference shares, of which half only would be accumulative. I said that this £1,000,000 would be the proceeds of the issue of a million preference shares fully paid or of £1,500,000 preference shares, 13s. 4d. paid up only. He is quite right when he speaks of £5,000,000 total capitalization. There is £3,500,000 shares and £1,500,000 debentures. But he omitted to mention that the £4,000 excluded a million preference shares and half a million ordinary shares, held in reserve, to absorb other concerns if they wish to come in. I will proceed to discuss the relative merits to the ordinary shareholders of our scheme and his scheme. His scheme is first of all to issue 2,000,000 ordinary shares, with Government guaranteed dividends from date for twenty years at 5 per cent. Then he says the issue of 2,000,000 six per cent. debentures will take care of itself. My first criticism is, will you get the 2,000,000 debentures subscribed after that ? They will have no say in the management of the corporation at all, and supposing in 15 or 20 years it goes bankrupt, they are not guaranteed by Government, and I say these debentures would be difficult to make attractive to the public in these circumstances. It is a curious thing again, if that is the right way, how in almost every case the negotiations for finance fell down upon the refusal of this Government to give a guarantee in some shape or form of debentures or some other kind of stock. I take leave to doubt if on this plan he would get the debentures placed on favourable or reasonable terms. I suggest to the hon. member for Kimberley (Sir Ernest Oppenheimer) that he should give us some more explanation of his ideas of the attractiveness of these debentures, after 2,000,000 ordinary shares have been subscribed for by the public. Taking the assumption that the construction period ceases, and the operating period commences, say, in the middle of the fourth year from commencement—taking it that the fifth year, for the purposes of comparison, is the first full working year, and, again only for the purposes of comparison, it has nothing to do with that comparison whether the full prognostication of the experts is reached, I shall take the full figures of profit adumbrated by the German Commission. During the construction period the debenture interest will not be debited to profit and loss account, as the member for Kimberley seems to assume. It has been laid down in various judgments, the debenture interests may be added to the cost of construction.

Where does the Bill show that ?

I am sorry to be asked that question from the hon. member. Although one listens to him often with pleasure one does not feel that his remarks politically have much weight; but, I look upon him as a man learned in the law and on the advice of legal authorities I am informed that it has been settled by various judgments that that is a perfectly legitimate and proper operation. The fourth assumption is that the cash is required in the same order of time and amounts in each case. On the plan of the hon. member for Kimberley (Sir Ernest Oppenheimer), the first money to be raised, is 2,000,000 ordinary shares to be subscribed by the public, guaranteed 5 per cent. interest for the next 20 years. That will be required in the first and second year. To the end of the fourth year the corporation will have to pay out in dividends £300,000, which it will receive from the Government and will give to the Government 300,000 shares for that. But that is not in the same position as debenture interest, The 300,000 shares are simply subscribed by Government and the corporation would simply be paying dividends out of capital. No that sum must be debited to profit and loss account and must be redeemed and ultimately recovered out of profits. At the end of three years, when profit earning begins, there is £300,000 as a little bit of a debit balance to profit and loss account. Then comes the £2,000,000 debentures at 6 per cent. That means there will be £120,000 debenture interest which has been capitalised in the cost of construction. We take the fifth year’s operations on the plan of the hon. member for Kimberley. The first charge on the profit and loss account is £46,000 income tax. We do not propose and we have never proposed that this corporation shall be free from income tax any more than any other corporation. There is debenture interest for the year of £120,000, and then there is three years dividend £300,000. making £466,000, as a debit in the profit and loss account in that first year’s operations, assuming a profit of £450,000, leaving a debit balance at the end of that year of £116,000. The Government will have to put up another £100,000 to pay interest on those 2,000,000 shares. The sixth year they will start with a debit to the profit and loss account of £116,000, with another £120,000 for debenture interest, and £46,000 income tax, enough to pay 7 per cent. on the 2,400,000 shares to which the issue will now have amounted. Merely for purposes of comparison I am ignoring in both cases the need for reserve or depreciation. Now we will take our scheme. In our scheme the accumulations against profit and loss account will not be, as the hon. member for Kimberley told the House, £400,000 or £500,000. Nothing of the kind. We shall have had to pay in that construction period for interest on debentures, loans, etc., a matter of £280,000, which will go into the cost of the works during construction period. The accumulative preference dividends for three years will amount to £112,500. The first charges to that fifth year, the first operating year, will be £46,000 income tax, cumulative preference shares dividends £112,500, debenture interest £82,500, 7½ per cent. on the whole of the preference shares, participating and cumulative £75,000, making £316,000, leaving, not a debit balance, as in the hon. member’s scheme, of £116,000, but a credit balance of £134,000 out of which a small dividend of 3 per cent. or 4 per cent. might be paid and something carried forward to next year. Then, in the sixth year, on these same figures, where it is estimated by the hon. member that we would only give 7 per cent., the shareholders will be getting 12½ per cent. at least, with money to spare; or 10 per cent., dependent upon whether these 500,000 shares are kept in reserve or really have been issued in absorbing other concerns, which is unlikely. The hon. member may have, and no doubt has, a very great reputation in high finance in floating companies; but, in a matter like this, I venture to think that our scheme, when carefully investigated, will be seen to be a sounder financial scheme—I may say a more honest financial scheme—one which shows the shareholders what guarantees they have and what prospects they have—than the scheme of the hon. member. We were treated in the press this morning, and I have no doubt in the press throughout South Africa, to an almost adulatory worship of the speech of the hon. member for Kimberley, and his scheme is represented as absolutely the last word that can be said in criticism of our scheme; hut, again, I say that we also have our advice, and the commonsense of the investor may very well be trusted to choose between the sort of scheme put forward there and the scheme which we put forward. But if he can convince us in Select Committee that any portion of his scheme can be adopted which is not window dressing—well, I shall he delighted to discuss and examine and explore it; but we are not going to depart from the principle of this Bill that, where we give a Government guarantee, it shall be a guarantee of a debenture issue, and that the public credit being pledged we are going to see that we stick to the control to see that the concern is properly run. Then we come to the last compartment of this amendment. The last proposition is—

Why bother about this clouding it with a lot of words? Why don’t they say the Union Iron and Steel Corporation at once ? That is what they mean. The Minister of Mines and Industries has already dealt with that very fully and thoroughly. We are perfectly ready to discuss any equitable proposal if they wish to be absorbed in this scheme; but it has got to be an equitable proposal. It has got to be a proposal purely for obtaining an interest in this scheme for the assets which are of value to this scheme and nothing else. If there is any other arrangement later of—any such arrangement as, for instance, seeing that the finished product of a steel works is in many respects in many articles the raw material for some subsidiary work—then it is a question of arranging with the corporation that they shall supply works which produce wire with the rods with which the wire is produced; any such arrangement as that, after this Bill is through, will have to be made with the Corporation when it is set up, I am quite certain of this—that so far as in us lies we are going to see that those we are going to appoint to look after our interests on that corporation will be men inspired by a desire to see that corporation a success, and if it is to be a success, the directorate will be as interested as anyone else in seeing that subsidiary industries spring up, not only to ensure the consumption and use of the products of the steel works up to the 132,000 tons contemplated, but by the expansion of these industries increase the output and business of this corporation very largely. But it is most interesting to find the right hon. gentleman taking the view he does. As far as I can understand it, from what he and hon. members opposite said, there is a moral obligation on us to sec that the Union Corporation in no way suffers by the Government establishing or helping to establish steel works at Pretoria. But what was the attitude of the right hon. gentleman and his friends opposite in this matter when they were the Government ? These two companies approached with the request to enter into business relations with Armstrong, Whitworth and Company. Armstrong said—

An arrangement between the two companies, lasting for six or seven months, was come to, which subsequently lapsed. After it had lapsed, the right hon. gentleman used the machinery of the Government and Mr. Karl Spilhaus, our trade commissioner, to get support of the Anglo-Dutch-German combine for the Pretoria corporation. If that had succeeded—and it was only a matter of degree, Government services were used—and the Pretoria company had succeeded in establishing these works, the right hon. gentleman would have shrugged his shoulders and said—

If anybody had said it was inequitable to the Union Steel Corporation to help the Pretoria establishment with Government help he would have shrugged his shoulders and said—

Why this solicitude to-day ? Once this Bill is through, any other arrangements of a business character with the corporation will not be made with us, but with the directorate of that corporation on ordinary sound business lines. I find in none of these reasons in the preamble of the amendment any sort of ground for delaying the second reading of this Bill. What is the Select Committee to do anyhow ? Call the experts again and go over the ground that has been gone over for several years ? The matter has been inquired into, and you have a report laid on the Table of the House which your financial leader says he accepts, and not a single word has been said to throw a shadow of doubt upon it. I am glad of the tribute paid by the hon. member for Zululand (Mr. Nicholls) paid to Dr. Meyer. What need is there for further witnesses ? You have got to face a decision; do it now, and make a success dens) (Mr. (Coulter) propounded the delight of it. The hon. member for Capetown (Gar-proposition that it was the duty of the Government to search for an unfavourable report otherwise they would not hear the other side of the question. The hon. member for Kimberley (Sir Ernest Oppenheimer) and other members on the opposition side accepted the commission’s report and we accept the commission’s report and we propose to act upon it. What is the Select Committee to do? Call a lot of evidence regarding the appointment of Government directors on the corporation ? What rubbish! There is the Reserve Bank in which the Government have five out of the eleven directors. The issue of the second reading is perfectly clear. The Opposition say—

We say we are going to start it with public money and credit and we are going to take very good care that we have an adequate voice in seeing that the undertaking is properly and soundly run. I will tell you, however, what a Select Committee could usefully do after the second reading has been taken. It can go over the clauses and see if alterations and improvements can be made, so that the Bill carries out what has clearly been said to be our intention. There are many points. One point, that of the disqualification of members of Parliament to sit on the directorate, has been raised by the hon. member for Kimberley. The obvious intention was largely governed by there being so many Government directors. I see no reason why a man representing the ordinary shareholders should not be a member of Parliament. This point we can certainly discuss in Select Committee. Another point is the disqualification to a seat on the board of any person who is a director, officer, agent, or servant of any company carrying on the business of producing iron and steel. It is a question whether sufficient latitude is given to the board of the corporation to vary considerably the order of issue of the securities. On all these matters we are quite ready to meet criticism, but we are not going to impair the main principles of the Bill. Another point was raised—I think by the hon. member for Gardens, who, in the course of his speech, assumed that we had bought a pig in a poke by purchasing the Pretoria assets without inquiry. The position is, we have an option extending over six months after this Bill has passed, so that the corporation can take advantage of that option. I am perfectly certain the corporation will say that it is a great deal cheaper to obtain the rights on these terms than to get them afresh for the corporation. I do not think I need detain the House any longer. The Government have only embarked upon this after the fullest deliberation . . .

Replying to a question by Mr. Jagger, which was inaudible,

I think we got a modification and improvement in the terms with the Pretoria Municipality. In spite of hon. members opposite, we are convinced we shall get the money from the public and as the Minister of Mines stated in his speech and Minister of Finance interjected, even if the public don’t, we are fully aware of the obligations taken on ourselves—that if the public don’t subscribe—to see this matter through. There is only one thing which makes me the least bit anxious or nervous or uncertain as to the almost certainty of the general public subscribing to these ordinary shares, and that is lest more political animosity shall continue the crabbing which is going on against this Government’s enterprise, and spread around the totally false impression of the chances of success of this enterprise. That is the only real danger to the fruition of our scheme. If we have to take the shares ourselves, it will only be a matter of a year or two, and the facts will speak for themselves. The Opposition want to go on delaying and inquiring and talking and discussing, and the Government say the time has come to act. On this division we shall decide whether their attitude is right or ours is right, and I say the country is tired of the South African party method of delaying and talking and inquiring, and prefers our method of doing.

Question put: That all the words after “That,” proposed to be omitted, stand part of the motion.

Upon which the House divided:

Ayes—54.

Alexander, M.

Allen, J.

Badenhorst, A. L.

Basson, P. N.

Bergh, P. A.

Beyers, F. W.

Boshoff, L. J.

Brink, G. F.

Brits, G. P.

Brown, G.

Cilliers, A. A.

Conradie, D. G.

Conradie, J. H.

Creswell, F. H. P.

De Villiers, A I. E.

De Villiers, P. C.

De Waal, J. H. H.

De Wet, S. D.

Fick, M. L.

Fordham, A. C.

Havenga, N. C.

Hay, G. A.

Hertzog, J. B. M.

Kemp, J. C. G.

Madeley, W. B.

Malan, C. W.

Malan, D. F.

McMenamin, J. J.

Mullineux, J.

Munnik, J. H.

Naudé, A. S.

Oost, H.

Pearce, C.

Pirow, O.

Pretorius, J. S. F.

Raubenheimer, I. van W.

Reyburn, G.

Rood, W. H.

Roos, T. J. de V.

Roux, J. W. J. W.

Snow, W. J.

Stals, A. J.

Steytler, L. J.

Strachan, T. G.

Swart, C. R.

Te Water, C. T.

Van Broekhuizen, H. D.

Van der Merwe, N. J

Van Niekerk, P. W. le R.

Van Rensburg, J. J.

Van Zyl, J. J. M.

Vosloo, L. J.

Tellers: Sampson, H. W.; Vermooten, O. S.

Noes—36.

Anderson, H. E. K.

Arnott, W.

Ballantine, R.

Bates, F. T.

Chaplin, F. D. P.

Close, R. W.

Coulter, C. W. A.

Deane, W. A.

Duncan, P.

Geldenhuys, L.

Gilson, L. D.

Grobler, H. S.

Heatlie, C. B.

Henderson, J.

Jagger, J. W.

Krige, C. J.

Lennox. F. J.

Louw, J. P.

Macintosh, W.

Marwick, J. S.

Moffat, L.

Nel, O. R.

Nieuwenhuize, J.

O’Brien, W. J.

Payne, A. O. B.

Pretorius, N. J.

Reitz, D.

Richards, G. R.

Sephton, C. A. A.

Smartt, T. W.

Struben, R. H.

Stuttaford, R.

Van Heerden. G. C.

Van Zyl, G. B.

Tellers: Collins, W. R.; de Jager, A. L

Question accordingly affirmed and the amendment proposed by Gen. Smuts dropped.

Original motion put and agreed to.

I move—

seconded.

I do not rise to oppose the reference to select committee, but I would only point out that if the Minister intends to carry out the expression used by him to-night in regard to the reference to select committee, then I think it would be futile to refer it to a select committee. The Minister has laid it down—he has given a mandate to the majority of that committee—that as far as the Government is concerned, there shall be no amelioration or amendment of the principle. A select committee has got a perfect right to amend the principle of the Bill. The Minister has laid it down that there is to be no amendment of the principle. He has said that on certain details he will have no objection to the committee bringing in recommendations. That is the salient difference between referring a Bill to select committee before second reading and doing so afterwards. This committee gets practically a mandate from the Government that the Government majority on the Committee will have to carry out of the dictates of the Government on that Committee. I submit that, unless the Minister is prepared to recede from that position.

The hon. member is not entitled to discuss what the Minister said in the debate. He must confine himself to the question before the House.

With all due deference, Mr. Speaker, we are now asked to refer this to a select committee and we are dealing with a new question which can be debated.

The hon. member must confine himself to the motion.

I am giving my reasons why the matter should be referred or not referred.

Do I understand the hon. member is opposing ? I want to point out that I have allowed him to go on, but under the rule it states that if the matter under discussion has been finished where the eleven o’clock rule has been suspended, only unopposed business may be taken before the adjournment.

I will withdraw the motion.

The hon. member for Caledon has the floor.

I only rose to say that if the Minister maintains the position he has laid down to-night I am afraid not much good will come from the reference to the Select Committee. I will appeal to the Minister and the Government to allow that Committee full latitude to inquire into the main principles underlying the Bill, and if the Committee should see fit by a majority to make proposals to the House dealing with the principle, that should be allowed.

Seeing the attitude adopted by the Opposition, I withdraw the motion.

The hon. Minister can only do that with the leave of the House.

In view of the opinion just expressed by the spokesman of the South African party—the hon. member for Caledon (Mr. Krige)—I would appeal to the Government to withdraw the proposal to refer the Bill to a select committee.

Might I now, with the leave of the House, withdraw it?

I object.

Motion put and agreed to.

Having been informed that Mr. Christie, a member of the Select Committee on the Chartered Accountants Designation (Private) Bill, an opposed Private Bill, was absent at this morning’s meeting of the Select Committee without leave of the House, and that he has left Cape Town, I have to announce that the Committee on Standing Rules and Orders has discharged him from service on the Select Committee and has appointed Mr. Waterston in his stead. On his return Mr. Christie will no doubt take the earliest opportunity to explain to the House his failure to comply with the rules.