In the remarks that I made the other day when I moved the adjournment of this debate, I alluded to the fact that notwithstanding the very large surplus which the Minister of Finance had announced, there had been no material reduction of taxation, which I regarded as extremely disappointing to the country. Un that occasion I also pointed out that, although the present Ministerial party when in Opposition in 1923 and 1924 had denounced the high rate of taxation then existing, and the amount of taxation at that time was £16,854,000, and during the incoming year the Minister expects to receive from taxation £19,952,000, an increase, in other words, as compared with 1923-’24 of£3,098,000, equal to 18.4 per cent. altogether. Now the Minister claims that notwithstanding this increased taxation, no more burdens are placed on the people than were placed on them in 1923. I propose to try and show how this will be an increased burden, despite the increase of population. If you compare the European population in 1923-’24 and the revenue for that year, with the present population and the revenue which will be raised during the current year, it will be found that it means an increase of 14s. per head in taxation payable by the present European population of the Union, which, I take it, is about 1,700,000. In other words, we are paying now per head of population 14s. more than we were paying four years ago. The Minister also claims that the increased duties which have been levied in recent years have not increased the cost of living. That may be the case, but if it does not increase the cost of living it certainly has prevented the reduction in the cost of living which otherwise would have taken place? What are the facts of the case in this regard? In the United Kingdom since 1924 prices have fallen by 151 per cent.; in Canada by 7½ per cent.; and in Australia by 6½ per cent. In South Africa, as shown here by the latest bulletin issued for March, 1927, there has been a reduction in prices of exactly 1 per cent. It gives the figures here in table 5 for wholesale prices for 1924 and January, 1927. If hon. members will compare them, they will find on the average all round the groups that the reduction since 1924 has been 1 per cent. as against 15½ per cent. in Great Britain. The effect of the policy of the Government both industrial and fiscal has been to prevent the fall in prices which would otherwise have taken place. In other words, the wages have not appreciated in purchasing power as they would otherwise have done, and consumers are not getting the benefit of the world-wide fall in prices. The burden of this taxation, of this policy of the Government, both industrial and fiscal, is falling heavily upon the primary producer in this country. That is to say, on the farmer and the miner. Do hon. members know that we send the major portion of our produce, over one-half, overseas, to be sold in the world’s markets, and have got to accept, naturally, the world prices. For comparison’s sake, let me just mention that in Great Britain, with all their big export trade, and their big industrial production, they only export overseas about one-third of their total production, as against one-half of our total production. Then take the United States of America. Of their total production, they only export less than one-tenth. The consequence is this, that for all that South Africa sends overseas, we have to take world prices, but South African producers have to buy at prices which are artificially maintained at a higher level than the world prices. I do not know whether hon. members know how very few people benefit from these fiscal tariffs of my hon. friend. I take the European population given in this bulletin engaged in industrial pursuits in the five big centres, Cape Town, Port Elizabeth, East London, Durban and the Witwatersrand. The total number of Europeans engaged in industrial pursuits is about 32,000. In mining alone, there are engaged 37,500 Europeans, and about 200,000 European individuals over 15 years of age are engaged in the primary industry of farming and so forth. We take another indication of the relative importance of these various industries. Take production and the value of that production. It is set forth in the report of the Economic and Wages Commission appointed some time since. The total income of this country has been estimated at £186,000,000 which I think is quite fair. Of that, agriculture produces £47,000,000 or 25.4 per cent. and mining £37,000,000 or 20 per cent. as compared with the manufactures 16.7 per cent. so that the two primary industries each considerably exceeds the value of the production of manufactures.

Is that not always the case before a country is developed industrially?

But you have not got the population here. This customs tariff, also, in some cases, actually handicaps some industries in this country. We have a heavy duty on condensed milk. Then there are jam and confectionery. All these require as an important ingredient, sugar. Owing to the duty on sugar being about 1d. per lb. all these industries are handicapped. Everybody in business in this country knows that if he is dependent on the local market it is not worth much. If he wants to do anything on a fairly large scale, he must have markets overseas. He cannot do it if you have to pay £4 to £5 per ton more for your sugar than they have to pay in Great Britain. How can he compete? It must come in time that you must supply sugar to the jam manufacturers at considerably reduced prices. We have been told several times—it is a rather favourite argument of the Minister’s—that the policy of the Government is to create local markets for the products of the farmers. That is a world-wide argument in support of tariffs I must say, and what is it worth? How are you going to create a local market for the wool produced here, and how are you going to consume all the wool here? You cannot consume more than a fraction. Take hides and skins. It is absurd. The owner of cattle (or the butcher) does not get a scintilla more for his hides than he can get overseas if they are shipped. The same is true of maize and minerals. You cannot get a sufficiently large local market for any of these. The population is too small. You have to produce on a large scale to find markets overseas. The only benefit that is derived from these manufacturing centres is perhaps in the case of the man who produces milk—the dairyman— vegetables and so forth. If he lives near a large town, then he can send to the local market. Take the United States of America. There they have a large population, as hon. members know. But do they know at the present moment, owing to the drop in prices, the position of the farmers there is very serious? I have a letter from Mr. Molteno, a South African born man, who writes about conditions there—

It is the conclusion which has been come to in Canada as well; and to a large extent also in Australia. Of course it stands to reason; and if hon. members will think for one moment, they will see that if farmers have to send their products to the open market and have to be content with world prices, and you compel them to buy the goods they require at inflated and enhanced prices, it is a little bit rough on the primary producer. The Minister has promised to have the matter of the customs tariff thoroughly investigated. I am pleased to hear it, and it is a right step. I only hope he will not stop there, but inquire into and place on record the effect of indirect taxation on the cost of production, as well also as on the cost of living. He would be doing a public service to South Africa. To come back to the question of taxation revenue my hon. friend must admit that during recent years, certainly during the last four years, there has been a steady increase in the share of wealth produced in this country which has been taken by the Government. This is not the case in other countries. There with an increase of prosperity and of production they have been able in many cases to reduce taxation. I mentioned the other day Canada, New Zealand and Australia, because the circumstances are somewhat similar to our case. Since then I have had a Canadian paper brought to me (the “Montreal Gazette”) which gives a full account of the speech of the Minister of Finance in the Canadian Parliament, in the course of which he says—

That is what I should say is a fairly substantial reduction, and I only wish we were in the same position. The conclusion I draw from this is that other Governments understand the importance of leaving as much money in the pockets of the people as they possibly can, and seeing that Government services are carried on at the minimum of cost to the taxpayer. If in a young country such as we are you take £20,000,000 out of the income of the people like you do here it is a very large sum which if left with the people would be reinvested in businesses and industries, and farming. It should be the Minister’s policy to promote the re-investment of savings as far as possible. That is the soundest, in fact, it is the only sound, method of doing away with unemployment in this country. The more people can reinvest the more new businesses, or the more people can enlarge their present businesses. Notwithstanding the efforts of the Minister of Labour, there is certainly a good bit of unemployment about in this town. My hon. friend, instead of reducing taxation, actually took £1,250,000 out of the pockets of the taxpayers which he did not require. If he had left it there it would undoubtedly have been used for re investment for industries and business, the development of farming and so forth. As far as I can judge, in my opinion, this very heavy taxation which the country suffers from at the present moment, and which is maintained in the present year, is the explanation of the extremely small savings of the people of this country, as indicated in the returns of the post office savings bank and Union loan certificates. As a matter of fact, the latest figures of the post office savings bank show that the deposits are £5,499,000, and savings bank certificates, £853,000, and loan certificates, £4,413,000. In February of this year the total of these savings represented a sum of £10,766,000. In 1923-’24 the figures were £10,525,000, so that in four years the total increase was only £241,000, a mere bagatelle, with a population such as ours. These are small figures compared with other countries. In New Zealand, for instance, which has a white population of only 1¼ millions, the post office savings bank deposits amount to £40,000,000.

What rate of interest do they pay?

It is not a question of interest. We pay 3½ per cent. on deposits and practically 5 per cent. on Union loan certificates. In Victoria the savings bank deposits amount to £57,000,000, and for the whole of Australia they total £200,000,000. The reason of our small total is that high taxation and the high cost of living do not leave a man very much to save, or to invest in fresh industries. The more people save the more they have to invest, for you cannot obtain interest on your capital unless you invest it.

The post office is not the only place where you can save money.

A small man with a few shillings to deposit will not take them to the Standard Bank. I now want to say a few words about the railway accounts. A very large portion of the speech of the Minister of Railways was devoted to showing that the railways were being run more economically than in 1923-’24. But he did not tell us that he had a windfall in January of about £250,000 owing to the transfer of the Colenso power station to the Electricity Commission, this amount being placed to revenue account. If it had not been for that windfall the total deficit would have been close on £400,000. The Minister, who gave a long and laboured explanation, should remember that if you spend more than your revenue you are bound to have a deficit. There is only one way to avoid deficits—as the Minister of Finance has done—and that is to keep your expenditure well under your revenue. No elaborate explanation is going to get over the solid fact that, although there was an increased revenue of £816,000, the Minister leaves off with a deficit of £146,000. I will quote figures to show how the railway expenditure is growing alarmingly. In 1924-’25 the expenditure was £24,120,000, and in 1925-’26 £27,010,000, or an increase of £2,890,000. Last year the total expenditure was £28,210,000, an increase of £1,200,000 over the previous year. I think these are enormous increases, there being an increase of over £4,000,000 in two years. These figures are so incredible that I have had them checked. In 1926-’27 it cost the Railway Department £1,200,000 to earn an additional revenue of £284,000. The expenditure is still increasing. The estimates for the coming year show an advance of £517,000 over those of last year, and we shall have supplementary estimates towards the close of the session, and in the first part of the next session we shall certainly have additional estimates. This is in addition to the expenditure of last year, which also showed a very large increase. In 1923-’24, the last year the late Government was in office, the railway earnings were £24,429,000, and the expenditure £22,979,000. According to the estimates for 1927-’28 the earnings are estimated at £28,768,000, an increase over the earnings of 1923-’24 of £4,338,000 or 17¾ per cent. The expenditure in 1927-’28 over that of 1923-’24 is estimated at £5,749,000. Excess of expenditure over revenue being thus £1,410,000. In other words it means that during the time my hon. friend has been in charge of the railways the expenditure has increased at a greater rate than the earnings by £1,410,000. In other words he gets an increase of business, and yet the increased expenditure shows that it has cost the Railway Department more to obtain it than the earnings amount to. Most big businesses, when increased business comes along, are able to show better results because they spread their overhead expenses over a bigger area. If the Minister continues on the present lines to spend more to get business than the business is worth, there is only one end. I say emphatically that with the increased scale on which the Railway Department is now getting, he should be able to run the railways at a lower working cost, and he should be able to reduce the rates accordingly. The Minister made the point that there was a flat working cost on the basis of train mileage, and that this had been reduced a fraction, but had been swallowed up by the increased overhead charges. Now that is beside the point entirely. Overhead charges in a business like the railways are bound to increase. The only thing to do is to keep a strict control on them and do not let them increase more than the increase in revenue. The increase in revenue is 17¾ per cent., but you have increased your expenditure by 25 per cent. That is not the way to do business, and it is because the Minister has not had the foresight to spread the increase of expenditure over a larger area in proportion to his increase of revenue. There is another point mentioned by the Minister; he makes a lamentation over the fact of the larger increase of revenue from low-rated traffic. I heard that trotted out while I was in office, and he is not the first Minister who has had that problem to tackle. The railways have carried low-rated traffic for years, and it is always increasing. Now, in 1924, in high-rated traffic there was carried 1,727,000 tons, and in 1926 2,031,000. an increase of 17½ per cent. The low-rated traffic in 1924 was 16,733,000 tons, and in 1926 18,817,000 tons, or an increase of 12½ per cent. That is 5 per cent. less proportionately over the higher-rated traffic than in 1924. With this increase of high-rated traffic over 1924 he should have been in a better position. In 1924, notwithstanding the fact we carried a bigger proportion of low-rated traffic than last year, we came out with a surplus of over £1,000,000, whereas, in 1926, when they were in a better position they came out with a deficit. Those are the facts before the House, and I leave the House and the country to judge which was the most economical management, that of the Nationalist Government now in office or that of the South African party Government in office 1921 to 1924, and which is going to conduce most to the best interests of the country. As far as one can see, there are to be no reductions in rates. Farmers must note that. There is not going to be any opportunity for reduction. The position is hopeless. The producers and consumers up-country will have to continue to bear high rates. Take, for instance, groceries. They pay 42 per cent. higher rate to-day than before the war. Sugar pays 54 per cent., boots and shoes 81 per cent., agricultural machinery 65 per cent. more than before the war. I take these figures from the Auditor-General’s report on railways, page 19. Cement pays 97 per cent. more, and the single and return fares from Cape Town to Johannesburg at 25 per cent. higher, and nearer home, from Cape Town to Worcester, 25 to 30 per cent. higher. These rates should be reduced because they fall heavily on the up-country consumers. I might be asked why I didn’t do it when I was in office. I didn’t do it because I did not enjoy those big surpluses which my hon. friend has had, otherwise these would have been reduced, but the opportunity for such reductions has now passed, and I am afraid the up-country consumer will have to continue to bear the burden. The opportunity for reducing rates on produce, which the late Government always tried to bring about, has also passed. We knew that every reduction in rates for transportation of produce gave an impetus to production in the country. Now the opportunity is passed, and it will take us all our time to avoid increasing the rates, and if the expenditure goes on as it has done in the last three or four years it will inevitably mean we shall have to increase the rates.

One is in a very difficult position when one has to speak on the estimates from the Government benches, because one can only get up and approve of the Government’s policy and its surplus. Virtually all that is left one to do is to congratulate the Minister on the surplus and on the healthy financial position. One is accustomed to hear the hon. member for Cape Town (Central) (Mr. Jagger) criticize the Government’s protection policy year after year, but we know that his own party does not agree with him. It is not usual for one to know when a member of the Opposition is speaking in the name of his party or when he is only expressing his personal opinion. I take it that where he criticized our protection policy this afternoon, he delivered his usual plea for free trade. It is unnecessary, therefore, to deal with his remarks on that point. Even the hon. member for Cape Town (Central) will have to admit, however, that the cost of living has not been increased as a result of protection. According to the statement of the hon. Minister, the cost of living has diminished. One can see more and more clearly how the country is progressing as a result of protection. The hon. member made mention further of the fact that taxation has been increased by £3,000,000 since the present Government has been at the helm. It is true that taxation has increased, but then expenditure has increased. Did the hon. member only want expenditure to increase so that we should have a deficit to-day of £3,000,000? I will show later why expenditure has increased, and will challenge the Opposition to indicate any item under which we should have economized. They must show us where we can economize before they can criticize and say that taxation has been increased. Taxation has not increased as for the ordinary man, but has rather diminished. The hon. member for Cape Town (Central) has mentioned the mines, and I want to admit that the mines have carried more taxation. At the same time the mines have been more prosperous than in the past, and if they can carry more taxation and are still able to prosper, then the country will not object to the Government’s policy. One even finds that the hon. member for Cape Town (Central) is at a loss to criticize this budget. There is nothing to criticize, but I would like to go into the matter, because it is necessary from time to time to make the public outside think a little. Our people are too much inclined to forget the errors of the past, and therefore I want to compare the position as hitherto with the altered conditions to-day. We find then that during the three years in which the present Government has been in office things have been considerably improved, if compared with the position under the former Government. I hope that the Minister will not rest content with a small improvement, however. The improvement should be much greater, because the former Government ran its house so badly that a small improvement is not satisfactory, and a bigger improvement is required. I hope, however, to be able to show by reference to the figures that a considerable improvement has already taken place. We are hearing all day from hon. members of the Opposition that we ought to economize. Who is not in favour of economy? Everyone is in favour of economy where possible, but the members want to dictate to the Government and the Minister in what manner they should economize, and they want us to do what they were never in a position to do. Similarly with regard to the payment of 5s. to oudstryders. At their congresses they take resolutions that the Government should grant the 5s. to the oudstryders, something which they were never able to do. We are in favour of economy, but it does not only mean a decrease in expenditure—if that were so, the Government would simply do away with the police, in consequence of which the number of crimes would increase; or close the schools, in consequence of which education would suffer —but economy means avoiding unnecessary expenditure, and doing away with wasteful expenditure. If there is wasteful expenditure, then the Opposition ought to reveal it, and show clearly where money is wasted. Then the Government can take steps. The Opposition do not do that, however, but they tell the people that expenditure has increased by more than £3,000,000 during the time this Government has been in office, and they do not do their duty in enlightening the public about the increased expenditure. They do not mention that it is necessary expenditure, and that because of such increased expenditure there has to be a larger contribution from taxation to balance the Budget. We ought to explain the position to the public, and I would very much like to apply this test. The hon. member for Dundee (Sir Thomas Watt), who was a member of the former Cabinet, and can speak from experience, said, with reference to the budget of the former Government of 1924-’25 (their last budget), that if the Minister was to nominate a commission to investigate every branch of the public service, they would not find one in which economy would be possible. He was even prepared to take a bet on it if the rules of the House would allow. He referred to the fact that in the past a certain amount had been wasted, and that a certain number of superfluous officials had been dismissed. It is true that in this regard the former Government did economize during the last years of its existence, but the hon. member for Dundee admitted that when the former Government resigned, the budget was in a state permitting of no further economy. The hon. member for Standerton (Gen. Smuts) made a comparison last year between the budgets of 1921 and 1924, and asserted that the expenditure had been decreased from £30,000,000 to £24,000,000. I do not wish to discuss again the faux pas he made with regard to £4,500,000, for the reason that £4,500,000 of the so-called decrease was an amount simply brought over from the General Account to the Railway Account. But the saving of £1,500,000 was brought up in any case, and that shows again that the amount was first wasted, and eventually saved by the former Government. The hon. member for Standerton admitted that the £1,500,000 had been unnecessarily wasted. But let us look at the budget of 1924. That was the last budget of the former Government. This Government came into power a few months after the beginning of the new financial year. Let us take the budget up to that year. We find then in that budget expenditure at £24,246,000, and the only difference made by the present Government is an amount of £100,000 towards the Department of Labour. That can be subtracted, but it does not make much difference. If we then take the present budget of 1927, then we find that expenditure stands at £27,437,000, showing an increase of nearly £3,250,000 on that of 1924, and this increase we must examine, because people outside are led to believe that expenditure has increased unnecessarily. The hon. member for Dundee (Sir Thomas Watt) stated that on the last budget of the former Government no economy was possible, but if we go into this increase of something over £3,000,000, we find that it is made up of the following amounts: An amount of £13,000 which appears this year for iron and steel, and which has to be paid according to the Act of 1922; for sanitary provisions on the diggings there is an amount of £19,000. That is also quite in order, because the Government derives benefits from the diggings by way of licences, etc. Then there is an amount of £10,000 for national parks, which is justified by the Act of last year, and which is not open to remark. Then we come to bigger amounts. The first is £250,000 more for debt redemption. An amount of £400,000 was placed on the estimates for 1924 towards redemption of our public debt. In the present budget an amount of £650,000 appears for the same purpose. Also this is the first time since Union that a fixed amount has been set aside towards debt redemption, chiefly unproductive debt. And the fault found by hon. members of the Opposition last year with regard to this was that the amount was not large enough. However, to-day they say that expenditure is increasing. Then we find a difference in the amount of interest to the extent of £376,973. Naturally, with the increase of public debt, interest increases also. It cannot be otherwise, and later I would like to show that this Government has increased productive and not unproductive debt. Then we find that there is a large increase in the amount for pensions, viz., £462,000 more than in the former budget. From where does this come? Must it not be admitted that, with an eye to this increase, the former Government did not do its duty? What is the amount? £160,000 will have to be paid every year for the following 25 years towards the Cape Civil Service Pension Fund, which seems to be in a more serious position than was expected last year. We find that there is a shortfall of £2,525,711, while last year it was given as being under £2,000,000. This is the result of the doctrine of laissez-faire. The former Government simply allowed the position to develop. This Government realizes its duty and the old debt is being paid off, but outside it is said that expenditure is increasing, and not that we have had to rectify the bankrupt pension funds of the former Government. Then £90,000 has been placed on the estimates for distribution to oudstryders. Here again the hon. member for Standerton (Gen. Smuts) gave his support. He said that he thought it was an excellent thing, and could support it wholeheartedly; in other words, he had to admit that he did not do his duty in the past to these oudstryders. No one will be able to object to that amount. The balance of the increase in pensions has reference to pensions payable to officials according to law, and over which the Minister has no say. This portion of the increase therefore cannot be criticized either. We now come to the provincial administrations. This item shows an increase of £1,040,000. Here also it is very difficult to understand the point of view of the Opposition. Do they disapprove of this amount, or do they approve of it? But let us examine it. We find that the former Government rendered it more and more difficult for the provincial administrations to do their duty. Education had to suffer, and the position was a matter for anxiety. When the new Government came into power, a change was made in the position. With regard to the new arrangement with the provincial councils of providing grants for schoolchildren, I want to mention that this was already approved of in advance by the past Minister (Mr. Burton). He stated that the old £ for £ system of payment was wrong, and that the only manner in which to settle the matter’ properly would be to provide the provinces with a certain amount for every school-going child. That puts an end at once to the accusation that the Government is keeping children out of school, because the provinces obtain a grant for every child at school. But although the former Minister of Finance (Mr. Burton) approved of it, he could never carry it out, because of his continual deficits, and education suffered. Mr. Burton declared that neither his Government, nor any other Government, would be in a position to do this, and that the provinces would thus have to carry on the existing basis, and that they would have to put their damaged house in order if they could. He was thus powerless, but he did not know that a Government such as we have to-day would follow him. This Government gives general satisfaction. The provincial councils are satisfied, and, having regard to the statement of the past Minister, I ask again how it can be stated that the present Government is unnecessarily increasing expenditure? What was the result of the policy of the former Government? There is one thing that people will remember for a long time, and that is how thousands of children were kept out of school by the former Government and received no education.

What about the parents’ duties?

That is just where we differ so vastly from the former Government. It is true that the parent has a duty, but where that duty is not fulfilled the Government steps in and sees to it that in the interests of the country children have the benefit of education. Let us inquire into the results of the policy of the former Government. In the Cape the normal increase in children attending school was about 5,000 per year, but after 1923 it began to lessen. In 1923 the increase was only 152, and in 1924, as a result of the policy of the former Government, there was not only no increase, but a reduction of 2,000. In the second year the policy of the S.A.P. Government was therefore responsible for the fact that 11,800 children in the Cape alone were kept out of school. In the Free State the position also was unsatisfactory, and in the Transvaal it was so bad that teachers received notice that in all probability they would not get their cheques at the end of the month unless some solution was found. The solution offered by Mr. Burton was to leave it to them to put their house in order. His policy was one of letting things slide, and let’s see what happens tomorrow. That was usually the policy of the S.A.P. Government. A country may economize in many ways, but it should never do so at the expense of necessary education. That was also one of the chief causes leading to the downfall of the former Government. What does the Cape Provincial Council say to-day about the increased grants given by the present Minister of Finance to the Cape? Do the South African party majority in the Cape Provincial Council really voice the opinions of the South African party, where 14 days ago a motion was proposed complaining that the amount granted to the Cape was too small, and that the Cape should get more and should be placed on the same basis as the Transvaal?

Naturally the Cape ought to be placed on the same basis.

I am glad to hear that, but then I would like to tell the hon. member that naturally he is talking non-sense. One cannot have it both ways. According to the Baxter Report of 1924, the Transvaal was to get £16 7s. 6d. for every school-going child, the Free State £15, and the Cape £14. The hon. member for Standerton (Gen. Smuts) found fault with the Minister of Finance when he made the basis the same in the Cape for the first 30,000 children as that in the Transvaal, viz., £16 7s. 6d. Where the Minister, therefore, granted £2 7s. 6d. more for the first 30,000 children than recommended by the Baxter Report, the South African party in the Provincial Council now says that still more ought to be granted, and the right hon. member for Standerton, the leader of the S.A.P. in the House here, says the Cape should only get the £14 per head, and not £16 7s. 6d. as fixed by the Minister. The increased grant means £71,250 per annum more for the Cape than as recommended by the Baxter Report, and if the former Government had remained in power, then that report would have been carried out. One cannot understand who speaks in the name of the South African party, because they are never unanimous. With regard to Posts and Telegraphs, there is an increase in the budget of £303,000; let us see what has caused this increase. More post offices have been built, and telephone services have been considerably increased. The money applied here is productive. Now I want to refer to the figures in order to show what has been done on the countryside, and it is extraordinary that it has been done by two Labour Ministers against whom the country has been warned. Then we will be able to compare it with what the former Government, which calls itself the true friend of the countryside, has done. Since the 1st April, 1924, 7,299 new telephones have been established on the countryside by extending the network of telephones, and 14,169 miles of lines have been laid. Under the former Government 2,221 telephones, with a length of 4,520 miles of line, were installed. The average number of connections put through by the former Government per annum was 150 for farmers, but under the present Government the average number has been 2.400 per annum, that is to say, 16 times as many per year. The same comparison can be drawn with respect to the length of line. If the Opposition disapproves of the expenditure, they should say so. However, the country-side is indebted to the Government for the manner in which they have helped to develop the country. Men like the hon. member for Cape Town (Central), living in the towns, cannot speak for the countryside. The people in the country live on the land surrounded by difficulties, and one of the things they will always remember is that the former Government always forgot them and pushed them aside, while the present Government has taken steps in their interests. Then there is the question of increase in salaries. In 1925-’26 the amount was £170,000; in 1926-’27 £172,820, and for the financial year 1927-’28 it is estimated at £186,218, a total of £529,038. The increase is to a large extent attributable to the annual increase in salaries which takes place under the existing law. I do not want to discuss whether a law is good or bad which lays down that a clerk, whether he is weak or good, gets his increase in salary every year until he reaches the top of his grade. This takes place according to an Act passed by the former Government, and if the hon. Minister does not carry it out, he can be summoned by any official to appear before the court. The increased expenditure in education in the Union is £389,000, also a considerable increase. This is partly attributable to the fact that the present Government took over technical training and industrial schools from the provincial councils. If the Government had not imposed taxation for that purpose, the provincial councils would have had to do it, and the money would have come out of the pockets of the same taxpayers. More has been spent also on universities and university colleges, and it is a healthy sign that so much progress has been made in higher education. As a result of the increased expenditure, we find that more and more boys from the country are able to prepare themselves for filling even the highest offices in the country, hitherto given to people from overseas. Then there is the question of child welfare. It is true there is an increase of £39,784, but the Opposition surely does not want us to economize here. I hope that the Minister will not economize on this head, because provision should be made for children whose parents cannot provide for them. The Minister is helpless as against this increased expenditure, because magistrates send the children to institutions where they have to be provided for in order that they may get on. They cannot surely be thrown helplessly on the world. If I have any fault to find with the Minister, then it is that the amount is not adequate. I think that a word of thanks is due to the different charitable committees and institutions for the work they have done, and the sacrifices they have made in order to provide for neglected children. All these amounts come down to an increase of £3,430,473, and the Opposition will agree with me that we cannot economize on these items. These are amounts for which the Minister is responsible, and which he must take upon himself. Let us add this to the sums regarded by the former Government as the absolute minimum in 1924. The estimate of expenditure for that year was £24,246,477, and if this amount of £3,430,473 is added thereto, it gives us a total of £27,676,950. The present estimate is, however, £27,437,907, so that it is actually £239,043 less than the absolute minimum of the South African party in 1924, plus the necessary increases I have just mentioned, so that the figures actually show that the Minister has economized to the extent of nearly £240,000. And even if the expenditure of £100,000 in connection with the Department of Labour is subtracted from that, there is still a saving of £140,000, and that in spite of the additional activity in State departments, which have to do much more work to-day. New divisions in the public service have been formed, and more is done in the interests of the country, but in spite of this increased activity, we find that the present Government has economized considerably. In connection with the Department of Labour, it is interesting to hear from the Minister of Labour what his department has already done. I would like to refer to the fact that the department is giving more and more work to Europeans in place of natives. During the past two years up to the end of 1926, no less than 1,361 natives have been displaced by Europeans. There was an additional expenditure of about £73,000, but the Europeans do better work, and it is an expenditure which will be approved of by the people, because otherwise work would have to be provided for Europeans who would be out of work. The hon. member for Cape Town (Central) said that unemployment is increasing, but I wonder what would have happened if the former Government had had to act under such difficult circumstances. The Opposition should be honest, and if they think that money has been wasted they should show clearly what expenditure has been unnecessary and where economy is possible. They dare not do that, however, because then they would have to criticize themselves, because, as I have shown, there is actually a reduction on the absolute minimum of the South African party in 1924. If the Minister can economize still further, the country will be very thankful. Let us inquire further into what happened while the former Government was in power. In 1920 the then Minister of Finance paid over an amount of £460,000 to the public debt commissioners because there was at one time a surplus, but that amount was withdrawn. In spite of that, the Opposition comes here to-day and wants to dictate to the Minister what financial policy he should follow. Take, e.g., also the three years after 1920. Every year a considerable amount had to be taken from loan funds in order to balance the budget, viz., 1921-’22 £934,106, 1922 ’23 £826,621, 1923-’24 £525,000, because the former Government could at that time do it in no other way. Year after year there were deficits, and money was drawn from loan funds, in an unlawful way—I think that it can be called unlawful—in order to balance the Budget. In those few years about £2,750,000 was drawn from loan funds, and there was never any surplus to enable the then Minister of Finance to recover. And that also in spite of the fact that the former Government had resort to the most inexplicable taxes, such as the tax on medicines and tobacco. Those taxes have all been remitted by the present Government, and, in spite of that, a credit balance has been assured. I am surprised that the hon. member for Cape Town (Central) still refers to the so-called surplus of £200,000 on Mr. Burton’s last budget. In the country the assertion is repeatedly made that the surplus was there when this Government came into power.

That is true.

The hon. member still says it is true. I would like to refer him to what Mr. Burton himself said about that. He said—

He therefore thought that it was particularly satisfactory to draw half a million pounds from loan moneys and then present a surplus. I want to ask the hon. member for Yeoville (Mr. Duncan) if he also thinks it satisfactory if £2,500,000 is taken from loan funds, and then a surplus of more than £2,000,000 is presented. We cannot be thankful enough that we are rid of financial policy of that sort. Mr. Burton himself said that unfortunately a surplus arrived at by drawing money from loan funds and in that way achieving a credit balance is not an honest one. He said himself that if revenue has to be covered from loan funds, it cannot be honestly said that the budget has balanced. The hon. member for Yeoville still cleaves to that improper way of balancing the budget. The hon. member may jump about as he likes; they cannot hide the deficits as the result of the hopeless policy of the former Government. In spite of the fact that more than £2,000,000 was taken from loan funds, our Government found when they came into power an accumulated deficit of £1,988,000. If those amounts had not been taken from loan funds, the accumulated deficit would actually have been £4,200,000.

Where do you get the money from?

We got it by taxing the man who could pay and lightening the burden of the man too poor to bear taxation. There is too much of a contrast between the policy of the former Government and this one. Every year this Government comes to light with surpluses without taking money from loan funds. This Government presents honest surpluses without taking illegal measures. In 1925 the credit balance was £808,000, that was the first since 1920, the year after that there was a surplus of £422,000 and this year it is £1,250,000, thus £2,480,000 in the three years, instead of deficits mounting up to £4,000,000 in the few years under the former Government. And how have these credit balances been applied? Towards paying off the public debt, paying off the public debt commissioners and in overhauling the bankrupt pension funds. But those are not the only amounts paid towards redemption of the public debt. We find that in spite of these surpluses the Minister placed an amount of £524,000 on the Estimates last year for debt redemption and also in 1925 £423,000, while this year £650,000 appears on the Estimates for this purpose. With regard to the Opposition press, I am glad that they also approve the utilization of this year’s surplus, amounting to £1,150,000 or possibly £1,250,000, towards paying off the public debt. But may I just remind hon. members what the hon. member for Cape Town (Central) said in 1924. He said that he thought that the use of surpluses for paying off debts should cease, and that the surpluses should be carried forward from year to year and that annually a fixed contribution from revenue funds for redeeming the public debt. Our Minister has not only fixed a certain amount to be applied for that purpose and has not only fixed that amount at £650,000, but he sees a chance of reducing the public debt by a considerable amount. The Minister could have made himself very popular if he had done what the hon. member for Cape Town (Central) suggested, because then he would be able to build on with a surplus of more than £2,000,000. That accumulated surplus could be used in reduction of taxation shortly before an election and make the Government particularly popular, but this Government is not out to win the approval of the electors in that way. That is the difference between the present and the former Government. The former Government was never popular, but what little popularity they had they were afraid of losing, and therefore they did not dare to inflict imposed taxation in order to avoid deficits. This Government does not buy the approval of the country in that way, but does things without further agencies.

The Pact Government.

Yes, the whole Government. The Government as a whole has done much good work in the interests of the country, and what is strange is that the Government has not had a wonderfully prosperous year. There was one prosperous year but only just one. The other years were notable for great difficulties, locusts and drought, which still exist; but in spite of it all the Government has presented a healthy financial position. But we have had industrial peace under the Pact Government for which the Minister of Labour is perhaps entitled to the utmost credit. This has given general satisfaction and confidence and placed people in a position to pay the taxes which benefit them. The “Cape Times” has talked about a lucky budget and regards it as a bit of luck that the Government can present such a favourable budget. Even if that is so and the Opposition has always had bad luck, then we must be thankful that we are freed from the unlucky ones, the Opposition. But what is more taxation has been reduced. The leader of the Opposition last year after the member had delivered his budget speech cried out “Oh, for a Jagger.” Now the hon. member for Cape Town (Central) (Mr. Jagger) has again tried to persuade us that twice two is five, but the public does not believe that any more; they know that unfortunately the hon. member does not always mean what he says and that he speaks as a party man. Let us just see in what manner taxation has been reduced. The tax on medicines has been remitted by this Government, and in that way £75,000 has been given up. By means of the remission of the tobacco tax £220,000 has been surrendered. The introduction of the penny post means a loss of revenue of £400,000 and with regard to income tax the abatement has been raised from £300 to £400, which means that £205,000 has been given up. Then there have been changes in the taxation of estates. The hon. member for Cape Town (Central) will say that that is no reduction, but I maintain that it is a reduction. Formerly estates upwards of £1,000 were taxed. In that way the estate of the man who owned but little was also taxed, but now the minimum has been raised to £7,500 and the taxation now only affects the man who can bear it. Nevertheless, it is a reduction in taxation. Then we come to the higher subsidies granted to the provincial councils. Had this not been done the provincial councils would not have been able to carry out their duties except by imposing heavy taxes. The amount involved is nearly £1,000,000. In the Transvaal the companies tax and the employers tax have already been remitted, otherwise other taxes would have been necessary to enable them to fulfil their duties properly. In the Cape Province the provincial council has discussed taxation calculated to bring in £400,000, but the higher subsidy has rendered it unnecessary. The poor man is as a result of the policy of the present Government freed from taxation and the burden has been placed on the man who can carry it. Further the Government has protected the industries of the country by remitting these taxes. The public debt has increased but it is productive debt which has increased. Unproductive debt has diminished. When the Government came into power the public debt was £208,232,000 and 70 per cent. of that carried interest, i.e., £145,225,000. While the unproductive debt was 30 per cent. of that, or £63,000,000. The public debt has now been increased to £228,760,000, but of that amount only £49,500,000 is unproductive, and the interest bearing, thus productive debt has only been increased. The unproductive debt has been reduced from £63,000,000 down to £49,500,000, or by £13,500,000, and the productive debt has been increased by £20,000,000. We note that about £13,000,000 of the increased capital expenditure had already been applied when the present Government came into power, and we do not find any fault with that, because we know that it is productive debt. If money is applied to productive purposes we will never quarrel with that because South Africa is still a young country which must be developed and it cannot be done in any other manner than by borrowing money for that development. To-day one hears nothing more of the former warnings to the country that the present Government is so dangerous that the country would not be able to borrow money for its development if this Government got into power. This warning was contrary to the interests of the country because people in the country attached a certain measure of importance to what the hon. member for Standerton said. What has happened, however? The present Government obtains money on easier terms than the former Government did. In 1924 £8,000,000 was obtained at 99½ per cent., and in 1925 another eight million at 99½ per cent., and this year four million at par. This has never happened in other dominions, nor under the former Government. Fortunately, investors did not bother themselves at what was said by the Opposition because they realize that the present Government is acting in the interests of the country and makes provision for paying off its debts, as a result investors have confidence in our country. It is also asserted that we would kill the gold mines with taxation but that is non-sense. What we did say was that the gold mines would be taxed according to their ability to bear taxation. The position to-day is that the gold mines are more flourishing under the present Government than under the former Government. The production last year was a record in the history of South Africa, and we must not lose sight of diamond production either. While I am busy on the mines I may say that I am glad to see that there is a considerable improvement with regard to the employment of Europeans on the mines. In the past three years, 1,725 more Europeans were employed there. There is another important matter, however, to which I want to draw the attention of the Minister, viz., the question of importing natives for the mines from Portuguese territory. That is not only a matter of great importance to the mines but also the farming population. I admit that a few years ago we proposed a motion in the House asking that natives from the Portuguese territory be not allowed on the mines, but the position has changed since that time to an alarming degree. At that time there was enough labour in the Union for the mines, which labour would have been left unemployed if the quota of natives from Portuguese territory had been increased. The position has changed, however, and I want to ask the Minister to seriously consider the possibility of increasing the number. The Minister admitted last year that the mines would have yielded more for the Treasury were it not for the shortage of native labour. To-day that shortage still exists and we find that the mines which are naturally more industrious because there are more mines and a bigger profit, need more native labour. I do not plead for the mines because they are fortunately in the position that they can bring natives from anywhere in the Union and can pay them wages which the farmer cannot do. The mines, therefore, draw natives from the farms, but if the mines can get enough labour from outside the Union, no matter where they come from, then the farmers will also get enough labour. On the diggings there are to-day about 50,000 native workmen who would otherwise be working on the mines. It must also be taken into account that the natives work much less to-day than formerly because they have enough for their own needs which are not great, and because they plough and cultivate their ground in a different manner they can produce sufficient for their living without going to work. There is as a result to-day a shortage in industrial circles, and especially on the farms, and it is necessary to make provision for that. The mines can pay higher wages than the farmers and can collect natives in a way not open to farmers. Naturally it should be that the natives in the Union get first preference in obtaining work in the country, but it will be easy for the Government to see to it through the Department of Native Affairs, that all the natives in the Union who want work get it. The Government can demand a guarantee from the mines that the natives in the Union shall first be taken up before natives from Portuguese territory. If there is a shortage it ought, however, to be supplied by natives from Portuguese territory. The Minister knows that where it is in the interests of the country, it should be done. The former Government wanted to import natives from Portuguese territory at a time when natives in the Union could not get work. That was a mistake against which the Labour Party protested, and which the country disapproved of. If that is achieved then there will not only be more natives available for the mines but more Europeans will also be able to get work. The Government can easily provide that the ratio of Europeans to natives existing to-day be maintained. Last year it was 9.3 to one and the Government can see to it that that is maintained. The Minister of Native Affairs made a test at Louis Trichardt because an office has been established there where forbidden immigrants are allowed to work for farmers in the northern Transvaal. I must say that we are particularly thankful for that because we find that natives who could not otherwise come in are now admitted on certain conditions. They are imported properly and registered and when their time has passed they are sent out of the country again. The farmers in the northern Transvaal do get labour, but it is strange to think that the farmers in whose vicinity hundreds of thousands of natives live cannot get other labour. Where a farmer in such a case has to pay a fee of 30s. and for the transport of natives, as well as their clothes and a good wage, it shows that actually there is a serious shortage of labour. If that is the position in the northern Transvaal then one can imagine what the position is in other parts. The position is a serious one for the farmers, and I want to refer to what certain representatives of the agricultural industry said before the Economic and Wage Commission in connection with the importation of natives from Portuguese territory. The question was asked whether a limitation ought to be placed on the importation from adjacent districts and whether natives from the Portuguese territory should not be excluded. The answer was that they should not be excluded and that no limitation should be placed on them. Another question asked was when recommendation was made because insufficient labour was obtainable. The answer was in the affirmative and to the effect that that was the reason for the recommendation. On the question as to whether the further limitation of the importation of natives would affect agriculture disadvantageously the reply was that that was the general impression. Again, it was asked whether natives should be admitted free for agricultural purposes and to this the answer was in the affirmative. If natives are admitted from Portuguese territory to work on the mines then natives of the Union will be free to work on the farms. I hope that the Minister will give his serious attention to the matter because it is something which the farmers, who are to-day in a sad plight, regard as being very important. They appreciate very much what has already been done. The hon. member for Cape Town (Central) also asserted that the farmers are taxed more heavily to-day, but that is not so. I do not think there is one farmer who is taxed more heavily under this Government, rather taxes have been reduced and the farmers have been met. In connection with the Act providing for loans in time of drought, I want to ask the Minister if it is not possible to make some alteration. We are thankful for what has been done, but now we find that a district must be declared a drought-stricken area before help is forthcoming. Now there are districts which have bad years but are not drought-stricken districts. Districts do not want to get that bad name, because if a district has once been proclaimed a drought stricken area then people outside think that it is a district where there is continual drought. The position in the northern Transvaal is that this year drought prevails and that it is a greater hardship because it is something unusual. Now I want to ask if it is not possible to make provision for helping a certain area if the Government considers that assistance is necessary without proclaiming it a drought-stricken area. Then I want to ask if provision has not already been made this year and I hope that the Minister will be able to give me an answer. Then I also want to ask if it is not possible to lower the rate of interest of the Land Bank. Two years ago it was said that as soon as the loss in connection with the co-operative associations has been worked off the rate of interest would be reduced to 5 per cent. and I hope that the Minister sees his way to do that this year. In spite of what the hon. member for Cape Town (Central) has said, we know that the result of protection has been specially favourable The Minister can be congratulated that during 1926 more than 100 factories have been established giving work to more than 2,000 Europeans. I can say that the people will not listen to the hon. member for Cape Town (Central) when he disapproves of that and I hope that the Minister will continue with his present policy especially as it does not involve an increase in the cost of living. I am glad to hear that some firms only give work to Europeans. The firm of General Motors have 400 Europeans in their service, and Mosenthal and Company 250. Now I want to ask whether it is not possible to bring to the notice of the public which firms are doing their duty by keeping a large number of Europeans in service, and whether steps cannot be taken to induce the public to realize its duties to such factories. If the public knows that certain factories are doing their duty to the country then those firms should be supported. It somebody buys a motor-car then he can buy one produced by a factory which does its duty to the country. If more publicity were given to statistics of this sort it will help much in that direction. I learned recently that with regard to printing surprising progress has been made as a result of the Government’s policy of protection, and that even the “Cape Times has reaped considerable benefits. I hear that one of the big tobacco companies which formerly had their cigarette boxes made overseas now has ten millions of them printed by the Cape Times” monthly, and the “Cape Times has therefore reaped the benefit of the Government’s policy of protection. If other establishments were to follow this example it would mean much for our country. Then sending of printing orders overseas by establishments here should be discouraged, and I want to mention to banks especially, who have their cheques printed overseas, and certain insurance companies which even have their policies printed overseas. There are, however, two cases which I want to bring to the notice of the Minister. Those are the cases mentioned in the report of the Auditor-General. I know that they occurred without the knowledge of the Minister, but it is necessary for me to refer him to it. There are two officials who do not yet realize that it is necessary to give South Africa the preference. 1,167 chairs have been ordered for the Department of Defence in London and at a cost of £1 7s. 8d. per chair delivered in South Africa, and certain kitchen tables have also been imported. These are, I suppose, officials we inherited from the former Government. The other case is where certain stamps for the Department of Finance are printed in London. Everybody is satisfied with the budget speech of the Minister, even the Opposition press, and the only fault the “Cape Times” had to find was that the speech was somewhat too formal. I think also that the Minister should have laid more emphasis on the favourable results of the Government’s policy and asked where the false prophecies of the past are now. Deficits and poverty in the country were prophesied, and I therefore agree with the “Cape Times” that the Minister made his speech too formal because he should have referred to these matters. Another fault I have to find is that the Minister has not taken enough credit to himself, and claimed for the Government the healthy financial state of the country. The people, however, realize their indebtedness to the Government and hope that it will remain in office for many years. When the Minister made his budget speech the Opposition members never as much as said “Hear, hear.” It seems they were sorry that there was a surplus, because they wanted to go back to the country and say that their prophecy with regard to a deficit has been realized. I hope they will still look forward to it, and that there will never be a deficit under the present Government. We are all in favour of reduction of taxation. I hope that the Government will also have further surpluses, but perhaps attention may be given to the request of the member for Cape Town (Central) (Mr. Jagger) to ease the load of the taxpayer in the future, especially where there is a fixed amount of £650,000 on the Estimates for reduction of the public debt. The former Minister of Finance has had a vision. A prophecy was once made by the Opposition when he said “there are better times ahead and the light is breaking through.” He did forget to say that better times would come about by a change of Government and that the light was the rising sun of the Pact Government.

I am glad the hon. member thinks the country is satisfied. They were so satisfied at the last provincial council elections that they decided the time had arrived for a change. I want to congratulate the hon. member who has just spoken. He is the first Pact member to admit we are taxed by £3,000,000 more than previously. We remember the hon. member for Gordonia (Mr. J. H. Conradie) going round the country saying they had remitted £3,000,000 of taxation, and the Minister of the Interior told the country there was no increase in taxation, but a reduction of at least £3,000,000. Now the chairman of the Finance Committee tells us that he is satisfied taxation has gone up by over £3,000,000 under the Pact Government. Let me refer to one or two points in his speech. He told us that our Government drove children out of the schools. I am going to give some figures compiled by the leader of the Pact party in the provincial council, Mr. Geldenhuys, and given by him in reply to a question. In 1910 there were 81,775 children in the schools of the Cape Province. These increased by 5,000 to 6.000 per annum under the South African party, until, in December, 1923, they reached the figure of 137,723 children. They were educated at a cost of £2,482,000. In March, 1926, after the Pact party had been in power in the provincial council for some considerable time, we found the number to be 135,012, and these were educated at a cost of £2,878,000. In other words, 2,700 fewer children were being educated, and we were paying nearly £400,000 more for their education. The same story is told of the Transvaal and Free State under this combination. There was not a single member of the South African party in the provincial council who asked definitely that our subsidy should be raised to the level of that of the Transvaal, but we did object to the differentiation, and I think they were reasonable in that objection. For European pupils in primary and secondary schools, the grant made was £16 7s. 6d. per head for the first 30,000 children. After that, in the Cape and Natal, they got £14, and in the Transvaal £16 7s. 6d., and in the Free State £15 8s., so that there were very good grounds for the Cape Provincial Council to grumble.

Were not those figures arrived at by two commissions?

Yes, and you condemned one of those commissions, the Baxter Commission, when you were in opposition, but accepted it later when responsibility made you more reasonable. We said we did not want differentiation, but that we wanted equal treatment. We said we wanted to be on the same basis, and I think the better position would have been to have raised the figure to that of the Transvaal. If all the statements made by the hon. member, who has just spoken, are as correct as these two, then we can place little value on what he has said. Now I want to come to the railway budget. We had two very lengthy and important budget statements by the two Ministers, and it seems to me that the true financial position of the country today is reflected by the railway budget and not by the general budget. The Minister of Finance had extraordinary good fortune, he was extraordinarily lucky. We warned him what the position would be, namely, that there was an inexcusable under-estimate of what he would receive by way of taxation through the customs. That under-estimate alone is the cause of this big surplus, and he enjoys his luck at the suffering of the people. The Minister of Railways delivered a speech not unlike the one that he delivered last year. We had the same avoidance of all essentials and the same party political propaganda from beginning to end, though, in one or two matters, I must admit the Minister has somewhat changed his views. I think the change was due, however, entirely to the practical demonstration of the correctness of the policy pursued by his predecessor. We were accustomed in the past to hear his condemnation of the grain elevator system and the electrification of the line in Natal. To-day we find that the grain elevator system has been extended, and that the electrification of the railway is hailed by the Minister as the salvation of the traffic problem in Natal. Let me give the Minister’s own words—his words are always interesting, though not always instructive—

He goes on —

What better testimonial could the hon. member for Cape Town (Central) (Mr. Jagger) get than that which he thus received from the Minister of Railways? Coming to the finances, the Minister told us that, according to the revised estimates, there is every indication that he will have a deficit of £146,424. He omitted to tell us that part of what he claims as his income is a sum of £250,000 derived from the Electrification Commission, a sum which under no circumstances had the Minister or anyone else the right to allocate towards “income” from the working of the system. Further, there was a sum of £21,844 which the Minister brought forward from last year, so that if we take these two sums together the deficit by his own showing would amount to £418,268. But I feel, and feel strongly, that we have not had a full account of the true loss, the loss which would undoubtedly have accrued had the Minister not departed from his oft-expressed policy. About two months ago the Minister told us he expected that at the end of the financial year the expenditure and income would balance. One sees how fearful he must have been of his own position for he suspended every replacement of wastage. For example, he suspended all replacements on open lines—both European and non-European labourers—from the 16th February, about the time when he made his speech, to 31st March. The dates are rather significant. Let me remind him that if he could afford to suspend replacement of wastages right through the system and make no replacements of any kind then our criticism that the Administration is overburdened with employees has been fully justified. I think we are entitled to some explanation as to why the Minister fixed the 31st March when replacements may take place again. We know, of course, that the 31st March was the end of the financial year, but I must not suggest that that could have influenced the Minister. I doubt whether it did. Certainly, I cannot think that he would have stopped replacements merely to let his budget appear less disastrous. But we remember also that when he was in opposition, and even after he took his seat on the Government benches, he blamed the hon. member for Cape Town (Central) for not replacing wastages, and referred over and over again to that system as “dismissals” from the service. Then we wonder how, in view of that, the Minister himself now dare resort to such an expedient. But he does not stop at suspending all replacements on open lines; he restricts replacements in such grades as drivers, firemen, cleaners, carriage repairers, examiners, gangers and labourers on the permanent way, signalmen, shunters, station foremen, and instructs that, under no circumstances whatever, can he consider additions to the existing establishments in the service, including grades. He absolutely debars matriculated students for training purposes. Staff required for new lines or road motor services must be recruited from the already depleted staffs. He suspends all appointments, and new appointments already authorized, if not effected, also must be stopped. Under no circumstances can acting appointments be made on even the discretionary power given to recruit ordinary casual labourers up to 30 days, he has suspended until 31st March, 1927. Surely it shows a state of absolute panic on the part of the Minister at the very moment when he was telling us that he was expecting to have his accounts balancing, and I do feel that there is very much more for us to know. To my mind, if the Minister acts in this way, he must feel that the position is extremely serious, and that he had to cut down as much as possible in order to get something like a fair budget. The Minister reverts to his claim that agricultural rates here are cheaper here than elsewhere, that generally the rates compare favourably with those of other countries and that fares are as low as possible. When we remember the advantages we have in this country—we have all our coal here, we have cheap labour and we know that the whole of the future of the country depends entirely on cheap transport— then I say that even if the Minister was correct there is nothing to boast about, but he was far from being correct. Let me quote a few figures, and I would like to say that it is exceedingly difficult to follow the S.A.R. tariff book. It is a veritable Chinese puzzle, and I was very careful, therefore, to have my figures verified by those who can read that tariff book. We will take passenger fares and compare them with the fares in Victoria and New South Wales, the only two other countries of which I could find the year books. We will take a distance of 50 miles—1st Class (single): New South Wales, 6s. 8d.; South Africa, 9s. 6d. 2nd Class (single): New South Wales, 4s. 9d.; South Africa, 6s. 3d. 100 miles—1st Class: Victoria, 18s. 11d.; New South Wales, 17s. 7d.; South Africa, 19s. 2nd Class: Victoria, 12s. 7d.; New South Wales, 12s. 1d.; South Africa, 12s. 6d. Take 350 miles—1st Class: Victoria, 58s. 5d.; South Africa. 63s. 3d. 2nd Class: Victoria, 38s. 11d.; South Africa, 42s. 500 miles—1st Class: New South Wales, 86s. 4d.; South Africa, 89s. 3d. 2nd Class: New South Wales, 57s. 10d.; South Africa, 59s. 6d. In every case, therefore, our railway fares are higher than in those two countries. Take goods rates, per English ton. Agricultural produce (100 miles): Victoria. 9s. 9d.; New South Wales, 11s. 5d.; South Africa, 8s. 8d. We are thus cheaper than the other two countries at the short distance, but at 500 miles, and do not forget that this is a country of long distances, we find New South Wales, 19s.; South Africa, 26s. 2d. This is agricultural produce, which the Minister claims is carried cheaper than anywhere else.

What class of produce are you referring to?

I am taking it generally under the heading of agricultural produce. These other countries have a general rate. But if the Minister objects, I will take a particular case. Let me take meat. That is something definite. Victoria, 21s. 4d. for 100 miles, New South Wales, 18s. 11d., and South Africa, 26s. 2d. per English ton for 100 miles.

Give the livestock.

The Minister must let me give the figures I am prepared to give, and not cross-examine me on the whole tariff book. The Minister’s statement was general, that the rate for agricultural produce was lower in this country than anywhere else. Let me take the longer distances: 500 miles, New South Wales 43s. 11d., South Africa 93s. 4d., and for export 46s. 8d. Let me take the highest rate: Victoria, 51s. for 100 miles, New South Wales 76s. 8d., South Africa, 74s. 8d. Again for short distances, a low rate, but take the longer distances, so important in South Africa, New South Wales, 500 miles, 197s. 6d., South Africa 257s. 7d.

Is that for home consumption or export?

I will give it to the Minister again. Freight on meat for 500 miles for home consumption is 93s. 4d., and for export 46s. 8d., against New South Wales 43s. 11d. I cannot go through the whole tariff book to answer every question of the Minister. I have taken out some of the figures which strike me as going very far to refute the correctness of the Minister’s general statement. Consider the lowest rate: For 100 miles, Victoria, 5s. 4d.; New South Wales, 3s. 7d.; South Africa, 6s. 1d.; and for 500 miles, New South Wales, 12s. 4d. and South Africa, 14s. 7d. These figures do not bear out the Minister’s contention. He may be able to point to a few items where our tariff is the cheapest in the world, but that does not entitle him to make the sweeping statement he made in defence of his decision to make no further reduction in rates and fares. The Minister attributes most of the loss and I fancy he claimed the whole of the loss to the decline in the maize traffic. Surely the Minister knew, when framing his estimates, that he could not possibly expect to have a maize traffic equal to that of previous years. He takes no account of the increase in coal and other traffic which it is doubtful if he could have handled had he had a full maize crop. Take his own figures. He lost 1,000,000 tons of maize for export—that would mean a loss of £500,000—but last year when there was a small crop he carried 136,000 tons of maize, which must have brought him in £68,000. He had 4,500,000 increase in passengers. If we take that number at a very low average figure, say, 2s. 6d., he gets an increased income from that of £562,500. In general goods traffic he received £111,355 over the estimate. In all, he gets in excess of what he expected, £673,855, as against £500,000 loss on the maize traffic. How, therefore, can the Minister claim that the whole of the loss is due to the maize traffic? Added to this he had £250,000 which he got from the Electricity Commission. It is difficult to understand, therefore, how the Minister can claim that on account of the decline in the maize traffic a surplus of £672,987 was turned into a deficit of £146,424 and how can he claim to be running the system economically. He said he was going to show that he was running the system economically, because as he said he was running it at much less per train mile than anyone else had done. This argument, even, to the Minister, must appear somewhat absurd. In the first place the increase in train mileage is due almost entirely to the branch lines, which, as every one knows, are run at a much cheaper rate than the main lines. In the second place, cost per mile is entirely fallacious, for we know that every general manager throughout the world is vying with every other general manager to bring down expenses per train mile as much as possible, and by doing so all sorts of items are omitted from the actual debits. For a Minister to get up and base the whole of his argument on cost per train mile, when he must have known these facts, is, as I have indicated, altogether fallacious. The Minister is not the sort of man, if he really believed in that argument, to have stopped where he did stop. If he had thought that the argument was sound he would have pressed it home as far as possible, so as to gain party advantage. He was very careful, however, and after a mere reference he said—

It was so excessively modest an action for the Minister, that I immediately became suspicious. That argument of the Minister’s I think we can brush aside and consider the actual increased revenue in relation to the actual increase in cost. Up to November last, according to the Railway Bulletin, the increased earnings were .076 per cent., while the increased expenditure was 3.77 per cent. That has been the position right throughout, practically since the Minister took office. Month by month we find the expenditure increasing at a rate far greater than the income. The increase income on open mileage was 10 per cent. and the increased expenditure was over 33 per cent. That must go very far to show that the Minister is not justified in claiming that he is running his system economically. Let me take one of many concrete examples one can give of over-spending. There is an increase, for example, in overtime work. The increase for the daily paid staff is £295,000 and for the salaried staff £21,000, or a total increase or £316,510. The percentage increase in the mechanical department, e.g., is 337 per cent., as compared with 177 per cent. in the previous year over 1924. The output figures compared with 1924, are negligible. There is a decreased output in 1926. Nevertheless, the overtime increased by £103,873, and this year again further provision is made for a large amount of overtime. All this hardly supports the Minister’s contention that the system is being run more economically than in 1924. Take the railway expenditure, the total increase for 1927-’28 compared with the estimates of 1926-’27 is £651,161; the expenditure in 1927’28 is £28,728,395 and in 1926-’27 £28,077,234, but of this net increase, the increase on the railways alone is £628,396. These figures, however, are only after we include £767,662 on special appropriation. For the purpose arriving at a clearer comparison of the working costs and in order to ascertain where the true increase in railway working costs lies it is necessary to exclude these special appropriations and to compare the expenditure of the two years under the three railway heads, main services, subsidiary services and expenditure on the net revenue account. Taking these three heads in comparison we find that the expenditure according to the estimates is anticipated to go up in 1927-’28 by no less a sum than £1,396,058; £825,738 on main services, £208,652 on subsidiary services and £361,668 expenditure on net revenue. Now let us revert to the comparison shown in the present estimates, as between 1926 ’27 and 1927 ’28 and, still dealing with railways only it will be observed that under main services, with the exception of the maintenance of permanent way which shows a decrease of £128,323 there are increases under every other head totalling £954,061 in the aggregate, or just under a million pounds sterling increase. Let us next take the general charges, here we have an increase of £21,575, which mainly lies between the general manager’s and the chief accountant’s offices. The estimates for the general manager’s department (salaries, wages and so forth) in the two years, 1926-’27 and 1927-’28, have gone up £14,180, as compared with 1925-’1926. The increased provision in 1926-’27 amounted to £5,104 and now for 1927-’28 a further increase of £9,076 or an increase of 22 per cent. for two years on the 1925-’26 estimates. Even the increase of executive expenditure would hardly warrant the increase of administrative costs. I think an allowance should be made for the increase in the accountant’s department, because the accountant has to administer the new superannuation and pensions fund, for which he requires an increased staff. A notable feature of the present estimates is the substantial increments of salary granted to each assistant general manager. At Johannesburg, £160; Durban, £100; Cape Town, £160, and Bloemfontein, £150. Take Head 2, Maintenance of Permanent Way. Here, as I stated, we have a decrease of £128,323, but it is very difficult to attempt a satisfactory comparison because we have no information which is likely in any way to show us what amount is expended on the renewals fund. Although a reduction is shown on this head, this reduction, for all we know, would be more than set off by the increased expenditure from the renewals fund, and unless we know, we are unable to criticize. It will be recalled that wages expenditure on relaying and re-sleepering much of the main line was spread over a certain period and always taken as a special head in the maintenance vote. It is now charged to the renewals fund, and we do not know what the expenditure is. The increase on building is £23,848, and the increase on the maintenance of rolling stock is £179,937. The main increases are locomotives £129,756, and goods stock £52,540. Wages under this head have gone up by £29,374. The running expenses in 1926-’27 were £4,398,834, and in 1927-’28 £4,844,421. That is an increase of £445,587 or over 10 per cent. and 50 per cent. of this is for increased wages. With the 11 per cent. estimated increase in train mileage, this seems high, but it is much lower than the previous year. Thus in 1926-’27 we had an increased mileage of 2,814,844 and an increased estimate of £488,032. In 1927-’28 we have increased mileage 5,664,629, and an increased estimate of £445,587. Traffic expenses increased by £241,536. Of this total increase £206,557 represents salaries and wages. If we take the estimates for running and traffic expenses for the four years, 1924-’25 to 1927-’28, we see a certain peculiar anomaly. Take 1924-’25, the increased train and engine mileage was 4,952,560, the running expenses increased by £169,787, and the traffic expenses decreased by £20,622. In the next year, with an increased train mileage of 5,766,029, there was an increase in the running expenses of £175,497, and of traffic expenses, £91,653. In 1926-’27, with an increased train mileage of 2,814,844, the running expenses increased £488,032, and the traffic expenses by £270,457. In 1927-’28, with an increased train mileage of 5,664,639, the running expenses increased by £445,589, and the traffic expenses by £241,536. We actually have less increases of the running expenses and the traffic expenses than in the previous year, though there is a great increase in the train mileage, which is very anomalous, and I hope the Minister will give us a very clear indication how that is brought about. The increase of expenditure on superannuation is mainly due to the new superannuation fund and the increased membership arising from the Administration’s civilized labour policy. Since the introduction of the civilized labour policy, the amounts went up by leaps and bounds. In 1924-’25 the amount was £348,000, in 1925-’26 £457,707, in 1926-’27 £503,375, and in 1927-’28 £544,445. These figures are exclusive of any special contributions to reduce deficiencies in superannuation and pension funds. I would like to refer the Minister to page 152 of the Auditor-General’s report. Globular sums are voted for workshop expenses, but the only details given us—after the event—are those given by the Auditor-General, and even he is not supplied with full information. Take Salt River, the estimate was £2,008,488; the expenditure was £1,902,237. The Minister should tell us what the expenditure includes, and how much is for work actually done in the shops, and how much for goods imported. Why have we had this big saving —£106,252—at Salt River, while at other centres large sums such as £676,886, £154,063 and £148,732 have been spent in excess of the estimates. We are entitled to know what wages are paid, and if there is any difference, for instance, between the wages at Salt River and those at Pretoria. The tendency, unfortunately, is to give Parliament as little detailed information as possible, and to have globular sums voted and to spend these without any information being supplied. The expenditure on grain elevators shows an increase of £49,702, and there is an item of £9,681 for grain bags, which, I thought, would not be needed when the elevators were constructed. This should, therefore, be eliminated to arrive at a true figure of working expenses of the elevators. The estimate then reflects an increase in working expenses of £59,383. In 1925-’26, when we had a bumper mealie crop, the loss on the grain elevator system was £11,914, and for the nine months of the financial year 1926-’27, the loss was £71,526, but as we have still three months’ accounts to come in to complete the financial year, we can estimate that the loss will be in the neighbourhood of £100,000. A feature of the estimates is the extraordinary increase in the interest charges on the railway. The charges for the current financial year are £4,979,342, an increase on the preceding year of £287,698. On harbours the interest charges for 1927-’28 are £524,674, as compared with £478,235 for the preceding year, or an increase of £46,439. The following figures will give an idea of the progressive increased provision which had to be made for interest charges. For the purpose of comparison I take railways and harbours together. In 1924-’25 the total interest charges were £4,620,249, in 1925-’26 £4,961,680, in 1926-’27 £5,169,879, and this year £5,504,016, so there has been an increase in the annual interest charges over the four years of £883,767. Taking into account the Administration’s liability for interest which they must in effect pay to the Electricity Commission on that portion of the electricity capital expenditure recently taken over by the commissioners, the increase in interest charges for the four years will be well over a million a year. If one takes in review some of the more important works on which expenditure for loan funds has been made in recent years, one feels rather doubtful whether a commensurate return comparable with the increased interest charges is likely to be obtained. For instance, what are we going to get from the grain elevators, which, undoubtedly, are necessary for the development of the country? We also require graving docks and branch railways, but in most cases we shall not see the return of the interest on capital. The capital on which the Administration has to pay interest amounted at the date of Union to £86,252,960, and at March 31st, 1926, it was £136,182,903, an increase of just under £50,000,000 since Union. But even these figures by themselves do not show fully the extraordinary rate at which the capital expenditure has been increasing. For example, in the three years 1923-’24 to 1925-’26, the amounts borrowed from treasury to meet capital expenditure on railways and harbours have been in 1923-’24 £5,294,015, in 1924-’25 £5,398,265, in 1925’26 £6,214,549 and, according to the estimates this year, the amount required on loan account is £7,173,645, or a total of £24,080,474, representing an annual expenditure of over £6,000,000. I put it to the Minister that if we continue at this rate, and I admit much of the expenditure is necessary, we shall in, say, 50 years, be faced with an almost impossible position. The loan capital will have increased to an enormous figure, and no provision exists for the redemption of the debt. It is true that certain annual betterment provision is made from revenue, that is to say the loan chest is not applied to for every penny required for new works and improvements, but the provision for betterment has fluctuated very considerably between £500,000 and £750,000 in the first four years after Union. Thereafter, from 1914-’15 to 1921-’22, £100,000 per annum and from 1922-’23, to date £250,000 per annum. It is well to remember, however, that a large proportion of the sums contributed by way of the Betterment Fund have been utilized on what may be termed major alterations of existing structures which would have had to be met from revenue in any case if this betterment provision had not been made. It is true also that for the last two years the sum of £250,000 was regularly placed on revenue estimate as a contribution from revenue to meet the reduction of railway debt. There is, however, no statutory provision, and it depends entirely on the Minister whether he makes provision or not. Changes are taking place almost every day, and already road motor services are in operation. Before long these will be a serious menace to the branch lines, and I ask the Minister to give serious consideration to the suggestion that we should form some kind of redemption fund for the future. Every one of the branch lines might be wiped out by the serious competition of the road motor services which are already paying better than the branch lines and are meeting the requirements of the public. Supposing we got outside competition merely by paying the licences, anyone could put a road motor service on any road and we might find in a few years all the branch lines cut out. If it should be argued that our railway debt is represented by a permanent capital undertaking consisting entirely of live assets and that there are no dead assets representative of any portion of our railway debt, then I think we would be on very unsound ground. For instance, looking at the railway and harbour capital account and the details shown therein, an item which strikes one very forcibly is an amount of £306,064 representing dead assets. But this item must be under-estimated, for, in the same account, there is an item, Kowie harbour capital £306,064, and Port Shepstone harbour £78,069, and we know that both these come within the list of dead assets. I have no doubt that if the assets of the railway were subjected to keen scrutiny it would be found that there are many railway assets which are obsolete or dead and have disappeared from the active list, and yet the capital debt has not been written down. The necessity for a sinking fund provision would seem to be emphasized also viewing the expansion which has taken place in the Administration’s activities in recent years and the debt incurred in certain directions which would appear to be largely deadweight debt, that is to say, deadweight debt in the sense that the expenditure which it represents will never return interest on the amount expended. I refer more particularly to such works as the graving dock at Durban, costing £1,399,700, and showing a working loss of £711,750 in 1925-’26; then, again, there is the grain elevator system costing something like three million pounds on which, in the current year 1926-’27, there was a working loss of £100,000. Then in another direction also, the need for the establishment of sinking fund provision would appear to be urgently necessary. I refer to our system of branch railways which is being substantially added to year after year, the capital expenditure on which does not in many cases return interest on that capital. Now, at one stage in the existence of our railways, it might have been said that all railways, main or branch lines, could be regarded as live and improving assets, and in every respect might be regarded as permanent institutions. But it is doubtful if to-day that idea of permanency can be maintained with any degree of assurance. We know that with the expansion of road motor transport services, and the increasing competition offered by road motor transport, the position of many of our railway lines, in view of such competition, may become precarious. We know that in the case of large municipal undertakings such as gas works, electric light and power works, and municipal tramways, there is statutory provision for the redemption of the loan capital expended on such undertakings and for such purpose, making compulsory the establishment of sinking funds. Take the Glasgow tramways, the most efficient in the world. The position there to-day, on account of the ’bus competition, is serious. It is something the Minister should consider very seriously. Under the Electricity Act of 1922 (Act No. 42 of 1922) the Electricity Supply Commission may establish or acquire electric undertakings, and in terms thereof they have recently taken over from the Railway Administration the Colenso electricity undertaking, including power station, transmission lines and substations. Now, under their Act, there is provision for the establishment of a sinking fund for the redemption of capital, and there you have the anomalous position of one-half of the Natal undertaking being subject to sinking fund provision, while the other half of the undertaking—that half remaining under the control of the Railway Administration—is not subject to sinking fund provision. Another point is the extra cost for white labour. With regard to the details of this the Minister has evidently made up his mind to leave us in the dark, and he has given us no figures. The last figures we had were for 1925-’26, where the extra cost was set down as £191,000 for wages and local allowance, and for the erection of quarters, £270,799, or a total of £461,799. That was to make provision for 10,161 men and youths. In 1926-’27 the number went up to 14,000, and for 1927-’28 it has increased on the estimates by 2,921, or an additional 28 per cent. Now the Minister tells us he has accepted the scheme propounded by the committee appointed by him. He says—

Last year, in the budget speech, he said—

Last year it was the “settled policy” of the Government and this year it—

I hope the report laid on the Table last Friday is going to have a big influence on the Minister, and that he will pay attention to the very important recommendations made. I hope the Minister will not resent my referring to the matter.

Are you speaking for the party?

What I am going to say here every member of my own party, and of your party as well, will probably agree with. On behalf of your party the Minister has already agreed to it, because he said he accepted the report. One need not at this stage go back to what the general manager said in regard to this question or what the Economic Commission stated a little while ago. Now, we were told last year that this matter would be referred to a committee, and I find that it has been. The committee have gone very closely into the position. But I want to put this to the Minister, that he could not expect a body of men—I think they are technical men—to go into a matter very fully and exhaustively if he restricts them in the way he restricted this committee. They were required to frame their report—

That hardly gives to these men a free hand. It will be found that throughout they have experienced very great difficulty in working under the conditions imposed, and they say in one place that, while they were anxious to avoid contentious details, they could not avoid urging the recognition of certain clearly defined principles whereby the general scheme could be built up and properly organized, but, they add, unfortunately, these have been misconstrued as principles. I would like to know from the Minister who had misconstrued these as principles. Surely this report, before it was finally signed, was not submitted to the Minister and Railway Board for approval. If this report, which is an important and valuable one, has been hedged around, first of all, by restrictive conditions, and then was submitted before being finally signed by these gentlemen, then I say a very great deal of the value of that report has been taken away.

Do you seriously suggest that it was submitted?

I say that the Minister can tell us what they mean by the remark—

Who misconstrued them? I ask the Minister, can he explain these words, and, if not, to tell us that this report was seen by nobody until submitted, in its final form, to the Minister. In spite of these restrictions, in reading that report we find that there is a tendency throughout to question this policy. The underlying suggestion right through is that, before embarking upon So important a policy as the Minister has done, it is the duty of the Government to try and keep on the land all who are on the land, and to replace on to the land all those who have been taken off, and who had come to the railway to join on account of this policy. Surely this suggestion is a far more sane suggestion than the policy embarked upon by the Minister. Right through the report very serious suggestions are made, for we find the committee expressing a fear and making definite statements that by the present policy we are going to have an inefficient service. I want to impress that upon the Minister, too. I will give a few extracts which I think are of very great importance—

I would ask the Minister of Posts and Telegraphs whether he agrees with this. The committee continue—

Surely that is what we on this side of the House have been advocating from the beginning, and it is the policy we pursued when in office. They go on—

I do think this report is of so great importance that every member should read it very carefully and study it. If one could read the whole of the report very carefully, it would be of very great advantage to all of us. I trust the Minister is adopting the greater portion of the suggestions in the report, more particularly in regard to the learners. We are in the dark entirely; we do not know what the Minister is going to do in regard to this report. I feel that if the Minister had told us in his budget speech exactly what he was going to do, it would perhaps have saved a lot of criticism to-day. If he goes into that report carefully, he will find hon. members on this side anxious to support him in having an efficient service and in giving employment to those who deserve the consideration of the Government, but what we do say and have always said is that we object to the railways alone bearing the whole burden of what is a new policy, and secondly we object to men being pitchforked into positions when they are unable satisfactorily to do the work required.

I have followed with considerable interest the extracts which the hon. member has read from the departmental committee’s report. He read those extracts with such gusto that I took it to imply that he—and I take it he speaks for his party— favours the abolition of the civilized labour policy and the employment of as much cheap labour as possible and as little white labour as possible. That seems to be the gist of the extracts the hon. member has read. It justifies us in our criticism of the policy of employing officials in big positions who are apparently out of sympathy with the policy of the Government. If these extracts are typical of the attitude to the policy of the Government, I hope the Minister will not only take no notice of them, but that he will see that he has officials in his department who will approach the policy of the Government sympathetically and not hamper it. I want to touch on one or two matters dealt with by the hon. member for Cape Town (Central) (Mr. Jagger). Generally speaking, one can anticipate the speech which the hon. member is going to make; we can always tell what he is going to say about expenditure and about economy. The hon. member for Pietersburg (Mr. J. F. Tom Naudé), who, I think, is to be congratulated on his speech, has dealt very fully with those figures, and has shown that the figures about increased taxation come very badly from a member who was a member of a Government which increased taxation. I think examination of some of the points he made indicates very clearly that he only told half the story. Let me take his criticism about the question of the exports. He gives us figures in which he showed that as far as the exports are concerned, the exports from Great Britain are one-third of the production; from the United States, one-fifth of the production; and the exports from South Africa, less than half.

No, more than half.

Well, his point was that our percentage of exports was very much more than the exports from Great Britain or the United States. The reason has not been given by the hon. member. The reason why the exports from South Africa are so much greater than those from Great Britain or the United States is to be found in the fact that we have a very small local market, not only on account of the smallness of our population, but on account of the policy of low wages. Naturally, if those who are producing in South Africa are getting low wages, the result is they cannot buy the produce of South Africa, and the producers are forced to look for overseas markets, whereas it would be much better for them if they had a local market to a very much greater extent than they have now. If he takes note of the charitable institutions of South Africa, he will see what amount of money they have to spend, or are trying to spend, to help people to a slight extent who are starving. We have not been able to pursue the policy we believe in, to a large extent—the securing of as much employment at as decent wages as possible. I think if the policy which has been pursued during the last three years is pursued with greater vigour, and a greater attention paid to the principles we have been adumbrating, you would secure better service, and you would also find, as far as the farmers and producers are concerned, that the difficulties to which the hon. member has referred will greatly diminish. They will have a larger local market. The hon. member has also given us the principle about which we continually read, that lower taxation will do away with unemployment. I am not in favour of piling up taxation, and continually deriving as much revenue as possible from the ordinary sources, but favour a lowering of taxation, but that would only tend to reduce unemployment if the taxes are reduced in respect of the poorer, and not of the wealthier, classes of the population. The position is, you cannot really, by a policy of lowering taxes, do away with unemployment; if you could, wherever they are pursuing such a policy, and the free trade policy of the hon. member for Cape Town (Central) (Mr. Jagger), you would have no unemployment. In the U.S.A., to which reference has been made, why they have less unemployment is due to the policy of protecting industry, and that of higher wages. Before I go any further, I wish to touch upon what the hon. member for Pietersburg (Mr. J. F. Tom Naudé) said with reference to the question of the importation of native labour. I follow what I consider to be right, and I regret very much the point of view that has been followed by the hon. member, who, I hope, was speaking for himself, and not for his party. As far as I am concerned, I believe that the policy for which the Labour party has stood in the past, and, as far as I am aware, it stands for to-day, is the correct one, that is, we should not go in for the importation of native labour from beyond Union territories, and that instead of increasing that importation, we should restrict and reduce it, until it is brought down to zero; firstly, because it is not fair to the natives of the Union themselves, and secondly, I believe it is not good for the white population either, because once you pursue that policy with regard to the importation of natives from territories beyond the Union, I see no reason whatever why you may not import Chinamen. The principle is the same. It is simply a question of extending it.

It is not the same thing.

I can understand my hon. friend saying that, because he is in favour of the principle of cheap labour. The position should be that labour should be attracted by wages and the ruling conditions, and not by a policy of indenture and of recruiting. I am not anxious in any way to do anything that may hurt the mining industry, but, on the other hand, the mining industry has no right to be singled out for special treatment in this direction. As to taxation of the mining industry, the State is entitled to get more than it is getting. I go further and say that if the mining industry adopted the policy of utilizing better paid labour where-ever they can and utilizing 100 per cent. white labour on the surface, it would release thousands of natives for other work. I take the case of the diamond industry, and in 1926 I found that the alluvial diggers were employing 37,000 natives to 9,593 Europeans. This is from the Government Mining Engineer’s report. The ratio is one to four, but in the diamond mines it is one to seven, and in the coal industry it is less than one to twenty. If in these industries greater opportunities were afforded for the employment of white labour thousands of natives would be released for other work. People should be attracted on the basis of freedom, and not on the basis of indenture. I hope the Government will not lend their ear to what the hon. member for Pietersburg has said with regard to this question. It is quite enough if this is advocated by members of the South African Party, without supporters of the Government doing so. There has been a great deal of criticism also in connection with the surplus which the Minister has presented to this House, and as far as that is concerned, I think some of the criticism has been rather envious than reasoned. I think the South African party are envious because they did not have the opportunity of obtaining such surpluses when they were in power, but I am not altogether enamoured of these big surpluses for they usually are created in one of two ways. Either the Minister budgets for a deficit to stave off the clamours of the spending departments for more money, or, alternatively, he budgets for a reduced revenue through sheer miscalculation. In either case the result is not very satisfactory. I am certain this miscalculation has not been intentional on the part of the Minister, but to some extent the surplus has been due to a miscalculation particularly over the results of the reduction in the Imperial preference. When that subject was discussed in this House I stated that one did not desire to see the British preference altered in any way to the disadvantage of Great Britain, unless as a result the goods we imported from Great Britain could be manufactured here. Nor do I want the reduced Imperial preference to result in the diversion of trade from Great Britain to other countries. I am afraid that it will be found that a portion, at any rate, of the extra customs revenue is due to the reduction in the preference to Great Britain, and it has not resulted in benefiting South African industries to the extent we had hoped, and therefore the South African taxpayer is paying extra taxation either to the advantage of British manufacturers or what is even worse, we have benefited manufacturers on the Continent who pay less wages than the British manufacturers do. Another cause which has contributed to the surplus is the bigger revenue from the alluvial diamond diggings, because the money made on the diggings is expended in South Africa and not sent overseas. The Government is to be congratulated on not having curtailed the operations of the alluvial diggers. A South African Party Government would not have benefited from this cause, as it would probably have curtailed the operations of the alluvial diggers in the interests of the diamond mines. Another factor which has contributed to the surplus is the following by the Government, perhaps grudgingly and unsympathetically in some cases, of the policy of the South African Labour Party. Firstly, we have had an influence on the Government in the direction of the employment of civilized labour and the payment of better wages and in that way increasing the spending power of the community, thus giving the Minister more revenue. Secondly, the Labour Party can take credit for the fact that its influence has brought about three years of industrial peace which has considerably helped the Treasury to obtain revenue. From 1918 to 1923, during which period the S.A.P. was in office, there were 175 strikes, affecting 169,981 employees and entailing a loss of 2,860,944 working days, while the amount lost in wages alone was £2,354,873. In addition to the extra wages one has to take into account the additional output and consequent increase in our national income resulting from a period of industrial peace. As a result of the industrial peace which has prevailed since the Pact Government has been in office and for which the hon. member for Cape Town (Central) (Mr. Jagger) gave us credit there has obviously been greater spending power, which has been reflected in the wages and also in the output. I believe that neither politically nor industrially has sufficient been paid for the industrial peace that South Africa has enjoyed as a result of the Pact being in office as far as the workers are concerned.

They are getting much better wages.

I do not know that they are getting adequate compensation for the industrial peace, for although the workers have greater security now than in the past, more people are employed and to some slight extent their wages are better, the security to which they are entitled is not as adequate as it should be. I do not think they have the wages to which they are entitled. There is a lot of leeway to be made up. I hope my hon. friend, as a fair man, having accepted the report of the wages board on the mining industry, with which no doubt the Chamber of Mines is satisfied, will pay similar attention to other reports of the wages board to which I intend to refer. I know on the question of white labour, there is a vital divergence of opinion on different sides of the House. Recently the Government and the people of South Africa have had the benefit of a new declaration of faith of the South African party. They are very modest, they do not run to fourteen points; they are content with six points. I was rather surprised when I read that declaration, because hon. members often told us that they stuck to their principles and many of us began to wonder what the principles were, and apparently they themselves began to wonder and thought it time they should be declared publicly. Leaving out the items dealing with status, and we are glad the South African party are satisfied with the results of the Imperial Conference, and the second plank in which they have laid down the principle which the National party have had so long, in favour of a national flag, and I am glad that they state that they are opposed to making party capital out of this question. I hope that declaration will be reflected in the course of discussions which will have to take place this session, although I regret it. I find, in the third item, they are indebted to the hon. member for Vrededorp (Dr. Visser) and they have actually utilized for one of their six planks, something for which the hon. member for Vrededorp was responsible. I notice on the question of civilized labour their policy is eloquently silent. There is not a word about civilized labour or about extending the avenues of employment for white labour in South Africa. On the native policy, I notice, they are also eloquently silent. I do not know whether it is because the South African party has not got a native policy, or perhaps it cannot compose its differences on the native policy. For instance, how can they compose the differences in that policy as set out by Advocate Stallard in the Transvaal and the policy preached by Dr. Abdurahman in the Cape Province. The same thing applies to protection. The South African party does not know whether it favours a policy of protection or not. Those of us who are ignorant of great philosophies look upon the hon. member for Standerton (Gen. Smuts) as a philosopher, and we are curious to know whether he, with his philosophical mind, will be able to co-ordinate their native policy, and perhaps he will show us that the policy of Dr. Abdurahman and the policy of Advocate Stallard are one and the same. And perhaps he will try to prove that there is no difference between the free trade speeches of the hon. member for Cape Town (Central) (Mr. Jagger) and the protectionist speeches to which the House always listens with pleasure from the hon. member for Zululand (Mr. Nicholls). There is only one point in the manifesto on which the South African Party seems to be unanimous. It has unanimity on economy and cheapness. It is worth while for us to know that and to congratulate ourselves on the issue of this manifesto, so that South Africa might know that if the South African party, by any chance, are ever put into office again, they will be able to offer divergence and division on native policy and industrial policy, but unanimity on low wages, cheap labour and economy; unanimity that the wages board will have to be done away with and the Industrial Conciliation Act will only have to be administered so far as it does not increase wages. We can congratulate them on having the courage of their convictions. Now this policy of cheapness, low wages and economy is something for which the country, in the long run, has to pay. It has to pay for it in unemployment, because the lower the wages of the producers the smaller is their spending power, and they are unable to buy back the product of their labours with the result that as the time must come when you are unable to compete with the overseas market, and you have only your local market left and that is restricted by a cheap labour policy, and the result is you have rampant unemployment similar to what we had in 1923-’24 in South Africa. Business suspended at 6 p.m., and resumed at 8.7 p.m.

When the House adjourned I was referring to the fact that this policy of the South Afrcian party of economy would not only help the country, but it would make the position considerably worse than it is now, and it would be bound to result in unemployment, in wasteful production so far as South Africa is concerned, and, instead of reducing the expenditure of the country, I believe it would have the effect of increasing expenditure, because so much more money would have to be devoted towards the relief of unemployment, to the relief of those who as the result of low wages would have to get some compensation to make up for those low wages, and also to the assistance of their dependents. That, I believe, would be the effect, but in any case on this question of expenditure I think the criticism of the S.A. party is wholly unjustified. I do not propose to repeat the figures which have already been given, beyond saying this, that if you take the expenditure of 1923-’24 and compare it with the expenditure for the present year, you will find that practically the whole of it is accounted for by important services which it would be impossible for the Government to have reduced, the increase of the debt charges of the country and the increase of the charges for pensions which, with one very small exception, are pensions which are being paid at the present time in accordance with contracts entered into under laws passed by the S.A.P. Government, and, generally speaking, you may take it that if you make provision in the expenditure of to-day for items which the S.A. party are responsible for, there is very little difference between the expenditure of 1924-’25 and the expenditure for this year. You have this year an interest charge on your debt of £4,600,000, and you have pensions which, with the exception of a small item passed by Parliament last year, are simply a continuance of the pensions payable under contracts entered into under laws passed by the S.A. party. Take your department of justice and your police force; can the Government possibly avoid spending the money in connection with those services? In connection with the police force, I notice that there are claims from all parts of the country, and certainly Johannesburg is clamouring for more police. Yet here come the South African party members who say we must have less expenditure. I ask them what do they want to do? Are they prepared to repudiate the national debt? I should not imagine so. Therefore, they would not suggest any reduction of expenditure in that direction. Are they prepared to cancel your contractual arrangements with the civil service of this country in respect of pensions? Are they prepared to do away with the administration of justice and abolish the law courts of this country? I should not imagine so. Similarly with the police; are they prepared to do away with the police force, which is protecting the private property about which we hear so much from the South African party? If they are not prepared to do away with these services, I ask them further if, in their anxiety to reduce expenditure, would they be prepared to hand out the administration of justice to private contractors or the police force of this country to private contractors, private enterprise? And when we come to the defence force, do they want to do away with that, or do they want to hand it over to private people? Unless they are prepared to do either the one or the other, then I submit that their criticism of the expenditure as far as we are concerned is wholly unjustified. We have, as a result at any rate, as I have stated, partly of bad estimates, partly of the good fortune of the alluvial diggings and partly of the improvements which have come about as a result of the Labour party’s policy slowly but grudgingly having been accepted in certain directions—it is partly due to that that we are placed in the position of having a budget with a surplus of close upon a million and a quarter. I can imagine that the S.A. party would not only be delighted with it, but they would approve wholeheartedly of the policy of the Minister of Finance in applying the bulk of that sum to the reduction of debt. Personally, I am rather sorry that the Minister has adopted this policy of applying the whole of the surplus to the reduction of the national debt. We are already applying a definite standing sum of £650,000 per annum in redemption of the debt. However desirable it may be to reduce the national debt, I submit that it should not be done at the expense of the needs of social betterment in South Africa. There are many items which I submit have a prior claim upon the Treasury. We have the question of the slums and overcrowding in South Africa. We have the question of malnutrition. You get reports that show that children are going to school underfed, ill-clad and ill-shod. We are wasting money on their education because they have not the capacity, on account of their malnutrition, to take advantage of their education. We have infantile mortality. We know that thousands of children are dying as the result of the conditions under which their parents are forced to live. Dr. Mitchell, the Union medical officer of health, stated that the average life of the people of South Africa could be increased by a period of 10 years if the conditions were such—and they could be made such—as were necessary. Surely it is a better policy to utilize that surplus in the directions I have indicated. A man who gets low wages or no wages at all cannot be expected to look after health matters. He cannot be expected to get out of slums and live in comfortable surroundings; he cannot be expected to make provision for old age. He has not the means to provide for these matters. Let me quote one or two figures in connection with this matter. According to the income tax returns, there are fewer than 90,000 people in South Africa in receipt of incomes of £300 per annum. The average income of income tax payers of South Africa for 1925 ’26 came to £715 per annum. Of these 1,959 were in receipt of more than £2,500 per annum. Of the income tax payers in South Africa, 2.28 were in receipt of £8,837,611, or more than 14 per cent. of the income tax payable. When you look at the so-called majority report of the Economic Commission, you find the position, according to them, is this: they made an investigation as to the total national income in South Africa, and they came to the conclusion that the total national income for the years they were investigating, 1923-’24, was £186,000,000. They found that the persons in employment in South Africa came to 1,861,000, of whom 532,000 were Europeans, and 1,329,000 were natives, coloured and Asiatics. So that they found that the average income of the population of South Africa was £26 per head of the population, as against the average income of the income taxpayers of £710. The average income of occupied persons came to £43. When you take these figures, one is entitled to ask what possible hope have the majority of the people to make provision for these services of social betterment I have mentioned. Having regard to the lowness of the national income, I submit it is imperative that, at any rate, a very substantial portion of the surplus should rather be utilized for the improvements I have mentioned, than for the reduction of our national debt. I have mentioned the question of old age pensions. One would like to know what is the position in connection with this matter, and what is holding the Government back from taking steps to make this provision. There is another direction in which the Minister could have applied at least a portion of his surplus. In the Transvaal the working-classes are suffering under a hardship. Until the Government took over vocational training, it was free in the Transvaal. Under the new Financial Subsidies Act vocational training has been taken over by the Union Government, and as far as the Transvaal is concerned, the children have to pay for it. That is an unnecessary and undue hardship on the children of the poorer sections of the community. The only reason I have heard in justification of that is that the other provinces have been in the habit of charging for vocational training. It would be a much wiser step, and one more in the interests of greater efficiency in the national production of South Africa if, instead of securing uniformity by imposing a charge on the children of the Transvaal, you secured uniformity by making vocational training throughout the Union free. There is another direction in which I think some of this surplus might have been applied. We have been urging on the Minister from time to time that the income tax abatement should be increased to £500. We appreciate what the Minister has done in making it £400, but I think when he is in the position that he is in, some consideration should be given, either to increasing the abatement to £500, or alternatively, increasing the abatement in respect of children to more than it is at present. An increase in the abatement up to £500, either directly or in respect of children, would be a reduction in taxation which would undoubtedly be to the benefit of the people. They are not people who go in for luxuries, and that money would be utilized for expenditure on the needs of the people. If you want to make up the difference, you can easily do it by making the tax on super-tax payers a little steeper than it is at present, because they can well afford it, and also by making some distinction between the incomes that are earned, and the incomes that are not earned. In the case of a man who, over and above his own energy, is earning money as a result of investments, there is no reason why, on that unearned money, the tax should not be higher than it is on those who pay on the actual earnings of the individual. My hon. friend wants to know in what category members of Parliament come. I have no objection to their falling under the steeper tax, but in the light of South African party interjections I have no doubt we could make up the amount by charging the public who come to listen in the gallery—and I am sure they would gladly pay. There is another reason why the surplus could have been better applied than it has been. Although there has been considerable improvement in the condition of a large number of people since the Government came into office, the real wages of those who work are very much less to-day than they were in 1914. The hon. member for Cape Town (Central) (Mr. Jagger) referred to the fact that the cost of living in South Africa had not gone down proportionately to that of England, Canada, and one or two other places. But as far as England is concerned the comparison he made is rather unfortunate, he must not overlook the fact that the wages bill has been reduced considerably more than the reduction in the cost of living, and, as a result of that, in spite of the reduction of the cost of living, real wages in England are lower than they were in 1914. If you take by way of comparison the United States, Canada and Australia, you find that there the cost of living has been going down, but the increase of wages has been more than keeping pace with the reduction of the cost of living, and the result is that the real wages are higher than in 1914. The latest figures were given by Mr. Hoover in October last year, and he showed that while the wages in the United States have increased by 138 per cent., the cost of living, and the wholesale prices in comparison with 1913, have increased only by 50 per cent., and, therefore the real wages in America to-day are very much higher than they were in 1913. There is another item to which I want to refer, which is one arising out of customs duty. I strongly believe that, although ultimately there is no great difference to the worker between protection and free trade—under protection he pays through higher prices, and under free trade he pays through lower wages—in a new country the best policy to adopt is that of protection, provided it is accompanied by certain safeguards; firstly, to safeguard the employee so that the tariff should be utilized in such a way as to create further avenues of employment under conditions and remuneration which are reasonable, and, secondly, to see that the consumer shall not be unduly mulcted. The present Government has accepted these principles in its efforts. One is not sure, in spite of the improvements that have taken place, and the increase of employment in certain industries, whether the figures of the imports make one very cheerful, and to conclude whether the full advantage of our Customs Act is being received by the people of South Africa. I take three items—clothing, printing matter and footwear. According to the customs returns, one finds that the imports of these articles have increased as compared with the previous year, and, therefore, I suggest to the Minister, when he mentions that he is now going to make an investigation into the effects of the customs tariff and whether anything more shall be done in the matter, that he should devote his attention to seeing whether the conditions of Section 4 of the tariff are being given effect to by the manufacturers of South Africa. Where he finds that an industry has availed itself of the protection afforded by the tariff, and is not giving effect to the conditions laid down, he should revise the whole position and see that in those matters the policy to be adopted in future should be that we will encourage these industries by means of a bounty rather than by customs duty. The ideal to pursue is that you must definitely lay down a national minimum securing to every member of the community every requite necessary for a civilized standard of life. It must not be a minimum under which they can starve, but one under which they can maintain themselves and their families under decent conditions, so that we shall not have the spectacle of thousands of people being rejected for your defence force owing to the conditions under which they live. There is a further aspect in connection with the matter, which is, if you carry out the policy to which I have referred, you will be creating, not merely avenues of employment, but an ever increasing local market which will benefit the workers, the farmers and the manufacturers. I think the hon. member for Cape Town (Central) referred to the decision of the Wage Board. I want to quote the conclusion the Wage Board have come to and I refer to their report issued in June, last year, dealing with clothing, confectionery and so forth. The report states—

The South Australian Board of Industries reports that low wages mean a low market, low purchasing power and an inefficient population. When we think that these are the conditions which are existing, I think that even the hon. member for Cape Town (Central), as an ordinary humane man, in spite of his theories, will agree with me that it is imperative to make impossible the conditions as reported upon by the wage board, and to create a state of affairs under which there will be a local market with a greater consumption than there is at the present time. The hon. member for Bezuidenhout (Mr. Blackwell) spoke about the colour bar. We are out to help them by increasing their earnings. If you increase the wages of the 1,860,000 occupied people by 1s. a day you will increase the spending capacity by £33,963,000, or something equivalent to half your ordinary exports from South Africa. If you lay down that the average earning of our total population will be increased by 1s. a day you will have an increased consuming capacity of £127,000,000, or double your present exports.

Who will have to pay?

I do not think my hon. friend will have to pay. All the evidence that has been taken by almost every commission, and according to the experience in Canada, Australia and other countries, shows that the bigger the wages you pay the greater the production and the greater the output. The workers themselves will be paying for their increased wages by increased efficiency and increased output. Low wages have always been found to result in inefficient labour and inefficient management, because in such a case the management feels, as long as wages are very low, they need not bother about the best methods of management and the best types of machinery. In America high wages preceded increased production. Mr. Philip Kerr, who took an active part in things in South Africa some years ago, recently revisited this country and on his return to England he stated—

You have not assisted in that direction.

Oh! yes. The hon. Minister for Posts and Telegraphs has initiated a policy of paying 1s. per hour for which the hon. member and his party have severely criticised him. In any case Mr. Kerr has come to the conclusion that the correct policy is not that of the South African party, which says pay a white man the same wages as those upon which a native can live, but pay a native the same wages as a white man could live upon— the policy which has always been advocated by the Labour party. This policy of increasing wages will not only be an advantage to the workers, but also to the farming population because it will increase the demand for their products. At present the South African farmers, in addition to having his goods exploited, overseas, are in the hands of the steamer and the cold storage combines. In this connection one would like to know what steps, if any, have been taken to carry out the recommendations of the’ Egg Export Commission. The farmers need not be afraid of this better wages policy, but they should welcome it, for the position is that more and more young men and women will have to get away from the land and find employment in industries in urban areas. Hence it will be an advantage to the farming population to raise the status of the workers in the towns, because their sons and daughters will, in many instances, be compelled, to earn their living in industries. As the hon. member for Winburg (Dr. van der Merwe) said the other night in his very admirable speech, the securing of political freedom is not the be-all and end-all of our existence, and that sovereign independence for South Africa is of very little value unless the people themselves are free. I would add that unless the people are economically free and earn sufficient to maintain themselves in decency, their political freedom is of very little value. The way to attain economic freedom is by seeing that those who do the work shall get the full value of their produce, and not be left with a mere pittance upon which to starve, to live in hovels, and to become a C3 instead of an Al population. The farmers should free themselves from the dominance of the shipping combine. The other day I quoted from a British Government report to show how these shipping combines were against even their own nation. It is imperative that we should see that Government railway transportation be supplemented by Government control of sea transportation. An attempt is being made by a certain company to start a new shipping service between England and South Africa, but one does not know how long it will be independent or become absorbed in the shipping combine. I hope the Government will take into serious consideration the need for re-introducing the Ocean Freights Control Bill by the aid of which they can fight these combines. If some members of the Ministry are nervous that they might be going too far by establishing a State shipping service, they should at any rate make arrangements to establish a steamer service of which the Government should have control and in which it would have a financial interest. The Minister of Finance went out of his way to pay a tribute to the South African banks, and suggested that next year some of the recommendation of the Kemmerer Commission might be put into force. That, however, would simply be playing with the subject, because some of the recommendations are simply calculated to give the Reserve Bank greater power to check the rate of interest, but does not suggest that the Reserve Bank should be a competitor of the private banks. It is imperative, in the interests of the farming population and of the country as a whole, that steps should be taken to prevent a system under which two private banks, one of which is controlled overseas, and whose main interests are overseas, should be able to dictate our financial policy and the rate of our development. I want to quote a statement made only a few weeks ago by Mr. McKenna, a former Chancellor of the Exchequer and now President of the Midland Bank. He has been forced to the conclusion that there should be a thorough investigation into the banking position in England. Speaking at the annual meeting of the Midland Bank Ltd.—one of the five banks which control the financial policy of England—he said—

When a man of Mr. McKenna’s position points out the immense power wielded by banking institutions, I ask if we are justified in allowing the destinies of this country to rest in the hands of two private banking institutions. I submit that if the Government is desirous of pursuing the policy of making South Africa economically independent it should have no hesitation in going definitely for a policy of State control of credit and State banking. It is a policy we have pledged ourselves to and a policy enunciated by the Prime Minister at Smithfield at the last general election. I believe these are policies which should be pursued by the Government and that they would do a great deal to acquire that independence in South Africa at which we are aiming I believe the majority of the people who believe in the development of the country for the benefit of the people and not for the benefit of the few, believing that those things should be controlled by the people and not by the few will come to the conclusion that the policy we are advocating is the only method whereby you will obtain economic independence, the natural corollary of the independence we have already attained, and the time will come, perhaps sooner than many imagine, when Dutch and English-speaking South Africans in their desire to eliminate poverty and unemployment, finding that in such politically free countries as England and the United States of America poverty and unemployment are rampant—in the United States in spite of its Fordism and high wages in some industries more than 50 per cent. live below a minimum standard—will be forced more and more to accept our policy and then you will see established a powerful—

which will fight to secure the economic freedom of the people of South Africa.

One feels at this hour that one should preface one’s remarks by apologising for continuing a debate after listening for the last two hours to the eloquence of the last speaker which surely cannot be justified in the length and multiplicity of words employed. But I should like to congratulate the Minister of Finance, not only for balancing his budget, but for being able to tell the country that he had taken from the pockets of the taxpayers and consumers one million and a quarter of money more than he had even expected to do. That is an achievement indeed, and he must consider himself a lucky man. Now the hon. member who has just sat down said the only way it could have been brought about was by one of two alternative reasons, either he had alternatively under-estimated the requirements of the year in order to control his spendthrift colleagues, or the estimates have been framed so carelessly that he found himself to his surprise in possession of the immense surplus in hand. Personally I don’t think either is correct Budgets always have an individuality of their own. You have spending budgets, budgets designed for the development of trade, budgets like the land budget of Mr. Lloyd George which was a ghastly failure and the Harcourt Death Duties Budget which was a ghastly success. And if I was asked to describe the individuality of this particular budget I should be inclined to say it is a budget that should go down to posterity as—

because the Government have been gambling, in diamonds which has really produced for them, this 1¼ million surplus. Directly or indirectly this surplus has been brought about by the tremendous flood of money in the country as the result of the indiscriminate mining for diamonds. I was particularly struck with the loud cheers that went up from the Government side when the Minister of Finance announced that he had a surplus of 1¼ millions in hand. But I wonder how many members on the opposite side really knew what they were cheering about, how many of them appreciated the true inwardness of this 1¼ millions. For analysing the position it will show that this very 1¼ millions has within it the germs of the future financial troubles of the Government. Let us consider the position. The diamond industry is a very sensitive one, it is a luxury one, pure and simple, and the world’s demand for diamonds under sensitive handling is in the proximity of £12,000,000 per annum. Owing to the throwing open of the Lichtenburg diggings and giving 100,000 licences to diggers we have produced in the Union alone somewhere in the neighbourhood of £12,000,000 worth of diamonds which is equal to the world’s demand. But in addition to this you have got mining in other parts, in Tanganyika, in the Belgian Congo, in British Guinea, Bereka, Angola, Brazil, all digging up diamonds and if you over-supply an article of luxury in this way you will destroy the whole industry. By throwing open these alluvial fields for indiscriminate mining in spite of solemn warnings, it has resulted not only in ruining the diamond trade, a most valuable one to South Africa, but has resulted to-day in a depreciation of capital, capital stock, share capital and diamond stocks to the extent of £5,000,000, largely the property of South African investors, and that depreciation is continuing. That is the result to-day of the policy of the Government in losing control of the output of diamonds. The Minister has declared that he realises that they have gone too far in other words that they have killed the goose that lays the golden egg, and so they have a Bill on the Table to-day to limit the production of diamonds, this has come too late as the damage done is irreparable.

But you voted against the Bill for the control of diamonds.

That Bill had nothing to do with the uncontrolled output of the alluvial fields. This state of affairs is the result of the Government’s policy, and the only immediate tangible result is that they are able to show a surplus of 1¼ millions. Hon. members opposite are supposed to be representatives of farming constituencies and while they were cheering at this 1¼ million surplus what was happening to your farming industry. If you listened to the speech of the Minister of Finance you heard that everything the farmer is producing is down by many millions. Wool is down 2½ millions alone, although there are more sheep and the farmers have given more attention to the wool industry than ever wattle bark and extracts are down by about £200,000.

What about onions’

No, doubt the hon. member is an authority on onions, but wool, cotton, maize, mohair, citrus and everything that is keeping this country going are beyond the hon. member’s comprehension apparently. Altogether the farming exports are down by 3¼ millions.

We are consuming our own stuff.

If the S.A. farmers were dependent upon our own people for the consumption of their products, 90 per cent. of them would be in the bankruptcy court in six months. Who then are our best customers? Industrially the best customer for the South African farmer is Great Britain. Great Britain purchases the bulk of the products of the farmer, but what is the policy of the Government in respect to our best customer? First of all we establish a tariff wall against them and, wherever we can, we trade with their rivals overseas. We go to America for engines suffering from adenoids and asthma, which should go into hospital, and we go to Belgium for rails which cannot bear the weight of a train and they are lying now as so much trash in the railway yards. Further than this, if there is not an actual boycott of British goods in some parts of South Africa to-day then we are very near it. We do all we can to discourage British capital and British trade from coming to this country, and yet 90 per cent. of our industries have been built up on British capital and British industry. When you start an unfriendly attitude towards your best customer you make it impossible for that customer to give you the best prices for your raw materials. You must not forget that we send 75 per cent. of what the farmers produce to Great Britain and yet we are making it more and more difficult for her to buy. As a sidelight example of the spirit existing let me take the instance that was mentioned the other day by the hon. member for Illovo (Mr. Marwick), regarding the treatment of a South African living for a short period of each year in London. That treatment at the hands of the High Commissioner was in the opinion of many, disgraceful and no credit to this country. It is a complete departure from all our previous attitude of decency and courtesy. That kind of thing is doing a lot of harm. I come again to the position of the South African farmer. He it is who is responsible, as far as the latest figures which are available show, for £81,000,000 worth of produce every year. He alone produces that amount of national wealth and that is equal, approximately to the mining and the industrial productions of South Africa added together, but, notwithstanding that, £81,000,000 is the total national output of the farmers in South Africa, their average income is only £165. As against that, they are faced with a falling market, for the only market that the farmer has for his surplus produce is overseas, and an increased cost of production.

What about the local market?

That is a reasonable question. The local market is dependent upon population. No individual consumes more than a certain amount of food per diem. What you want in South Africa is a greatly increased consuming population. Population, I take it, is to be got by the encouragement of industries, and a nice State-aided system of immigration, but there is a vast difference between the encouragement of industries and the establishment of national industries on socialistic principles, and it is that feature which we condemn in connection with the establishment of the iron and steel industry at Pretoria. That is practically a State-owned, nationalized, key industry. What is going to happen? Do we suppose for a moment that it is going to pay? It is going to produce, of course, a very large quantity of the articles required by the farmer, and he will be forced to buy them, and it will supply the local markets with what they require in the way of iron products, etc., but the question I would like to have answered is, what is going to happen if this industry does not pay? It is a Government-owned institution, and, if it does not pay, what is the next step? Why, the price will be immediately put up.

The hon. member should not anticipate the discussion on a Bill before the House.

Am I anticipating it? I will eliminate that as regards the iron and steel industry, but may I take as a general example any industry that the Government decides to establish? Suppose it is a key industry, and you decide to establish it on national lines. If it does not pay, what happens? You put up the price. You put up the price to your consumer. Who is your consumer? He is your own people, and particularly the farmer. The produce raised by the farmer is on the down grade, and with these national-established industries you are going to make the cost of production still higher. Naturally, the farmer will kick, and he will return again to the imported article. Then you counter that by raising the tariff against the imported article and checkmate him there. If this policy is allowed to go on at the behest of the Socialists you are going to ruin the farming industry. Now I am glad to see the Minister of Defence is in his place, because he and I have had a little matter between us which we decided should be discussed here, across the floor of the House. I would have liked to come to an amicable settlement outside, but, unfortunately, we look at this matter from such totally different angles that we decided that the only course was to discuss it here. The Minister, in his wisdom, has adopted the brigade system of training as the highest tactical unit in connection with the training of the defence force. In that I think he is right. In connection with the formation of these brigades it is necessary that a certain number of brigadiers should be appointed to take command. These brigadiers, I may explain, are presumably free-born independent electors and citizens for 50 weeks out of the year, and for two weeks out of the year they are uniformed soldiers. For 50 weeks they regard themselves as being ordinary citizens of the country who are entitled to have an opinion of their own, and, if they like, even to approach their members of Parliament and discuss matters frankly. That is a view which is not held by my friend opposite. During last session the Minister of Labour, who might almost be described as autocratic, as well as plutocratic, threw a contemptuous remark across the House in regard to the back-benchers on this side, and we rather resented that remark coming from that quarter. Now it seems to me that this microbe, this despotic microbe, which inhabits the Minister of Labour, also seems to have bitten the Minister of Defence rather badly, and he too is adopting what might be termed a lofty attitude towards the mere backbenchers on this side of the House. Coming to the defence force and the discussion on which we have had, a certain brigadier, who has been a brother officer of mine for over twenty years, in discussing the system of training to be followed, put certain points before me which he thought might reasonably be improved on. Now, as a trained and professional soldier, I may claim to know something of the subject upon which I am speaking, and these points certainly commended themselves to me as being most reasonable. I suggested, therefore, to him that he should drop me a line when I got to Cape Town, and I would have a chat with the Minister and see what he had to say about it. In due course this letter arrived. It is quite true that I did not approach the Minister on all-fours, but I did approach him in what I considered was a very proper and deferential manner. I tried to be as humble as I possibly could, bearing in mind the great difference between his status and mine. I enclosed this letter, which also was of a very courteous and harmless nature, together with some very mildly expressed opinions of my own on the subject, and at the same time I put it to the Minister that I would value his opinion. A few days afterwards I met him, and he was all affability, in fact almost familiar, and we had quite a genial and friendly talk. He said—

I said—

I am not in the habit of recording lobby conversations.

This was an official conversation, not lobby gossip. I said to the Minister that they should be given a trial. He said—

Did I say a pretty letter?

Does the Minister deny that?

I have told you I do not keep records of my conversations.

The obvious inference was that I was going to get a civil reply. What did I get? I got a letter which not only reprimands this brigadier for discussing this matter with me, but it reprimands me.

Why don’t you read these terrible words that you are so offended at?

Don’t get jumpy. It is not becoming to a Minister of Defence.

I will give the exact words as near as I possibly can. It was to this effect. The Minister took exception to his approaching him through me. He would have been better pleased if he had approached him through some other channel. Now I took immediate exception to that.

Your description is not very accurate.

It is practically correct. But this is the point at which we are at variance. Any officer, it does not matter whether he is a full-time officer or otherwise, is perfectly at liberty to discuss matters with his member of Parliament so long as it is not a matter of discipline. The inference which the Minister conveyed in his letter to me was that this officer did not know his job. But the trouble is this, that it is the Minister who does not know his job. If he knew his job at all he would know that in the Imperial Service a full-time serving officer suffering under a disability which can be put right by question in the House of Parliament, is at full liberty to approach his member and have that question put, and it is occasionally done without any question of reprimand. To turn round on an officer who has done nothing more than to discuss with his member a matter of policy and reprimand him even though mildly and by inference and to include in that reprimand the member of Parliament again by inference is to make relations between a member of Parliament and a Minister very difficult if not quite impossible. If the Minister is going to take up this lofty attitude it is impossible for us to approach and discuss anything with him in a friendly way. I tried to put this view to the Minister. I said—

He said, quite frankly—

Subsequently he decided to think it over. I thought the matter was then settled in the only decent way such differences of opinion are settled as between one gentleman and another.

You think the Minister of Defence is a bit puffed up?

I would not say that, but I do think he has made a mistake. It would be better if he would adopt a more reasonable air. If he would not stick his hands so deep in his pockets and walk about the place as though we were unfit to breathe the same air as himself. If he would readjust himself a little it would be for the better working of the department. Now I have a few words to say to the Prime Minister with respect to the Native Department. He will remember that last session I drew his attention to the unrest in the native mind, particularly in Natal. His reply was-that he had no information of any such unrest. Within a fortnight or three weeks of that, two tribes were knocking each other about. One man was killed, and a number were injured and a large number of huts were destroyed. It was only due to the fact that at that time we had in that district a police officer of great experience with a full knowledge of the natives and with full control of the personnel of the police department in that district that the renewed fight timed to start at daybreak never came off. What has happened? For 40 years we have always had in that district—which has been the storm centre of native trouble since I was born—a police officer of training and experience and responsibility and with a full knowledge of native affairs. Today there is nobody. The hon. member for Liesbeek (Mr. Pearce) who knows as much about natives and police affairs as he probably does about cold storage and other things, was appointed as a commissioner to go through the country and advise the Government as to where these officials should be placed, where removed and where withdrawn altogether, and this officer, is one of those who has been removed and there is now not a police officer of responsibility between Pietermaritzburg and Dundee. Now this has been going on and compromising the Prime Minister’s department ever since the Pact Government has been in power. I should like to inform the Prime Minister that if there is one thing his department is responsible for, it is for the co-ordination of the work of every other Minister under him; instead of that we have the work of the Government carried on in watertight compartments no one knowing what the man next door is doing. We have experienced magistrates removed from native areas—men who know native habits and customs and their language and their people, and others sent down who know nothing of the people and their conditions. The result is that to-day the Prime Minister is out of touch with native opinion, particularly in Natal, and knows nothing of what is going on, and unless you can restore that state of things and the Prime Minister steps in arid asserts his authority, and sees that only magistrates and police officers with a full acquaintance and experience of native affairs are established once more in these districts, so that they may be kept in touch with what is going on, there is going to be a rude awakening not only for the Prime Minister, but a far more rude awakening for the people of this country.

I want to confine myself to-night specially to the interests of the farmers, but before I do that I want to make mention of the injustice done to the Cape formerly in connection with the grants to school children. The hon. member for Pietersburg (Mr. J. F. Tom Naudé) has referred this afternoon to the resolution of the Cape Provincial Council, but there is no doubt that an injustice has been done to the Cape. Although the first 30,000 school children in the Cape with regard to the grant are treated on the same footing as those in the Transvaal, and the grant is £16 7s. 6d., we find that after that the grant was only £14, thus there are to-day 105,000 children for whom only £14 per head is granted by the Government, and, in comparison with the Transvaal, the Cape loses about £250,000 consequently. In my opinion the Cape is hard hit because the province is large and schooling expenses are therefore high. The hon. member also said that there are more children in the schools since the present Government came into power, but the position to-day is that there are actually less children at school than when the Pact Government took things over. The allegations of hon. members opposite with regard to the number of children on the farms who went about without schooling was not at all accurate, because the number of school children in 1926 is actually less than 1924. The hon. member for Pietersburg spoke also of the surplus of the Minister of Finance, but it would have been as well if he had mentioned the fact that the Government has taken over nearly £3,000,000 from Custodian of Enemy Property. I am glad that there is a surplus to-day, but the Minister has undoubtedly had a bit of luck in getting a surplus of 1¼ millions. My disappointment is, therefore, greater that there is not a bigger reduction in taxation. The tax on estates weighs heavily on the countryside.

How high was the estates tax when the S.A.P. Government was still at the helm?

That is where the Government made things easy in smaller estates, but the tax on large estates is made very much more heavy. We see for examples that the income from this source is to-day actually double of what it was in 1922-’23.

What was the tax on an estate of £10,000 in 1923, and what is it today?

That is not the point. Only small estates have been eased. Landowners suffer heavily to-day by reason of this taxation, and there is no doubt that its principle is unsound.

Who applied the estates tax?

If the principle is wrong why does the present Government not raise the tax.

Why did you impose it?

Hon. members opposite undoubtedly got much support from the countryside because they expressed themselves against the estates tax, but although the tax on small estates up to £10,000 has been lessened, estates from £20,000 and £25,000 are more heavily taxed. The income from this source was in the past year also much greater than in the past.

More rich people died.

It remains a fact, however, that it is a tax on the ground. If the ground has a value of £25,000 then it is possible, if there is a change of owners, that the value of the ground after a number of years is paid out over and over again. That is an unhealthy principle. These taxes brought £610,000 to the coffers of the State, but seeing that there was a large surplus, I cannot see why the estates tax cannot be raised altogether where it is of application to immovable property. With regard to income tax that is where the Minister increased the untaxed income last year to £400, but in order to encourage farming, I would like to see that the income tax on farming is raised altogether. The Minister and the Government are busy to-day encouraging industries and developing them as far as possible. In order to do that higher taxes are laid on the people, and this year, from import duties, an amount of 8½ millions has been obtained, an income of 3½ millions. If the people are going to be taxed in this way in order to encourage industries can the taxes on the farmers in general not be reduced in order to develop agriculture? If the income tax on farming is done away with more people will be persuaded to put their money into farming. It is said that the Government pampers the farmers too much, but has to do with many difficulties without a doubt, and it is no more than right that the Government should see to it that their difficulties of taxation should be removed in order to give them courage to continue with their farming. I am convinced that if the Minister would lighten the taxes on farms then South Africa could become a great agricultural country. The South African farmers work hard and do their best to prosper, but they have natural difficulties to combat. Were the taxation difficulty removed things would be much easier for the farmers. Another tax which is felt to be heavy in the Eastern Province is the poll tax on natives, and we have already pressed the Minister several times to do away with it. Farmers will be encouraged if that is done, because to-day farmers in the Eastern Province are finding difficulty in getting natives to their farm. If this tax was put aside then the natives who lie about in the location would go to the farms. If the poll tax is removed it will help considerably to getting labour on the farms. Today it is nothing more than a further tax on the farmers. One of the chief difficulties of the farms and public in the interior is the high railway tariff. I am glad that the Minister himself, on a former occasion, admitted that it would be a mistake to take people from the farms under the civilized labour policy into service on the railways. Undoubtedly the greatest proportion of the people working on the railways under this policy are, however, by owners who were formerly on farms. Instead of being an advantage to the country on the farmers they are a burden to the country. The Minister has admitted his mistake, but it is already too late.

Do you want to say that all the people at the time of the drought could have remained on the farms?

That would have been quite possible if the Minister had followed another policy. Will the Minister say that there are no landowners working on the railway.

They may have been landowners.

They are now poor whites on the railways.

That is just what I say. Their only hope was to get work on the railways.

If they had only had an opportunity of relief of way of tariff they would have been able to last out on the countryside. The Minister himself has said that the Department of Labour adopts the policy that nobody is taken on under this policy if they come from the countryside.

That I never said.

That is what I understood. The lowering of the railway tariff would be of great importance to the development of farming in our country. A large portion of the income of farmers goes in railway tariff. That is especially the case with farmers under irrigation schemes who produce fodder and sell it. Sometimes they have had to pay more in railway rates than what their profit is. Another point I want to mention is the loan conditions fixed on the countryside. The wages of the towns are applied to the countryside. On the cross benches cheap labour is always being talked about. How many farmers are not prepared to work on their farms for a low wage. How small their profit is. To-day the wages are increased to such an extent—

Under what law?

Under the Conciliation Act which is applied to the countryside.

The law must be carried out. I admit that the law was made by us, but who carries it out?

Must the law not be carried out?

Is the hon. member for Albert (Mr. Steytler) satisfied in the way in which the law is carried out on the countryside. It is the member’s duty to see to it that the Minister does not apply the law to the countryside, but members are contented and satisfied behind the Minister and allow the law intended for the big towns to be applied to the countryside.

Why was the law made in that way?

We can’t always know what Minister is going to apply the law.

These things are not possible under the Wages Act. It is only possible under the Act made by yourselves.

It reads that the Minister may apply the law, not that he must apply it to the countryside. The Act says quite plainly that the Minister can apply it there where its application is requested. The countryside has never yet asked for it to be applied. Why do members sit still when the the Minister applies it to the country? The Act was passed in 1924 and shortly after that the new Government came into office. It is the Labour Ministers who are at present oppressing the countryside.

Does the hon. member not appreciate the telephones constructed in the country. The members there are responsible for the Act.

You are responsible for carrying it out. In the hon. member’s district there are two towns where the Act is felt to be heavy.

That is just the complaint I have against their Act.

This Act has not been asked for. Employees, as well as employers, in the country are protesting against it.

What does the Act say. Must the farmers ask for it?

The Act says that employers must be consulted. Has that been done? People in the country are not unwilling to pay hard-pressed people the minimum wage, but there are no civilized people there.

Well then get them.

Does the hon. member want us to get the civilised workers from Cape Town? No, we have our people there. Usually they take on contracts themselves, but skilled workers are no longer available.

The sort of things happening in the country now are not possible under the Wages Act.

The Wages Act is there as a threat, but members are hiding behind the Conciliation Act. If the Conciliation Act is not adequate, the Wages Act is there as a threat. The conditions in the big towns differ vastly from those in the country. If one wants to build a house in the country to-day it costs almost more than in Cape Town. There is no skilled labour in the country and transport of everything necessary has to be added. A house may be let in Cape Town for perhaps £20 or £25, but in the country it does not bring in more than £3 at the most per month. It is impossible to treat the country and the town on the same footing and apply the same conditions on the towns and the small towns. It is said that the Conciliation Act is intended to single certain persons out, but the small places are usually not represented on the conciliation boards.

The Minister of Finance is to be congratulated on being able to show a surplus of nearly a million and a quarter, and at the first glance it would appear as if we were in a sound position. However, if we examine the position carefully, we see that our increased revenue has almost entirely depended on diamonds. Whilst I agree that that industry should be helped and fostered as much as possible, I think we ought to realize that it is not in the best interests of our country that we should depend upon fashion for our prosperity. To my mind one of the most outstanding and alarming features of the Budget is the fact that the export value of our farm produce in 1926 was £8,400,000 less than it was in 1925, and I do hope that our farmer friends on the opposite benches will not agree with the hon. member for Pietersburg (Mr. J. F. Tom Naudé) when he says—

My farmer friends will realize that there are other things that the farmers of this country need besides telephones. Maize, wool, mohair, skins, citrus and deciduous fruits were all considerably less than in the previous year This is a very unhealthy state of affairs and shows that the farmer is not making the head way he ought to do and also that he is not being fairly treated. Everything that is used by the farmer—boots, clothing, harness, carts wagons, implements and buildings— is becoming dearer and yet with very few exceptions the returns from his produce are lower than ever they have been. Under these circumstances it is not surprising that there is a steady drift from the country to the towns and, if something is not done to check that drift, it is going to have a very serious effect on the future of South Africa. A friend of mine who has been visiting some of the south western and eastern districts has told me that there is hardly a district where you cannot find dozens of houses locked up and unoccupied. That shows that the country is in a very serious state indeed. We must realize that it is of the utmost importance that the farming community that section of our people which receives less for its labour than any other section, must be helped as far as possible to retain its hold on the land. I am glad the Minister of Agriculture is here, because I want to tell him that a radical change in our agricultural policy must be made. We must legislate for the struggling man and not, as at present, for those who can well afford to help themselves, and we must realize that it is the small man who requires most assistance. I know hon. members will say it is the drought, and I agree that the drought has played an important part in the position of the farmers to-day, but we have had droughts before and we shall have them again, and we must do something to combat these droughts. In many localities drought could be overcome by the Government putting down bore holes for the farmers, payment of which should be extended over a long period of years; in fact, I would go as far as to say—

At the present moment water boring by the department is a farce. It is very much more expensive and less efficient than that done by private firms. In other parts, conservation of water for stock purposes could be successfully carried out, but here again Government assistance is necessary. We must realize that the farming community as a whole must be helped, and to do this a comprehensive investigation by practical people of how to keep people on the land should be undertaken at once. I wish now to refer to railway matters, and I want to congratulate the Minister of Railways on the interesting way in which he put up a very bad case. At the same time I must say that I very much regret that the Minister did not have the courage of his convictions, and come to the House and ask for a sufficient sum of money to begin to put our railways on a commercial basis. It would have been a clear case where a little judicious spending would have been the best economy. We are still short of all kinds of rolling stock, and the way we crowd coloured and native passengers in the compartments is an absolute disgrace. In spite of the fact that the non-European passenger pays the same fares as others, the accommodation given is very inferior, and I have received many complaints from this section of users of the railways. As far as waiting rooms are concerned no effort is made to accommodate 1st and 2nd class non-European passengers, and they have to mix with the raw native under conditions Europeans would not tolerate for one moment. A large number of our engines are obsolete, and unfortunately some of the new ones are not too good, and this fact no doubt accounts for the unpunctuality of many of our trains. Recently I saw in an up-country paper that the trains from Cape Town to Port Elizabeth through the garden route are invariably six hours late. As far as the coaches are concerned hundreds have now reached that stage when they should be replaced by a more modern and comfortable type of vehicle. In regard to this I would like to quote from the general manager’s report for 1926, in which he makes reference to the suburban passenger service at Cape Town. This is what he says—

If this large number were found defrauding the railways it is quite clear that a much larger number escape detection, and this is almost entirely due to the obsolete type of coaches in use. Many of our station buildings are such as to make expeditious working of our railways very difficult and costly. In some places the delay in connection with the delivery of goods is a serious matter, and recently I had to bring to the notice of the Minister a case where it took from six to eight days to get goods from one town to another 20 miles apart, in spite of the fact that there were at least ten trains a day between the two places concerned. Now Mr. Speaker, I want to congratulate the Minister on another matter, and that is on his decision to start a number of men at the various workshops to expedite repairs to rolling stock. The Minister made it clear that these were to be employed only in a temporary capacity, but I want to assure him that their services will have to be permanent if justice is to be done to our rolling stock. At the risk of being told by the Minister that I misrepresent the railway men, I want to say a few words about the workshops and I wish to draw attention to the general manager’s report for 1926, page 78. This is what he says—

We also have reference to that in the report of the chief mechanical engineer, dated the 28th September, 1926, where he reports with regard to his department—

Then we have the Minister’s own words. Speaking on his budget he said—

After these strongly expressed opinions one would have thought that at last something was going to be done to our workshops, but we find in the general manager’s report for 1926 this rather interesting statement—

These figures become very interesting indeed when we compare them with what was authorised to be spent on workshops during the regime of the hon. member for Cape Town (Central) (Mr. Jagger)—

according to the present Minister. During the three years the hon. member for Cape Town (Central) was in office, the average amount spent on workshops was £257,940 per annum, as against £108,000 spent last year. It seems to me that we get plenty of sympathy, no end of platitudes and a great deal of political propaganda from the present Minister of Railways, and I ask him to get busy and deliver the goods. In regard to the staff I should like to ask the Hon. Minister if he will not in the interest of economy, consider the question of doing away with the differential rates of pay? I can assure the Minister it is false economy to continue this unfair treatment. I want to put this case to the Minister who, in some things, is reasonable. In Cape Town, a first-class carpenter receives 2s. 9d. an hour, and works 44 hours per week. This man may not have any special qualification whatever, and he may know nothing of drawing plans or specifications, yet the law fixes his wages at a certain amount. On the other hand, at Salt River workshops, you have an apprentice who has to jass a very stiff competitive entry examination. As soon as he is in the service, he is compelled to attend technical classes for three years, and he becomes very expert in drawing, specifications and other technical matters. After serving five years as an apprentice, and two years as an improver, during which time he becomes thoroughly skilled, in all branches of his trade, yet he receives from the Administration only 18s. a day, or 4s. a day less than an artisan who has been trained in a private workshop. This is an injustice to the man trained in the Government workshop. It does not lead to efficiency or economy, and in the long run it is most expensive, is not fair to the South African boy and is certainly not carrying out the principle of—

I was told of a case this evening of a Cape Town checker who was promoted to a salaried grade under which he has more responsibility and work, and loses £40 per annum. There is another matter which I am told is causing uneasiness in the service, and that is in connection with the railway sick fund. The railways and harbours sick fund provides medical attention, medicine and hospital treatment for the members, their wives and families, and sick pay is provided for the members. The fund is financed by subscriptions from the employees, and for every £100 so subscribed the Administration contributes £75. For the purposes of administration the fund in the Union is divided into four district systems, and each system is managed by a district board, consisting of four elected members and four nominated members, one of the nominated being chairman. Two elected and two nominated members are chosen from each district board for the central board, the chairman of which is the General Manager or his deputy. While the representatives of the board are equal, the administration selects a chairman, and so controls the board. In that respect I want to say, as an old member of the district and central boards for many years, I never saw this power unjustly or harshly used. All appointments of medical officers were made by the district board, and had to be confirmed by the central board. That has recently been altered, and the Auditor-General’s report on page 70 says—

In this case “the Administration” means the hon. Minister and the Railway Board. I was told recently that a railway medical officer was required at a certain railway centre. Two local doctors applied, both were South Africans and both were bilingual. Two petitions were received by the board, one, the smaller, was in favour of Dr. “A” and the larger petition asked the board not to take notice of any petition but use their own judgment. After a very serious and exhaustive inquiry Dr. “B” was appointed by the district board, and this was confirmed by the central board, but the Minister and the Railway Board refused to approve, and said they had appointed Dr. “A.”

Why?

I do not know why.

What district are you referring to.

I hoped there was only one district concerned. The Minister seems to think there is more than one. He ought to know. If the Minister wants the particulars, I am willing to give them to him privately, but I don’t want these medical men dragged into public discussion. The district board, in reply, pointed out that the new regulations did not give the Minister or his board power to appoint, but merely power to approve or reject, and they, the district board, adhered to their original recommendation. In the interest of the sick fund I hope the Minister will leave such matters to the board concerned. In fairness to the Minister, I want to say that I believe he is out to do the right thing to the staff, and I want to ask him whether he thinks the men and officials are not capable of looking after their own affairs. Look what this might lead to. You might get a Government in power whose slogan is—

and you may get medical appointments made in cases like these. I appeal to the Minister to put the health of the staff, their wives and families, beyond the reach of politics and allow the representatives of the men and the representatives of Administration to manage their own affairs without the interference of the Minister and the Railway Board.

I want to congratulate the Minister on his Budget. It looks as if the Budget has at least had one result, viz., that it has completely flustered the Opposition because the arguments referred to by hon. members on the other side up to the present was only intended for criticism, because we have now too much money to spend. Before the present Government came into power the country was warned by the same speakers that if the Pact Government got into power they would not have money with which to govern the country. Now we find, however, that every year there is a surplus, and that this year’s surplus is the largest we have had since unification. In spite of the difficulties of the Opposition the House and the public outside feel fortunate in having the Minister of Finance to-day such as we have, and we have the fullest confidence that the country in the hands of a man such as the Minister of Finance will progress tremendously, and that our credit will be enhanced from time to time. I would not be surprised that the Minister, should he wish to take up a loan in London again, would be able to do it above part. Before I go any further I want to say a few words about the address of the hon. member for Cradock (Mr. G. C. van Neerden), who has come again with his old story to persuade us or the people outside that he has been driven by our Labour friends to increase the cost of loans or building costs on the farms. He forgets that the point of which he complains so much now is one of their own making, and that we on this side of the House are only bound to carry out the law introduced by the S.A.P. Government itself. The hon. member asks why the people have not been consulted, but if employees and employers ask for a thing then they have consulted themselves, and all that the Government can do is to carry out the law if the request is made. I hope that this will be the last time that the hon. member will get up and use that argument, or as my hon. friend here next to me says, to talk non-sense. He need not think that we will part without Labour friends, because, with their help, we have at least a Government in power such as we have never had since Union. We have a Government to-day which keeps the peace in the country and knows how to govern. The country is not plunged into debt and the majority of the population reduced beggary, because we have a Government which will build up the country and create a great people in the future.

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

It is a very short Bill of one or two sections, and the object is to meet the wishes of the House as indicated last year and again this year by the hon. member for King Williamstown (Maj. Ballantine).