I move, as an unopposed motion—

seconded.

Agreed to.

Amendments in Clause 5 and amendments in sub-sections (1) and (2) of Clause 7, put and agreed to.

Ou proposed new sub-section (3) of Clause 7,

I move, as an amendment—

seconded.

Agreed to.

Amendment, as amended, put and agreed to.

Remaining amendments in Clause 7 and amendments in Clause 8 put and agreed to.

On Clause 9.

I move, as an unopposed motion—

seconded.

Agreed to.

On amendments in Clause 9,

I move, as an amendment—

seconded.

Agreed to.

Amendments, as amended, put and agreed to.

Amendments in Clause 10, new Clause 12 and amendments in old Clauses 12, 13, and sub-sections (1) and (2) of Clause 14, put and agreed to.

On Clause 14,

I move—

I would like to point out that the amendment which is now put forward is somewhat different in form from the amendment put to the House at the committee stage. The amendment which is now before the House provides in the first place that the new corporation shall have a monopoly of 50 per cent. of all the requirements of the railways. Then with regard to the remaining 50 per cent. this is to be open to public tender by producers in South Africa. The amendment placed before the House in committee provided that the remaining 50 per cent. was to be open to public tender by any producer not only in this country, but overseas as well. During the committee stage the Minister agreed to reduce the period of this monopoly from 15 years to ten years. That was no concession because the effect would possibly be that within ten years sufficient time would have elapsed for the existing industry to be completely broken and obliterated. Time alone will show whether this will be so or not. The clause as it stands at present grants a complete monopoly to the new corporation which is being constituted under the Bill. I submit it is bad enough for the existing industry to have to compete against a Government-aided and controlled concern, but apart from that, if the Government in addition insists upon the whole of the railway requirements being purchased from the corporation it is simply going to eliminate completely the existing industry. The effect of the clause will be to stifle all competition and for this corporation to receive the preference of all Government departments. I would point out that 33-1/3rd per cent. of the iron and steel purchased in this country is purchased by the railways. It is apparent that under this clause the corporation is to be made to pay at all costs no matter what the cost may be to the taxpayer. I would have preferred to see it provided that all requirements of the railways should be purchased under tender of producers of iron and steel in this country and that the best tender should be accepted. During the committee stage the Minister gave no reasons why he refused to accept the amendment which was then discussed. I ask the present Minister to give an explanation why the amendment should not be accepted. He cannot deny that the amendment is perfectly reasonable and fair, and I submit also, just. If the Minister thinks it is not fair or reasonable, I should be glad if he gave his reasons when he replies, but I am certain he will not reply because he can give no reasons. It would be almost impossible to obtain tenders from outside to decide the prices that should be paid for these articles by the railways. Naturally, outside producers are not going to give prices simply to enable the railway administration to fix one prices they are to pay to the new corporation. I would like to know from the Minister on what basis the prices are to be fixed. Are the highest or the lowest prices to be taken from outside countries, or is the standard of any particular country going to determine the price the railway is to pay to the corporation? If the Minister refuses to accept the amendment there can be only two conclusions which the House and the country would be justified in drawing. Notwithstanding the radiant optimism of the Minister in his second reading speech he has found out that this intricate and highly technical industry is very complicated and that there are many snags which he never anticipated. The next point is that the Minister, notwithstanding his gloomy, and I say it advisedly, uncalled-for attack on the existing industries by stating they were economically unsound, apparently since he made that statement and since he has seen the evidence of Major Butler and other witnesses before the select committee has realized that the existing industries may be able to compete successfully with the industry as established under this Bill. There is another conclusion this House and the country will be entitled to draw, and this is, if the Minister refuses to accept the amendment, the House and the country will be fully justified in concluding that the Minister is determined to crush the existing industries. If a total monopoly is to be granted, no greater injustice could be perpetrated on an industry which has had to fight many difficulties, and to which this House and the country should be grateful for the efforts made in establishing that industry. What this Government wants is less government in business, and more business in government. Let this Bill be a warning to this country and to the financial and industrial world of what they may expect; if they establish industries in this country, they may have to face a Bill similar to the one now before the House. To-day it is iron and steel, to-morrow it will be the bakers and butchers.

Order, the hon. member must confine himself to the amendment.

The Minister says I have a girder on my brain; if I am wandering it is possibly due to that. If this clause goes through it will be a landmark to this country and in the financial and industrial world of what diabolical injustice the Pact Government is capable of doing. I am afraid my voice is like that of John the Baptist—crying in the wilderness; but the voice of John the Baptist is one still to-day being heard throughout the world. This will be my message to all good South Africans—

I second the amendment. I hope the Minister will accept the amendment, because it is so entirely reasonable. One could understand the clause as it stands in the Bill giving practically all the railway work to this new corporation if there was no existing industry in the country, but seeing we have an established company capable of producing many of the articles required by the railways, it is not unreasonable to say, if the railway administration entered into a contract with this new company, it should be for half its requirements and let the other half be called for by public tender. I can understand the Minister of Railways and Harbours saying that this amendment is in the interests of the railways, because this does not ask for the railway business, unless in competition with the new corporation, and from other companies producing the articles. Surely it is in the interests of the railways to get, subject to other things being equal, their articles in the cheapest possible market. I think it is only fair, seeing that the Union Steel Corporation and other similar companies are producing these articles, that they should get an opportunity of getting a share of the railway requirements, and I hope the Minister will see his way to accept the amendment.

I should like to support the two previous speakers. Is it business, I ask the Minister of Railways and Harbours, for an administration such as the railways to give the whole of their requirements to one producer? Is it business to enter into a ten years’ contract before the producer has produced a ton of pig-iron or steel, and to say that you take the whole of your requirements from that one institution. No business man would dream of doing it. It is against the South Africa Act, under which the railways are to be worked as a business institution. Under this Bill the corporation can undertake subsidiary industries. I recognise that to-day they could not do that because the capital is not sufficient, but it is quite competent to come back to this House and ask for the capital to be increased in order to undertake these subsidiary industries. The railways will be bound under this clause to deal, in regard to their requirements in these subsidiary industries, as with regard to steel and pig-iron. It would be a most unsatisfactory position if they started subsidiary industries in which private interests are already engaged, and if they can cut out the whole of the railway requirements from the legitimate aim of these private individuals to compete for that product. That would be a most unfair and unsatisfactory position for the railway department to put the corporation in. The clause has been vitally altered in select committee. As originally introduced the clause gave certain very definite rights to the corporation, and the railway department saw that this was going to be very detrimental to them and therefore they suggested the amended clause. I agree that under this clause proposed by the railway administration the whole suggestion may be turned into a bluff. The department saw the very serious nature of this clause which might do them an infinite amount of harm and so the department persuaded the select committee to substitute a clause drawn in very much looser terms. Consequently a clever general manager may be able to “wangle” the railway from taking anything at all from the corporation. It would, however, be very undesirable to persuade people to take shares in an undertaking and then for the Railway Department, after guaranteeing to buy half-a-million’s worth of goods from the undertaking, not to carry out its agreement. That would savour of a third-rate swindle. So we must take it for granted that the department intend to enter into a fair arrangement. The railway administration at the same time must have a definite assurance that the prices charged by the corporation are not more than the price for which the department can obtain the goods from other South African manufacturers. This is of paramount importance to the railways, and it is only fair to the South African manufacturers that they should have the right to tender, as they are taxpayers. It is very important that the clause should be modified now. For if you leave it to be dealt with say three or four years hence the corporation would have real ground for saying that Parliament would be taking away a prescriptive right, and that private people had invested their money in the enterprise on the specific undertaking that the corporation had preferential treatment over every other South African industry. As the clause stands now we may, if we have a weak general manager of railways, come to the position when the railway department will carry this industry on its back by paying it more than they should for their requirements. It will be a great temptation if the corporation is only just holding its head above water, for the Government to say that if the railway department give the corporation a decent contract it will be able to pay its way. It will depend on the price the railway department pay for their goods whether the corporation does, or does not, make a profit. It is very extraordinary that with such a clause in the Bill the Minister of Railways has never said a word about it. He is going to give the corporation a half-million yearly contract for ten years and he really does not take the slightest interest in the matter, and does not even tell the House whether he is satisfied or dissatisfied.

Hon. members who have supported the amendment have overlooked the fact that the whole effect of the amendment would be to vitiate the possibility of the corporation being a success. That opinion was definitely expressed to the select committee by the principal witness. I do not want to comment on the speech made by the hon. member for Newcastle (Mr. Nel) beyond saying that the comparison he made between himself and one of the greatest figures in history is either absolute foolishness or blasphemy. I want to remind the House of the statement made before the select committee by Maj. Butler. On page 84 he stated—

Then again, on page 89—

It must be clear to the House that the acceptance of the amendment of the hon. member for Newcastle (Mr. Nel) can only tend to destroy the success of the industry. The House having accepted the principle of the establishment of the corporation, it would be contradicting itself if it accepted that amendment.

The point I wish to make is that the quantity of iron and steel taken by the railways, as pointeci out by the hon. member for Newcastle (Mr. Nel) is only a small portion of the production of these works. The hon. member said that the whole of the railway requirements are only equal to 33-l/3rd per cent. and if the Government take 33-l/3rd per cent. how are they going to crush this industry out of existence? Surely there is room for the Union Steel Corporation to carry on their works with the 66-2/3rd per cent. which is not affected by this contract. It is interesting to note this Union Steel Corporation have had an agreement with the railway administration to take the whole of their supplies, and that is to be carried on still for another year, until 1928. In carrying out the agreement it is shown in Question 1061 of the Select Committee on Railways of 1925, that the Union Steel Corporation produced 18,900 tons of steel and only supplied 5,000 tons to the railways. Surely an industry of the size they say this is, is not going to fail if it cannot supply this 5,000 tons of iron? The question has been raised by the hon. member for Newlands (Mr. Stuttaford) that if this contract is entered into they are going to subsidize the industry at the expense of the railways. Surely he has not read the Bill.

Yes, I have.

You cannot have done, because under the contract the goods have to be supplied at the price at which they can be imported and the railway administration is wide enough awake not to pay more than a fair price for the goods. In reply to another question it was shown in 1913 that the requirements of steel in the Union outside the requirements of the railway were 145,000 tons. Surely there is also a market for the Union Steel Corporation. Another point made by the hon. member for Newlands was that we shall find later on that this company will want to establish subsidiary industries. Why not? We are anxious to see other industries established.

With Government capital?

We are not talking about Government capital. If they can establish subsidiary industries and supply goods equal to the price of those imported, we ought to support the Government. I hope the Minister will not accept the amendment.

This question has been raised and decided, and I do not intend revising that decision. I shall not accept the amendment. The position of the railways is safeguarded and for that simple reason the hon. Minister of Railways has not taken part in this debate.

Can you show me how it is safeguarded?

As to price and quality.

It is not safeguarded in this clause.

In the old and the present clause the railway is absolutely safeguarded, just as it was under the following clause with Vereeniging—

There is no essential difference between the nature of this clause and the clause in this Bill. The matter is entirely in the hands of the administration. If the Administration is satisfied, after enquiry, as to price and the quality, there is no earthly reason why the work should be divided and only 50 per cent. given instead of the whole. If it is not satisfied the work will not go to the corporation at all.

Where do you get your price from if there is no competition?

Surely the standard is laid down in the clause, in B of the new clause. That is my answer and I cannot accept the amendment.

I do not agree with the Minister. Under the agreement of the railway department with the Union Steel Corporation there was a safeguard. They could only pay the price at which the stuff could be delivered in South Africa from overseas. In this clause is the proviso—

What is to prevent the Government from putting on a good stiff dumping duty and then you have to reckon that in the cost? That was not in the old agreement. There is nothing to prevent, in the giving of orders for iron and steel on behalf of the railway department, the putting on in the first place of a good stiff dumping duty in computing the price and to this you have also to add the customs duties. It does not rest with the railway department to say what they shall pay. They have to pay this landed cost price plus the customs duties and any dumping duty which may be put on by the Government. The position certainly is not safeguarded as it was in the case of the Union Steel Corporation contract. I agree with what has been said by the hon. member for Newlands (Mr. Stuttaford). I think this is a distinct breach of the Act of Union. The Act of Union lays down that the railways shall be run on business lines. This is not on business lines. You are binding down the railway department which has to buy thousands of pounds’ worth of this material every year to buy from certain people.

Why not, if the price and quality are right?

It is not a question of price and quality. You cannot compare the stuff you can get from overseas with the stuff here, because the Government may put on a dumping duty and you will have to pay and the customs duties as well. The dumping duty is, I consider, the weakness of this business. How can you compare the steel procured here with the steel that you can get from Germany, England and elsewhere? It will be said, of course, that they are dumping this stuff here and then there will be a dumping duty put on.

We protect all our industries from dumping.

Yes, and very many that do not dump at all. Here we have to think of the national interest. It is in the interests of the railway department to buy its material as cheaply as it can. The people who bring produce and merchandise to the railways and have to pay railway rates will have to bear the cost. This just shows, when you get off the straight line, where you get landed. You have set out to foster this industry and it is going to be dependent on the railways, for the most part, at the cost of the users of the railways. Somebody has got to pay and they are the people who will have to pay. I hope the country will take a note of that.

As a very ardent supporter of the principle of this Bill and as one who spoke very strongly in favour of its acceptance on the second reading, I must confess my inability to understand the attitude of the Government on this matter. I thought the object of this Bill was to produce cheap steel. Without the production of cheap steel it is quite impossible for these subsidiary industries to be established in this country and yet we are told that the acceptance of this amendment will vitiate the success of the industry. How can we reconcile these two arguments? It seems to me that if we are going to provide cheap steel in this institution, then the Government has absolutely surely nothing to fear in regard to competition from this industry. Why the Government won’t accept such a reasonable amendment as this I, for the life of me, cannot understand. If the Government won’t accept the amendment, then, obviously, to any unbiassed man, the object must be clear. The object then is to bolster up this industry, not to produce cheap steel, but steel probably costing so much that it will prevent the establishment of the secondary industries which we are all looking for. The establishment of this industry itself is nothing, but it is the industries that would be established upon the foundation that you are here building and you are preventing the production of this raw material of industry in as cheap a manner as possible by trying to bolster it up. I think the Government have been very wrongly advised if they’ won’t accept this amendment.

Amendment put and negatived.

Remaining amendments in Clause 14 put and agreed to.

On the amendments in Clause 16,

I move, as amendments to these amendments—

Is the Minister in order in moving this under the provisions of Standing Order 172?

These are amendments to the proposed amendments. They do not require notice.

seconded.

Amendment put and agreed to.

Amendments, as amended, put and agreed to.

I move, as an unopposed motion—

seconded.

Is that amendment in order, Mr. Speaker?

The Minister can only move the omission of the sub-section as an unopposed motion. Is there any objection? There being no objection, the Minister may move it.

Amendment put and agreed to.

Amendments in Clause 17 put and agreed to.

In Clause 19,

I move, as an unopposed motion—

seconded.

Agreed to.

Bill, as amended, adopted.

I move—

seconded.

Later.

How much later?

I leave it to you. Six months hence if it suits you.

Third reading on 28th April.

The amendment, I see, includes the word “mainly.” It is a very important word here, and I do not like the alteration at all. Perhaps the Minister would be good enough to give us some explanation, and then any objection one has may be waived.

I think the word is very clear. The money was originally given for the purpose of assisting the co-operative societies, but as I said at the second reading there is a certain surplus, and such societies can now be liquidated with the object of having the money divided amongst the members. If societies mainly go into liquidation for this purpose, then this Bill will come into operation, and that is why the word “mainly” has been incorporated.

Amendment put and agreed to.

New Clause 2,

I move—

seconded.

Agreed to.

On amendments in Clause 2,

In the Bill, as originally brought in, the date when it was to come into operation was given as the 25th of April, 1927. Then it was altered to the 15th of April. Why the 25th or why the 15th. Perhaps the Minister can give us some explanation.

Associations were formed under the Act, some for a period of 10 years and some for a lesser period. They do not get sanction to have that period extended, and for that reason I have put down this date because some of these associations might dissolve before the date when this law comes into effect.

Amendment put and agreed to.

Bill, as amended, adopted; third reading tomorrow.

There is an amendment by the hon. member for Colesberg (Mr. G. A. Louw) on page 464 to Clause 4, and, as the hon. member is not here, I wish to move it on his behalf. The Bill, as it was passed through the committee stage, in Section 4 lays down that the magistrate or justice of the peace may issue a warrant directing that such person may be arrested. Then the Bill goes on to say that in lieu of arrest be may be summoned, and the hon. member desires that the Bill should point out first of all that the man should be summoned, and then have it left to the discretion of the magistrate whether he should issue a warrant for his arrest or not. I said I had no objection to his amendment; in fact, I think it is an improvement, and so I accept the amendment. I move, as an unopposed motion—

seconded.

Agreed to.

On Clause 6,

There is another amendment to Clause 6 standing in my name on page 391. This amendment I have had drafted on the representation of the hon. member for Yeoville (Mr. Duncan). The hon. member for Yeoville pointed out that the present Clause 6 was a little bit paradoxical. That is to say the court might, in lieu of convicting an accused, order him to be detained at a colony. The hon. member pointed out that was a conviction. The original intention was that it should not be regarded as a conviction, and on going into the matter more fully, I agreed with the hon. member, and I have had this clause drafted to meet the objection. I move—

1. (a) a contravention of any law relating to vagrancy; or
2. (b) a contravention of any law relating to the supply of intoxicating liquor; or
3. (c) a contravention of Section 3, 4, 6 or 7 of the Children’s Protection Act, 1913 (Act No. 25 of 1913), or any amendment thereof; or
4. (d) theft,
   the court, if satisfied that the offence in respect of which such person was convicted was committed entirely or largely as a result of conditions under which he was living, and that it would be in his interest or in the interest of his wife or any child if he were committed for detention in a colony, may, in lieu of passing any sentence upon him, order him to be detained in a colony named in the order for a period stated’ therein, not being less than one year or more than five years.

seconded.

Agreed to.

Amendments in Clauses 8 and 11 put and agreed to.

On Clause 16,

I move—

seconded.

Agreed to

Amendments in Clause 18 and the title (Dutch), put and agreed to.

On the motion that the Bill, as amended, be adopted.

I would like the Minister to take into consideration at a later stage whether some amendment should not be made to Clauses 4 and 8. In Clause 4, sub-section (a) provision is made for the punishment of people who habitually beg for money, food or clothing. He has made no exception in favour of charitable institutions, and people are sent out by these institutions to beg. In the streets of Cape Town and other towns you find people asking for contributions, and when you give something you get a little badge. Such people should not be liable to prosecution.

I think the right place for the hon. member to discuss that is at the third reading.

I am pointing it out now for the consideration of the Minister.

The Minister cannot make any alteration now, even if he wants to, unless the Bill be re-committed.

Perhaps it may be advisable to do that. Clause 8 makes provision for

Order. I do not think the hon. member is in order in discussing the matter now. If he wishes he can move that the Bill be re committed at the third reading stage.

Bill, as amended, adopted.

On the motion that the Bill be read a third time to-morrow,

I think you should give some more time than that. My hon. friend has an important amendment.

I would like to submit to you, sir, that I would be in order, subject to your ruling, of course, to draw attention

The hon. member must confine himself to the motion that the Bill be read a third time to-morrow.

I want the Minister to have plenty of opportunity of considering this important amendment.

Draw the Minister’s attention to it privately.

Third reading on 27th April.

I move—

There has been a considerable delay in presenting this measure to the House, and I quite appreciated the impressions of the hon. member for Cape Town (Central) (Mr. Jagger), and also the hon. member for Parktown (Mr. Rockey), but they will realize what an extremely difficult subject this matter is. It is a most complicated Bill. It deals with the most complicated interests you could imagine, and in every way the whole measure is complicated, intricate, and difficult to understand, except by those who are accustomed to dig for diamonds and make a special study of the Acts. But we have gained, on the other hand, by not bringing this measure forward sooner, because there have been such rapid developments that we have been enabled to deal in the Bill with an entirely new situation, and to revise what we previously had decided upon, in the light of these new facts. The main points of the measure are not new, because I find, as far back as 1922, my predecessor attempted to pass legislation dealing with this thorny question. I find that there was a Bill before the House in 1924, and it went so far as a select committee, and last year we laid a Bill before the House—A.B. 59—’26—which, unfortunately, owing to the congestion of the order paper, could not be dealt with. The select committees of 1923, 1924 dealt with this matter, and the committee of 1923 simply reported—

That committee took some evidence. In the following year there was another select committee which also took evidence and reported—

Now we must bear in mind that the alluvial diggings are the only instance of our marvellous mineral wealth where the small man gets an active chance to take part, to produce and to make something. That opportunity is entirely excluded in all other cases. Take our gold, coal, platinum and tin mines—in almost every field there is almost no opportunity for the small man. I find, in the existing Acts of the four provinces, as regards alluvial diggings, the intention of the legislation and of the legislator has always been that the right to dig shall be granted to “natural persons.” It was never contemplated that syndicates and associations and companies should be formed. Now I may say that the main principle underlying this measure is that alluvial diggings, subject to the interests of the State, and a fair participation of the State where necessary and desirable, should remain the reserve and the preserve of the small man. I am quite at one with the hon. member for Cape Town (Central) (Mr. Jagger) that the State’s interests should be guarded, and I am certainly taking steps in this Bill to give the State a better share as regards alluvial diamonds. It is simply preposterous, if you take the case of Lichtenburg to-day with these marvellously rich pockets, that the State’s interest and benefit should be limited to a paltry 5s. a month from licences and claims, and the 10 per cent. export duty. The principle of this Bill is, therefore, to eliminate—and in that respect it will be merely declaratory of the present law and the present statutes in the provinces—to eliminate all syndicates and companies, and to limit as far as possible, alluvial diggings to—

That has obtained for the last 60 years or more, and it is only since the 30th June of last year, with these wonderful finds in Lichtenburg, that the position has been abused, and the true spirit and intent of the present legislation has been grossly departed from.

What is a “natural person”?

Our Act of interpretation states that a person includes a juridical person—by “natural person” I mean an ordinary human being—not a syndicate or corporation. The principal reasons for this Bill are to put a stop to what has been specially rampant in the Transvaal—the exhaustion of alluvial diggings under the guise of prospecting. We have had such problems as this—under the law of the Transvaal if diamonds are discovered by an owner or those who are given leave to prospect, within three months from the date of the discovery you must either proclaim or give him a discoverer’s certificate. You give him a certificate at once when you are satisfied that diamonds are found or are in payable quantities— within three months of this you must either proclaim the ground, or the discoverer is entitled to work his discoverer’s claim and work his owner’s claims. The owner of a farm in respect of which the State has as yet no control allows prospecting on a large scale. I think instances have occurred where as many as 2,000 people have gathered on a farm, and, under the guise of prospecting, they were all the time winning diamonds and paying ten, fifteen or twenty per cent. to the owner of the farm. It is true that the Mining Commissioner can stop prospecting, but by the time he is able to intervene, hundreds of people have congregated in a jiffy, as it were, and they make an appeal ad misericordiam, and say—

It is only human nature that the department should be influenced by that state of affairs. The root of the evil lies in that you cannot control prospecting under our present powers. Another of the chief reasons for the introduction of the Bill is the intense sub-division of farms; another principal reason is the better administration of the improvement of social amenities on the diggings and the control of the native population on the diggings. The Bill will also consolidate, as far as possible, the Acts of the four provinces, and will give the State a better participation in the country’s alluvial wealth. The control and manner of prospecting are also dealt with. If you have an area here and an area there, it is most undesirable that people should be allowed to congregate on one of the areas, and after scratching the surface only, fly off to another area, because they think it is richer, and to leave an area in which there are diamonds in fairly payable quantities, this area becoming derelict. The Bill aims at giving further control over production and diggings, and to avoid diamond rushes. I think the hon. member for Cape Town (Central) (Mr. Jagger) stigmatized diamond rushes as a scandal. I quite agree that the method has become entirely irregular and most undesirable, if not barbarous. I have, on previous occasions, pointed out that the State is very materially interested in the production of diamonds, or—as has now become the case—the non-production of diamonds. According to our statistics we derive about 23.31 per cent. from diamond mines. From the South-West we derive an average of 20.74 per cent., and from alluvial diamonds 10.85 per cent. The total percentage from the Union and South-West Africa is 20.46 per cent., which is a very material interest. In other words, the State is interested to the extent of one-fifth of the total diamond production, both as regards pipes or mines and alluvial diggings. We arrive at this figure by taking 60 per cent. of the Premier, 40 per cent. from the Free State, and 50 per cent. of the Cape mines, and 10 per cent. export duty, and so on. These percentages are the result of that basis of calculation. It is obvious that the State being so directly and materially interested cannot view with indifference the possible collapse of the diamond industry or trade. For these reasons, it is extremely urgent that this measure should pass during this session as soon as possible. There are really no new principles involved in this Bill, and there is really nothing highly contentious in it, except the provision regarding retrospectivity. The lottery system is dealt with in Clause 51—regulation for distribution of claims. That clause gives the widest possible power to the Governor-General. He may confine the distribution or allotment to persons who have been carrying on bona fide digging operations for a period of not less than six months, and I propose adding to the clause—

There is ample precedent for this lottery system, which was in vogue in President Kruger’s time to avoid gold rushes, and was adopted by us last year when we amended our gold law. The clause is purposely made most elastic. The Government is taking very large powers under the Bill, but it does so for the reason that it is impossible to embody in the measure provision for every possible case that may occur. It is possible, for instance, that the Governor-General, in a case like that of Namaqualand—I am not indicating the line of policy of Government, but in view of the fact that Namaqualand has suffered for years from drought and otherwise, it would be competent for the Government, under the lottery clause, to say—

although I do not say for a moment that this is going to happen; and so on with other areas. Say you have several areas in Lichtenburg district. You may have 10,000 people taking part in a lottery for 5,000 claims. You can then stipulate that those who obtained claims in the first lottery cannot participate in the second lottery. The next principle introduced is the leasing system, which is dealt with in Clause 74—alternative method of disposing of alluvial areas. That is only a repetition of the principle contained in Section 30 of the existing gold law. The next point is contained in Clause 75, which enables the Governor-General to declare any land or any alluvial digging to be a State alluvial digging, and he may deal with it in any manner which may be prescribed by regulation. There again you have the principle of Section 30 of the gold law, which says you may declare any precious metals area as a State digging. It does say—

but I do not propose to put that in this Bill, for to handle alluvial diggings is a bagatelle compared with the handling of a block of two or three thousand claims on the East Rand, which presupposes the sinking of £1,500,000 or £2,000,000 before you can obtain any profits. The machinery required for alluvial diggings is so insignificant that it would be a mere bagatelle, and, in cases where diggings prove to be enormously rich, it would be a neglect of duty on the part of the State to parcel these rich diggings out to the general public. The State should say that these diggings are to be worked for the benefit of the State, to allow the public to get a certain percentage if possible and desirable, but that the bulk of that wealth should go to the State. Clauses 63 and 73 provide for the elimination of companies and syndicates working claims. That is not a new principle, for the whole principle of the existing law is to confine diggers’ certificates and licences to natural persons. Under the legislation of the Cape and the Transvaal, which are the main provinces interested in alluvial diggings, a person applying for a digger’s certificate has to be approved in every way, especially as to his character, which condition cannot be applied to juridical persons.

A person can assign his rights.

But only to a natural person. As a matter of fact, until recently the syndicates have been quite insignificant, and few and far between. Then I come to the limitation of output, Clause 115. I shall deal with that separately afterwards. I am dealing now with the main principles which are not new. We have the Diamond Control Act of 1925, so that the limitation of output is not new. Then we have the exclusion of civil servants, Clause 114, and the last schedule of the Bill. If there was ever a desirable provision, it is this. It is wholly unsound that civil servants should be interested in anything speculative. Clauses 13 and 19 deal with prospectors’, discoverers’ and owners’ rights, and we make provision on the same principle as in the Reserved Minerals Act of last year for people who are mere settlers. We give them a share in alluvial precious stones. Although the Bill deals with precious stones, the only concrete instance up to now is diamonds. In the Reserved Minerals Act we placed the settler in a better position, and the State was debarred from interfering unless they resumed the possession of the land and gave the settler compensation. Generally speaking, we have awarded to the settler one-half of the rights that would accrue to a full owner or a private owner. You find that under Clauses 13 and 19, and especially in the fifth schedule of the Bill. Then we make provision for the control of liquor on the diggings—108 (1) (i). You will see it is a regulation for—

I hope, when the Minister of Justice brings forward his Liquor Bill, he will deal very fully and comprehensively with liquor on the alluvial diggings.

When will that be?

Well, I suppose next year, either he or his successor in office, if that is any solace to my hon. friend. Then in 87 we have—

The present position is you have a democratic system. There are various diggers’ committees to whom application has to be made for a digger’s certificate, and in their discretion they may cancel a digger’s certificate. These committees are elected on a democratic basis and the election is carried out on the lines of a parliamentary election, but the diggers are usually so intent upon their pursuits that where you have two thousand or three thousand competent voters, only about 200 appear on the scene, and they elect a diggers’ committee which is not satisfactory to the rest, who come forward to the department and say they are dissatisfied with the committee. We can only ask them why they didn’t take part in the election. There is a difference of opinion on this question of diggers’ committees, but so far they have answered very well and have done substantial justice. Their discretion has not been fettered in the past. They have been able to cancel certificates in their discretion, and they have by experience been found to do substantial justice, although certain irregularities have occurred, especially since July last, and so we take power to dissolve a diggers’ committee and to substitute an administrative board. Really that principle is not exactly new, but it is a departure from the present Act, and is a necessary safeguard. Then we come to Clause 76, which deals with what are called restricted alluvial diggings, and the object of that is to carry out the main principles of the Bill, that is, to preserve diggings that can be worked by small people. Subsection (2) says—

In order to effectively eliminate syndicates and companies, you must have a limitation such as this, so as to make it not worth while for syndicates and companies to surreptitiously, in the guise of natural persons, to exploit those persons and to virtually carry on alluvial digging. In 60 we make provision for certificates of character which applies to European, coloured and natives as well. That is a very necessary thing, and under 115 sub-clause (2) we make provision for the control of prospecting—paragraph (d)—

That is when we come to the conclusion that over-production is threatened. That is a necessary power, otherwise you cannot limit the output. It is better to go to the source of the whole thing than to allow a man to prospect and find a rich alluvial digging, and then prevent him from working it. It is better in the first place to prevent him from finding a bucketful of diamonds than not to allow him to dispose of them when found. With regard to the 60 per cent. in the Premier Mine, 40 per cent. in the Free State mines, and 50 per cent. in the Cape mines, as distinguished from the alluvial digging, I am proposing to make it uniform as regards future pipes or mines by making it 50 per cent. throughout. I shall take the sense of the House on that question, and if the feeling is that we leave the percentages as they are to-day, I shall be glad to give effect to that. I leave it an open question. In Clause 2 we deal with State title. In sub-clause (1)—

We know the history of the Free State and the dispute in Griqualand West and the £90,000 compensation. These farms fall in that category. In Clause 1 the right of mining for precious stones and disposing of precious stones is vested in the Crown, and that is the practical effect of the legislation in the gold laws for a long period of time, and for that reason I do not see why these few Free State farms, because they were taken from the jurisdiction of the Free State about 1870, should enjoy this immunity any further. If they had remained in the Free State they would have become subject to the legislation of the Free State like every other Free State farm to-day. I find the Volksraad resolution of the Transvaal in 1858 took the right of mining from the hands of the owners of the land, and the principle set out in the first gold law of 1871 is that the right of mining for gold and precious metals shall belong to the State for the protection of persons and goods, and for the benefit of the public. As regards the Cape, for a long period of time, grants were issued with a reservation of mineral rights to the Crown. In Natal legislation was passed a very long time ago vesting all mineral rights in the Crown. In the Free State, I think as far back as 1871, an Act was passed taking control of fields on which precious stones were discovered, giving the State the right to purchase such areas or farms if precious stones were discovered if the owner consented. If the owner did not consent, the State assumed the right of mining, and practically controlled disposal. In the Transvaal in 1883, there was an Act which actually vested the minerals themselves also in the State. At the same time, while vesting the minerals formally in the State, that Act conferred certain rights on the owners, or left certain rights vested in the owners, which practically amounted to the ownership of the minerals being, from a common-sense point of view, vested in the owner. But hon. members must distinguish between the dominium in or the ownership of minerals from the right of mining and disposal. Now the gold laws throughout have always asserted that main principle, that the right of mining and disposal is vested in the State. Ordinance No. 66 of 1903 of the Transvaal dealing with precious stones lays down the same basic principle. On these grounds I think it is invidious to distinguish between these few Free State farms, about 16 or 17 of them, I believe.

Oh, many more.

How many has the hon. member got? I believe there are about 23 of them.

There are 137.

I will have to check that. My information is that there are very few. If there are few, there is no reason for discriminating, and if there are many all the more reason why the State should get the interest that is properly due to it. I want to point out to the hon. member (Sir Ernest Oppenheimer) that I understand the De Beers Company are the people who own these farms, or a good many of them, but whether it be the De Beers Company, or the ordinary natural person, or a big man or a small man, the fact remains that his farm is entirely guaranteed to himself, unless he prospects or allows others to prospect, and if he chooses to prospect or allows others to prospect, and as a consequence of his own action the farm is proclaimed, he must naturally stand the consequences, and then the State must acquire its rights. There is no reason for excluding them in case of proclamation. Up to now these farms have been entirely outside the law, these few farms compared to the hundreds and thousands of farms in the Cape have been a law unto themselves, and I do not see why that state of affairs should continue.

Hear, hear.

I understand that there are a few of these farms where actually private diggings are being carried on, and I do not propose interfering with them. I am going into the question, and should I find that they are unintentionally affected by Clause 2 of the Bill, I will put in the appropriate wording to exclude them. The two instances that I know of—and I know of no others—are Sidney-on-Vaal and the Pniel Estates, where private diggings are being carried on, and I must say, to the credit of the people who are carrying them on, they are model diggings. That is my information. There is no intention at all to affect them by this Bill. Another principle that is introduced in this Bill, which will be found in Clause 10, is that diamonds found in the course of prospecting shall be considered the property of the prospector. He must, of course, be a licensed prospector. Under this Bill he must have a certificate; he must be an approved man. If he finds diamonds in the ordinary course of bona fide prospecting, they shall be his property, but the Governor-General is vested with the power of declaring by regulation in respect of any particular area or district, that diamonds found in the course of prospecting shall be shared by the State and the prospector. It is rather singular that the statutes up to now have never said to whom the diamonds found in the course of prospecting belong. There is not a word in any statute on this question, but it has been assumed, and it has been the practice, that the prospector should be awarded the stones. Do hon. gentlemen know what has recently occurred? At the mouth of the Orange River, at Alexander Bay, between £150,000 and £160,000 in value of diamonds were found within seven weeks, with 20 people working in the trenches, in the course of prospecting. Now on what principle, I ask, these finds being on Crown lands, on what principle should the prospectors there pocket the whole lot? I say that it is not fair to the State. No Government will abuse its power. We do not want to interfere with the small man and the poor man prospecting and finding a diamond here and there. He is welcome to any reasonable find, out when we come to an extraordinary position like this, then I say that the State is entitled to its share.

By what right were they searching there?

They were searching there under a licence which gives them prospecting areas. When I viewed these diamonds, I must say that I saw the loveliest stones that have been found in the course of our diamond history. They are simply marvellous. Now in this Bill we take very explicit powers in favour of the Government that enable us to say—

I went up there personally a few days ago, and I must say that I am quite satisfied that these gentlemen who carried on the prospecting there, Dr. Merensky and his colleague, acted in the most bona fide way, but that area is so marvellously rich that they could not help themselves, they could not help finding these diamonds in the course of ordinary bona fide prospecting. As I say, none of these principles are new, or very contentious. That is in the clause about prohibiting subdivision. You will see in Clause 20 that power is given to the Minister, which, of course, means the Government, that where he is satisfied that in the past a farm has been deliberately cut up in order to multiply the 250 owners’ and discovers’ claims by 10, 20, 30, 50 and 60, as has actually been the case, the Government can say—

It is retrospective and it is a matter that can be fought out here in the House in the committee stage. There is no need for a select committee for these matters. I have endeavoured to convince hon. members that most of these principles are not new principles, and as it is urgently necessary that this Bill should pass and be applied as soon as possible, I do not think it is desirable to refer it to a select committee. It is rather ironical that the same gentlemen, who have been stigmatizing certain other measures before the House as socialistic, should run to the Government to-day and clamour for the control of alluvial diggings. What we propose here in regard to the limitation of output and what is desired, very strongly desired, by hon. members opposite, is a justification, an ample and complete justification of the action of the Government in introducing the Diamond Control Bill of 1925. What would have been the position of hon. members who are to-day clamouring for this control if there had been no Diamond Control Act? Could they with any vestige of justification have come to the Government to-day and said—

whilst they themselves in regard to mines were not controlled? Obviously not. They would have had to come to us to-day and say—

I want to point out that this measure, the Diamond Control Act, was described by the right hon. the leader of the Opposition at the time as—

I hope he is not going to regard this Bill in the same light, and I hope he will recognize that it is in the interests of the State, and in the interests of every mine owner and in the interests of every alluvial digger that some reasonable limitation should be placed upon the output of diamonds, otherwise down will come baby and cradle and all; the whole lot of them, to use a vulgar expression, will be in the soup. It is obvious to me that when we passed the Diamond Control Act in 1925 we excluded alluvial diamonds on the sole ground that their production was so insignificant that we could ignore them. Another motive that actuated me was that the big syndicate—I am speaking of the present syndicate as well as the old one; I do not see much difference in principle between the old syndicate and the present one except that we have got better terms for the producers—that your syndicate spends its profits in other countries whereas your alluvial digger spends the money in this country. But to-day we have to deal with an entirely new problem. There has been a revolution of alluvial digging and we are bound to take cognizance of it and to protect both the State and the mine producer and the alluvial digger. You will see that the select committee of 1924 already adumbrated the possibility of limitation of the output—

As regards South-West Africa, there is no need for legislation. The Administration of South-West has an ample grip on the situation now, and what is more, while the State here in the Union has a very material interest in the diamond market and in the success of the diamond industry, South-West is to a very large extent dependent for its revenue on its diamond trade. With regard to this right of mining, and the disposal of precious stones, you will find that in the Transvaal Parliament in 1908, before Union, the position was fully set forth by the Minister of Mines, Mr. Jacob de Villiers, now Judge of Appeal, and is reported in the Hansard for 1908. As I say, we maintain in this Bill the root principle that has always been a characteristic feature of past legislation, that an owner is not forced to throw his ground open to prospectors or to have his ground proclaimed. If a man is a farmer and wishes to remain a farmer he is fully entitled to do so, and I think it would be a sorry day if the State stepped in and compelled a farmer, an owner of land that is beneficially occupied, to have his land thrown open and proclaimed against his will; but if he chooses to allow prospecting and exposes himself to the proclamation of his ground, then he has to deal with and recognize the possibility of a big community arising on the digging and the necessities and amenities in connection with the community, such as water and so on.

What does he get out of it?

In Sections 13 and 19 his rights are defined. We simply maintain the rights as they are to-day. The select committee suggested that we should have a proportional basis, which would have eliminated the object of these intense subdivisions that have taken place during the last nine months. It was a very laudable object they had in view, but when I analyzed the result of their proposition I found that in the Cape Province, for instance, we should be giving away State assets by granting uniform rights throughout the Union. For instance, in the Cape Province to-day on a farm of 1,000 morgen the owner becomes entitled to claims consisting of 90,000 square feet. In the Transvaal under the very same circumstances the owner becomes entitled to 414,000 square feet. By what right would we have been entitled to give away State assets in the Cape Province by levelling up the 90,000 with the 414,000, bearing in view the fact that this has always been the law in the Cape Province and that every owner who has thought of minerals or precious stones has acquired his property and got transfer knowing what the law was? We did not feel justified in doing that. There was so much dissatisfaction on the part of the owners that we thought it better to leave the law as it stands to-day, and that is why in Schedules 4 and 5 of the Bill we have set forth the rights as they exist to-day. With regard to Clause 20 and this retrospective provision, our statistics show that up to 30th June of last year the average size of a piece of ground proclaimed as alluvial digging in the Transvaal was no less than 1,040 morgen. In the Cape Province the average size proclaimed was something like 1,020 morgen. Suddenly since this intense subdivision the average has fallen to quite an insignificant number of morgen. We have the farm “Welverdiend” which has been cut up into 50 blocks, and on every block a special company has been floated. That company is the registered owner of that plot of ground, and the result is that each company claims 200 owners’ and 50 discoverers’ claims which is roughly equal to five morgen. These acute and astute gentlemen are very far-seeing when it comes to extracting wealth. That farm has changed hands long ago, and the registered owner is a company. What could they do? They could divide it into a thousand pieces of five morgen each, and each five morgen would be equivalent to their owners’ and discoverers’ claims; and not one inch of ground would be left to the public and the State. No one in his proper senses could ever say that that was the intention of the Legislature of the Transvaal or of any part of the Union. These are owners’ farms intensely subdivided. [List read.] If you look at the diagram of the farm “Doornplaats,” it is a sheet like this [the Minister held up a diagram] and full of strips, cut up with a view to artificially increasing the owners’ and discoverers’ claims. Grasfontein has been divided into 50 portions, Welverdiend into 50, and so on; the African and European Investment Company has eight of these farms and has a capital of £2,000,000; the Treasure Trove Syndicate, £127,000; Lichtenburg, £70,000; Welverdiend West, alluvial, £50,000, and so on. We know what is behind this. It is not a bona fide industry for the production of diamonds. It is making paper and selling it. It is market-rigging. Everybody knows what happened with platinum. Before an ounce of platinum had been extracted out of the soil companies had been formed here and elsewhere and shares were quoted on our markets, which panned out at no less than 13 millions sterling, before an ounce of platinum had been produced; and then they talk about the innocent shareholder! What people were the shareholders? Not the ordinary poor farmer and digger, but the gambler and the speculator. It is commonly conceded and it is common cause that this intense subdivision is a great evil, and should be stopped. They are now coming with tears in their eyes and saying—

That is why I propose to make the clause retrospective. We had a similar evil in the Transvaal, and I am sorry to say that that was the spirit that prevailed on the Rand in the early days—I am not commenting on the present conditions—for many years the gold mining industry, as an industry, was very much neglected, and the main object was to make paper, sell it and rig the market. The main object was to obtain control over companies, not by holding shares, but sending out circulars and proxies to be signed by the ordinary shareholder who allows himself to be led by the nose. When, under the aegis of the leader of the Opposition, or rather Gen. Botha at that time, and the leader of the Opposition was his right-hand man, Mr. de Villiers, the Minister of Mines, introduced the gold law of 1908 he said this in the House—

This is the evil I am trying to combat in this retrospective clause, and for the future also. There is the case or the Consolidated Main Reef—recently its shares have appreciated. Why? I leave it to hon. members. Take the case of the Geduld East. We were reproached for not accepting the terms offered, and that area was systematically decried. Last year we gave this area to the Union Corporation, and what was the result? Before anything worth while mentioning was done to the property, the shares on the market stood at 33s. The only development that was done was a few hundred feet. Take the case of a ` company a few years ago. There a company used one of its officials or directors as a mere dummy, and hon. members should read the opinion of Mr. Justice Kotzé on the methods that were employed. That is the sort of evil I am trying to eradicate.

Why didn’t you do it in 1908?

I am very glad I took part in drawing up that law, and I am not ashamed of the part I played. The Minister forwarded me a draft copy of the Bill, and I spent nights over it, and I and others are responsible for the leasing clauses contained in Section 30. The leasing system was suggested by Mr. Warington Smyth (Secretary for Mines and Industries), and the formulas and calculations were made by Sir Robert Kotzé (late Chief Mining Engineer), and the Government of the day—to their credit, be it said—entirely approved of this new principle of leasing. The mine owners of the Transvaal and the mining industry were, in President Kruger’s time, unjustifiably well off, and if it were not for that leasing clause under the Act of 1908, we should not to-day be drawing £1,300,000 per annum from the Government Areas alone. The Government Gold Mining Areas are the finest, the biggest, the richest and, perhaps, one of the best-conducted mines in the world. I want to give the leader of the Opposition every credit for his share in that arrangement. Why has the Government Gold Mining Areas been such a success? Because there were no watering of capital and no vendors’ shares, and the laws restrict the company to such an extent that there can be no improper dealing with the company or its shares. If that principle had been followed from the very start, the State would have drawn millions of pounds from the Transvaal alone. That is my justification for employing the lease provisions. I would refer hon. members to the Transvaal Hansard of 1908, page 703, where Mr. de Villiers, the then Minister of Mines, dealt with the question of leases. The leaders of the mining industry in the Transvaal opposed that principle. The people working the New State Areas, the Government Gold Mining Areas, and other leased areas, are quite satisfied, and the State is satisfied also. The State has substantial and entirely justifiable interest. Mr. de Villiers, in his speech referring to Clause 30—the same principle as I have proposed—said—

That is why I say the mining industry was unjustifiably well off in republican days. The proposal has been made to me that instead of giving the owners discoverers’ rights, as set forth in Clauses 13 and 19, we should cut out all owners’ and discoverers’ rights, and adopt the percentage basis. The owner and the discoverer is usually one and the same person. The owner of a farm does not allow anyone to prospect without his permission. The owner stipulates that he should have the benefit of any mineral discoveries that may be made, and he allows the discoverer some compensation. The idea under the percentage basis is to cut out the owners’ and discoverers’ rights, and instead to give the owner 12 per cent. or 15 per cent. of the value of the finds. It is suggested that the buyers should account to the owner for that percentage. It seems, however, to be an entirely impracticable scheme, and not feasible for a moment. The effect would be to lay a direct tax on the diggers, who would be up in arms at once. There are so many administrative difficulties, that I do not think we can entertain the proposition. I have inquired from the mining commissioners and the officials of the mines department, and it has been represented to me that the whole thing is impracticable. What is more, I have never had a general request from the owners suggesting a percentage basis. I should not be justified, on the information I have to-day, in adopting such a basis. For one thing, the opportunities for evasion would be many. I do not think I need dwell further on the main principles of the Bill. As regards the exclusion of officials, there are certain syndicates to-day in which I have reason to believe public servants have been directly and materially interested. I mention the Carrig Syndicate and Waaikraal. It has been represented to me, I do not say it is true, because I have not investigated, that certain officials get hold of certain information, and that information, by way of telegrams, is divulged. I have reason to believe officials are interested in alluvial diggings and in recent discoveries, and I say that the thing is entirely unsound, and I think the House will approve of the principles in President Kruger’s law in 1898, repealed afterwards, that officials were to be excluded. According to the schedule, we shall include members of the Electricity Supply Commission, the Miners’ Phthisis Board, the Miners’ Phthisis Medical Bureau, the Miners’ Phthisis Medical Board of Appeal, the Control Board of the Land and Agricultural Bank, the Railway Board, or any other board whose members are appointed by the Governor-General or by a Minister of State, or by the administrator of a province. It is unsound that these persons should be interested where they are giving their whole time to the State. These diggings are pre-eminently speculative.

Will you exclude Cabinet Ministers as well?

I have no objection at all. With regard to the rushes which have taken place, members will remember we were forced to withdraw Namaqualand from prospecting. In the first place, the find at Alexander Bay was to unprecedented, and the production, even in the case of one prospector, so without example, that we were bound to take steps. If we had not withdrawn Namaqualand from prospecting, we should have had a rush from all parts of the Union, and many of the people who would have come there would have been hopelessly smashed, and would have been thrown on the shoulders of the Government. Representations have been made to me to embody provisions preventing wives and children from being present at the diggings, and I think other provisions of the Bill are calculated to reduce the enormous aggregation of human beings at the diggings, but I say it would be inhuman to prevent wives and children from being on the diggings. It would lead to a most undesirable state. The sound thing to do is to ascertain as far as possible the capacity of a particular digging, and to see by the administration of this Bill, when it becomes law, that we do not allow there more people than are reasonably proportionate to the capacity of the diggings. To-day you have diggings thrown open where the capacity is 20,000 people, but you have people there in clusters of two or three times that number.

How does this Bill prevent this?

Because we are going to limit the area by applying the lottery system, or the lease basis, or by declaring it a State digging, and controlling it in every way to see that the number of employees is limited. If you have a lottery, all the persons will have to be present on the proposed digging personally, and they must have their licence in their possession. You do not throw the digging open at once. After the lottery has taken place, and the prizes drawn, they can only start work a month hence, and those who have not drawn a prize will return to their homes. Those, for instance, who go to places like Lichtenburg and Rustenburg to take part in a lottery will not take their ox-wagons and their wives and families, as is the case to-day. They come in the most improvident manner. Another thing we are endeavouring to do is to purge the diggings of undesirable characters. You will never succeed entirely, but you can do a lot by controlling the licences; by eliminating the criminal class; by controlling the trade on the diggings; and by preventing traders from being interested in claims, and by confining the digger simply to digging. He may not be interested in anything else. In Clause 59 we make provision for the grounds upon which diggers’ certificates can be refused. You will see by Clause 59—

What happens is really shocking. Whites go to native locations for immoral purposes. A man who does that sort of thing has no right to be on the diggings. Or—

It has been represented to me we are conferring larger powers on the diggers’ committees than those which have existed in previous legislation. A diggers’ committee to-day can refuse a certificate or cancel it, and the remedy is that the digger can appeal. We provide here for the appeal, but we specify the grounds because a diggers’ committee, not being a court of law, will have a better idea of those grounds. With regard to an appeal from a diggers’ committee, the appeal court is a3 follows—the mining commissioner, the head of the detective department, and the chairman of the diggers’ committee which has refused or cancelled the licence. It is obvious that the chairman who has taken part on the diggers’ committee which has decided the matter will be unconsciously biassed in an appeal, so I have made it necessary that the chairman of an entirely different diggings must go. I have made no difference or alteration in the case of the mining commissioner. As regards the head of the detective department, I have had a case before me where somebody in the detective department has written to a diggers’ committee mentioning that a certain digger’s licence should be taken away. The certificate was cancelled, and the digger appealed, and the very person who instigated the taking away of the licence sat as a judge of appeal. That is absurd. Of course, it is too absurd for words. That will be done administratively with an official of a certain standing from the detective department who has had nothing to do with the particular digger, and who shall sit as a judge on appeal with the other two. Then the control board which has hitherto, been an extra-legal body in this sense, that the law has not provided for it, although it was created by my predecessor and has been recognized in administration and in practice, it has been represented to me that we should abolish that. But I am not quite satisfied. I think that under the new Bill there will be a new state of affairs, that the diggers will take far more interest in elections than in the past, and that also the diamond control board will take a far greater interest than in the past, and until they have proved entirely unsatisfactory I think we should not abolish or dissolve them. However, the power is maintained under the Bill to either dissolve or abolish them, and to supersede any diggers’ committee by an administrative board. Now the question may very well be put to me whether the diggings have been a curse or an unmixed blessing to the digging community. I must say candidly that my impression is that they have been a disadvantage rather than an advantage. I cannot get away from that impression. I know the diggers won’t love me for saying it, but at any rate the diggings have in any case afforded an outlet to people who otherwise would have been thrown on the shoulders of the State.

You rather favour them now.

Yes, because they are there and we have got to deal with accomplished facts, but we must try and control the thing and regulate it and if it is properly controlled and regulated I think it can be turned into something of a blessing. You have had, of course, appalling conditions on the diggings—gambling, immorality, epidemics or illness—I won’t say epidemics—but still sanitary conditions were far from satisfactory—and it has also occurred that people with a reasonable means of livelihood have simply been seduced by these so-called chances in diggings to leave what was a reliable and reasonable livelihood and go in for this wild speculation.

Hear, hear.

The labourers are being enticed from the farms and the ordinary people whom we as a Government have been trying to help have been in many cases enticed away from the work they are doing to-day. Sir Robert Kotzé, a few years ago after this Government came into office, made a calculation and I think he came to the conclusion that if the diamonds which had been produced from alluvial diggings for a certain period up to the time when he reported had been produced by mines, the State would have been better off to an extent, I think, of over £300,000. But we must bear in mind, on the other hand, that the mines employ comparatively few whites and the alluvial diggings afford a very large outlet to whites. Many more whites are employed on alluvial diggings than on the mines.

What is the total population on the alluvial diggings?

It is very difficult to say. I am not in possession of statistics or reliable data to give the exact figure. On the other hand, for instance now in Namaqualand, I have been told that in a certain area where diamonds have been found and where the farms have been mortgaged, the farmers have taken advantage of the opportunity and they have made enough money out of these discoveries, the mere fact that diamonds are on their ground, to pay off their mortgages and pay their ordinary debts and they are free from debt. I have been told that that has been the case in the Lichtenburg district. But I must say probably if you take the debit and credit side of the thing all round, you arrive at a debit balance, and, in my opinion, not a credit balance. In regard to the professional digger, I do believe that he has made a decent living and more than a decent living, but you have a lot of men going on to the diggings who have never been diggers before and who have had no experience and they generally get into a hopeless mess. I hope that conditions will be ameliorated in the future. I propose putting on the order paper, as soon as the second reading is passed, a list of amendments. There are defects in the Bill as now drawn. I propose putting on the order paper these amendments and I hope that when hon. members criticize the provisions of the Bill at this stage they will bear in mind that these amendments will appear.

What are they?

Do they touch important points? Let us know what they are.

There is that very important clause, 73, in which we mention the date 30th June last. I am not wedded to that date. We can discuss the matter and see what can be done in that direction. Sub-section (3) of that clause reads—

I am not wedded to that date. Then, as I have mentioned, I am quite willing to make provision if the provision is necessary, for excluding Sydney-on-Vaal and Pniel estates, and similar diggings. As hon. members debate the question on the second reading, I will indicate across the floor of the House where I am making provision. For these reasons, I think that this Bill ought to become law as soon as possible, that it ought not to be referred to a select committee.

I listened with the greatest attention to the speech of the Minister of Mines and Industries and I would like to deal at once with one point. He said that it was a very strange spectacle that we who went to him and urged him to do something about the alluvial diggings were the people who objected to the socialistic principle of the Diamond Control Bill and the Iron and Steel Bill. It is quite true that I had an interview with the Minister before Parliament met, and I think I discussed the matter with him twice afterwards, but I did not go like a mendicant to the Minister and ask him to bring in this legislation. Had he not introduced the Diamond Control Bill he need not have introduced this Bill to-day. It is because he tied the hands of the diamond mines, because he ties us down to a certain production and certain prices, in short by preventing us from competing, that he forced us to come to him and say—

Our hands were tied and alluvial production was allowed to increase and increase without anything happening. The Minister will give me credit that I introduced an amendment at the time the Diamond Control Bill was before the House that “alluvial” should be included, and I based my argument on the fact that we had the experience of South-West Africa, and we had the experience of Angola and the Congo. The Minister would not accept the amendment for the reason which he gives, and it is a reason which guided previous diamond conferences in refusing to limit the output of alluvial, and that is that alluvial production was not very large. The fact remains that we, on this side did propose an amendment, which, if it had been accepted, would have made this Bill unnecessary to-day. Therefore it was hardly fair to suggest that we had come and said: “You must protect us at all costs against ourselves.” We do not approve of anything which savours of socialism in this Bill. We did not ask for socialistic legislation and we do not approve of socialistic principles even in this Bill, and I want to make it clear that anything which savours of socialism, anything which does not give the digger the same right as we have, anything which does not give the digger the right to which he is entitled, will not be acceptable, to me anyhow.

Who owns the diamonds?

The people who find them, I suppose. Now, Mr. Speaker, I agree that this Bill is long overdue and that it is very essential and that it should be passed promptly into law. And I may say this to the Minister, that in this instance I am speaking for the South African party, and we shall give the Minister every assistance to pass the Bill into law in the quickest possible time. (Hear, hear.) The diamond industry is in so precarious a position that unless a real sign is given that the Government is alive to this position, unless something is done, a collapse will follow. I want to say this, I do not stand here defending any particular mining industry, I approach this question from the same angle and in the same spirit which induced the Minister of Mines to send a telegram some time ago to the Mayor of Kimberley, congratulating him on the 60th anniversary of the discovery of diamonds, and on the civilizing influence which the diamond industry has had, I look upon the industry as a whole, both alluvial and mines, as branches of one industry, and the one branch cannot flourish where the other one is decaying. The diamond industry as a whole deserves the support of the Government, of any South African Government, not only because it gives them revenue, but because that industry has played a large part in the development of this country, and if placed on a sound basis it will again play the part of a great civilizing influence in South Africa. The history of the diamond industry in South Africa is an interesting, and one may even say a romantic one. Diamonds were discovered in Kimberley sixty years ago and it was the money made out of the exploitation of diamonds in Kimberley which supplied the means for the development of the gold mining industry of the Witwatersrand and which eventually established the national credit of South Africa. Even to-day the national credit of South Africa is largely dependent upon the mining industry (gold and diamonds) of this country. It was the properly organized diamond mining industry which played a leading part in the opening up of Rhodesia, which played a great part in the establishment of the fruit-growing industry of the Western Province, of the dynamite works at Somerset West, cattle ranching, horse breeding, agriculture and so many other spheres of industry in South Africa, and I am convinced that it is only the uncertainty regarding the position of that industry which has prevented the diamond companies from continuing their many general activities. I see no reason why, given the proper conditions, they should not resume their useful activities; but otherwise it with be a question of seeing how they can keep every penny and get every penny back to pay a small dividend to their shareholders. The difficult sections of the Bill are those dealing with alluvial deposits. The Minister has approached the question from the point of view of the genuine digger, and he has made every effort to preserve the alluvial diggings for him and I am in complete agreement with him on this point. On the other hand, the Minister has not shown the same solicitude for the rights of the owner; not even the discoverer has received that generous treatment to which I think he is entitled. In his very laudable desire to protect the individual digger, the Minister has been unduly hard on—

by making certain sections of the Bill retrospective. Even the section dealing with the—

can, with advantage, be strengthened so as definitely and unequivocally to prove to the consumers of diamonds the world over that they can rely on our not squandering the riches with which nature has endowed this country. I will now deal with the alluvial position and the sections of the Bill dealing with this problem. Diamond legislation in the Cape and Transvaal never contemplated that stones in alluvial could be found away from rivers; under such geological conditions as, in effect, to be equivalent to a mine, or any such climatic conditions that they could not be advantageously worked by individual diggers. The alluvial deposit was very rarely of any great thickness and therefore mining was easy. In short the kind of deposit known until recently lent itself admirably to exploitation by the individual digger. The Lichtenburg discoveries have already upset the old doctrine that alluvial is never very rich nor very persistent. In Namaqualand diamonds are found under still different conditions. The alluvial diamond deposits in South-West Africa, in Angola and in the Congo differ materially from any deposit so far discovered in the Union; but how do we know that similar deposits may not one day be discovered in the Union? This, then, brings us to the first new problem which the Minister had to tackle. How are these completely different varieties of alluvial deposit to be satisfactorily opened up, always remembering that nothing must be done to dispossess the bona fide digger. It is quite evident that the old division of diamond deposits into mines and alluvial does not hold good any longer and further subdivisions are necessary. The old system does not allow of any differentiation in the treatment of alluvial, and practically compelled the Government to proclaim any farm on which diamonds had been found within three months. This section of the law serves a twofold purpose. The Minister can get the discovery properly examined and see which category the discovery comes under. It also enables the Minister to protect the diamond market. That is if protection is wanted—if the production is such as to demand protection. I look upon this very right as being something most valuable. This right that they are not compelled to proclaim in a certain time and that the proclamation is left entirely to the discretion of the Government.

That is the law in the Cape at present.

In the Transvaal the law is that proclamation must take place within three months. But now the Government has it within its power so to regulate everything as to prevent over-production. The provision is one of the most valuable in the Bill for the protection of the diamond trade as a whole, and if this power is wisely used, it will go a long way towards solving the problem of over-production. But the Minister will admit that this is a distinct interference with the right of the owner.

Don’t you want that?

The provision in the Bill leaving the date of proclamation of a farm to the Government, as I have said, implies some interference with the rights of the owner, namely, his revenue from claim licences, from the sale of water, from trading rights, is delayed, and, of course, he cannot exploit his owner’s claims until after proclamation. I submit that the Government should have been generous, and should have given the owner some compensation for delaying his revenue for what may be a lengthy period. In the interests of a national industry the Government is justified in asking this concession from the owners, but then the Minister ought to remember this when fixing the rights of owners on proclamation, and compensate them by giving them more liberal treatment than heretofore. Having now put himself into the position of being enabled to differentiate between alluvial areas, the Minister creates four kinds of alluvial areas. There is the ordinary alluvial deposit as we have known it up to now, and to which class 99 per cent. of all alluvial discoveries belong. Then there is the special alluvial area created under Section 74. These are the areas which the Minister—if he is satisfied that such land cannot be worked to advantage by alluvial diggers in the ordinary way—can lease to the discoverer or any other person, or sell. The third class of alluvial area is the State alluvial digging created under Section 75, and, lastly, Section 76 provides for a restricted alluvial area, where no individual digger shall employ more than ten persons at any time. I shall now examine the various kinds of alluvial areas created under the Bill with a little more detail. The Bill concerns itself chiefly with the ordinary alluvial area to which category, as I have said, 99 per cent. of alluvial deposits belong. The Minister pursues the aim of reserving these areas for the genuine digger, an arrangement which everyone in the House will endorse. He says, in fact, to the diggers—

The old rush system is, fortunately, done away with, and a more equitable system of distribution or drawing of lots is introduced, and the allotment may be confined to bona fide diggers, namely, people who have been digging for six months prior to the date of disposal. The genuine digger is further protected by making it impossible for certain classes of people to become diggers, namely, civil servants, railway servants, or generally anyone in the employ of the Government. On the other hand, the diggers cannot in future go to the storekeepers or licensed diamond buyers and ask them to support him with the necessary capital to exploit his claim or arrange to work on shares. Section 63 lays it down that—

shall be guilty of an offence and liable to a fine of £100, and the licensed diamond buyer or storekeeper shall be equally guilty.

He can borrow money, but cannot mortgage his claim.

Yes, quite so. On the face of it, it may appear that this difficulty may be overcome by the other person taking out a digger’s certificate, but I do not think that that is the Minister’s intention, especially in view of Section 73, which makes it impossible for an association of partners to be interested in a claim.

There is an inelegancy to be rectified.

I have now dealt with the ordinary alluvial, that is the alluvial which the Minister reserves, and rightly so, to the individual digger. Then the Minister speaks of special alluvial where the Minister can decide whether the ground shall be given out as a lease or sold. The Minister has explained how well the lease system has worked in the Transvaal. I admit that it has been a very excellent system, and I think it will be a very excellent system in diamonds. I am referring to Section 74, and I submit to the Minister that he might follow the Transvaal example just a little further. He described how the Government gave out this ground. Well they might also establish a Tender Board, so that all applications could go first to the Tender Board which could advise the Minister.

That could be done. It could be referred to the existing Mining Lessees Board.

I think it would be an excellent safeguard, especially if the Minister bears in mind such valuable deposits as those that are found in Namaqualand. It would be a good thing if the board could decide whether a particular area belongs to one category or another. It may be the same board, of course. There are four classes of alluvial— ordinary alluvial, special alluvial, state alluvial, and restricted alluvial. I think the divisions made are very sound. I have mentioned it already to the Minister in private conversation that certain amendments will have to be made to Sections 75 and 76 to protect the rights of the owner. Take State alluvial, I suggest that State alluvial should only be available on unalienated Crown land. Now I want to examine the sections which deal with ordinary alluvial more directly. I see the Minister reserves the ordinary alluvial entirely for the digger. He says—

I think that is the position. The Minister says the digger must be in personal occupation. He must personally go for his digger’s licence and he must get the benefit, because he cannot work in partnership. Therefore, the digger cannot go anymore to the storekeeper and say—

I hope that the digger will realize that in future there will be an obligation on him to find the cash himself. It is not likely that the bank will give him the money at ordinary overdraft rates. Some other system will have to be found. He can go to the storekeeper and pledge his diamonds, because he cannot pledge his claim, but I doubt if the storekeeper will give him the money if he does not share in the result. The digger must know that in future he has to look after his own resources or his own credit in order to exploit his claim. If he has no money it will be more difficult. At any rate, I don’t cavil at the position, but that is one of the results. I do not cavil at the restrictions. I am pleased to see that the rush system has been done away with which, I think, the Minister should be congratulated on, as the old system seems to me to have become a somewhat barbarous one. The Minister introduces the system of drawing for lots, which, I think, is satisfactory. The Minister goes much further in his endeavours to protect the diggers. He removes “the corporate body or association of persons” root and branch from the ordinary alluvial diggings, and does not hesitate to make the provisions retrospective. He does this because of the Lichtenburg experience, where a number of syndicates, or even limited companies, were formed with the object of acquiring and working ground. These syndicates, whether corporate or only associations of persons, commanding larger funds, made it more difficult for the ordinary digger to acquire ground, and no doubt the Minister has received very numerous complaints. On enquiry it will probably be found that these syndicates either dealt in claims, or if they exploited the ground, employed licensed diggers to do the work on shares. There is, however, a great deal to be said in favour of making provisions against a repetition of the Lichtenburg occurrence, but surely nothing can be said in favour of any retrospective provision wherever it appears in the Bill. It is a most harmful precedent to establish, and bad in principle; it will destroy confidence in our ideas of fair dealing, and will deter people from investing money in this country if they run the risk of having vested rights taken away at some later date. These syndicates, or corporate bodies, after all, did nothing except what the law allowed. The people who participated in these companies are the general public of South Africa, and they will very naturally resent any action by Parliament which takes away rights legally acquired. If the Minister does not see his way to delete Section 73, then he should anyhow amend it most drastically. The present wording of Section 73 makes it even impossible for a limited company to hold owners’ or discoverers’ claims on their own farms.

If they are owners they are entitled to owners’ and discoverers’ claims.

The section states—

I draw attention to—

It says specifically elsewhere that they may work owners’ and discoverers’ claims.

If the Minister tells me so I accept it, but I hope he will look into the matter, and make quite certain of the rights of a corporate body and association of persons. It will also affect the case of two brothers who are the owners of a farm. I think it is only reasonable to amend this section so that, firstly, it does not apply to any owner of land, nor to any corporate body or association of persons which has acquired the owners’ or the discoverers’ rights. Secondly, nor should this section apply to any claim acquired or certificate granted before the commencement of the Act. Well, I hope the matter will be cleared up without any doubt. People have their legal rights as owners of claims, and why should such rights be denied a corporation because of the supposed iniquities of certain companies. My experience of companies hardly justifies the adoption of such stringent steps. Take platinum, which is a very speculative business. First they have to prove the deposit, and then to secure extraction, and it is a very good thing for South Africa that when platinum was discovered there were in existence limited companies which were prepared to undertake the risk of mining under such uncertain conditions. How would it be possible to raise £2,000,000 to mine gold 4,000 feet underground, or the necessary capital to work platinum which had yet to be proved, if the stock exchange did not exist? For the development of a country which depends on mining the stock exchange is very essential. So long as mining is a speculative undertaking we must rely on the man who is an optimist; “gambler” and “speculator” are too strong terms to apply to this class of man. Now the people who have acquired claims are ordinary members of the public. The Minister would be surprised if he knew the number of people who are shareholders in claims. They acquired the claims genuinely and honestly, and I am sure the public will resent the retrospective clauses of the Bill. Either Clause 73 should be eliminated, or it should be made clear that owners’ and discoverers’ rights can be held by corporate bodies, and that claims honestly acquired by companies will be protected. If these claims were taken away it would not benefit the Government, but a few people only, and the benefit to the diggers would not be nearly so great as the injury that would be done to the public by passing retrospective legislation of this nature.

Sub-division has gone on despite the issue of an official warning.

We shall be doing a great injustice if we eliminate companies if it is not made clear that they shall retain owners’ and discoverers’ rights over farms which they own, or have claims on, if they were honestly bought from people whose rights were undoubted. If an amendment of this nature is introduced it will get away from the retrospective nature of the section. The Minister and the Nationalist party should really consider the effect it must have on the general mind of the investing public if we take away rights genuinely and honestly acquired. The harm this will do to South Africa will be enormous, and people will not want to invest money here. However much we may regret that limited companies have obtained a footing on certain farms, that does not justify making any section of the Bill retrospective. I will now pass on to consider how the rights of owners are affected by this measure. I have already mentioned that the owner is entitled to some compensation for the delay which must, in future, occur in the proclamation of his farm. Then, although this is a consolidating measure, the Minister does not see his way to give the owners on alluvial areas equal rights in the four provinces. Take private land, for instance. In the Transvaal the owner receives 200 claims, in the Cape 45, in the Free State 400, in Natal 200. Why this difference? If the rights of the owners were increased to the Free State figures it would not be over generous.

What you lose in one province you gain in another.

I submit that the owner is entitled to better rights on alluvial anyhow, especially as he must peg his claims under the Bill in one block—

Under the existing law the owner could peg as he liked. This stipulation reduces the value of his rights considerably. What do his present rights amount to anyhow? One morgen equals 44.07 claims of 45 x 45 feet; and even in the Free State the owner receives only 9 morgen, surely a paltry award compared with the 50 per cent. the owner receives in case of the discovery of a mine. It would be a great deal in a town; for instance, in Cape Town, but it is very little on the veld. A mine is by far a more valuable deposit than alluvial. Why does the Minister find no difficulty in equalizing the award throughout the Union in that case, but finds it difficult in the case of alluvial? The rights accruing to the owner should be identical throughout the Union, and in view of the concessions the owner is called upon to make not less than the rights accruing in the Free State. I submit, further, that the principle of giving a fixed number of claims to the owner is not a good one, and I urge that the principle of giving him a percentage of the ground proclaimed from time to time be adopted, or that he should receive a certain number of claims per morgen of land proclaimed an alluvial digging from time to time. The percentage or number of claims per morgen should be such that it equals the rights now accruing to owners in the Free State. If this system were adopted the Minister could delete sub-section 20, which deals with the sub-division of private land, and contains a retrospective provision. I have shown that the Minister is not over generous to owners in his Bill, but the preliminary chapter of the Bill goes even further, and takes away vested rights without compensation. The preliminary sections of the Bill will, I am sure, meet with the strongest opposition from all fair-minded people. By a stroke of the pen the Minister takes away the form of title known in Griqualand West as “Free State title,” under which title the minerals belong to the owner. The right or wrong of such a procedure is really not affected by the question whether there are few or many such titles in existence, nor does the history as to why such a title survived in Griqualand West, and not in the Free State, make confiscation at this moment just. I visited Kimberley during the recess and enquired into this matter, and as it has been suggested that the large majority of these farms are owned by De Beers, I looked into this matter and found: Farms in Griqualand West granted with Free State or qualified reservation titles (Free State titles)—75 farms of which the approximate area was 502,793 morgen; 23 farms are now held by D.B.C.M., Ltd., of which area is 96,811 morgen; 52 farms belonging to other land owners, of which area is 205,982 morgen. Qualified reservation titles: 95 farms of which the approximate area was 349,583 morgen; 10 farms are now held by D.B.C.M., Ltd., of which area is 36,629 morgen: 85 farms belonging to other land owners of which area is 312,954 morgen. There are altogether 33 farms, representing 133,000 morgen, owned by D.B.C.M., and 137 farms, representing 518,000 morgen, owned by other land owners. The qualified reservation titles are to all intents and purposes Free State titles. After Griqualand West had been established as a separate Government, the authorities approached the farmers with the view of putting the question of title on a recognized basis. The farmers claimed the mineral rights, and, in order to expedite matters, the authorities suggested the qualified title, which provided that the granting of title did not prejudice the rights of Government, “if any.” Some farmers accepted this title, others refused, and finally the authorities recognized the position and gave the Free State title without the qualification. Why should the Government take this drastic step now of taking people’s rights away? It is absolutely wrong. I confidently rely on the fair-mindedness of the Minister not to press this provision. The Minister said he would not make it applicable to the Vaal River Estate. I suppose that that is because the founder of that company, the late Mr. Mendelsohn, presented that collection, of which we are all so proud, to the House of Parliament, and members would be ashamed to go there if they had robbed that company of their legal rights. Surely it is wrong to say to one set of owners who have made use of their rights to the minerals—

and to say to others—

I should like to confirm what the Minister said that Sidney-on Vaal, that is the Vaal River Company, is a model diggings, with good hospital accommodation, schools, and so on.

Business suspended at 6 p.m. and resumed at 8.6 p.m