I move—

seconded.

called for a division

Upon which the House divided:

May I ask whether the Minister in charge will make any statement in view of the rejection of the Bill by the hon. the Senate.

The matter has again to be considered by the hon. the Senate.

Business suspended at 11.15 a.m. and resumed at 12 o’clock noon.

I cannot agree to this amendment. It is a clause dealing with sub-division, and as originally printed, it mentioned the 30th June, 1926, any sub-division since that date. The 1st April, 1927, has now been substituted and I am sorry for reasons I have explained, that I cannot accept the amendment. The farm Grasfontein has been cut up into no less than 120 portions. The evil has been done, and unless it is made retrospective to the 1st the whole object of the clause would substantially fail.

I hope the Minister will reconsider his decision with regard to this clause. I am extensively interested in the Bill and the amendment proposed by the other place does not affect the fundamental principles of the Bill. It does not affect even the main objects of the Bill which are to control the output of diamonds so that they shall not go unchecked and uncontrolled and swamp the market and bring about a terrible fall in the price of diamonds. This clause is not of very great importance when you compare it with the main principles of the Bill. If this Bill does not pass this session of Parliament, you will have a disaster and a collapse of the whole diamond industry. All the merchants and traders in rough and polished diamonds in England will be tumbling over each other to get rid of their stocks to make their loss as small as possible. I think it is Reasonable to jeopardize this Bill simply for the purpose of depriving people of rights they have legitimately acquired and paid for and which this Bill makes unlawful. The sub-division of farms, which I do not approve at all—I quite agree with the Minister that it is a danger—was acquired under the law as it then existed, and you are making unlawful to-day what was legal at the time the subdivisions were made. I hope the Minister will alter his attitude. He has taken up the attitude that if he does not get his own way on this clause the diamond industry may perish. I assure him that thousands of men employed to-day in the diamond industry in the mines, will have to be discharged, and large cities’ cities like Kimberley, may become villages’ Several of the companies which have low grade mines will be unable to work at all; they will have to close down. The De Beers Company, for reasons which I stated on a former occasion, will survive. If this Bill, with all its imperfections—and there are many imperfections in the Bill—does not pass, there will be a collapse in the diamond industry, prices will crumble away, and the majority of the diggers, on account of the price to which diamonds will fall, will be absolutely ruined. I do think that the Minister should pause before bringing about this disaster upon the country. The responsibility will rest upon the Minister and the Government.

On the Senate.

…. and when the Minister’s eyes are opened to the sad result of this unreasonableness, it will be too late. The damage will be done and recovery cannot be effected for many years. We have a drought in this country. For the love of heaven, don’t let us add to the drought by bringing about a collapse in the diamond industry, and the loss of an enormous revenue to the State. I do beg of the Minister—I think I know as much about the diamond industry as anybody and what the effect of this Bill will be upon it—to be reasonable and accept these amendments, which do not affect the fundamental principles of the Bill.

I want to make an appeal to the Minister in another direction. I have no interests of any sort whatsoever in this Bill. I have not, and never had, a diamond share in my life, so I can speak entirely without bias in connection with this measure. I agree with the Minister that this system of dealing with these sub-divisions of farms is good, but I say you are embarking upon a serious course when in regard to transfers of property which have already been passed by the deeds office in this country, and received the force of law, you introduce retrospective legislation. I believe it is the view of the vast majority’ of people that when transfer of property is given, so long as they get transfer of that property lawfully—

Transfers are not affected.

They must have been legally passed if the law allowed them to pass.

Transfers are not affected; it is the multiplication of the privileges.

That does not matter. We have always looked upon it in the Province of the Cape of Good Hope that if you had got a title deed passed by the deeds office, that was considered a solemn document, and everybody was prepared to negotiate upon it, and to do anything to cause alarm in that direction, I would point out to the Minister, is not a good thing to do. On that account I would appeal to my hon. friend that in so far as the rights of property are concerned, and in so far as transfers are concerned that have been adopted by the deeds office, it is a very serious course to, by retrospective legislation, make the action of the deeds office null and void.

The discoverers’ and owners’ claims are recognized.

I want to speak on the Bill, not from the point of view of my hon. friends who have just spoken, but from the point of view of the national finances. I am only sorry that the Minister of Finance is not here, otherwise I cannot conceive, for one minute, but that he would have a few words to say on this matter. Is it worth while for the Minister of Mines and Industries to run the risk of wrecking this Bill, and has he considered what the results will be? I am not a diamond man; I have not a diamond share, and never had one. I look at this matter purely from the point of view of the national finances. It has been stated by those who are authorities on the diamond industry that it is going, I won’t say to be ruined, but to hold up to a very serious extent, the diamond trade of this country. I remember in the old Cape days when we had a similar hold-up, about 1907, as a result of the collapse of the New York market, and it made an enormous difference to the finances of the Cape Colony in those days. If the predictions of these hon. gentlemen are correct, that it is going to lead to a hold up of the diamond trade, suspend the trade, practically, what is the result? The estimated revenue to be received during the year ending 31st March, 1928, from Government ownership alone is £350,000. From the export duty on diamonds the Minister of Finance expects to get £1,000,000 during the current year. If there is no demand and no export overseas, where is he going to get it from? Then there is the income tax, £525,000, from diamond mines, a total of £1,875,000 that the Minister expects to get this year from diamonds. Is it worth while for my hon. friend to risk the disaster which would attach to the finances of this country? The Minister of Finance said the other day that he has come already to the assistance of the administration in South-West, simply because they are not getting and are not expecting to get as much from diamonds as they have done in the past. The position will be made still worse. South-West depends to a very large extent, unfortunately, upon the diamond trade, and if the diamond trade comes to a full stop through the action of the Government, where are they going to get the money from? I am absolutely certain so important is this that if the Minister of Finance were in his place, he would have to insist upon this Bill going through in some way or other, or there would be a serious crisis. It is absolutely necessary in the financial interests of the country that this Bill should go through. My hon. friend is not justified in the attitude he takes up, in running the risk of this being thrown out. The Senate have expressed their opinion. If the Minister does not see his way to accept it, he takes a very great risk indeed. The responsibility rests upon the Minister. They ought to know that. The Senate are the legislators, but the ultimate responsibility, as the people will tell them, when there is confusion, rests with the Government. I do not understand very much about the amendments, but from what my hon. friend behind says they are not of such drastic importance that the finances of this country should be run into very great confusion. We have sometimes to take these things in the interests of the country generally, and my hon. friend should not take the risk of ruining this Bill. I am worrying about the finances. I do not want to see the finances of the country thrown into great confusion and peril, as I am afraid they will be.

I want to protest against the attitude of some hon. members opposite who think the responsibility for what may happen if this Bill does not go through rests with the legislature.

Of course it does.

The responsibility rests with the Government, and nobody else. The Senate have brought the amendments in the exercise of their proper authority. They have just as much right to amend this Bill as we have.

Can they appreciate the difficulty mentioned by the hon. member for Capetown (Central) (Mr. Jagger)?

Of course they do, but in the last resort the responsibility rests with the Government. It is for the Government to say whether the amendment made by the other place is so important that rather than accept it, they will throw out the whole Bill. What is that amendment? The Minister has told us that in a certain part of the country farms have been cut up to an absurd extent; that was never contemplated by the law, in order to enable the owners or people to whom transfer of shares in the farms has been made to obtain the maximum number of claims under the diamond law. That, no doubt, is an extremely undesirable practice. I agree that it is and that it ought to be stopped. No one here, or in the other place, I say without hesitation, defends that practice. The whole question is this—whether that cutting up having taken place perfectly legally, and where persons who have obtained rights under the law got them registered in a manner which our law said is conclusive, they are now to be deprived of that ownership for a period of twelve months back by legislation made now, which cancels rights obtained and ratified by law— and that without the slightest regard to the interests of those who have obtained them lawfully, and paid full consideration for them, no doubt.

A lot of gamblers!

A pure assumption.

Is the Minister to condemn them from the moral point of view? This is not a moral question, but a question of law. Is legislation going to go into land titles and say that where these have been obtained by a gamble or a speculation or not, they should be cancelled by legislation? The Minister is introducing a principle which his hon. friends will not thank him for. We are striking a blow at the security of title in this country and at the security people have had in the past with their titles which were duly registered. They are the owners, and their property should not be taken away from them. Now you say that because we do not approve of the motives—

You are striking a blow at robbery.

By committing another robbery? That is the principle that prevails in some other parts of the world—if someone steals your horse, you go and steal some other person’s horse.

Stolen from the State.

The laws of the State allowed the property to be divided and people to secure title to it; and I am surprised that the hon. member for Albert (Mr. Steytler), of all people, is lending his approval to a law which says that, no matter if you have obtained title to landed property by every means the law allows, the legislature can come along and say that it does not approve of the motives which animated you in acquiring that property, and therefore it will cancel your rights. I think the House ought to pause before it agrees to a thing like that. The other House says make it retrospective, but to the date the Bill was introduced. Then people have fair warning, and if they do it after that they do so at their own risk. Is the Minister going to take the responsibility of not accepting the difference between June, 1926, and April, 1927 —the period which the other place has put in; and is he going to scrap the Bill? The responsibility is his.

The words of the leaders of the S.A. party might more properly have been addressed to their supporters in another place. If the Government insists on this going in, and another place says it shall not, the responsibility rests with another place. The majority of the elected representatives of the people of the country have insisted on something being done. The majority in another place who are against this have not even been elected, but have been nominated by the S.A. party, and they refuse to allow the Government to carry out the wishes of the majority of the elected representatives of the people. The responsibility does not rest upon this House or upon the Government, but with the chosen representatives of the S.A. party in another place. If the S.A. party want the Bill passed, let them call their followers together in the caucus room and ask them to agree to this Bill. It is said that the other place has become a nuisance—

The hon. member must withdraw that.

I withdraw. It is said that a little change that has been brought about has proved of advantage, and the action of one branch of the legislature is such that the Government should contemplate whether another change should not be brought about.

I do not think the public will agree with the hon. member that the second chamber should be done away with. I certainly don’t. People do not look at parliamentary government only from the point of view of the hon. member who has just spoken, but of the future of this country. If we leave legislation to a chance majority in one House that will be a very revolutionary change, and I doubt whether there would be a majority in the country for such a change. In this respect the Senate has been very much wiser than we have been, because they have defended a principle which is never abused without disaster— that is, the recognition of rights acquired before legislation affecting them was introduced.

They are doing that to rob the Government.

The hon. member should restrain his language. How can you talk about robbing the Government when the deeds registry passed these transfers and it is done under the law?

It is legalized robbery.

If it were robbery there would be no necessity to pass the law, but the people could be brought before the Courts. If the existing law were wrong, you have no right to make this measure retrospective, and by so doing you are aiming a blow at parliamentary government. Supposing the present Opposition were returned to power, would it be right for it not only to undo all the legislation passed by this Government, but in addition to make the measures they pass have retrospective effect? If you have a right to make a law retrospective for one year then you can extend the period to five or six years, for once you recognize the retrospective principle there is no time limit. If that is done you can cancel transfers lawfully passed with the approval of Government officials, you can cancel the formation of companies and you can cancel the investments of large numbers of people who have bought shares in companies duly registered. This is a form of legislation I strongly protest against, as it interferes with rights lawfully acquired. Many people who have subdivided their farms have sold them to companies in which thousands of people are interested. Although, no doubt, there has been a great deal of speculation, South Africa has derived considerable benefit from people putting their money into speculative mining ventures. We should not scorn people who risk their money in this way, because but for speculation of this sort our mining development would not have progressed at the rate it has done. In South Africa of all countries we need speculation of a certain type where mining is concerned. It is not right that people who have bought shares quite legitimately should be called a lot of gamblers. No warning was given at the time of the subdivision of these farms.

They did not want a warning—they evaded the law.

If they evaded the law then the transfers should not have been passed. To say that they evaded the law is mere quibbling and begging the question. What the House is asked to do is to strike a blow at fixity of tenure, security of title and parliamentary government. The other place on this point stands on a very much firmer footing as far as the real interests of South Africa are concerned than does the majority in this House which is assisting in passing the clause in its original form. The other place is safeguarding the interests of the country. But those who favour the clause having retrospective effect will find that their reaction will be a boomerang which will come back very disastrously to them later on if they should lose their majority in this House.

I am very sorry that the hon. member for Cape Town (Hanover Street) (Mr. Alexander) has worried about the matter because it appears from his speech that he knows nothing about the position at the Lichtenburg diggings. Syndicates have done things there to intentionally evade the law by sub-dividing farms and the public have thereby been robbed of their just rights. I should like to know from the hon. member for Yeoville (Mr. Duncan) or any other hon. member of the Opposition whether they approve of the methods employed by the speculators in sub-dividing the farms.

No.

They also disapprove of it as being against the spirit and intention of the law, but yet they want to allow the speculators to retain what they have obtained in that way.

Business suspended at 12.45 p.m. and resumed at 2.21 p.m.

When I got up to speak the hon. member for Ronedbosch (Mr. Close) also rose. I cannot help expressing disapproval of the action of the hon. member for Rondebosch and other members who know absolutely nothing of what has taken place in connection with the sub-division of farms in the Transvaal, except possibly that a few of the speculators who are guilty of evading the law live in their constituencies. Even the attitude of the hon. member for Yeoville (Mr. Duncan) is inexplicable because he acknowledged that he was opposed to the principle of sub-division.

It is not illegal.

The hon. member admits, however, that the principle is wrong and that those who sub-divided did something contrary to the intention of the law. I take it that there is not a single law in the land which cannot be evaded. My attitude is that if the Government is convinced that evasion has taken place owing to a flaw in the law it ought to be put right. The hon. member for Yeoville will agree. Through sub-division the State has been robbed of a few million pounds. The Minister is quite right in trying to put that irregularity right. As for Clause 20, I want to say that if the Minister agrees to its being amended as the Senate wishes, I shall not any longer be prepared to support the Bill, because of the fact that the syndicates have already bought and sub-divided all the land in the Western Transvaal. If the Clause is amended then the Bill means nothing and will be contrary to the interests of the diggers—100,000 citizens of the Transvaal. This clause will give back to the diggers and the public of the Transvaal what they have been deprived of by the evasion of the law. Even if we have to come back to have a second session about the matter I hope the Minister will not concede a point with regard to Clause 20.

I do not think we are very much concerned with the argument of the last speaker. Every reasonable man, whether inside the House or outside, who understands anything about the finance of this country, recognizes it is of supreme importance that this Bill should be placed on the statute book, or, at any rate, the clauses dealing with the control of the alluvial output. I would suggest to the Minister that he has got nearly all the points in this Bill over which there was controversy in this House; the other place has practically accepted every disputed point, and accepted the Minister’s view of the matter. The other place has practically accepted many things which those of us on this side of the House would not have dreamed of accepting. For instance, they have accepted the confiscatory clause dealing with mining rights on titles which are at present free. Properties which at the moment have their entire mining rights intact will, under this Bill, be confiscated. The Minister has got that point through—a very big point, and I do suggest to him it is only reasonable to show, at any rate, some spirit of compromise in this matter. Hon. members on the other side have suggested that the other place would be responsible if this Bill is thrown out.

So they will be.

I would suggest to the House that is practically a form of blackmail. The position the other side are taking up is that the country requires a Bill to regulate the sale of diamonds and they have said to the other place, “We will not agree to do this very necessary work, and put this very necessary legislation on the statute book unless at the same time you agree to other conditions being put into the Bill which a big proportion of the representatives of both Houses think entirely wrong and unjust.” I suggest that that form of blackmail can never act in the long run. You are practically reducing the other place to a nonentity, if they allowed it for one minute. Another point I would like to put to the Minister is that this clause, as I read it to-day, not only will injure those people who sub-divided the farms, who went to the length of this extreme sub-division which we all agree was wrong, although in law it is right, but you are not going to hit these people. The people who did this act, who stretched the law to the utmost extent, to a great extent, have already got rid of these portions to third parties. What does the Minister propose doing with regard to these third parties? He is going to confiscate what they bought for hard cash, in good faith and absolutely in accordance with the law. He is going to confiscate that property without giving them any compensation. What legal or moral right has he to do that? Does he propose these third parties shall have recourse from purchaser to seller right back until they get back to the original owner who subdivided? The thing seems to me an absolute impossibility. I do not think this clause, proportionately to the harm the Minister is going to do by not putting this legislation on the statute book, is worth one minute’s consideration of the Minister. He should agree to the amendment, because he is risking the whole financial structure of the country for the next two years, simply in order to get at certain people who stretched the law unduly. That is what it really amounts to, risking the financial embarrassment of this country. If anything happens to our diamond industry, the financial embarrassment of the Treasury, more particularly in the next financial year, is going to be most dangerous. I would also emphasize the very great danger there is of this kind of legislation forming a precedent. Where are we going to stop if a man, honestly purchasing certain rights—I am speaking of second and third parties—if he buys certain rights legally and in absolute innocence, if legislation is going to be passed months afterwards, confiscating the property which he has purchased? The precedent to me seems most dangerous, and I am astonished at a lawyer of the standing of the Minister of Mines and Industries sitting quiet. If he had not proposed it himself I could not suppose a lawyer of his eminence would be sitting quiet and seeing it done. I do hope the Minister will recant, and let this amendment go through.

I do not wish to elaborate the arguments which have already been used, except to say that it is most unfortunate in the state of the country that the Minister takes up this attitude, and sooner than give way he is taking the risks which have been indicated by hon. members. The Minister will hardly deny that nothing would have been easier than to ensure the Bill being wrecked, and it could have been done half a dozen times but the Opposition, although it did not like all the provisions of the Bill, felt that the main provisions embodied in the Bill should be passed, and to that end has deliberately refrained from making difficulty and criticizing various provisions which it did not like. The Opposition has given a good deal of assistance in getting the measure to the stage it has reached. There are certain principles to which we take strong objection in this House. The other place has taken the same view, and now we have come to this stage where the Minister says he will not give way on questions which are of minor importance, after all, in comparison with the main provisions of the Bill, and he is risking disaster. I have heard it said that Clause 20 is not as pernicious according to our view as it seems, because it is capable of being read that a man with any owners’ and discoverers’ claims may, notwithstanding the fact that the Minister may be convinced that these claims are situated on land which has been subdivided with the object of increasing owners’ claims, have these claims recognized as valid. I cannot see how it is consistent with the reading of this clause. Perhaps the Minister when he replies will give us some information on this point. If that is so, it will make some difference, and it would not be quite so objectionable as it appears now. For the sake of a clause which is going to offend vast numbers of people and is going to destroy a good deal of confidence in the country, is it worth while risking all this to get this clause?

I cannot understand the inconsistency of hon. members opposite, who strongly disapprove of this intense sub-division, and at the same time say we should not remedy it retrospectively. With regard to the construction of Clause 20, there is no doubt to my mind at all, and I have explained the position in the Senate. It is this: where you have a farm to-day [diagram shown and all that portion has been cut up, and owners’ and discoverers claims have been allotted by certificate, this clause will in no way interfere with that; but if there are portions on which there have been sub-divisions and no discoverers’ or owners’ claims have been allotted, and no certificates have been issued, they could be affected by. Clause 20 if the Minister exercizes his discretion against them. All the owners’ and discoverers’ claims already allotted remain intact and unaffected.

I do not see how you can make that out from the wording.

I have not the shadow of a doubt about it. The section was not framed to affect discoverers’ and owners’ claims already allotted. There is always discretion with the Minister. If you have to-day, say, a farm which has been cut up into 100 portions, and on 80 portions discoverers’ and owners’ claims have been issued, they are absolute, and cannot legally be affected by Clause 20; but of the remaining 20, the Minister may say, “I will not recognize owners’ or discoverers’ claims”; or he may say that out of 20 he may recognize ten, and not the remaining ten.

Why should he have such discretion?

We have discussed that over and over again. I hope the discussion will close now, and that hon. members will not insist on the attitude they have taken up.

Question put: That the word “thirtieth” in line 49, proposed to be omitted, stand part of the Clause,

I object to the insertion in the clause of the words “as from October 15, 1927,” and also to the insertion of the words “as from that date,” and also the word “thereafter.” To show hon. members that I wish to meet them to some extent, I am agreeable that these syndicates and companies should be given up to October 15, 1927, to dispose of their holdings; but I cannot agree to April 1, 1927, being substituted for July 1, 1926. I hope there will not be a long discussion about this for I have met hon. members materially. The suggestion came from another place, and I am now stretching a considerable point in their interest.

Do I understand that the Minister is unable to accept all the amendments on page 46?

Yes, sir.

What is the precise effect of sub-section (a) now that the Minister has accepted an amendment in sub-section (1) of Section 43? A corporate body is given the right to hold claims up to October 15, 1927. What is the percies effect of sub-clause (1) which exempts interests acquired prior to that date?

All claims will be legal if held by syndicates or companies only up to October 15, 1927; but if you put in April 1, 1927, then all claims acquired by virtue of sub-section (a) will remain legal for ever thereafter and they will not have to cease to be held on October 15, 1927. That is the difference. In other words, you will have a number of syndicates and companies formed since July last year, and they are really the people responsible for the evil that exists, and they will be permanently legalized by the amendment to sub-section (a) on page 48.

Amendments put and agreed to, with the exception of the amendment in line 4 on page 48 (viz., to omit “July, 1926” and to substitute “April, 1927”), which was put and negatived.

Following message sent to the Senate:—

Might I be permitted, for the information of members in the country, to ask the Prime Minister if he will be prepared to make a statement as to the attitude and intention of the Government in calling a special session of Parliament?

Perhaps the hon. member will raise that question on the motion for adjournment.

I think the House might suspend business until 3.15.

On the motion to suspend business,

Before that is put perhaps as it will be so late for hon. members wanting to catch the train, and as members are anxious to hear from the Prime Minister what the intentions of the Government are, perhaps, with your permission, sir, the Prime Minister will make a statement now.

I am prepared to do so now. The question put was what was the policy of the Government in regard to the Flag and other Bills, and whether there is going to be a session specially to deal with them before next year. Yes. I cannot, of course, state the exact date, but it is contemplated to have a session early in October in order to deal with the question of the Flag Bill, and with the question, amongst others, of the Iron and Steel Bill.

Might I ask the Prime Minister, will that session in October be a special session, and a short session, or an ordinary session of Parliament called earlier than usual, with an adjournment for the Christmas holidays, and to carry on afterwards?

I cannot say exactly now, but it is quite likely other matters, besides those, may be disposed of at that session.

Will you then adjourn for the Christmas holidays, and go on again in February?

It is possible, but I would not like to say at this stage.

Motion put and agreed to.

Business suspended at 3 p.m. and resumed at 3.20 p.m.

I learn that there is a little longer delay in the Senate than I had expected.

Business suspended at 3.24 p.m., and resumed at 3.54 p.m.

I move—

seconded.

Motion put.

I called for a division, Mr. Speaker. You had not put it when I called for a division.

The hon. member ought to have drawn my attention to it at the time. As there has been a misunderstanding I will put it.

I move—

seconded.

Agreed to.