TRANSVAAL FINANCES.

Evening Star, Issue 11692, 25 September 1902, Page 8

TRANSVAAL FINANCES.

THE QUESTION OF TAXATION.

Pun Association—Bj» Telegraph —Copyright,

LONDON, September! 24.

The reveone of the Transvaal for the yean .ended June, 1903, is estimated at £4,000,000, and the expenditure at £3,700,000.

The * Standard ’ states that it is reported that tile proposed loan of twenty millions becomes an immediate charge on the revenue of the colonies. The ‘ Morning Post ’ says the report is significant of the confidence of the people of Johannesburg in Lord Milner. Mr Chamberlain, replying to a correspondent, says:—“ No authentic statement has been made on the question of taxation in South Africa since my speech in the House of Commons.”

This speech was made by the Colonial Secretary on July 2S. In it be said : 1 think the next point is in regard to the question of future taxation. Upon that it is not within my province to say a great deal at the present time. We have not made great pi ogress. There are an immense number of complicated questions to consider. We nave before us the duty of making a whole new tariff for the Transvaal and the Orange River Colony. I need not say that that would involve an immense number of different considerations. We shall have to consult all the experts on the subject, and it would be altogether premature to iay down any absolute conclusion at the present time. But there is one point n v, ti.ch 1 know great interest is felt, and to which, therefore, I will direct the attention of the Committee—that is the question of the taxation of mines. Now, let us understand upon what principle we are proceeding. I U ink I notice in some quarters a desire to punish the mines and punish that class of people who are described as capitalists—a vindictive feeling of which the object is not the good of th“ country, not the amount of revenue to he obtained, but the punishment of certain individuals. Well, you will not do it hy putting taxation ou the mines. It is perfectly ridiculous to suppose lhat they will sutler in the slightest degree by any silly operation of that sort- The people who will suffer, if anyone does individually, are, no doubt, the shareholders in the irines. But who are they 7 They are tinndre Is of thousands, and tnousands of thousands, of people who have no great wealth themselves, and who most of them ’erve bought their shares in the mines at an immense inerease npon the original cost; and if you put on a tax which seems to be reasonable enough, having regard to the actual profit which the mine has made, it would he monstrous as applied to any profit which these individual shareholders can expect to make. The fact is that shareholders and investors in this country and other countries are willing to speculate in mines if they can get 10 cent., and they will not speculate for loss. But they are satisfied if they get 10 per cent. Now, if hy your policy you cut down this 10 per cent., there will, of course, be no investment in mines, and if there is r.o investment in mines there will be no development of the country and no revenue. You will not have the vast sums that we expect to acquire in order to carry cut the schemes of irrigation, improvement of agriculture, public works, and development of railways, all of which will matte Si-nth Africa, 1 firmly believe, one of the very richest countries on the face of the earth. But these things would hi? impossible if we were induced to carry out the ridiculous policy—for I can call it nothing else -whiih is suggested to us by those who. in their desire to punish certain individuals whom they cannot reach, would seriou-ly interfere with the general prosperity and development of the country. That establishes one principal. We will do nothing—and we will take- that as an issue if anyone likes to raise it—we will do nothing which will in any way interfere with the quick and complete development of the mines. But. subject to that, there is no man in this Bouse more anxious to recover a considerable proportion of the'expense of the war from South Vrnoa, than I am myself. What is the condition of things? Suppose that u had been within the scope of our policy to allow to these countries the restoration of their independence. It is perfectly certain, according to all modem experience and precedent, that we should have laid upon them a heavy indemnity. I see no reason whatever why, becau.o th> v have become colonies and will ultimately he self-governing nations in British Africa —I see no reason whatever why they should escape from some fair indemnity and not ‘near some fair proportion of the expenses of«tho war. from the results of which I firmly believe—and that, in fact, is the justification of the war, or one of the justifications of the war—from the results of which they will benefit in a high and marked degree ; for I do not believe 'here .is anyone who doubts that the material prosperity of these countries, to say n--thing else, will be enormously increased by the change in the government which has- taken place. I lay, th j n—in my opinion it is jierfectlv fair to lay upcir>| the industry of the Transvaal, the main and principal industiy rf the TTm svarl. a fair p-r porbon of the cost of the war. What is a fair proportion? If we say too much we are killing the goose that lays the golden eggs. That would he a heflish and ridiculous policy. If we say ;it the present moment too little, or if we fix a sum at all, hew do we know hut that in a year or two we may altogether revise our judgment? How is it possible for anyone to predict exactly what will be the extent of the prosperity to which these new countries may look forward? We know pretty well wh:it can he expected from the existing mints. We know a great deal of the state of the Rand, but we know very httle about tfc-2 rest of the country. We know it is highly mineraliferoas ; we believe there are large deposits of gold ; we believe there rs copper and iron; we believe there are also other goldfields which up to the present time have not beta prospected. From all these future sources we may derive, and, in my opinion, ought to derive, a large contribution towards the cost of the war which, has set them free for industrial development ; and I think it would be imprudent to make any too early a staieroent of what amount we should expect as a maximum under these conditions. But what I do think is this : that we may lay down, and shall lay down, certain sources of revenue which may lx; fairly applied for this purpose. Those sources of revenue will not be found in the existing mines to any ■ considerable extent. We have placed upon them, as the House knows, a profit lax of 10 per cent., which we are advised is as far as we can safely go without serious interference with the industry. The matter may have to lx; revised in connection with dealing with freights on railway) and the tariff on goods. Of course, if we are able to reduce these tariffs and freights it may be desirable to meet that further by some increase in the profit tax, but, speaking generally, we have established what I think will 'be found to bo substantially the normal condition of things with regard to existing mines. But then there are new which under the old system became the property of private specula lore in circumstances which would be impossible under a wellordered administration. What is the reason for these gigantic profits? It is that by one means or another the original owner of the mine became possessed of it for a contribution to the State iVhich Was altogether inadequate. I hope that at all events we mav put an end to that, and that we may demand for the benefit of the State a fair return from all future) development of the country. I think w© may also look to receive a certain proportion of any surplus which the ordinary income of the Transvaal may show over the expenditure, and from these two sources I believe we shall find a sufficient annual amount to justify a loan whicb can be applied, as it ought to be applied, in the reduction of the expenditure which the taxpayers of Ibis country" have undertaken. Now. I hope that I have made clear,'at all events, the general principles oa> which we shall proceed in this matter, and that the House will not press me for iurther details, which I believe it would be imprudent to give even if it were in my power to dp so.