TRADE MONOPOLIES.

Auckland Star, Volume LVII, Issue 158, 6 July 1926, Page 4

TRADE MONOPOLIES.

THE LAW ON THE MATTER, j PR AC TICi: IX DIFFEI;I"\"T COUNTRIES. ii tlie Ivjuii of ;i.f Karnng.'khapc Eoatl Bi;.-;.-.-.~s Men's i..arrii.' to-day, the speaker of the day was Mr. W. H. Cocker, 8.A., 1.L.8., \r!io delivered j:: audre 4 * on "M , t:"!"-'----l:cs and ilie Law.' , A monopoly, said tlic s-peakr:. might I o said to exist when a busiue.-s it group l>l businesses gained exelusivi .."ntrol • ■vor an industry, or at least suflicient iontrol to enable prices to he imlueiu'ed. Monopolistic organisations might take innnv form?, varying from informal rrue arrangement- uiuongst trader? to close and powerful inrporation? cmli us the Standard Oil Company or t'.ie Mccl Trust. Monopolies wore old. an<l m early a writer as Aristotle referred to siu-h attempts as "a general principle of the iirt of money making." The particular form wnieh monopolistic, organisations took depended to a large extent on the laws of tbe country where they existed. It was a principle of English common law that every person should be entitled to exercise his lawful trade without interference. Bui if an agreement between traders to maintain prices at a certain level tended to create a monopoly, or went further than was necessary to protect local trade, the Courts would not enforce the arrangement. This rule of law hud been a strong factor in retarding th>growth of monopolies in England, because if one trader broke away from the arrangement the others had no legal remedy. In Germany, on the other hand, this rule of law did not exist, and in consequence there had been a rapid growth of organisations, which took the form of cartels, and which were actually encouraged by the Government of the country. One evil tendency arising fron: the operations of these cartels or trusts, ■""as the practice of dumping to otitsidtcoun tries. Special efforts had been made in th. United States to deal with trusts. Some of the States, in their original constitu tion. included anti-monopolistic clauses, but so rapid was the development thai as early as ISSS each of the four leadius political parties had anti-trust clauses in their electoral platform. From tlhat time onwards restrictive legislation of one kind or another was frequently enacted both by the State and Federal Governments. Perhaps the most notable was the Sherman Law passed in IS9O, which aimed to prevent monopolies extending operations beyond a single State. Even an attempt to establish such a monopoly was subject to a penalty, and penalties were incurred even though the prices charged by such an organisation were held to be reasonable. Up to 1916 no less than 174 prosecutions were conducted under trust legislation, but technical defences enabled many offenders to escape punishment and in 1914 tbe law was added to "by tfie prohibition of interlocking directorates in companies over a certain size of price discriminations, and the formation of holding or trustee companies. American anti-tmet legislation became exceedingly stringi'at and properly interpreted would be veJy effective, but proceedings were very 'rcpensive and exceedingly protracted, it was sometimes difficult to say that the trusts affected were unable to influence the Courts of jurisdiction. Probably the most effective work in America had been done by the Federal Trade Commission, which prepared reports on various monopolies, and these were afterwards published. There was no doubt monopolies had come to stay in the United States, but such an organisation as the Trade Commission could act as a curb on energies that were contrary to the public interest for the public opinion formed as the results of its findings could not be disregarded. In Britain the inherent individualism of the English trader was against the formation of trusts, but one of the results of the war had been to encourage their formation as the Government had in war time encouraged combinations that would bring about mass production. In 1919 the Board of Trade Committee reported: "We are satisfied that trade associations and combines are rapidly increasing in this country and may, within no distant period, exercise a paramount control over important branches of British trade." However, no anti,trust legislation had been passed in Britain. The situation of X._>w Zealand rendered the country favourable for the : growth of trusts, as they could be developed behind the shelter of the tariff, and also the natural barrier of transportation. Another factor was the recurring booms with subsequent reactions, which were favourable to trade combines. But New Zealand had tackled the problem by passing the Commercial Trusts Art. Under this Act a trade monopoly became illegal, but only when it became a party to certain practices. Referring to Distributors, Ltd., the selling agency of the flour-millers. Mr. Cocker said that the Court of Appeal had neld that for the appellants (Distributors, Ltd.) to succeed it would be necessary to prove that the price of flour to the public was no higher than it would reach under normal trade ,'ompetition. The Court also hold that it would require the most cogent evidence to establish that such a monopoly was reasonably neoessary in order to secure an efficient and economical distribution of flour. The matter would shortly be reviewed by the Privy Council.