PRICE CONTROL

Dominion, Volume 19, Issue 156, 29 March 1926, Page 7

PRICE CONTROL

AND TOE SEQUEL GAINS AND LOSSES—WHOSE ARE THEY? WHAT “GOOD CONSCIENCE” IMPLIES The Woolston Tanneries Company "intentionally kept down its prices to a reasonable minimum from business policy; from a desire to afford no handle to its detractors; from a horror of profiteering; from the desire to 'do its bit? ’’—Sir John Hosking. In ah appendix to his report. on the Woolston Tanneries petition, the ,Roval Commissioner, Sir John Hosking, sets out the grounds on which he found 'against the petitioner. Incidentally be makes some remarks which have a general political-economic interest quite apart from the merits or demerits of the petition itself. The Royal Commissioner had to consider whether there were circumstances which “in fairness and good consci;encc” entitled petitioner to compensaI'tion. - ,

Everything pivots, of course, on what is meant by “in fairness and good conscience,” and the Royal Commissioner lays down: — “If it were established in a given case that the regulations made by the Government for controlling the tannery trade were made for the purpose '"of hitting some individual business in particular, upon grounds that had _ no ’ foundation, and were yet maintained in. force after the grounds had been shown to be illusory, or, at any rate, after an opportunitv had been offered which was . not taken of showing them to be so—-to such a case as' that, if ; injury or damage were proved as a ' consequence, ! should consider the fairness and good conscience clause to be applicable.” . ■' ,

Individual Element. But it is indicated that compensation payable “in equity and good conscience” would not be due if the individual effect of the damage were absent—“nor would the mere fact that one tannery business suffered more than others be of itself a basis on which to award compensation to all but the minimum sufferer.” The individual damage, to be entitled to compensation, would have to lesult from some individual, element in what the Government did.

In a time of war or crises a private concern ..might voluntarily elect to take courses that would cause it to lose money.. It has happened in the past and may happen again, that a company might Itnowinglv accept a sheer loss, or—with the. mixed -motives common to human nature—might invite a present loss in the hope of a future gain, or might even pretend to accept a loss in the secret hope of a profit (and find the hope baseless). But none of these cases would come within compensation “in fairness and good conscience.” To quote, again from the Royal Commissioner:—

The Commission does not "extend 4 to compensation' for any injury or damage that may have been self-imposed, such as charging for goods at less than the price which might have been asked, but which from conscientious or patriotic motives, or for the purpose of conciliating the public favour, or from other self-regarding motive, was not asked, although with the result that the public got the benefit of this self-im-posed restraint. Conduct such as that, arising from patriotic motives, is at times made the subject of personal recognition, or perhaps reward, but that is a different thing from a title to compensation out of the public funds for injury or damage. Voluntary concessions or contributions cannot be classed under the head of injury or damage.” ' But the “fairness and good conscience” clause would take effect if the Government was guilty of bad faith in its conduct towards the company which caused the company loss, or made some promise or entered into some obligation (although _ such promise or obligation was not binding In law), and' nevertheless broke the promise or did not fulfil the obligation whereby loss was caused to the company.”

“Would See Him Through.’': Proceeding from the general considerations to the particular allegations in the petition, the Royal Commission holds that there is nothing to show that the Government (through the Board of Trade) requested the petitioner to continue in business, and that the board’s 'inquiry, as to whether the petitioner would quote firm prices carried 'any implication of an “understanding.” The report (appendix) states: “Mr. Ollivier bases his claim upon an understanding, he says, he had formed in his own mind, that the board would see him through. He does not tell us why he should have formed that under- , standing. How, then, can the company, in fairness or good conscience, claim in respect of its extra loss, upon the basis of an expectation in Mr. Ollivier’s mind, which he did not disclose and of whose existence there is no evidence to show the board was aware? I can come to no other conclusion than that the company’s quotation of firm prices, and the steps it took in the way of purchasing hides for the purpose of doing so, and of carrying on its business, were dictated by business considerations, and not because the Board of Trade asked if it would quo'te.” The removal of the embargo, it is pointed out, affected all the tanners alike.

Another paragraph in the appendix states: —"l find that the company’s action in carrying on, instead of closing down, was not for the purpose of acceding to any request by Mr. McDonald, or the Board of Trade, to continue in business, but, as appears from Mr. Ollivier’s own evidence, was because of the company’s consideration for its employees, in doing which he was quite prepared to lose the £25,000 made from outside speculation This selfimposed loss, however laudable, cannot entitle the company to compensation out of the public funds, on the grounds of equity and good conscience. Recognition or reward for purely meritorious acts for the public benefit is on quite a different footing from a claim for compensation based on a breach of some moral obligation, or some individual injustice.”

Self-Imposed Burdens. The Royal Commissioner concludes: — “As to the plea so frequently reiterated by Mr. Ollivier in his evidence, that the company ‘played the game’—that is, lovallv carried out the arrangements with the Board of Trade regarding the fixing of prices, always treated the board with the utmost candour, scrupulously kept its prices to the. lowest level's, did not profiteer, kept its business going to prevent unemployment: Credit for all these self-imposed burdens ensuring to the benefit of the public must undoubtedly be given to the ’ company; but there is nothing to show that it 'was more exemplary in these respects than anv other tanner. It was operating on a larger scale than anv of the other individual tanners,

but, in proportion, the public reaped the benefit of the low’ prices spoken of from every other individual tanner also.” Some’hint of the danger of a compensation policy, if heedlessly applied after a price-control period, may be found in the following sentence: — "The Commission does not warrant me in finding injuries or damage that ought to be compensated for on a basis that would allow of the infinite claims that might be made by all traders, whether tanners or not, who were pecuniarily prejudiced by the war and the legislation by statute or regulation consequent thereon.”