THE FLOUR-MILLING CASE

Evening Star, Issue 18998, 21 July 1925, Page 4

THE FLOUR-MILLING CASE

CROWN'S APPEAL [Per- United Press Association.] WELLINGTON, July 20. Both divisions of the Appeal Court were engaged to-day hearing tho Crown’s appeal in the flour-milling case heard in Dunedin, in which penalties were sought for alleged breaches of the Commercial Trusts Act of 1910 (relating to monopolies) from the Crown Milling Company, Ltd., of Dunedin, flour-millers; Fleming and Co., Ltd., of Invercargill, flour-millers; the Atlas Holler Flour and Oatmeal Mills (Evans and Co.), of Timarii, flour-millers; Wood Bros., Lid., ol Christchurch, flour-millers; and Distributors, Ltd., of Christchurch, flour-millers’ agents, which companies are respondents in the present proceedings. Sir Francis Bell (Attorney-General) pointed out that it was possible lor tho people to create a most dangerous monopoly, to work innocently under it, and then after some years to exercise it.

Mr Justice Herdman : Is it admitted that there is a monopoly? Mr Skerrett (for respondent) : It is admitted that there is partial control of supply of flour. Sir Francis Bell: Wo submit the cxfacio'agreement constitutes an offence under section 5. Tho thing speaks for itself. Onr first- 1 contention invites the court to construe the agreement as though tho action had been hi ought just after the agreement had been feigned, and our second contention is that the question of whether tho contract is or is not contrary to public interest is a pure question of law. Thirdly, wo contend that the eases in the commonwealth upon which tho lower court placed reliance do not apply. In the fourth place decisions on the common law rule relating to contracts in restraint of trade or in relation to combinations do not afford any guidance to the interpretation of tho New Zealand statute. Fifthly, American cases under tho Sherman Act are‘ precisely in point both in the Standard Oil case and the tobacco case. In America there was an emphatic protest by tho minority. Sixthly, tho argument that tho agreement can ho defended n.s being consistent with tho attitude of the Government is voided bv this verv action.

Mr Skerrett; We do not admit that the question before tho court turns upon the mere construction of the agreement. Sir Francis Bell; Tho combination did not have the consent of the Government, but may have had that of Mr M'Donald. who was then in charge of the Board of Trade, and afterwards managing director ‘of Distributors, Ltd. "

Mr Skerrett; It was admitted by the Crown in tho court below that Mr M‘Donald’s conduct throughout tho whole transaction was square and aboveboard.

Sir Francis Bell: My seventh point is that many of or all tho bakers may have approved, but this has no hearing. If it has, then, the evidence shows why they did it. Eighthly, the evidence proves that conspiracy has actually operated which is contrary to public interests. If tho article being monopolised is of such a nature ns to be contrary to public interests if monopolised, then, as here, the monopoly must be contrary to the public interest. A monopoly of flour is of such a nature as to be in itself contrary to public interoCt. This special combination is contrary to public interest: (1) Because it prohibits all competition; (2) because it prohibits any mill producing more than 'a certain quantity in any .rear; (3) because it provides for a fixed price from all mills irrespective of quality; (4) because it provides that the price shall ho fixed by a commercial trust; (5) because it provides that the public shall take such flour as the commercial trust dictates, nv;d have no say as to the price or quality; (6) because it provides that if necessary in the public interest to have more flour than the Now Zealand mills produce, then the commercial trust, a.nd not millers, shall import it. These constitute the very reasons why the Act was passed. ’The by-products of flour are of great value. Foreign competition is excluded by tho policy of this country, which encourages the growth of wheat hero. This Is borne out by the defence by Mr Nosworthy’s statements, and by the evidence of how Distributors, Ltd., determined to exclude local competition. That is the crux of the action. The balance of the sitting was occupied by Sir Francis Bell in citation and discussion of the Australian and American cases, particularly those taken in the United States under tho Sherman Act. The case stands part heard.