PRICE CUTTING

Evening Star, Issue 21992, 30 March 1935, Page 14

PRICE CUTTING

JL GOVERNMENT PREVENTIVE MEASURE UNDER FIRE CURE WORSE THAN DISEASE WOULD RAISE PRIDES ON PUBLIC [From Ouk Pakuamextarv Reporter.] WELLINGTON, March 29. Claiming; that the effect of the measure would be to fix prices at a higher rate than those ruling at present, and that it would not deal effectively with price-cutting, the Opposition iii the House to-night strongly opposed the Government amendment which seeks to give three lines of defence to persons prosecuted under the Commercial Trusts Act, which was passed in 1910, with the object of repressing monopolies in trade and commerce, - ■ ■ Moving the second reading, Mr Forbes recalled that the original Act was designed to prevent monopolistic practices, but he had received numerous deputations and representations from chambers of commerce, business people, and employers, who represented that hardship was being caused through unfair price-cutting. He had in mind the case of a formerly well-known tea which got into the price-cutter’s hands, with the result that it was quite unprofitable for others to stock it, and the commodity went off the market. The amending Bill would safeguard the interests of the purchasing public, as it provided for throwing on applicants the onus of proving that their request would not be prejudicial to the public interest'. The House had previously dealt with tobacco price-cutting by removing tobacco from the schedule of'the Act because its provisions did not allow and tobacconists to protect themselves from conditions which meant bankruptcy. There were other commodities on which the same influence was felt, particularly petrol, the resellers having time and time again waited on members and on the Government declaring that pricecutting did not allow them to make a living. Mr A. A. Nash: High time it was stopped. The Prime Minister added that the small shopkeeper wanted conditions under, which it was possible to make a reasonable degree of profit, otherwise it was a struggle to make ends meet, and iri the course of it wages were kept dowm

In the opinion of Mr Nash, the Bill would have the effect of raising prices. If the Government submitted a measure that would overcome price-cutting, it would have the support of the Opposition, but the Bill before the House was on wrong lines, and would be harmfid. Its objective was to fix prices, and if it were passed the manufacturer, importer, wholesaler, and small retailer would work together to fix the prices. According to Mr Wilkinson, increased wages and regulated hours of labour would do more than the'measure before the House. The prices of goods already were too high, and as the Bill would raise prices, it was'against the public interest. The amendment gave manufacturers or importers the right to withhold goods as long as they could show that it was not against the interests of the public to do without them. The measure looked inoffensive,, arid had been brought forward quietly, but it was of considerable importance,' and shouldnot have been presented so late in the session. Although other countries had rejected price fixation, the Government intented to impose it in New Zealand. Price-cutting was vicious in practice, but it could be controlled in another way. The fixing of wages where girls were employed as wrappers at low rates of pay would help to overcome the difficulty. The sale of articles below the cost of production, as “draw ” lines should be prohibited. Mr Fraser: That would be difficult to chock. *' Yes,” replied .Mr W’iifcinson, “ but it is obvious that a grocer should not bo allowed to sell bread for less than the cost of production to the baker who was also retailing to the public. The Government should hold the Bill over until next session.”

Mr Sullivan said -price cutting was a factor in keeping down, wages, but it should not be dealt with in the manner proposed in the Bill, which sought to replace one evil with a worse one. The Government had not attempted to use its legislative powers to regulate prices. There was a case for action, but not for action that would lead to exploitation of the. consuming public. The Bill was one of tho most dangerous pieces of legislation the Government had ever introduced. The view of Mr Savage was that if the ■ Bill ■ became law the Commercial Trusts Act would be destroyed. It was essential that the Government should sec that the law operated. One of the first results of. the amendment would be increased prices for agricultural implements, coal, fuel, and ‘ food for: human consumption. Before the Bill could apply the Crown would have to prosecute, but when the offender came before the court, the Crown would hare to prove that what had been done was contrary to the public interest. It would lead to long-drawn-out litigation, and'all the time prices would bo kept iip. He trusted that the business people would examine- the Bill closely before agreeing to it. it was dear that one man could not get more without someone else getting less, and it would be the small man who would suffer. If the Bill became law, the manufacturers could fix prices, and the Government would never move a muscle to stop them. ’ The second reading was still under fire of criticism when the House adjourned at midnight. . “ Are you going to keep on with tins confounded Bill?” asked Mr Lee, when the debate was interrupted. Mr Armstrong: The Prime Minister is going to drop it, isn’t he? Mr Forbes: Will the House let me drop.it. (Laughter.) There are so manv in favour of it. (Laughter.) Mr Fraser: Then let us hear the others. Mr Harris: there are none in favour of it. Mr Forbes: The others consider that the position has been misrepresented. I feel that myself. Mr Fraser: Does it matter ?