The Evening Star TUESDAY, APRIL 2, 1935. PRICE-CUTTING AND PRICE-FIXING.

Evening Star, Issue 21994, 2 April 1935, Page 8

The Evening Star TUESDAY, APRIL 2, 1935. PRICE-CUTTING AND PRICE-FIXING.

Theke are some people in business who sincerely deplore the Government’s dropping of the Commercial Trusts Amendment Bill. They believe that, despite the widespread disappointment over the farm mortgage legislation, the special session would have been worth while if only the Commercial Trusts Act of 1910 had been amended on the lines proposed. The amendment aimed at stopping cut-throat competition. The original Act was the conception of Sir John Findlay, then Attorney-Gen-eral in Sir Joseph Ward’s Government and Leader of the Legislative Council. Parliament and the country accepted that legislation with a good deal of scepticism, and that opinion was not weakened when its powers were invoked in an attempt to burst up the flourmilling combine, one of whose operations was to buy out or' close undoubtedly superfluous mills and compensate their owners by bestowal of life annuities or lump sums, and thereafter base the price of flour ou the costs of the least efficient mills permitted to remain in the combine. The case was heard in Dunedin, and it went against the Crown. On appeal, Mr Justice Sim’s decision was reversed. Taken to the Privy Council, his decision was upheld. “ What,” argued the man in the street, “ is tho use of legislation which is productive of nothing but fat fees for lawyers, or of snng"billets for some obscure branch of the Civil Service P”

Yet, it appears, there are people who set some store by its provisions. Among other tilings, the original Act makes it an offence to give concessions

or other consideration to others who undertake to exclusively deal in the commodity concerned to the exclusion of the products of other persons, or to refuse to supply to any person, either absolutely or except upon disadvantageous terms, unless the buyer undertakes not to deal with any other person in relation to any particular class of goods, or generally. But its application was not general. It was an Act with a schedule: “Goods to which this Act applies,” and the goods enumerated in the schedule were: Agricultural implements, coal, meat, fish, flour, oatmeal, and all the products and by-products of milling, petroleum and mineral oil, sugar, and tobacco; while later its scope was enlarged to embrace all foodstuffs. Whether or not it has succeeded in preventing the monopolistic price-fixing of the above commodities we leave to the public to judge. To take the second item on the schedule — coal. In a coal-bearing country such as this, whore fuel oil and hydro-elec-tric power have immensely lessened the demand for " black (or brown) diamonds,” coal is desperately dear—at least the Invercargill housewives and the Nightcaps miners thought so once. But coal agents are bitterly complaining of price-cutting in their ranks. The inference is that the mine owners must have at least nodding acquaintance with exploitation, and—with exceptions—must have at least a gentleman’s agreement as to prices, based on the costs of the uneconomic or in-differently-managed collieries to .be found in any coal-producing country. The abandoned amendment did not propose to <lelete coal from the schedule of the main Act. It simply proposed that in any court proceedings charging people in business with illegal concessions in consideration of exclusive dealing, or with illegal refusals to deal, it will be a sufficient defence if the defendant proves to the satisfaction of the court (a) that the specific acts charged against him were not unfair to the persons immediately affected, having regard to the circumstances of the case; (b) that they were not prejudicial, either to any industry carried on/in New Zealand, or to public welfare; (c) that acts of the nature of the specific act charged against him, if commonly practised or repeated, Would not in similar circumstances be unfair to the persons immediately affected, and would not be prejudicial either to any industry in New Zealand or to the public welfare. Had this become law, it would have been quite in order for a colliery or a group of collieries, or their representative on the wholesaie market to withhold supplies from a retailer who sold below a stipulated price. This, it appears, has been done by Some coal merchants, and doubtless a long, warm spring and summer, and (so far) a mild autumn have so diminished the public’s demand for household coal that “ salesmanship ” is being exercised in a form which the producer and wholesaler loathe, however much the consumer may appreciate it—and many consumers to-day have small and " casual ” incomes or have to pay the tax-gatherer a big slice of a very moderate income. The abandonment of the amending Bill means that price-cutting is to continue in this trade. If this would sooner or later—preferably sooner—lead to a root-and-branch reorganisation 6f the coal-mining industry in New Zealand on lines similar to what ,is now proceeding in Britain, we should not grieve. In stating this we make one reservation. In Britain a number 6f uneconomic mines have been closed, and in those remaining open up-to-date methods have been adopted which immensely increase the output per man. The displacement of some labour was inevitable, particularly as the demand for bunker coal in particular has declined; but the complaint is that the labour still employed is driven to breaking point in the effort to regain lost markets and compete with Polish and some other Continental coals.

Reverting to the Government’s alleged sin of omission, or looking back after putting its hand to the plough, the question arises whether the Commercial Trusts Act, 1910, ought not to be ended rather than amended. Its operation has always been most erratic, and the Associated Chambers of Commerce have repeatedly indicted it, as well as the Board of Trade Amendment Act. 1925. The following extracts from two indictments are typical:—

“ Under these Acts the Minister of Industries and Commerce is empowered in many and various ways to harass and persecute competent, honest, and law-abiding citizens of almost any and every calling.”

“ These Acts further extend some objectionable provisions of the Commercial Trusts Act by .applying to any and every person some of the ridiculous restrictions applied by the Commercial Trusts Act to a large body of traders. The Associated Chambers of Commerce and other commercial bodies have made repeated efforts to have these iniquitous Acts purged from the Statute Book.” “ When repeal of these Acts has been under discussion with Ministers of the Crown, it has been suggested that the Acts could not be repealed in toto, because of the continued necessity of certain regulations made by Older in Council under these Acts. Regulations by Order in Council are now so utterly befogging that it is impossible for commercial minds to keep tally of them.”

“ In their endeavour to market their goods in an orderly and profitable manner, merchants come continually up against these unreasonable and annoying restrictions, and it is no exaggeration to say that they spend annually hundreds, if not thousands of pounds on legal advice on the Commercial Trusts Act, and that they waste annually thousands, if not tens of thousands of pounds’ worth of time and energy in their efforts to continue orderly and profitable marketing in spite of the oppressive provisions of that Act. The price-cutters are the bane of every wellconducted trade, and the Commercial Trusts Act is simply :i license to the price-Cutler to defy sound traders and to continue causing loss and trouble to them and to the community at large.”.