BIDDING AT AUCTION.

Hawera Star, Volume XLVI, 20 January 1927, Page 8

BIDDING AT AUCTION.

THE “KNOCK-OUT” SYSTEM. lord DARLING S BILL. A Select Committee of the House of Lords recently took evidence m Tigard to Lord Darling’s Auctions (Biouing Agreements) Bill, which is designed re deal with the conspiracy kuo-vn. as “knock-outs” at auctions —agreements between dealers not to bid against each other in order to secure goods at much below their value, and to nave a subsequent meeting to dispose of Hie goous so brought among themselves at agreed prices.

The first witness was Sir hr."ley Blackwell, Assistant Under-Sec etar.y to the Home Office, who, referring to the difficulty of dealing with these a'leged agreements, said this was no new matter. It had received very great consideration by the Home Office as far back as 1908. The Home Office had no knowledge as to the extent of “knockouts,” but undoubtedy .such arrangements must be very common. It was difficult, however, to see that they resulted in anv such public mischief as would justify such arrangements being made illegal or criminal. lb seemed to him, said Sir Ernley, that vendors would have to rely upon the attendance of members of the public or of dealers outside the ring to counteract the fact that a ring of dealers had agreed among themselves that one of their number should bid upon their joint account, and thus avoid competition with each other. The vendor could, of course, fix a reserve price. The bill as drawn up would render illegal and criminal agreements which the, courts for about 80 years had held to be legal and which courts of equity bad enforced by granting . specific performance. There would be a very few cases in which it would he possible to obtain convictions. Agreements between dealers not to bid against one another were probably informal, and the law would easily be evaded. Sir Krn’ev emphasised that the Home Office had no views either in favour of or against the Bill, but that they felt that if the law were altered on the terms of the Bill it would be easily evaded and become a dead 'etter.

A TYPICAL CASK CITED. Lord Banbury put a typical case to tho witness oi «i farmer in* a difficult season having to sell a bullock because lie had not enough food to keep it. A ring of butchers, knowing this, agreed not to bid more than a certain amount vastly below the real value of the animal " “Would you not call that a swindle that should be punishable?” he The witness ropied that as the law stood no proceedings could ensue. Lord Banbury said that was .obvious; that was why the Bill was introduced., Did not witness think it should be an offence ? The witness: It would lie impossible to draw a clause that would fit what might lie called “knock-outs.” The vendor could put a reserve price on.

Lord Banbury : No, lie could not if he were compelled to sell because of the circumstances I mentioned, and the dealers, knowing that, enter into .an agreement to buy at their price. Is not that a swindle? Sir Ern lev Blackwell: It is not a swindle as the law stands at present Lord Banbury: I knov that, but should it not be?—lf it could be done in a wav which would not be in conflict with other forms of agreement which were quite legal. ! orc l Ranburv, commenting on this, said that apparently, however, great the evil, the Home Office were so conservative that it preferred to allow it to wo on rather than ran the risk ol interfering with other interests. “DIFFICULT TO PROVE.” Sir William Henry Wells, past-presi-dent of the- Auctioneers’, and Estate A cents’ Institute, speaking on behalf of the Institute, said they were- entirely in accord with Lord Darling m his efforts to check any conspiracy aimed at deprivinG; the vendor of the full value of the goods which am auctioneer was sell in o’. There, was little doubt that such 'conspiracies were not nearly so common as was generally believed The very nature of the agreements would make them difficult to prove, and thus there would be difficulty m enforcing the provisions in the Kill.