BUTTER PRICES.

Lyttelton Times, Volume CXVII, Issue 17311, 28 October 1916, Page 14

BUTTER PRICES.

VALIDITY OF ORDEI aWTIONID. OASB BEFORE PULL COURT. [Pjek Prbss Association.] WELLINGTON. October 27. Before the Full Court to-day, a ease was brought by way of summons under the Declarator Judgments Act to test the validity of the Order-in-Council made under Section 47 of the Customs Act, 1913, and Section 34 of the Regulation Of Trade and Commerce Act, purporting to prohibit the export of butter and cheese. Plaintiffs were the Taratahi Dairy Company, Ltd.. of Carterton, and the Mangorei Co-operative Dairy Factory Company, Ltd., New Plymouth, and the defendant was tho AttornoyGoneral. Tho Chief Justice (Sir Robert Stout) and Justices Edwards and Chapman wore on tho Bench. MiMyers appeared for the plaintiffs, and the Solicitor-General, Mr J- W. Salmond, for the defendant. In outlining tho object of the proceedings, Mr Myers said that tho Oi-der-in-Oouncil did not impose prohibition in the largest sense, but did impose a number of restrictions, the, principal of which was that no butter or cheese could be exported unless tho exporter paid a charge or tax of *d a pound on butterfat used in the factory. It did not matter whether tho butter or cheese so made from butter-fat was,exported or consumed hi the Dominion, and the manufacturei might have two or three factories, some engaged in making butter or choose for export and some for purely home consumption, yet ho had to pay the tax just the same. Mr Justice Edwards: He gets it back again. Mr Myers: No, sir. That is really just what he does not do. Continuing, counsel said it was not necessary for a person or company, although holding an export license, to export an ounce of butter. One person might manufacture for home consumption and share in tho distribution, and the man who manufactured for export might not get back one sixpence. The distribution was made amongst those selling butter in New Zealand. The Chief Justice: Who is the license authority? Mr Myers: Mr R. Triggs, one of the Public Service Commissioners. Tho Chief Justice: And who owns tho money? It seems to me that ib becomes Crown money? Mr Myers contended that if the money went to the Consolidated Fund it could not bo paid out in the way in which it was. Continuing, Mr Myers pointed out that some manufacturers sold only in New Zealand, and some exported all their output. The first man made a loss because the maximum price was fixed in New Zealand'. The Chief Justice: Hardly a loss. Perhaps he does not get the extra gain. Mr Myers: He gets his loss from the other man, who sells not an ounce in Now Zealand. Ho gets back not only his own Jd, but possibly something more, and people who export get nothing at all. Mr Justice Chapman: I suppose we may take it that it was the assumption of the Government that unless some such regulation were made manufacturers' would not sell their butter here, but would send it Home. Mr Myers: I suppose so, Sir,"but it is quite fallacious. Tho Chief Justice: Men who partially export and partially sell locally get back a proportion of the charge imposed. Mr Myers cited the case of a manufacturer who might export nine-tenths of his output and' sell one-tenth locally. Tho Chief Justice: Ho may be a gainer by the extra price obtained for exported butter. Mr Myers said that only a very small proportion of the butter made in New Zealand was consumed in the country. An exporter might get more for his butter than he would in New Zealand, but he might get less, as the export market was a fluctuating one. The exporter took the risk. Tho Chief Justice: I do not think we are to go into the ethics of tho matter. The whole q'aestion seems to be: Is the Order-in-Council authorised by any statuto in Now Zealand? Mr Myers: If there is power to impose a charge or tax, not for charges of Government, but to take money out of the pockets of A. and put it into tho pockets of B. Mr Justice Chapman: Can you call a license fee a tax?

Mr Myers: I do not think this is a license feo. Mr Myers suggested that what might have been done was that a certain proportion of the output from each factory might have been kepi in New Zealand. Ho went on to refer to the fact -that the tax was also imposed' on the manufacturer of cheese, who did not get anything back, but who still had to pay his Jd per lb. The Chief Justice: If there is proved to be power to make a levy, is there power to distribute the money, which seems to me to be Crown funds?

Mr Myers referred to tho expressed desire some little time ago of manufacturers of butter for local consumption to increase the price, as they found they were making less profit than the exporter. Then followed the Board oi* Trade report and the fixing of a maximum prico. The GovernoiMn-Council, he contended, had no power to fix a limit to prices obtained by an exporter, but only to fix a maximum price for local consumption. The charge, ho,added, was both an export duty and an excise duty, and the Governor was really limiting the maxinvum price the exporter was getting. Tho Chief Justice: He is only saying "If you export you must pay £d per lb."

Mr Myers quoted authorities in support of his contention that the charge was a tax and that the Govemor-in-Council had no power to impose taxation, which could not be imposed without the express direction of the Legislature If tho Order-in-Cbuncil was hold to bo valid, where, he asked, was the matter going to end? If the charge could be levied there was no limit to what might be done. Exporters of meat, wool and hemp might be told: " You nvast pay so much per bale or per carcase, to go into a fund to be paid to manufacturers of butter who are selling it locally, and who are not getting the greater gain of tho exporter." THE OTHER SIDE. For the Crown, Mr Salmond called attention to the immense powers which had been entrusted to the Executive Government during the present national emergency. These powers were conferred partly by common law 3 but had been largely added to by special legislation. At the present time the situation was simply that we were practically living under a despotic Government. Statutes passed during war time were to be treated as emergency statutes and must be viewed in a broad judicial spirit, having in view the welfare of the State. It would not be a service to the State to restrict the

functions of the Government in such a time as the present. Restrictions should ■ not be read' into the statute for which | there was no substantial foundationExtraordinary powers of government were now,being exercised in nil parts of tho Empire. The Governme-nt was in a position not only to tax goods, but commandeer them. It could, if it liked, take all tbo butter and feheese for nothing. . i The Chief Justice: That is not taxing. ! , Mr Salmond: It is worse than taxing. The British Government in the exercise ."of its common law prerogative had taken possession of an aeroplane, and when tho owner did not accept the compensation offered the Court fcrand that he was .entitled to nothing. While the Royal prerogative lasted surely the Governor could go the length of levying a charge on the butter trade. The Chief Justice: The Governor does not hold the Royal prerogative. That is held in England. Counsel quoted numerous cases in which tho Royal prerogative had been exercised, and quoted from; judgments to show that ordinary constitutional methods could bo forsaken in time of war. Ho submitted that the Executive could, under tho war regulations, override any Act on the Statuto Book. Tho Chief Justice: Surely you don't suggest that? Mr Salmond: Certainly. The Chief Justice: Can the Government override tho Constitution Act? Mr Salmond: I mean within the scope of the regulating powers be* forth for tlie purposes of the war. Most extensive powers had been exercised by the Attorney-General and the Government had been accorded uncontrolled Mse of ipillionß of money in connection with: the war. • ' The Chief Justice-. Section o 4 of the Constitution Act is still law, and there is no power in the Parliament of New Zealand to cancel it. The Chief Justice pointed out that there wa s a delegation-?: of, the * Governor's authority to ,an outside body,, which decided what ffche particular charge should be: Such' delegation. Had not hitherto been upheld. Mr Salmond contended, that* no %ax was levied. The essence'of; a'tax was obligation. This was not an obligation. It was a condition pure ana simple. No one could be&ued for the charge. It was no more a tax than was the charge made by a shopkeeper for his goods. It was the price to be paid for a license. One condition of the tax was that it mtist go-Vinto the public revenue, but this moncy.was not treated as revenue. If went into a special trust fundTho Chief Justice: -It is Orowntnonej and part of it can bo taken ior payment of Crown officers. Mr Salmond: Only the expenses Qr administration of that trust' were -to bo taken. The essence of the matter was not Government control of the fund, but a sensible device to equalise the profits of all concerned. It was simply regulation of trade' 1 and commerce, having regawl to the* conditions created by tho war. Further argument was postponea niltil to-morrow.