ALLEGED PROFITEERING.

New Zealand Herald, Volume LVII, Issue 17497, 15 June 1920, Page 6

ALLEGED PROFITEERING.

SAM. OF ALARM. CLOCKS, ''7'*' ■ .... ;<* -;■:■ '■ ■- v.' SEVERAL FIRMS CHARGED. ■"' S:"?®ESSIV|, PROFIT ALLEGED. , •__ 1 7*\ IMPORTANT POINT INVOLVED. % ''!' -'-"' lisY-ffELECJUPH.—PRESS ASSOCIATION.] '.'. "?f. "'*:VT CHBISTCHURCH, Monday. "..:.:-'"'■'":' i ,Charges'"lnstigatedi by the prices investi- ■ gation tribunal againstseveral ,commercial ':'•■ firms came on for hearing..;. before Mr. • ~Ql£& McCarthy, S.M., to-day. •,, .-.-;■. ; • .4;-';'; : Hastie, Bull* arid Pickering, of Christchurch, were charged. with- c ; having sold ; "George JJert- Christie, ■ -prices investi- '' gallon tribunal'? investigating .-.' officer, a Big Ben alarm, clock at a . price ot ,255,' V;v which was unreasonably high. ;.■,-. Similar charges were made' ngaimU the following. Christchurch firms:—'}. W. Drayton and ';,., Co., Ltd., Mason, Struthers and Co., Ltd., andK. Reece, Ltd.-- The offences were al- *.[-.,' r legfrd?to have occurred on.April-20.■ ' -" A. J. White, Ltd., were charged with ;. offering for sale on the date mentioned a -■. Big Ben alarm clock at 255. ,• .';.. .-■ yV The Drapery Importing C 0.,.. of Christ, church were. charged with having offered for sale on April 27 to George Hart Christie,, a clock. at. 455, which price was unreasonably high. r ; ' """.'•..;.// " A.rown and Bureau, Ltd., of Wellington, *-er*! - charged - with . : having unlawfully V;', ftnm&oUed another jHastie, Bull and - Pickering, Ltd.,. on March 1 to commit 1"~' an .offence ; under Section 32 of the Board -...; of Trade Act, 1919. by asking and advising ' " Hastie, Bull and Pickering, Ltd,, to offer . .-for sale alarm clocks a price which is ;; •arrcasonably high. ■ Brown and iDuress .'.■;: were; charged also with a similar offence ' 'on/the tame date,-it being alleged they . asked and, advised A.. Mmson, of Christchurch, to offer alarm clocks "at unreasonably high prices. : ' . • .S'Ai.r; W. C. Macgregor, of Dunedin, and ' Mr. A.. T. - Donnelly; appeared for the ' Crown. Sir John Findlay, K.C., appeared alone for Beecs, Ltd., Mr. Skerrett, K.C , appeared alone* for Dray tons, and the same ''''/vteunjel appeared jointly for A. ,J. White, *, / Hastier Bull and Pickering, and Mason, J '-;.'v fitruthevs.;;; • y ■■;.'.. 'V- ..• "Case for the Prosecution, - . The case against Hastie, Bull, and " dickering was taken first. ~ In opening - i the'case, Mr. Macgregor said that in addition :to" tie charges against local firms there were two charges against Brown and »;, ? Dureau, who controlled the trade in New r~;, Zealand, -and brought - clocks from v America, of counselling.- and procuring ■ l -sales it unreasonably / high prices, which were fixed from time to time by circular. i'S> Mr.'M. Myers appeared for Brown and -iv Dureap: and an arrangement had been 2'li made he should have" the light to j-. appear in all the- cases, and that the evi-i'.-vi dene* against Brown and Dureau, where admissible, should be accepted in the first "y. cases, Mr. Macgregor'added that ; he was • - : prepared to take all the cases together, but for the moment he. would open in *l'!'-. regard to the first = charge. ....,.,, "° Alter defining the Act, counsel said ~ \ u .i.thati for the purpose .the Act a price .was unreasonable • if it produced "more --■ — than a. fair and reasonable rate of com;mercial ; "profit." "A'Big Ben alarm was - sold for 2Ss, and three main considera- . > tions 4 emerged— (l) For what sum of r -"j" ; money was this clock bought? (2) for of money was this clock sold? ;■-..:;.-(3) is the difference between .these two '•■"*.' rams more* than .%. fair and reasonable t"; rate.of. profit ? The purchasing and selling ■■:/,i prices and the profit in each case were as ' follow':—Mason Struthers, 12s-255—108 ?er cent.: Hastie, Bull, and Pickering, 2*-255-108 per cent,; A. J. White, lis ;vj —255—78 per cent. ;'Reece, Ltd., 15s 9d— 25s— per cent. ;', Dray tons, 14s 25s— .', .75 pet- ; cent, ■~, . ■'-■;-■ r'\~ ••" » A Household Necessity." . .

-•/ i-'Counsel pointed out that every trader : ■was now forbidden, under-heavy penalties', to sell any article at a, price which '!•';•'.was unreasonably: high, no matter, at '; what prices he may nave sold or might " be-' content to sell "the remainder of Lis . stock*. An alarm clock was a household

f-f necessity, and if it was bought at 12s atfd sold at 255, .without.any real reason for ■ tie | Baccesaiva rises,. surely it was a typical and flagrant case of profiteering— the very transaction ..that' the Act was iX.-designed, to prevent. His Worship would --.;- doubtless be told all about the cost of "..'replacement,- average profits.V and the •''-',"" hardship of .isolating • particular, articles, ..\- but there was a plain meaning to the .'./■wtion.' and a wider, relation of business custom, might : become applicable only in -V considering the penalty. ... 'Evidence as to the purchase of clocks '.".2 ; at 25s was B ' veu by George H. Christie.

'2Z £' V Opening of the Defence. ——--Sir-John Findlay,- for the defence, said that if the Crown's contentions were right; then section 12 had brought commercial chaps and tha end of legitimate business. The fixation of prices was no • new. system. It was done in connection motor-cars with' beneficial results. He contended that the effect of fixing prices had been to keep the price of Big I Ben clocks at a lower price in the market}notwithstanding all the war conditions,, .wan all other clocks competing against it. ... He- detailed the causes of the rise in price .. : the Rig Ben clock, and said that at 25s "the profit was less than before the ' ..7 sr -:: No increase had.been made in the £ rice till stocks bought at a, low figure ad been depleted. The question: Why . did Mason, Stiuthers, who bought at 12g . Mil at 255? seemed, difficult to answer, but the firm had bought under a moral arid legal obligation to sell at the price fixed by the manufacturers, and the only honourable course open to them was to comply with that obligation. Onlv bv ». complying; could the. firm bo. assured of getting future supplies. That was ■what differentiated the present cases from ordinary cases of profiteering. The Courts had* already laid down that such contracts wero legally unassailable, and that any departure from the conditions imposed could be made the basis of an action for damage. The net profits made JJ hardware merchants 'in the period 1914-19 averaged 7£ per cent. Counsel went into the questions of rejplaceme.nt values and depreciated currency, and, in his concluding remarks, said that somehow or other it suited a ■ certain class of public • man -to mike profiteer hunting" the true and radical remedy for the cost of living. If tlcv wanted to cum the high cost of living - > they must get down to the fundamental causes. He » had profound respect for- Mr. W. Q. McDonald, of the . Board of Trade. Let „ c a man as Mr. McDonald have in* way and prepare regulations under section 26 of the Act, and then a real ad. v*nce would be made. Section 52 would end in killing' honest industry and commerce. " An Important Principle."

Counsel fur the defence were not pre Miit to meet this cane' alone, continued Sir John, but to fight for an important commercial principle. Thev asked that to the extent that section 32 killed business it would find no acceptance from His Workup, but that a broad and fair view should dc taken of «ie whole of the circumstaiiees. John Wilmot Duncan, manager for Brown and Bureau, aid that owing to the-; trade in alarm clocks generally beiii" clisorßanisetl by price cutting a representative of the manufacturers of Hit- Ben fin. had visited the. Dominion, as a resuit of winch a better system of telling the clock had been adopted. It provide* lor the fixing of the price for wholesaler and retailer based on a fair margin of profit and keeping the price as low m possible to the customer. He detailed , .the various rise* in the landed cost of the S£2rA Hl s. evidence had not concluded to*? CouH adjourned until to-mor'