PROFITEERING IN TWEEDS.

New Zealand Herald, Volume LVII, Issue 17641, 30 November 1920, Page 4

PROFITEERING IN TWEEDS.

TWO FIRMS CONVICTED. MAXIMUM FINES IMPOSED. COMMENTS BY MAGISTRATE. CHARGES UNREASONABLY HIGH. [BY TELEGRAPH. —PRESS ASSOCIATION.] WELLINGTON. Monday. Reserved - judgments regarding ' six charges of profiteering on the sale- of tweeds laid by the Board of Trade against the wholesale firms of Bing, Harris and Co., Ltd., and Robert Wilson and Co. were given by Mr. Evans, S.M., to-day.

The charges against Bing, Harris and Co. were of selling 7|yds. of suiting to Gothard Krebs at 16s 6d per yard, to J. T. Lewis, Ltd., 12yds. of suiting at lis 6d per yard, and to Kitto and Son 7|yds. at 22s 6d per yard, which prices were considered to have returned unreasonable rates of profit. Robert Wilson was charged with selling to James Smith, Ltd., 9yds. of suiting at 32s per yard, to Gothard Krebs 3Jyds. of Mosgiel suiting at 22s 6d per yard, and to M. Greenfield 65yds. of Mosgiel suiting at 17s 6d per yard.

In his judgment the magistrate stated that the general features of the case were the same. Therefore the principles governing them might be considered together. The general evidence in Bing, Harris and Co.'s case would apply to Wilson's case and vice versa. " The defendants," he continued, " are each charged with making three sales at different dates, contrary to the provisions of secuon 32 of the Board of Trade Act, in .that they sold ■ certain tweed suitings at a price that was unreasonably high. Defendants in these cases were both principals. Bing, Harris and Co., Ltd., ■was a body corporate, and Wilson was scle owner of a business. There was no definition of commercial profit, but the principles laid down in the Big Ben and Mellin'fi Food cases were the express judgment of the Full Court. In the two cases before the Court the actual decision turns on the facts of each —the Big Ben cases on the grounds that the selling price was fixed by the manufacturers, and in the Mellin's Food case that the sale price was higher than the price at which goods were sold by other traders. The first principle laid down by the Court was that traders might always regulate their selling prices at the current market rate at the time of sale, and might from time to time advance their prices, over the actual cost price, to the current market rate, Doth on goods in stock at the time of the rise in prices and on goods to arrive." That, in his opinion, was the true replacement principle laid down by the Court, not that the trader might at the time of pricing his goods advance his price on the current market rate to meet a possible rise in the future on the market rate. That was in the nature of a gamble on prices, and would involve an inquiry into the ouestion of what was a reasonable rate for each trader to fix on a speculative rise. "In my opinion tbe rate of profit charged by the defendants brings them within the penal clauses of the Act, and they must be convicted." The question of ■whether or not a bona-fide misconception of the principle of replacement costs was a defence was left open by the Full Court, and he would leave that question to be decided by a higher Court. Excessive Sates.

"Bing, Harris and Company." said the magistrate, " will be convicted on all the charges,, and Wilson will be convicted on the sales of New Zealand tweeds. The information for selling English tweeds will be dismissed. Bing, Harris and Company, Limited, is a company and Wilson admits he is practically a proprietor, trading under a firm name. In Bing, Harris and Company's case tweeds represented 90 per cent, of the business and the increase in their profits was high. In Wilson's case the increase was higher still, though his trade in New Zealand tweeds was small. But increased profits resulting from his excessive rates must have been considerable.

" Penalties in this class of case are intended to be preventive. The defendants are middlemen only. These goods were in stock for a very short period and could be, and were, rapidly turned over. in one case the profit put on by Bing, Harris was 40 per cent, greater than the total cost to the , manufacturers and freight. In another case it was 99 per cent. In the three charges the aggregate profit was 100 per cent, on the total costs to them. This is an outrageous profit for merely handling goods. Reasons for Heavy Pines. "In my opinion, therefore, in all the circumstances of the cases, notwithstanding tlfese different rates of gross profit put on, I would not be doing my duty if I did not impose the maximum penalty in each case." In justification for fining Wilson the maximum penalty His Worship said that, while his percentages were lower than' those of Bing, Harris and Company, he had stated frankly he was out to make as much as circumstances and the market would allow and would have charged 200 per cent, if he could have got it. The magistrate fined Bing, Harris and Company the maximum penalty for a company of £1000 on each of three charges, and Wilson the maximum penalty for an individual of £200 on two charges.