COMMERCIAL TRUSTS

New Zealand Herald, Volume LXXII, Issue 22197, 26 August 1935, Page 7

COMMERCIAL TRUSTS

CRITICISM OF LAW PRICE-CUTTING ACTIVITIES PLEA FOR AMENDMENT "The fact is that the operations of the price-cutter, on the scale to-day practised in New Zealand, have been made possible only by virtue of the Commercial Trusts Act," says a statement by the Associated Chambers of Commerce, in which it is considered that it was extremely unfortunate that the Commercial Trusts Amendment Bill, introduced by the Government last session, should have received such unsympathetic and perfunctory treatment from the House of Representatives. The statement adds that, by all accounts, the reason the bill was not now on the Statute Book was because of a misunderstanding of its purpose and its effects, should it have become law, when actually it was an honest attempt to serve the public interest and to remedy in some measure a long-stand-ing injustice to many manufacturers, importers and small traders. Briefly, the Commercial Trusts Act, 1910, and the Cost of Living Act, 1915, made it illegal for any commercial "trust'' to control the price or the supply of certain commodities, namely, coal, agricultural implements, petroleum or other mineral oil, foodstuffs and ingredients used in their manufacture. The definition of a commercial "trust" embraced the bulk of the wholesale traders of the Dominion, whether firms or unincorporated companies. " Extreme and Far-reaching " "The Act prohibits, under penalty, the importer, manufacturer or distributor of the commodities from controlling the retail price to the consumer," continues the statement. "This was an extreme and far-reaching prohibition. England has no legislation like it. There is no • prohibition of private price-fixation activities there, nor any need or demand for restrictive legislation. It is seriously open to question whether there was ever any need for the enactment in New Zealand of the Commercial Trusts Act, or ariv ■ need for its retention on the Statute Book. "The price-cutter respects no recognised retail prices, and, since the present law forbids distributors from withholding further supplies from him, the Act gives him full licence to hold a pistol to the head of the distributor, and to continue his price-cutting activities without hindrance. The Act is injuring many reputable traders in a manner that was never intended when the legislation was enacted. It has forced some out of business, others into bankruptcy, and it is seriously affecting others in their efforts to earn a livelihood. It is not without its effects on the unemployment problem." Law Protects " Pirate " The statement adds that th-?re has been a detrimental effect on i.onsumers and the general public. Although they might benefit temporarily by the actions of price-cutters, eventually the community had to pay for the loss of capital, bankruptcy and unemployment. The Act merely said bluntly that the control of prices and the withholding of supplies were offences which admitted of no defence if the actions were admitted. The law was therefore on the side of the "pirate." The Commercial Trusts Amendment Bill sought to infuse a measure of" justice into the Commercial Trusts Act, only two of the 15 sections of which were affected. Those related to the giving of concessions in consideration of exclusive dealing, and to refusals to deal with price-cutters. The bill also sought to give the right to raise a defence in a Court of law, throwing on the person charged the onus of proving what he had done was not prejudicial to the public interest. The Associated Chambers submitted that there should be no section of the House loath to give the bill passage and to make it law, when its purport was fully understood by members of Parliament.