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Otago Daily Times, Issue 13468, 16 December 1905, Page 6

LEGISLATING AGAINST TRUSTS. In f, country where the differences of opinion oh-the fiscal question are so sharply defined as they are in Australia, the introduction of an Anti-Trust Bill could only be expected to arouse violent discussions in the Federal Parliament. The measure brought down by Sir "William. Lyne, and supported by the Protectionists and Labour parties in the House and opposed by the Freetraders, is much wider and more drastic in its provisions than' the Bill which was passed into law by the New Zealaud Parliament this year with the special object of tentatively protecting the colonial manufacturers of agricultural implements against the operations of the International Harvester Company. A strong body of public opinion unquestionably exists in the colonies in favour of the proposition that it comes within the province or the Legislature to safeguard the interests of the manufacturing industries of the country against ruinous competition, and against the exterminating tactics which have made American trusts a terror to legitimate traders and a menace to the welfare of the people. Nor is such an attitude wholly repudiated by those who ordinarily give acceptance to the principle of Freetrade. It must be fully recognised, .however, that a general Act/ •which aims • sit- tb.o

regulation of the price of any commodity which may hereafter como within the scope of a Trust's operations, must bo exceedingly carefully drafted if it is not, to become a two-edged weapon in the bauds of its administrators, and one that may be used to the grave detriment of the very people whose interests it is designed to conserve. Our Parliament contented itself withj legislating against the International Harvester Company for one year, and the effect of tlio Act of Inst session is more likely to be moral than practical: it is hardly probable that it will be put into operation, but to the representatives of Trusts it will bo indicative of the feeling of a large section of the people of the colony. Sir Willinm Lyne's Bill can, however, so far as a. judgment may be formed upon the cabled summary of its provisions, be directed against any British, foreign, or intercolonial trading combination which may bo carrying on business in the Commonwealth under conditions more favourable than those enjoyed by an Australian competitor. The Kauri Timber Company seems to furnish a case in point. A still more striking illustration is probably supplied in the case of the Onion Steam' Ship Company and the Hiuldart-Parker Proprietary, which carry on the shipping trade between intercolonial ports under an agreement, and whose position in the shipping trade might be severely injured if competitors saw an opening to take* advantage of this remarkabla measure. Mr Cook, the Deputy-leader of the Opposition in the Federal House, has stigmatised the Bill as being not so much a proposal for regulating competition as one for preventing it, and he reasonably contends that tho operations of a Trust should not be deemed unfair until proved otherwise. The raison d'etre of a Trust is not necessarily to crush weaker competitors out of existence and to force up the price of commodities, however much tlio practice of certain American combines may have been open to grave reprobation, By the amalgamation of manufacturing concerns, the multiplicity of labour-saving devices, and the economies effected in the cost of production, commodities may be improved and cheapened to the great benefit of the consumer in general. The

subsequent utilisation of the Trust's united strength to drive a rival out of the trade and to appropriate hi,<i business is generally an afterthought, and, as such, should bo distinguished from tlio primary object of the Trust which is concerned for the most part with the question of production. Under the New Zealand Act the test of unfair competition is applied by a. subsequent comparison of the price of agricultural implements with that which prevailed at the time of the passage of the law: in Australia it is proposed to base the test on the effect of external competition on an industry, particularly in relation to employment. There would seem to be nothing in the Bill to prevent an employer who uses obsolete and expensive methods of production having recourse to the protection offered by the anti-trust measure. Moreover, a legitimate trader might quite possibly find himself haled beforo an inquisitorial Board of Inquiry set up by a Minister and required to show cause why he should not be fined £500 or suffer six months' imprisonment for wilfully contravelling the Anti-Trust Act! Sir William Lyne disclaim* any intention oil the part of the Federal Government to cause an internal monopoly, and suggests that the Bill is only directed against foreign firms which desire to dump goods in Australia "for the express purpose of killing local industries." But a measure of tliis kind must be construed literally, and it would conceivably bo just as likely that it would be used against tho Kauri Timber Company or some othpr colonial industrial concern as .".gainst the International Harvester Company. We should be disposed to fear that if tho Bili is passed in anything likn the form in which it has been introduced a feeling of grave insecurity will be created, such as can only react prejudicially.upon the Commonwealth itself. The postponement of tin? measure until next session of the Federal Parliament is, in all the circumstances, a prudent step. The effect should be to enable an intelligent public opinion to be formed on the subject before the proposals of the Bill are considered in detail.