THE OTAGO DAILY TIMES SATURDAY. APRIL 20, 1927. PROPRIETARY ARTICLES.

Otago Daily Times, Issue 20086, 30 April 1927, Page 10

THE OTAGO DAILY TIMES SATURDAY. APRIL 20, 1927. PROPRIETARY ARTICLES.

It may be presumed that the questions that are raised by the existence of a Proprietary Articles Trade Association were considered in all their bearings by the Committee of Inquiry which has reported to the Government that, in the opinion of the majority of its members, the operations of the association are dangerous to the public interest and injurious to trade. The argument that led the Committee to this conclusion is that the “cutting” of prices of articles is justified since othciwise tho practice, of competition of any kind in prices would bo called into question and this would be “to challenge one of the fundamental principles upon which commerce the world over is based.” But tho Committee was not prepared to g° the whole length in the support given by it to the practice of “cutting” prices. It expressed tho view that the selling of articles at a price which is below their cost, with the object of attracting custom, is “an evil" and, “like its converse, the selling of goods at unreasonably high prices, detrimental to the public interest.” It may be suggested to the Committee that, except in case of a monopoly, the public is able to protect itself, and does protect itself, against any attempt to exact unreasonably high prices for goods. Tho Committee’s opinion respecting this latter point is, however, a digression. And, as to tho sale of goods at “cut prices,” it has expressed two different conclusions which are not wholly reconcilable. To sell goods below their cost is “an evil,” but “nothing should be done to limit the power of traders to bring the producer and consumer as close together as circumstances will allow.” What are the circumstances that should bo taken into account? They must include tho allowance of a fair and reasonable profit to the producers and to the distributing agents. Where tho attempt is made to secure profits that are not fair and reasonable, it may bo anticipated that the effect will generally bo to encourage trade competition and that the interests of tho public will thus be served. The object of tho Proprietary Articles Trade Association is defined by tho Committee of Inquiry as being tho elimination of price-cutting on the grounds that it is detrimental to tho best interests of the manufacturers, wholesale merchants, and general body of retailers. The definition is somewhat wide, since the object of the Association covers only the proprietary articles produced bv its members. And we take it that it is the practice of the very business system which tho Committee has denounced as an evil, or at least of something very nearly approaching it, that has induced tho operations of tho Association. It is not unreasonable on tho part of the manufacturer of ft proprietary article

for which a reputation has been established to object to the sale of this article at less than cost in order to attract customers who may be purchasers of other goods. And if ho should resolve to withdraw his article from the market in which it is depreciated by being sold bfelow cost and in which ho is deprived of business with traders who would dispose of the article at a legitimate profit, the public may thereby be a real sufferer.