H.—44a

MINORITY REPORT. 19. I conclude from the evidence submitted that Hardship and loss of business are suffered by manufacturers and distributors owing to the practice of cutting prices below a safe trading margin of profit. Price-cutting has existed for a long time, but has become intense during the last four or five years. Objectors to the operations of the P.A.T.A. contend that a dealer, having purchased certain goods, has a right to dispose of them as he wishes, without having regard to the interests of the manufacturer or others. I cannot concur in this view, as I consider the manufacturer has the right to state at what price and on what conditions his goods are to be resold; otherwise his business may be much damaged, and his product may even be driven off the market. In reaching my conclusions I am guided to some extent by the experience of the P.A.T.A. in Great Britain, where the association has been in operation nearly thirty years. The margins of profit allowed by the P.A.T.A. there are not so large as the retailers wish, and are lower than the margin obtainable on uncontrolled goods of similar classes. The principles underlying the exchange of goods are world-wide, and I cannot admit that the public interest would be adversely affected by the operation of a similar association in New Zealand, especially as in this country the P.A.T.A. makes provision for a rebate from the fixed retail price in favour of the cash purchaser, and also it does not discriminate against co-operative societies. According to the evidence submitted, and also in the opinion of an economist of note, quoted during the inquiry, the greatest saving that can be made by the " cash and carry" system as. compared with the usual store is about 5 per cent., and the P.A.T.A. suggests that this saving be passed on to the consumer. The P.A.T.A. has expressed its willingness that an officer of the Board of Trade be associated with its executive committee while prices are being considered, or it is agreeable to submit the suggested prices to the Board of Trade before bringing them into operation. I do not consider either of these precautions necessary, as the Board of Trade Act gives ample power to deal with any abuses which may be attempted. " Experience generally raises some doubts as to the efficiency of legislative methods intended to abolish such organizations" as that under consideration. Any Governmental attempt at suppression of the P.A.T.A. will, in my opinion, be difficult to enforce, and will hinder and hamper the business of the manufacturer and trader, the continuance of whose trade depends on the creation and maintenance of the goodwill of the public. I have the honour to be, Sir, Your obedient servant, W. R. Hayward.

XVIII