The Dominion. THURSDAY, SEPTEMBER 26, 1912. AN IMPORTANT JUDGMENT.

Dominion, Volume 6, Issue 1555, 26 September 1912, Page 4

The Dominion. THURSDAY, SEPTEMBER 26, 1912. AN IMPORTANT JUDGMENT.

; , ' The judgment of tho Australian High Court last Saturday in the Coal Vend case, the full text of which is now to hand, is a strangely interesting document. It was described as being, we believe, "lum ; inous" by the Sydney Morning Herald, and luminous it certainly is. For it shows in the fullest and ■ clearest detail that tho Coal Vend could not possibly have been convicted under the law as it stands. Tho Act provides penalties against any person who is a party to any trade contract or combination "with ■ intent to restrain trade or commerce to the detriment of, the public." What "detriment" means is made clear by further words' in the Act providing penalties against any person who enters into a trade contract or combination "with intent to destroy or injure by means of unfair competition; any Australian in- ■ dustry, preservation of which is advantageous to the Commonwealth, having regard to the interests of producers, workers and consumers." It is obvious enough that to convict a person of a breach of the Act one must prove what cannot bo proved I against any ordinary trader. There J is first to be proved actual detri- ' mcnt t-o the public, and then intent to cause actual detriment—and detriment not merely to the-consumer, or the rival trader, but' actual de- . trimcnt to the often very conflict- , ing interests of the producer, the worker and the consumer. How - difficult it must be, in any conceivable circumstances, to prove all this against a trader will be apparent when one_ oonsiders how sound— ' given, as it is given in the Australian Act, that the consumer, the producer and the worker have necessarily conflicting interests—are the following general observations by the Court:— > It is clear that Parliament, contrasting detriment with advantage, recognised that tho interests of all these classes are elements to be considered in dealing with tho subject matter of the Act, and did not think that \in Act which is apparently detrimental}, say, to consumers is necessarily detrimental to tho public as a whole. . . . Consumers are a jiart, not the whole of the public, and in con- ' s'dering whether a contract in restraint of trade is detrimental to the public, re- ' card must be had to the public at large. ■ It may be that the detriment of en- & hancoment of price to the consumer is t compensated for by other advantages to the-n members of the community fthe producers and workers!, which may. in--3 deed, include , the establishment or continuance of an industry which otherwise j could not bo established, or would come ' to an end. 3 f The Court went on to say (speaking, . always, of course, as the slaves of , the statute) that it followed that an agreement or combination in restraint of trade might be beneficial, or neutral, as easily as detrimental, to the public, and that the ''intent" required by the Act must be. real end actufll, and not "a fonttpicti'-e 4 intent" to be imputed by virtue of

the English common law doctrine upon restraint of trade. AVe need hardly tell the readers of The Dominion that' the strange statutory division of the public into consumers, producers, and workers, engaged in a game of cut-throat, is to our mind thoroughly unwholesome, and must be the parent of much evil. But that is the law in Australia, and b,v that law the High_ Court had to steer. In America they rely upon a short and simple Act which leaves it to the Supreme Court to say whether or not a combination has unlawfully restrained trade. The Sherman Act was nearly killed by _ Mn. Roosevelt's _ attempt to inject into its administration the unsound doctrines actually embodied by implication in those parts of the Australian Act which we have quoted. It was only when Mr. Taft and his Attorney-General began to apply the law in its nakedness that it began to have some effectiveness. The old English doctrine—and it is questionable whether anyone can say that this doctrine has been entirely and really superseded—presupposes public injury in combinations to restrain trade. But in Australia they could not simply interdict combinations that actually restrained trade. They had to embody in the Act a sort of short political speech of a very unsound character. The result is that the Act not only fails to punish a Coal Vend which, in point of fact, was not shown to have pursued the methods of a predatory trust at all, but also is unable, to catch even a combination that may pursue the tactics of the Standard Oil Company. The Fisher Government cannot reasonably complain, after all its opportunities to shape the 'Act exactly to its liking, if it has failed to shape it so as to punish the, people it wishes to punish. Scattered _ through the judgment are many interesting. obiter dicta. One, which really is an obiter diclum—since, if it were not irrelevant to, it was at any rate not neccssary to, the argument—is of some interest to New Zealanders in view of the fondness of some of our economic doctors to talk about-, and legislate about, "reasonable" prices. "Price," said the High Court, "is a resultant'of many variable forces, of which wages constitute one, but only one, clement." It added that the argument in favour of . the contention that the Vend fixed "unreasonable" prices was based on the following assumptions:— (1) The price at which a commodity sells in any year is, prima facie, a price actually remunerative to the producer. (2) That price is, pruua facie, a reasonably remunerative price; that is, affords a remuneration with which tho producer ought to be contented. 13) Any higher price would be unreasonable. (1) All conditions affecting prices are to bo taken" as remaining stationary until tho contrary is shown. (5) Any riso of prices is, prima facie, detrimental to tho public. The Court rejected all of these assumptions, which are indeed obviously wanting in foundation.' If the first assumption be allowed, the price of anything whatever can be shown to be unreasonable and detrimental to tho, public by the straps process! of picking some year at which that thing sold at a less .price., .Yet .how ; otherwise than by allowing some such assumptions can a Court of British justice, conforming to the, principles of British law. decree jil'stly:"tfiat'.'.'any given price is an unreasonable price I The judgment did not merely acquit the Coal Vend of unlawful practices: it has dealt a heavy blow at the legislative empirjeism so dear to the Radical

mind.