SUEDE COURT SHOES

Dominion, Volume 13, Issue 279, 19 August 1920, Page 6

SUEDE COURT SHOES

SOLD AT UNREASONABLY HIGH PRICE

JUDGMENT IN AUCKLAND CASE

A FINE OF £75

By TeleemDh—Preas Association Auckland, August 18.— In the Mngis'.rato's Court this afternoon, Mr. Wilson, S.M., gave judgment in tho profiteering cl.argo preferred at the instanco of the Board of Trade against tho firm of Dudleys Ltd,, boot merchants. In giving judgment, His Worship said:—

"The facts which are proved or admitted are that on the. dato mentioned, April 1, defendant sold one pair of black suede court 6hoes (lady's) for tho sum of JC3 7s. 6d., which, it is claimed bv the informant, was an unreasonably high price. The defendant landed the shoos into tho shop at Auckland 'at a cost of ,£1 18s. 3d. Ho was called upon bv the Prices Investigation Tribunal to justify the price charged, and on May 10. 1920, tho secretary and working manager of tho defendant (Mr. Goldsmith) wrote to the secretary of tho tribunal, setting out that tho price was made up as follows'.-Landed cost, £[ 18s. 3d.; overhead charges, 19s. 2d.; added on the ground that the shoo was ft fashionablo one. and might have to be sold at a loss, 4s. Gd.; added on tho ground that the shoes had been purchased at a cost lower thnn that ruling at the time of pricing, ss. 7d.; total. .£3 7s. Gd. Mr. Goldsmith's' evidence was that the line of shoes from which the particular shoe was sold had only been a few days in stock, and that on tho day on which this shoe was sold lie had, sold three pairs of the same shoe -to one customer. In his opinion, if he 'imported direct from tho maker instead of buying from a local warehouse, his firm was entitled to add from 5 per cent, to 10 per cent, extra in pricing tho goods. "It seems clear '.hat tho shoe, in respect of the sale of which the charge is laid, was of a very fashionable type, and that there was more risk in. dealing in such types than in dealing in what one may call everyday lines. Tins' being so, I think it reasonable that the dealer Bhould have such higher price as will reasonably compensate him for his risk. 11 have to consider whother the price charged by defendant in this instance goes beyond that reasonable .figure. Taking nil the evidence,' I have come to '.ho conclusion that it does. The defendant admittedly caters for a highclass trade, that is. its customers are people who buy fashionable goods,. Admittedly there is a risk in such a business, and tho question' arises as to 'tho degree of risk and its compensation. It was urged upon me by defendant's counsel that I must have regard only to the particular transaction involved in the charge, and that I should not consider tho whole of the year's dealings in coming to a conclusion as to whether in this particular instance the price charged was unreasonably high. Ido not see. however, how I am to gauge the riski unless I do regard tho whole of the year's transactions. On the face of it, I have no hesitation in saying that a chaise of dC3 7s. Gd., for an article which is landed in defendant's place of business at a cost of M 18s. 3d., is.in my opinion unreasonably high, Defendant contends that tlio shoe is risky to deal in, and that, in common with shoe 9 of n. like fashionable and extreme nntuTe, it should bear additions which he has placed upon it. ' "In concluding, I feel that I nm entitled to l«ok to tho last balance of defendant's business, and seek there evidence as to whether or not dealing in goods of this nahiro entails such a risk as would justify the price charged. It seems that this gives tho -liest evidonco which can bo had. Tho balance-sheet for tho year ended March 31, 1920, shown that, the defendant company (which was incorporated in May, 1913., and which Is a private company, in which the manag. ing director holds tho great majority of shares) has a capital of JESOOO. During tho year covered by ihe balance-sheet produced, a! net profit "was made of and this after allowing for u salary to the managing director of .£SOO, in addition to other costs of conducting the business. The result of seven years trading is that the defendant company, after paying a dividend of 2 per cent, on its capital and a yearly salary of .£SOO to the managing director, hiw still its capital of .£SOOO intact, nnd in addition to that tho 6um of ,£10,012 of accumulated profit. I consider it impossible 'for me to come to any other conclusion but that the defendant could have sold the shoo in question at a' considerably lower prico, and yet havo received a reasonable commercial profit' on the transaction.

"In considering the evidence, I have looked for some indication that the high prices charged in respect of some lines would be applied in alleviation of tho cost of goods in more general use; Had defendant beon able to show that that was the fact, I should have considered it a relevant factor in determining whethor the%alo in question was at an unreasonably high prico. That, however, does' not 'appear on tho evidence given by Mr. Goldsmith." The Magistrate stn-ted that in _ his opinion an 'offence had been committed. The fact that defendant's business was of a special nature had ..to bo taken into account. Had it concerned goods required by tho ordinary run of buyers, he should have felt obliged to impose a very heavy penalty.. In tho circumstances the defendant company would be fined £15 ond £1 7s. costs.

At the request of Mr. M'Veagh, for defendant, to fix security for appeal on general grounds', His Worship fixed the amount at .£IOO.