PROFITEERING APPEAL.

Hokitika Guardian, 29 September 1920, Page 4

PROFITEERING APPEAL.

(Fer Press Association.)

WELLINGTON, Sept. 28

At the Appeal Court, in the “Big Ben” case, Sir John Findlay said that long experience had shown traders what prices they must charge so that in a series of years their business may show a profit, and that is the market or replacement price. The Crown’s caso ignored: (.1) Any reference to market price; (2) any reference to the true value; (3) tiie difference between the skill and ability of different merchants in organising and arranging their business. The Crown’s argument would deprive an able manager of the' extra profit. He can make over what a poor manager can make. Free competition is the best and only reliable regulator of prices.

Mr Skerrett, K.C., said it was* not the object of these prosecutions to attack the scheme of fixating prices. No attack was made on the reasonableness of the profits made by manufacturers, nor on the. rate of profit of the wholesaler and retailers, where goods' are bought and sold on a basis of one price schedule. No attack was made on the ground that the price to the public in April, 1920 (vis 255) was an unreasonably high price on the basis of March,1920, price schedule. The subject « r attack was merely 40 clocks, purchased before the coming into force of the March schedule. It affected a negligible quantity of goods. Three things might be said as to the construction of Section 32 of the Board of Trade Act: (1) It applied only to goods sold in the course of trade or business; (2) there was nothing in the section which prevented all the circumstances of the case being considered. Taking all the circumstances into consideration it was reasonable to sell old stocks under a new and higher schedule price. A reasonable course of business required a higher rate of profit on a few articles when the price is being raised owing to the increased cost of production. As to the cost of replacement theory, he submitted three propositions: (1) That the Magistrate was entitled to hold it was sound business practice; (2) that capital is lost if goods- that have gone up in price are sold at the usual margin of profit on the cost price; (8) converso-

ly- when goods in stock have fallen in price, they must be sold at a loss, or at a reduced rate of profit. The Solicitor-General (Mr McGregor) in reply, submitted that the Statute was passed for the benefit of the consumer, and not of the seller. The arguments of the other side with regard to the replacement theory were fallacious. The only way to estimate profit was to compare buying and selling prices. The sale at 25s of an article which only cost 12s was clearly an unreasonable scale of profit. The case is still unfinished.