PROFITEERING PROVED

Hokitika Guardian, 1 December 1920, Page 3

PROFITEERING PROVED

THE MAGISTRATE’S FINDING. WELLINGTON, November 29. Reserved (judgment [regarding six charges of profiteering 'on the sale of tweeds laid by the Board of Trade, against the wholesale Ifirm of Bing Harris and Co., Ltd., and Robert Wilson and Co., was given by Mr J. S. Evans, S.M., to-day. In Ins judgment the Magistrate said the general features of the cases were the same, therefore the principles governing them' might be considered together. The general evidence in Bing, Harris and Co’s case was to apply io Wilson’s case, and vice versa. The defendants were each charged with making three sales, at different dates contrary to the provisions of section 32 in that they sold certain tweed suitings at a price that was unreasonably high. The defendants in these c »ses were both principals. Bing, Harris and Co., Ltd, was a body corporate, and Wilson was the sole owner of the business. There was no definition, of commercial profit, but the principles laid down in tho “Big Ben” and Mellin’s food cases were the express judgment of the Full Court. In the two cases before the Court the actual decision turned on the facts of each case, the “Big Ben” cases on the ground that tho selling price was fixed by ,tli!e manufacturers, and in' Mellin’s food case that the sale was higher than the goods were sold at hv other traders. The first principle laid down by tho Court was that traders might always regulate their selling prices at the current market rate of the time of sale, and' might from time to time advance their prices over the actual cost price to the current market .rate, both on goods in stock at the time of the rise in prices and on goods to arrive. That, in his opinion, was the true “replacement principle” laid down by the Court, not that the “trader” may at the time of pricing his goods advance his price on the current market rate to meet a possible rise in the future on the market rate That was in the nature of a gamble on prices, and

would involve an enquiry into the question of what was a reasonable rate for each trader to fix on a speculative rise. "In my opinion,” said his Worship, “the rate of profit charged by defendants brings them within the penalty clauses of the Act, and they must be convicted. The question of whether or not a bona fide misconception of the principle of replacement costs was a defence was left open by the Full Court, and I will leave that question to bo decided by the Higher Court. Bing, Harris, and Co. will be convicted on all the charges, and Wilson will be convioted on the sales of New Zealand tweeds. The information for Belling English tweeds will be dismissed. Bing Harris, and Co., Ltd., is a company, and Wilson admits that he is practically the sole proprietor trading nnder a firm’s name. In Bing Harris, and Co’s case tweeds represented 90 per cent, of the business, and the increase in their profits was high.’ In Wilson’s case the increase was higher still, though his trade in New Zealand tweeds was small, but the increased profits resulting from his excessive rates must have been considerable. i “Tlie penalties in this class of case . are intended to be preventive. Defend- ; ants are middlemen only. Theso goods ' were in stock for a very short time, | and could be, and were, rapidly turned over. In one case the profit put on by Bing, Harris, was 40 per cent, greater than the total cost to the manufacturers and freight. In another case it was 99 per cent. In the three charges the aggregate profit was 100 per cent, on tho total cost to them. This is &n outrageous profit for merely handling goods. In my opinion, therefore, in all the circumstances of the cases, notwithstanding these different rates of gross profit put on. I would not be doing my duty if I did not impose the maximum penalty in each case.’

In justification for not fining Wilson the maximum penalty, his Worship said that while his percentages were lower than those of Bing, Harris, and Co., he had stated frankly he was out to make as much as the circumstances and market would allow, and would have charged 200 per cent, if he -could have got it. The penalty for an “individual” included the alternative of imprisonment, and if it had been an individual within the meaning of the Act who had put on the 100 per cent., he would have seriously considered the penalty of imprisonment in at least that charge.

He fined Bing, Harris, and Co. the maximum penalty for a company, of £IOOO on each of three charges, and Wilson tho maximum penalty for an individual of £2OO on each of the two charges.