ALLEGED FLOUR MONOPOLY.

Hokitika Guardian, 21 July 1925, Page 4

ALLEGED FLOUR MONOPOLY.

THE CROWN APPEALS. ! ] VERY IMPORTANT CASE. WELLINGTON. July •20. Roth divisions of the Appeal Court were engaged hearing the appeal in the Hour milling case hoard at Dunedin wherein penalties were sought tor alleged breaches of the Commercial Trusts Act. UMO (relating to niono|,o|ies) from the Crown Milling Coy. Limited, of Dunedin. tlotirimllers; Eieming and Company .Limited, In\cieargill. tlourmillers: Atlas Roller Hour and Oatmeal Mills (Evans anil Coy.) Tiinaru, tlinirinillers; Wood Brothel's, Limited, Christchurch, llmirinillers, and Distributors Limited, Christchurch, tlourmillers. agents; which companies are the respondents in the present proceedings. 'I 111; ease, as was with the sugar case of is one of the most important proceedings beard m New Zealand under the Commercial Trusts Act. The offence alleged was that respondents conspired together to monopolise. wholly or partly. Hour, bran and pollard in New Zealand, and to control its price anil supply, such monopoly and control being of a nature contrary to the public interest. It wa- alleged that control was exercised ly the incorjiMratioii in October p.rj.'i. of Distributors Limited, for the purpose of acting as sole selling agent lor Hour, bran and pollard lor all such Hour millers as should enter into agreement to that oiled. Alter such incorporation nearly all tl'nirindlcrs in New Zealand entered into this agreement for a period of about six years. r l in l Crown contended that the incornur.'ii ion of Distributors Limited resulted in many bakers being unable to obtain the brands of Hour ordered, and ..ml-,- getting an inferior article. M r ,1 iisice Sim found in favour of the respondents and the Crown is now appealing against that decision. The ease is likelv to last a week. Sir K. Bell applied to have Counsel hoard for appellants, saying the Soln i-ior-l tenoral and Mr Adams were not going to l iver the same ground. The Court granted the request. Sir E. Bell said the Crown’s argument was that such a combination as bad been created was ipso iaeto. an olfcni c under section live ol the font, menial Trusts Act. Even if lhere was. no breach of section farce and lour. Under the terms of tlm agreement, all the millin',noiv. sold ilmir output. to Distributors Ltd. at tlm price which Ilial Company fixed. If was appointed bv agreement to ileal with Credere, an age n't ■ The agency covered not only what the niillowner manufactured, but also wltai they imported into New Zealand. Sir E. 801 l read an agreement. between Distributors l,td. and various millowuers; also Mr Myers' address n the New Zealand llounndlers in eniuni it lee 011 -21st. June I!C'2. Sir E. Bell said the Govt, had to have regard to the price of bread i.iicii it encouraged farmers to grow wheat. It was ridiculous to assume that the fixing of the juice of wheat by Distributors Ltd. bad any other object 1 1 1 .- l ii the gaining of jn'nlit |nr the miller. ' , ('out inning Sir E. 801 l pointed out that it was ini|«isvib!e lor |>oo|ile to create the most dangerous monopoly, to work innocently under it. and men. oiler sonic years, to exercise it. Mr Justice llerdnian: Is it admitted that there is monopoly:-' Mr Skerrett (for the respondents); It' i- admitted that, there is jiarlial control of the supply of Hour. Sir E. Bell: Wo submit that, ex facie, tlie agreement constitutes an olIViii'c miller .Section o. Ihe thing sjienks for itself. Our first emit mil ion invites the. Court to i onsinm the agreement as if an action had been l.roiiglit just after the agreement bail been siguod Our second i-ont cut ion is that the qm-tion of whet In r tb" '""t ract is. la not. contrary to jniblic interests j n pure qim-tion of law. Thirdly, that the cases in the Commonweal tlt upon which the Lower Court placed !•'• Hamm, do not apply. Fourthly, that the decisions on the common law rule relating to contracts in n-traint ol trade in- in relation to i mil.illations, do not afford aiiv guidance to the interpretation of the New Zealand Statute. Fifthly, that the American cases under tlm Sherman Art are precisely m Both in tie' Standard Oil Ur.'-e and Ike Tobacco Case in America. there was an emphatic protest by a minority. Six.,;.jv timt. (J:e argument that the agreement call be defended as being lotisiM--0,,1 with the attitude of tlm Cu\erulili*lit is indicate I by ibis wry ac.lmn. Mr Skerrell: \Yr do not admit that lhe question before the om.i'l turns ' upon tlm mere ,■ Duet ion id 'be - agreement. Sir E. Bell: The nnbii.almn did | not haw the consent of the ' nmnt. but it ui.-iv have had that ol 'ir McDonald, who was then in charge ol ' the Board of Trade, and afterwards was Managing-Director of Distributors Lid. 1 Mr Skerret.L : if was admitted by , tlm Crown in tin* Court below that 1 Mr McDonald's conduct throughout | Dm ulmlc transai 1 inn was square and above h ail'd.

Sir F TFll: My seventh point is that manv. or all (d the hankers mn\ have approved, hut this lias no hearing; hut. if it has, then the evidence shows why they did it. Kighlly, the evidence proves that a conspiracy has aetuallv operated which is contrary to Die public interests. If an article that is being monopolized is of such a nainie as to he contrary to the public In-tere-ts if monopolised, then het'e nmnupolv must he contrary to public in-lere-.ls. A monopoly of Jour is ol such

•i nature as to be in itself, contrary to public interest:- (1) because it prohibits ."II compel iiou ; (2) because it prohibit'' any mill producing more than ;i (.orlain quantity in any year: G>) I oca use it provides fur a fixed I from all mills, irrespective of quality. (,|) because it provides that the price dial I be fixed by a commercial trust; io) because II provides thnl the public shall take such flour as the commercial trust dictates, and shall have no xav as to the price or quality; H>) because it ’provides that, it it is nerossarv. in the public interest, to have more Hour than me New Zealand mills nroduee. I hen a cioumereial trust, ami not the millers, shall imporl li. I hose eonstitute ike very reasons why the y rt was passed. The by-products ol |"lour are of great value. Foreign compoiition is excluded by the policy ol this country, whicli encouraged the growth of wheat Imre. This m borne out hv the defence by Mr Xnsworthym statements, and by the evidence now that Distributors Ltd. determine in explode local competition. Tlmt is the crux of tho action. The balance of the sitting was orcopied hv Sir F. Bell in the citation and discussion of Australian and American cases, particularly those Inkon in iiie United Stales under me Sherman Act. , The ease stands partly heart!.