THE SUGAR TRUST.

Taranaki Daily News, Volume LV, Issue 279, 17 April 1913, Page 5

THE SUGAR TRUST.

BEFORE THE APPEAL COURT,

By Telegraph—Press. Association. Wellington, Last Night.

In the Appeal Court a further stage in the litigation in the Sugar Trust case was readied to-day, when the hearing of the appeal of various defendants against the judgment of Sir Robert Stout, inflicting fines for breaches of the Commercial Trusts Act, 1910, was commenced before a Court consisting of Justices Sir T. Williams, Denniston, Cooper and Chapman. Messrs. C. P. Skerrett and T. Young appear for the Merchants' Association, J. Nathan, and Bannatyne & Co.; Mr. J. Hosking and Mr. H. Richmond, for the Colonial Sugar Company; Mr. Myers, for Levin & Co.; and the. Attorney-General (Sir J. G. Findlay) and Mr. Ostler, for the Crown. The result of Sir R. Stout's judgment was that fines amounting to £SOOO were inflicted on defendants.

Mr. Skerrett, opening for appellants, said that prior to the passing of the Commercial Trusts Act the Sugar Company was the only refining company in New Zealand. It was what economists would call "a, natural monopoly," which, from its nature, could not be interfered with by legislation. The company fixed the price of sugar in bulk before the Act was passed, subject to a sliding scale of discounts, according to the amount of purchases. The company fixed the price not by reference to local conditions of the New Zealand market, but by reference to the sugar market of the world. Their policy was to fix the price at what it would not pay New Zealand merchants to import into New Zealand. Before the Act the company took advantage of an existing organisation, the Merchants' Association, for the purpose of pushing their sugar. This was done in lieu of going to the expense of themselves distributing the sugar amongst retailers. The discounts were always proportionate to the amount of purchases. The scale of prices was subject to certain special stipulations, viz., a special bonus of 10s a ton was allowed on the express condition of exclusive dealing with the company; (2) a declaration had to be made by persons entitled to discount that they would not give 1 away any part of the discount. The scheme also provided for the arranging of syndicates to ensure that each irr dividual received discount on his purchase. The company admitted large retailers into the syndicate, as they were in a position to do without a middle man, but individuals did not guarantee one another. After the Act was enforced the company issued the' first scale, and gave up Lite bonus for exclusive dealing, also the arranging of syndicates, and the new scale was equal in its operation. Anyone could earn the discount by purchasing the stipulated amounts. The scale was intended for individual purchasers, but it was soon found impossible to prevent combined buying and the pooling of discounts. The Merchants' Association pointed out that if the company removed from the Association the, distribution of sugar the company saw a danger of the merchants importing foreign sugar. The company recognised the danger, and brought out a second scale, which was sliding. Commenting on the Judgment of Sir R. Stout, Mr. Skerrett said that it had been found that the Sugar Company and the other defendants had been guilty of conspiracy to monopolise the purchase and sale of sugar in New Zealand by means of a scale of discounts which it was thought would prevent other groups earning a higher discount. Secondly, the eompary was found teuilty of offering discounts. This punished the company twice on the same facts. Thirdly, the company was convicted of refusing to deal with Fairbairn and Wright except on relatively disadvantageous terms. Lastly, all the defendants were convicted of aiding and abetting the offence of the Sugar Company. This was a conviction on the same facts relied on for the conspiracy charge. Mr. Skerrett continued his argument in the Sugar Trust case this afternoon, reading and discussing documentary evidence in the case, but had not finished his analysis when the Court adjovned.