H.—44,

14

Local manufacturers, in seeking legal protection, have frequently drawn attention to the provisions, of section 26 of the Board of Trade Act, particularly clause (c) of subsection (1), which reads as follows : — •■, " (I.), The Governor-General in Council may, on the recommendation of the Board of Trade, make by regulations under,this Act, such provisions as he deems necessary in the public interest for the following purposes. ... . -(c) For the establishment of fixed or maximum or minimum prices or rates for any classes of goods or services, or otherwise for the regulation or control of such prices or rates." In certain cases the Board of Trade has fixed maximum prices, but so far has invariably left the adjustment of minimum prices to free competition. The Department is quite aware of the serious inconvenience to manufacturers that often arises out of the practice of price-cutting by retailers, but owing to the difficulty of the application of a uniform price to different classes of trade, the Department has considered that the determination of minimum prices should be free from Governmental restriction, except where there is evidence of unfair commercial practices. The opponents of price-fixing deny that price-cutting has disastrous effects. The price-cutter claims that he has paid the price which the manufacturer demanded, and fails to see why the manufacturer, who has given up title to the goods, should be empowered to dictate the conditions of resale. It is contended that price-maintenance carried to its logical conclusion would bring the machinery of distribution virtually within the control of the manufacturers, as the power to fix resale prices carries with it the power to fix the retailer's profits. As the service rendered by retailers varies considerably, an arbitrary retail price could not reasonably apply to every class of business. The question appears to be not whether manufacturers should have power to fix resale prices, but the extent to which they should have such power. It is fairly evident that generally price-cutting below cost is harmful both to the manufacturer and to the trade competitor. At the same time it is unfair to the consumer from whom the price-cutter makes recoupment. This class of price-cutting is in a totally different category to the .charging of low prices as a result of an efficient selling organization which enables a retailer to work on a fine margin of profit. So long as the goods are not sold below cost the practice is not harmful. This type of competition tends to stimulate trade and benefits the consumer. Unless manufacturers allow for the varying costs of service rendered by the different classes of retailers — e.g., "credit and service" stores, as compared with the non-service or "cash and carry" stores —it will be apparent that any attempt at price-fixation will be unsound and unfair. A modified form of price-maintenance which permits the price to vary according to the variations in the cost of handling would appear to be reasonable. SEA CARRIAGE OF GOODS ACT. This Act, which was passed by Parliament last year, was mainly a consolidating measure intended to bring into one enactment, with certain additions, the law relating to the carriage of goods by sea. After evidence had teen given before the Statutes Revision Committee on behalf of both shippers and marine carriers,, the law was agreed to by the conflicting interests, and was referred to London for Royal assent. There appeared to be some possibility of delay in securing assent to the new measure, but representations made through this Department had the desired effect, and the Act came into force by virtue of a Proclamation gazetted on the sth July, 1923. One of the essential provisions of the new law will prevent the unreasonable clausing of bills of lading, inasmuch as any such clauses shall be null and void unless declared by a Court of law to be reasonable under the circumstances. In cases where clauses on bills of lading have reference to the condition or defect of packages, such clauses shall be null and void unless the attention of the shipper is drawn to such defect at the time of shipment. Other provisions in the Act make for greater security, and in general clarify the law on this matter. The passage of this measure has given considerable satisfaction to the trading community. CUSTOMS INQUIRIES. As was reported last year, the Department has given assistance to the Customs Department in relation to a number of tariff matters, and close investigation has necessarily been made into the condition of_the industries concerned. The financial result of trading, prices charged for local manufactures, and costs of production have been ascertained, and recommendations made for the guidance of the Hon. Minister of Customs. It will be evident that details of the work done in this connection cannot be published in this report. ""V FRENCH COMMERCIAL MISSION. In January last a visit was made to the Dominion by a French commercial mission on the cruiser " Jules Michelet," commanded by Rear-Admiral Gilly. The mission was headed by Governor Guyon (French Colonies), who was accompanied by M. Chauvel (Foreign Office), M. Petrequin (Industries and Commerce), Corrite de Vitry (Department of Mines), and two technical associates, Lieutenants Pigelet and Ziegel. The main object of the mission, which was making a world tour, was to encourage reciprocal trade relations between France and the various countries visited. For the purpose of exhibiting the good qualities and varied nature of France's exportable products, the cruiser was fitted, to a large extent, as an exhibition ship.