I.—lo

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129. Did you announce that to the other persons who were making arrangements with the Freight-reduction Committee ? —They knew it perfectly well. 130. Was it not a secret arrangement by which you got the special advantage? —Oh, no. 131. Is it not an equivalent to the 2s. 6d. black-mail ?—Oh, no. I was entitled to put my wool on steamers and charge them the five-sixteenths; but I acted liberally, and said I would take their offer. 132. Where is the difference between that and the 2s. 6d. which you say the co-operatives demanded, because they had a special quantity to sell ? —They said " If you do not give us this we will close our shipments." 133. You said, "If you do not give me the one-sixteenth I will fine you by sending my wool by steamer " ?—They knew that. With regard to that 2s. 6d. received by the co-operatives, they said, " Let us see how much we can get." 134. When you were writing to the papers, did you not mention the fact that the. 2s. 6d. had been demanded by the co-operatives? Did you not deliberately leave the inference that it was Levin and Co., and merchants like them, who had been guilty of what you call black-mailing?—l knew it was not so. 135. Did you not so write your letter that the public should draw that inference?—l had no intention of that. 136. Do you now see that is the necessary inference from your letter as it appears ?—I think it was so generally known. 137. Do you not now read your letter in that way? Do you not think that it was unfair, at least unfortunate, that the word "black-mailing" has been applied to the gentlemen whom it affected?—l did not put that interpretation upon it. the Chairman : We might now take the law-points that Mr. Bell wishes to address the Committee on. Mr. Bell: The case I wish to refer the Committee to is the case of Baring v. Stanton, in Volume 3, Chancery Division, page 502, and also to the case of the Great Western Insurance Company v. Cunliffe, L.E. 9, eh. 525. Of Baring and Stanton, Lord Justice James says, " A shipowner had for several years had an account with merchants who effected for him insurances on his ships. In their accounts they charged him with the full premiums, but they had been allowed by the underwriters, and retained out of the premiums, 5 percent, brokerage, and a further 10 per cent, discount for ready money, as usual on insurances. On taking the accounts in a suit respecting a mortgage on some ships the shipowner objected to allow the merchants to retain the 10 per cent. Held, that as these allowances were usual, and as the shipowner had never inquired on what terms the merchants effected these insurances, and appeared to have accepted their terms, he could not now raise the objection." Then Lord Justice James says, at page 505, "It is quite clear that it was known to everybody connected with insurances that the insurance offices were in the habit of making allowances by way of brokerage and otherwise of 12 per cent, of the profits or 10 per cent, discount, and also 5 per cent, brokerage, so much so that some of the documents produced actually contained the thing printed as common form. It is quite obvious that this is a recognised practice of the offices. That being so, it is very difficult to believe that Mr. Stanton must not have known that Messrs. Baring were receiving from the offices such allowances as the offices were in the habit of making. Their dealings go on for years. Mr. Stanton never takes the trouble to make inquiries, but settles all the accounts and deals with Messrs. Baring on that footing." Then Lord Justice Mellish says, at page 506, "I think that this case cannot in principle be distinguished from the case of Great Western Insurance Company v. Cunliffe. It appears that there are two ordinary modes in which agents employ underwriters—the cash system and the credit system. According to the credit system the accounts are made out at the end of the year; all the premiums which the particular merchant or agent has brought to the underwriter are put on one side, and all the losses are put on the other side; and then, if there is a profit, the underwriter allows the merchant 12 per cent, on that profit. We held that the merchant who brought the business was entitled to keep that profit. The cash system adopted in this case is : Some underwriters, particularly new insurance companies, object to a long credit system, and prefer a system by which they get their premiums paid at once. They are willing to make a sacrifice for the purpose of obtaining prompt payment, and on payment, instead of the 12 per cent, on the net profits, if the premium is paid within a fixed number of days after the insurance is effected they make an allowance of 10 per cent., the customers being charged with the premiums just as before. If that is generally known and acquiesced in, I cannot conceive that it is a fraud upon anybody. It may be a misfortune to Mr. Stanton that, being an American, he really did not know the usage in London. But if a person comes and trades in London he must make himself acquainted with the usages in London, and when he employs the Messrs. Baring he must expect the Messrs. Baring to treat him in the same way as they treat all their other customers; and he cannot be entitled, because after ten years' business transactions with them he quarrels with them, to say that they should treat him in a different way from that in which they treat anybody else." Then Lord Justice Baggallay also delivers judgment. In that case there were two discounts—the ordinary 5 per cent, brokerage and the additional discount which was allowed under two different alternatives. Both were challenged, but so patent was it that the ordinary 5 per cent, brokerage could not be disputed that the plaintiff abandoned that part of his claim. The Committee will observe that, though Lord Justice James said it was difficult to believe that Mr, Stanton did not know, yet he decides on the assumption that Mr. Stanton did not know; and Lord Justice Mellish decides on that assumption only, and expresses an opinion that no wonder Mr. Stanton did not know. So I apprehend, so far as the law of England is concerned, and the law of New Zealand, that it cannot be suggested that there has been illegal practice in the retention of these primages. I hope, however, that you will understand that I only ask the Committee to refer to that case, and I am confining myself to that, and therefore I do not offer to address the Committee on what I conceive to be a plain distinction between a secret freight and a