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4. The 'Bill provides as to this section 3 that in any proceedings for an offence under that section " it shall be a sufficient defence if the defendant proves all of the following matters to the satisfaction of the Court " ; and I set out these three matters. I take it you are familiar with them :— (1) That the specific act or acts charged against him were not unfair to the person or persons immediately affected, having regard to the circumstances, of the case. (2) That the specific act or acts charged against him were not prejudicial either to any industry carried on in New Zealand or to the public welfare. (3) That acts of the nature of the specific act or acts charged against him, if commonly practised or repeated, would not in similar circumstances be unfair to the persons immediately affected and would not be prejudicial either to any industry carried on in New Zealand or to the public welfare. The Bill in this respect throws the onus on the defendant. Then I set out section 4 :— Every person commits an offence who, either as principal or agent, refuses, either absolutely or except upon disadvantageous or relatively disadvantageous conditions, to sell or supply to any other person, or to purchase from any other person, any goods for the reason that the latter person — (a) Deals or has dealt or will deal, or intends to deal, or has not undertaken or will not undertake to deal, with any person or class of persons, either in relation to any particular goods or generally ; or ( b) Is not or has not been, or will not become or undertake to become or has not undertaken to become, a member of a commercial trust; or (c) Does not act or has not acted or will not act, or does not intend to act, or has not undertaken or will not undertake to act, in obedience or in conformity with the determinations, directions, suggestions, or requests of any commercial trust with respect to the sale, purchase, or supply of any goods. Under this section the offence is a refusal to deal either absolutely or except on disadvantageous terms ; but such refusal must be for one or other of the reasons set out in paragraphs (a), (b), or (c). 5. The provision of the Bill set out in paragraph 4 above applies equally to proceedings under section 4 as to proceedings under section 3 of the Act and with the same effect. 6. The question arises as to how the amending Bill will or may assist in combatting price-cutting. In the case of tobacco and cigarettes the price-cutting evil was met by deleting tobacco from the Schedule to the Act, thus leaving it open to the manufacturers and merchants to set up their own price-structure, and to maintain it without fear of proceedings under the Act, which no longer covers tobacco. Here, however, petrol is not withdrawn from the provisions of the Act, but what is contemplated is that the oil companies may, by disciplinary action or by threat of such action, prevent price-cutting. The methods are — (1) The refusal of rebates, discounts, &c., to offending resellers. There is no possibility of the resellers themselves exercising any power on the price-structure. They may, of course, make representations to the oil companies, but they cannot do more. 7. It must be apparent that the Bill would make it possible for the oil companies to regulate prices so as to ensure a reasonable rate of profit to resellers. But it might on the other hand make it possible to the oil companies to fix a lower rate of profit. As against this possibility, however, the Bill would require the oil companies to show that the specific act or acts charged were not unfair to the person or persons immediately affected. The effect of that has been stressed by Mr. O'Leary and Mr. Johnston, and I suppose what they have to say there that the Act is for something, but when it is actually examined it would give little or no protection to him or ourselves. The oil companies may discriminate. Section 4 (c) of the Commercial Trusts Act — Every person commits an offence who, either as principal or agent, refuses, either absolutely or except upon disadvantageous or relatively disadvantageous conditions, to sell or supply to any other person, or to purchase from any other person, any goods for the reason that the latter person — (c) Does not act or has not acted or will not act, or does not intend to act, or has not undertaken or will not undertake to act, in obedience to or in conformity with the determinations, directions, suggestions, or requests of any commercial trust with respect to the sale, purchase, or supply of any goods. That raises the question of what is a commercial trust, and may I submit to you, gentlemen, that each one of the major oil companies is itself a commercial trust within the meaning of the Act when it does anything which under the Act is prohibited, because section 2 defines " commercial trusts " and says it includes any firm or incorporated company having any such object or acting as aforesaid, so that if a firm or major oil company sets out to control prices, either of its own power or in combination with any other person or company, it comes in as a trust and that has been one of the safeguards of the industry and particularly the independent operators, with the fear that the major oil companies will take action under the Commercial Trusts Act. 8. But we think that the Bill goes further than is required for the reseller. In our opinion it would be sufficient if the Bill applied only to paragraph (c) of section 4of the Act. Anything more would be dangerous to the interests of resellers. That was the position as it appeared to us when we say the Minister and I refer back now to section 6 of my statement: — I understand that the oil companies have made no representation in favour of the Bill, and that they are not tendering any evidence to the Committee. It would appear, therefore, that the wholesalers of motor-spirits do not seek the Bill, and my clients do not see any practical benefits assured to them by the Bill. On the contrary, they feel strongly that the Bill, if enacted, wiJl weaken the Government's control of the oil companies. 7. My clients are not concerned with the arguments pro and con of those traders who deal in goods (other than petrol) of the classes enumerated in the Schedule to the Commercial Trusts Act of 1910. I understand that the only class of traders who are making representations are those who deal in " articles of food for human consumption, and ingredients used in the manufacture of any such article." We respectfully submit therefore that if the Bill is to proceed then — (а) Its operation be confined to section 4 (c) of the principal Act, or (б) If that course be not favoured, that it be expressly declared that the Bill do not apply to the item in the Schedule " petroleum or other mineral oil," &c. It is further submitted that the only practicable measure for controlling price-cutting of petrol is the exercise when and where necessary, of the power to fix prices.

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