1,— 13a,

Mr. Boulton : I might mention that we do not sell to the merchants ; the merchants carry stocks on our behalf. lam not saying that we cannot control the prices of our tea now —that was before. Mr. Ansell.] You did make that statement; you referred right through your evidence to the fact that were your firm to decline to sell to the price-cutter you would be guilty of an offence under the Act. Mr. Sullivan.] If Mr. O'Leary's statement of the legal position is correct, you have no grudge against the Act ? — Yes we have ;we have a grudge that we have to carry on our business in a manner that is unreasonable ; we have to adopt a certain method to protect something which we have spent years to build up, which is our own property, which no one need buy unless they like. If you have already the power now —-which Mr. O'Leary states you have —then the provisions of the amendment are a wash-out. Might I suggest that it is not an effective power ? —No it cannot be used effectively at present. What do you say to the statements made by Mr. O'Leary and the other witnesses giving evidence against the Bill that they are making substantial profits ; they have demonstrated to us by figures that they are making good profits and that is because of their good organization and the cutting out of certain services to the public —giving credit, delivering orders, &c. Mr. McCaul (Interjection) : Low wages. Mr. Sullivan.] Witnesses have shown that they are paying above the award wages, but they are cutting out certain services to the public. Their organization is so efficient that it enables them to sell at a lower price ; they submitted to us figures showing that they are making substantial profits. They also make the point that if prices were fixed they would be making too high a profit, what have you to say to that I—ln1 —In many lines there are so many brands of a similar character which a trader has to keep ; competition would prevent this. There may be a few lines on which a man could make good profits, but take tea for instance —it would be impossible owing to the many competitve brands on the market. [Mr. Sullivan respectfully suggested to the Chairman that the legal position in the matter previously mentioned should be obtained at an early date in order that the cross-examination of witnesses and also the deliberations of the Committee could be carried out by the members in possession of the necessary information.] [Mr. O'Leary, in reply to a question from Mr. Sullivan, stated that no decision had actually been given on this point; the opinion expressed had been his own, but it was also the opinion of other lawyers. Mr. O'Leary suggested that the Crown Law officers be asked for advice.] [Copy of the departmental report produced for Mr. Sullivan —who said that it appeared that the view of the Department was contrary to Mr. O'Leary's. Discussing the matter further, Mr. O'Leary remarked that the Department could get a declaratory judgment in regard to the point. '' I might have had some hesitation in putting forward the opinion as my own, but I do know that it is the opinion of other lawyers much more eminent than myself."] The Chairman informed Mr. Sullivan, in reply to a question, that at the present stage they had only the opinion of the Department; they had not the opinion of the Crown Law Office. (Continuing cross-examination of Thomas Baker Boulton.) Mr. O'Leary.'] Mr. Boulton, not on your particular matter, but generally, you make this oftrepeated statement that price-cutting is used to attract business to the detriment of the manufacturer of that particular line. Do you know of any proprietary lines that are being cut at the present or have been cut over recent months ? —No, I cannot tell you that I know of any. Will you cast your memory back and go back to the last incident of that kind you can recall ?•—There may be other proprietary lines on the market that may have been ; I cannot recall. Can you recall of your own knowledge the last occasion on which a proprietary line was cut in the way you say ? —No, I cannot give you any definite aid. Mr. Boulton, does not that rather weaken any statement you may make with reference to that. It looks as if you are talking from heresay. Can you recall one incident in the last ten years of the wholesale cutting of a proprietary line ?—Yes, go back to 1928 where our brand was cut by a chain store when they opened shops in Christchurch. I have their original advertisement to prove it. The one that you do recall is your own ?—Yes. How long is it since you supplied tea to the National Distributors ?—We have never supplied National Distributors in the course of their existence. So you cannot make any complaint of National Distributors or the Self-Help being responsible for your position —having cut your line -They have obtained it from the other merchants. They have had it of recent years I—They1—They have not been able to get it. For how long ?—Since 1930. For five years they have not had your tea ? —No, but they had it for six years before that. You cannot suggest over the last five years any price-cutting of theirs that has affected your business ? —You have the cumulative effect to bear in mind. Because it has stopped at a certain time it does not follow that the injury has stopped. It goes on. How do you prevent them getting supplies ; you refuse to sell, yet you say they get it elsewhere. How did you stop that ?—By carrying stocks all over New Zealand. I am afraid that does not convey very much to me. —We control it. Carrying stocks all over New Zealand and appointing the holders your agents ? —And moreover they on their part always used to demand that they be placed on our wholesale list, which we refused. They have asked repeatedly to be placed on your wholesale list ? —Yes.

50