I.—13a,

are always delivering freight-paid to the shops, and we can take no action as an association with these merchants. That is mostly the fault of the people concerned in the business. [It says here that "At association meetings prices and discounts are agreed on, and members are under an honourable agreement to observe these ?" —Members are under an honourable agreement to observe them. There is a Merchants' Association, is there not ?—There is a Merchants' Association. They have some disciplinary powers to control these people ? —I wish they had, and the Merchants Associations would be the first to say they wished they had. The matter has been brought up before the Hon. Mr. Masters, and we were told it was quite useless for us to take steps against the merchants under the Act. Merchants receive 7| per cent, discount off list prices, but they can go out and quote retailers list prices less 5 per cent. Our travellers call on the shops, who say, " Why should we buy from you when we can buy your lines cheaper from somebody else ? " Mr. O'Leary.] Mr. Smith, is it not a disadvantage that you and those associated with you are a commercial trust ? Is not that so ? —Under the meaning of the Act. You say you want to run your own business in your own way, but that is not quite right is it ? You want the right to combine with other people to direct how somebody else shall run his business. Itis a combination of you who want to fix your prices, and by that combination you want to control the next person, do yoii not ?—You are forgetting the second part of the first paragraph. Although we are an association we are not strong as associations go in New Zealand. There are others outside of the association, and to a certain extent they fix the prices. As Mr. Wilkinson said, if the whole lot were in the association we would definitely be a trust. It would be better to say we were a trust within the meaning of the Act than to say we were not. If you are a commercial trust you are limited in what you can do. A commercial trust means any number of persons, and I take it that two people could be a commercial trust having as its object that of controlling, determining, or influencing the supply or demand or price of any goods, and your association really wants to influence the price of goods if it can ? —Definitely no. All we are asking for is to control merchants from giving away their discount. The price of goods would not be influenced. There seems to be no reason why a manufacturer should not be able to deal direct with the retailers, but the position is that we cannot do that because the retailer —I do not say all retailers —will say, " What is the good of buying from you when we can buy cheaper from the merchants ? " There is nothing to prevent you doing it: you could deal with the retailers if you wanted to ? — Not and remain in the association. Then you tied yourself up —no one asked you to go into the association ? —Can I put the question back to you ? I think you will agree that it is in the interests of the public that the association is there, and it is obvious what would happen from the employment point of view if the association broke up. Apparently what you want to do is to combine ?—Starting at the last line of the first page : — " As the Act stands at present, we cannot take any disciplinary action against a merchant who is not abiding by our terms of sale, and as this fact is well known to merchants, the position is growing steadily worse," &c. You want to be free to take disciplinary action against a merchant who is not abiding by the price agreement ?—We want to be able to say, " If you can give away 5 per cent., then apparently 2£ per cent, is sufficient for you. Here is 2J per cent, discount. That is all we are asking for. If he would not agree to that you would cut off his supplies ? —No, only take away his discount so that he could not give discount away. Your discipline would be to deal with various people on different terms ? —Actually the action that would be taken would be that if we found a merchant quoting our lines less 5 per cent, we would say, " Your discount is apparently too much and 2| per cent, appears to be sufficient for you." You want to discipline him ?—Yes. Apparently that is the desire ? —ln disciplining the merchant we are not increasing prices. If you gave him a lesser discount it would cost him more for goods ? —lt would not cost the public any more, and I think he would come into line very quickly. The Chairman.'] " I should say that a manufacturer or distributor may refuse to supply his goods to a retailer who unfairly cuts the price. He could not, however, refuse to supply because the retailer will not agree to enter into a price maintenance agreement." That is, an individual can come under the commercial trusts Our point is that we have no trouble with the retailer : our troubles are with the merchants. We want to deal with more retailers and our trade is gradually going : our travellers call on shops, we deliver the goods to the shops, and we are asked to put the account through the merchants. The merchant takes the commission, and we do all the work. It is steadily getting worse. Mr. Wilkinson.] You can refuse to supply, of course ? — You can see what would happen in an association. Supposing one firm starts refusing supplies and another firm starts taking the same action there would be a case under the Act, for it does not take much to prove collusion if you find all members taking it into their heads to refuse supplies to a certain shop. One manufacturer could do so, but if two did there would be collusion. The. Chairman.] Will the proposed amendment enable you to get over that difficulty : are you suggesting that it will ?—lt has that effect because any case of injustice goes to the Minister. Mr. O'Leary.] To the Supreme Court ? —The bulk of the merchants want this badly. Mr. Wilkinson referred to associations. The Chairman : The Wellington manufacturers are asking to give evidence on Wednesday morning —That is, next week.

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