I could not advert to these things without referring to a speech by the Minister at a chamber of commerce where he was the guest and where the practices I am talking about were given as the worst example. The emphasis at the particular meeting was upon restrictive practices and was based upon two disclosures that were made by certain United States and other foreign experts. When I read some of the phrases, it is not to remind the Minister of what he might be anxious to forget or to rub things in. I want to understand at the start whether the Minister believes in these things. If he has this volume of comment with regard to restrictive practices I think it should be published. I saw a copy of one of these documents this morning and glancing through it rather hurriedly, I failed to find reference to the amazing restrictions which the Minister said in the chamber of commerce speech had been disclosed by the reports. Speaking at the annual dinner of the chamber of commerce at the Gresham Hotel on the 16th October this year, the Minister is paraded in the Chamber of Commerce Journal for October, 1952, as saying:—
"Groups of foreign experts who had surveyed various aspects of our economy in recent months had reported that we were wasting our time organising an export trade unless all policies and programmes were adjusted."
It was then stated:—
"The experts had warned that there would be no progress such as we desire unless the policies and practices of all sections were deliberately adjusted so as to assist it, with no section or interest standing out of the general effort. That adjustment would have to be achieved by agreement, which pre-supposed understanding; and that was the most important question affecting the country's future."
Then, the phrases came fast and furious:—
"All of those outside experts had commented on the prevalence of restrictive practices which were hampering expansion of economic activity. They pointed out the folly of talking about expansion and practising restriction, and said they found a disposition favouring restrictive practices in every sector of our national life—in business management, in agriculture, and in trade union policy. They said that too high a proportion of time and effort of every section appeared to be directed to consolidating existing positions, and protecting existing advantages and privileges; that they found insufficient evidence of any disposition to face the hazards upon which expansion depended."
The Minister, in a further phrase, said:—
"They discovered no inclination amongst the majority of Irish producers to take any sort of risk, no evidence of capacity to produce the drive necessary to make an impact on external markets. Our first need, they said, was a clarification of aims and a confident and wholehearted commitment to their fulfilment."
In the same context, the Minister said:—
"The action urged on us was an objective re-examination in detail, to sweep away those impeding practices, even if it meant abandoning also the advantages they conferred on special interests and accepting the risks inherent in all changes. `What we have been told is that we cannot have it both ways at the same time'."
Later, he said this, as not all the facts supported that view and I presume we are getting away from the experts here:—
"We had built up industries based on the home market behind protective barriers, measuring their development more by the volume of their production than by their efficiency, more by the number of workers they employed than by their labour costs of production."
He wanted:—
"...a bold development policy voluntarily accepted by all sections directed towards new production targets, involving the elimination of all impediments to expanding economic activity, which cannot fail to pay off in more jobs, higher wages, better profits, lower prices and lower taxes."
The answer given by the president was in brief phrase, that he hoped they would be given details of these reports. That is a hope which I share and it is a hope which has not been gratified yet.
That was the introduction. There were other meetings, but that was the last great barrage just before this measure was introduced. It was then introduced. The Irish Times as usual welcomed it and having patted the Minister on the back, as is their habit, said:—
"His speech might not have provided a convincing justification of the Bill as it stands, but as an exposition of the need of legislation of some sort on restrictive trade practices, and of the difficulties that were in the way of any other type of legislative approach, it was masterly."
In addition to that "masterly effort which was not convincing justification," a leader in the Irish Times showed the view that journal properly took in an article more or less welcoming the whole thing, and saying that it was a pity that the position should be left that manufacturers and traders should be allowed to argue that the Government had discriminated against them. That is because trade union activity had not been brought within the scope of the Bill. The leader went on, and the sting is in the tail of the editorial:—
"Nevertheless, as the adage puts it, the best must not be the enemy of the good. A start must be made somewhere, and the trades unions, when their turn comes, are likely to be more amenable as a result of their knowledge that they have not been singled out as the first victims."
I think a few phrases were used by addled supporters of the Minister that this was a perfect instrument, but for what purpose they did not go on to say. The corresponding measure of this type in the House of Commons in 1948 was described by the President of the Board of Trade in introducing it as a piece of legislation by which they gave to the State two ears, two eyes, a pretty lengthy nose and what he called an effective set of teeth to grapple with the particular practices. The criticism of that particular legislation was that it was promoted as a cure for organic disorder but was merely a salve for incidental blemishes. The salve for incidental blemishes has so worked that, in the four years that commission has been at work, it has produced four reports—one on dental goods, one on rainwater goods, one on electric lamps and one on insulated cables—and the previous Attorney-General who became President of the Board of Trade said that he had, in fact, despaired to some degree of the commission because his estimate was that it would take them 12 years to produce an effective report on any one of the 55 articles which by that time had been referred to them for their consideration.
So far as this measure is concerned, we are lagging four years behind the British in the introduction of this type of measure. I want to say of this Bill that it is not even a salve for incidental blemishes. It promises that hereafter, if certain things happen, we may have an incidental salve produced for certain blemishes that may be disclosed, and that after an address by the Minister in which he said he was convinced that these restrictive practices—I take this to be his meaning—were quite extensive and very hostile to the public welfare. As for the teeth this measure has, they do not exist, but I hope, in Committee Stage, to be able to stick one or two into the gums. I suppose the Minister's idea, however, is that the fitting of the dentures would have to wait two years until the new proposals in regard to health, of which we have been told, make their appearance.
The Minister seems to accept that there are restrictive practices. Deputy Declan Costello has talked about the principles the Minister accepted in what I am afraid is the usual type of rather ambiguous and non-committal speech. There is a good deal in the speech of complaints made to the Department, and these are presented to the Dáil as being indicative, as even evidence and proof, of certain practices being widespread; but, on the other hand, the Minister tailed off at the end and talked about the vast body of the traders being free from any criticism under this head. I do not know what he means except it is a case of: "Well, there is this volume of complaints and it needs inquiry. Hence, we are going to inquire." He did use one or two phrases, however, that seem to indicate an acceptance of the complaints. I believe we should accept them, because we have all in our experience in life come across very definite practices which could be described as restrictive of the old-time competitive effort that is supposed to be at the root and a virtue of capitalism.
At column 813 of the Dáil Debates of 31st October last, the Minister said:—
"That the purpose of this Bill is to provide administrative machinery for the investigation of these trade practices and to do something about them where they are found to be inimical to the public welfare. When I use the term `public welfare' in that connection I mean practices which are designed to eliminate or restrict competition in the supply or distribution of any class of goods or which operate to deprive an individual citizen of the opportunity of engaging in legitimate trade in a particular class of goods."
I am going to suggest that we should declare these practices just in that phrase, as being inimical to the public welfare, as being illegal and make the practices and the continued use of them an offence. Let us cut down deep into these malpractices phrased in that way because the Minister has said that practices which are designed to eliminate or restrict competition in the supply or distribution of any class of goods are practices inimical to the public welfare. Continuing at column 814 the Minister gave details of the practices. One is—and this he said drew the largest volume of complaint—
"that of refusing supplies of goods on trade terms to persons who are not members of an association, who were denied membership of an association or who could not get the approval of an association to engage in business in these goods."
That is what he called the refusal of goods except in association. Apparently the Minister has complaints of and accepts these complaints as evidence that there are certain people who are refused goods unless they are in an association and he finds, with regard to these people, that they were denied membership of an association, membership which was required of them if the goods were to be supplied to them. He further finds that they could not get the approval of the association to engage in business in these goods. This practice he says:—
"is said to operate in respect of most building materials, motor-cars and bicycles, newspapers and periodicals, paper bags and wrapping paper, electrical goods and many other goods of perhaps lesser importance."
Of course this is all hearsay: it is said to operate. I do not know what the purpose was of putting these things to us except to establish that in the Minister's view, these practices were current and were inimical to the public interest and widespread over these particular trades.
The second practice was what is called exclusive dealing arrangements; that is to say, the supply of goods to a trader on condition that he does not stock similar goods supplied by a competitor. That is inimical, in the Minister's view, to the public welfare.
The third practice in relation to which there is a volume of complaint is the "unreasonable limitation of wholesale channels so as to give a virtual monopoly in the supply of some goods to a limited number of firms." At column 816 he refers to the fact that:—
"...there is the practice of excluding new entrants from a trade either by over action, point-blank refusal of supplies, or by imposing onerous conditions either as to dimensions or trader's premises, the technical qualifications which he should possess or the staffs that he should employ."
These are all practices which, in the Minister's phrase, are inimical to the public welfare. These are all practices that could easily be put into a formula attached to this Bill and declared to be illegal straightaway with certain necessary reservations and conditions.
The last of these practices to which the Minister referred is the practice that is known as "resale price maintenance arrangements." That is a practice that has been very definitely considered elsewhere. In fact it came to the point where the Labour Government in Britain in 1951 decided to make resale price maintenance arrangements illegal. They produced a White Paper in which they set out the phrases by means of which they proposed to describe the offences. I do not know whether the present Government in England has accepted that proposal but the Labour Government in 1951 issued a White Paper in which they announced their intention of making resale prices maintenance arrangements illegal and they added the phrases in which the offence was to be described.
At column 818 the Minister says that he wants to smash trade rings—
"—and I use that term in the sense in which the average man understands it—"
This is the sense, according to the Minister, in which the average man understands it:—
"...a combination of traders designed to confine trade to themselves, to eliminate competition between themselves and to exploit that position to their own benefit and the public detriment."
Later, and I think the phrase can be tied up with what has gone before, at column 820 another type of phrase is used:—
"Where a trade association takes power to exclude any citizen from any trade, or imposes restrictions which have the effect of excluding any citizen from any trade, then no matter what justification there may be for that course, and no matter what arguments can be advanced by the association in defence of these restrictions, that association is taking to itself functions which properly belong to the Oireachtas."
May I add in conclusion of that that if the Minister had completed that properly he would have gone on to say: "and should be declared illegal and an offence".
At the same column, 820, the Minister said that he was asking:—
"... the Dáil to accept the contention that agreements or combinations or conspiracies between producers and traders to monopolise a particular form of commerce, or to fix or maintain prices for any class of goods, because they involve the power to control a market, is clearly inimical to the public good."
All that being said, if these malpractices are widespread they must have a considerable effect in increasing the cost of living and therefore considerable benefit would be done if a direct attack were made upon them, a benefit likely to produce immediate or almost immediate results.
What is proposed? There are points in this legislation with which I disagree, particularly in the main part of it, in so far as machinery is concerned. The Minister proposes to establish a commission. That commission will make its report to the Minister. The Minister may make an Order. He may bring that Order before the House. That Order must be debated here as a new piece of legislation and eventually —how long will the "eventually" last? Perhaps a couple of years—we may get some of these practices declared illegal, and some good may result from that declaration.
I would like to remind the Minister now of his third thought in connection with this matter. This is the Restrictive Trade Practices Bill, 1952. In 1947 we had the Industrial Efficiency and Prices Bill. That was never introduced actually, but it did get to the length of a White Paper, as we discovered when we were in office. There was a piece of proposed legislation called the Emergency Powers (Unlawful Profits) Bill, 1945. I quoted from the memorandum that accompanied that in the Seanad in 1950, and the point I quoted there was that the Minister, when presenting this piece of legislation to his Cabinet, said that the necessity for the Bill arose from the trouble in enforcing proper price control. An attempt was being made to establish a reasonable level of price and prevent excessive profit-taking. The Minister at the time said there were defaulters, and he demanded, as Minister for Supplies in those days, the fullest discretion to deal with these people. He said he was aiming only at cases of gross profiteering where the sums involved were substantial. He said that, apart altogether from the fact that there was gross profiteering, in which the sums involved were substantial, bad example was given by these people who, so to speak, got away with their unlawful profits, and who were thereby a danger to the community because, if they were successful in their operations, that might induce others to follow along the same lines.
In connection with that Bill, the Minister indicated that he did not want any recourse to court proceedings. He said delays were inevitable in connection with such proceedings and the deterrent effect of the measure he proposed would, in consequence, be very much lessened. The idea of that legislation in 1947 was to set up a tribunal. That tribunal would examine and the Minister would make a finding with regard to the particular rate of profit, either gross or other profit, as to whether it was or was not unreasonable. Certain operations then followed. When the report was made the Minister made up his mind. There was to be a complete keeping away from the courts. The Minister himself would get after these people in connection with their unreasonable profits.
As far as I remember, he could appoint a receiver in the business and run the business in which he thought there was an unreasonable profit taken out of the community until such time as he could hand back the profits made. There was to be a tribunal, and it is interesting to compare the body envisaged in 1947 with what is envisaged in 1952. The chief point distinguishing the 1947 Act from the present Bill is that, in 1947, before the British moved in the matter and before there was any evidence as to what the British conditions were, and before there was an accumulation of facts through the investigations of the Monopolies Commission over there, and before ever this volume of complaint had come to the Minister as to the restrictive practices that were growing up and becoming rather prevalent here, there was no nonsense about a commission to inquire into these practices. The proposed Section 39 in that piece of legislation was:—
"No body or person shall—
(a) regulate or attempt to regulate the minimum price for a commodity or service, or
(b) restrict or attempt to restrict trade in a commodity or service to particular persons unless——"
I shall come to the "unless" in a moment. At that time there was nothing like the evidence that has apparently been collected since and nothing like the same abuses had developed as we are now led to believe have developed since. At that time a regulation or an attempt to regulate the minimum price or an attempt to restrict trade in a commodity or service to a particular person was to be made an offence.
Section 41 of the Industrial Efficiency and Prices Act, 1947, is as follows:—
"Where any body of persons contravenes, whether by act or omission, any provision of this Part, the members of the committee of management or other controlling authority of the body and such of its officers as consent to or facilitate such contravention shall each be guilty of an offence under this section."
That was an offence that was going to be prosecuted by the Attorney-General. There was no question of a private investigation. There were reservations. Section 39 dealt with the restriction on regulation of minimum prices and charges and restriction of trade. Section 40 (1) which dealt with authorised arrangements, reads as follows:—
"A recognised trade association may submit to the commission a draft of a proposed arrangement (in this section referred to as the arrangement) for the regulation by the association of a minimum price or for the restriction by the association of trading in a commodity or service to particular persons."
Section 39 stated:—
"No body of persons shall—
(a) regulate or attempt to regulate the minimum price for a commodity or a service, or
(b) restrict or attempt to restrict trade in a commodity or service to particular persons,
unless—
(i) it is a recognised trade association, and
(ii) it acts in accordance with an arrangement approved by the Minister by Order under Section 40 for the time being in force and in accordance with such conditions as may be specified in any such Order."
I have quoted from Section 40. I thought it was a good proposal but I felt it was weak and I proposed to modify it. I wanted equal law for everybody. I wanted to have it that it was an offence to do these things unless it were for "the regulation by the association of a minimum price or for the restriction by the association of trading in a commodity or service to particular persons" and was in accordance with an arrangement approved by the Minister. If the Minister had any such arrangement he had to give public notice of it, the reasons for it and indicate the people to whom the arrangement applied. That was the 1947 idea—to declare these things offences, to let them be prosecuted and to have fines for them.
The Minister puts himself forward as a person who has learned a great deal more since. He puts himself forward as a person who has got much more information as to the prevalence of these practices, their greater effect upon the community and their greater evil. Having got the greater evidence, we have retreated from the idea that the practices will be made illegal. We say that we will give them to a commission to examine and to report to the Minister on them.
To be contrasted, also, are the details as to the establishment of a commission. The commission is dealt with in Part II of the Industrial Efficiency and Prices Bill, 1947, which starts at Section 13. Section 13 provides: "There shall be a body to be known as the Prices Commission." Section 14 (1) provides: "The permanent members of the commission shall consist of a chairman and two other members and they shall be appointed by the Minister." Sub-section (3) of the same section provides: "The Minister may also appoint temporary members for the purpose of a particular inquiry." Then you come to the matter of the tenure of office. Section 15 (1) provided: "The term of office of a permanent member shall be fixed by the Minister when appointing him and shall not exceed five years." Sub-section (4) of the same section provides: "The Minister may remove a temporary member from office." Then there followed the usual provisions about bankruptcy, and so forth. The situation under this was that three permanent members would be appointed for some fixed term at the time of appointment and that they would not be removable from office until the term had lapsed. Temporary people could be removed but permanent people could not. I am referring to that now because I want to come back to it again later.
The situation, in any event, is that at a time when there were not as many complaints we had a direct attack upon the malpractice. We now have the idea of what may be a long and continued investigation by a commission whose duty it will be to report to the Minister, who may make Orders which will make certain practices allegal. The growth of these trade associations since the war has been enormous. The war made trade associations into rather compact bodies. The whole idea in England during the war was to get supplies— to get them more or less by any means. The price was not so much the trouble. The trade associations got together and realised their powers. They put up the case of the great benefit they were giving to the community, that they had provided funds for such things as research, commercial intelligence and so forth. These thing were examined by certain people. I have an article here which was printed in The Times of 16th June, 1944. It says:—
"The consumer interest is most closely affected by the exercise of the third function of associations— namely, commercial regulation. Probably no one knows, and none but a much-needed official inquiry could elicit, the extent to which associations do temper the competitive process. Yet there is no doubt that many of them do in various degress formally regulate prices; that once the habit of co-operation has been induced informal price agreements sometimes follow; that certain retail associations do combine with manufacturers to maintain retail prices and fix distributors' margins; and that the allocation of quotas of output among members of associations is by no means unknown. Associations may in fact promote not only constructive co-operation, but also high prices and restricted output. Price regulation is not without its advocates who profess that joint price regulation serves to stabilise prices and employment, and to provide the funds necessary for industrial research and high wages. It is, however, clear that these claims cannot be accepted without question."
The article continues:—
"On the other hand, the trade association, which has to satisfy all its members, tends to fix a price which will provide an umbrella to protect the inefficient units in the trade, leaving a differential profit to the low cost units. It is true that, in this situation, the more efficient firms will often be eager to expand and so may break the bonds which limit their output. It is also true that there are such checks as foreign competition, the availability of substitute products and, if profits are high, a queue of potential new producers. But the tendency remains for prices to be fixed above competitive levels, and, as a result, for the teeth to be taken out of the sanctions against inefficiency. The trust or combine is in an even stronger position to charge excessive prices than the association. But at least it is able and usually willing to close down its least efficient units."
The article then goes on to deal with the control of distributors' trading margins. It continues:—
"The control of distributors' trading margins by retail trade associations, acting in concert with manufacturers, raises yet another problem."
Then the article deals with price rings. It says:—
"The chief difficulty is how to deal with price rings, retail price maintenance, and output quotas."
These were the mischiefs seen in England in 1944. We were not, apparently, aware of them here. Nevertheless, when the volume of complaint grew and when it has, apparently, been accepted that it is evidence that these practices exist and that, clearly, they are inimical to the public welfare, all we can do is to say that we will have a commission which will inquire into the matter and report to the Minister, who may make Orders which may be incorporated in legislation.
I shall deal now with the machinery in this Bill which, to my mind, is objectionable. I come first to the formation of the commission itself, which is set out in the Schedule. I should like Deputies to contrast its formation with what I have quoted from the Industrial Efficiency and Prices Bill, 1947, in regard to the members. Sub-section (1) of Section 2 of the Schedule states that the term of office of a permanent member shall be fixed by the Minister when appointing him and shall not exceed five years. Sub-section (1) of Section 4 states that the Minister may remove a member from office. That is to say, that this is completely a creature of the Minister: at every point it is to be under his control. There is no permanency for any time established in regard to the commission. There is not time to operate. A member is not strengthened by the knowledge that he is free from such control as a removal for a certain number of years. He may be removed within six months of his appointment. In other words, if he happens to find one way and does not find another, the Minister may come down upon him.
That makes the whole of this commission completely suspect. It will be nothing in the nature of a judicial inquiry. It will possess none of the attributes of an independent judge. I do not know what the personnel of this commission is going to be, but any member of the commission has all the time hanging over him the fear that unless he knows what the departmental mind is and acts accordingly, he can be faced with dismissal immediately. There is no question of any reason being assigned for it. He can be dismissed without cause shown, even if he has a stated term of office.
Why that very substantial change should be made from the proposal in the 1947 legislation where the members were safeguarded against dismissal of that kind I do not know. To my mind, all that makes this commission suspect and it deprives it completely of any good.
Even if a proper commission were to be appointed, then I still have an objection to the machinery to be established. The commission has got to keep under review the operation of the fair trading rules which they make. That may or may not be any great harm but it may not be any great advantage. The commission, under Section 5, are to keep under review the operation of fair trading rules and if the rules are not being observed they are to report accordingly to the Minister. What will happen upon that report, the Bill does not go on to say. That report need not necessarily see the light of day. It has not to be laid before the House. The commission under Section 6 are entitled to cause inquiries to be held on their own initiative or they may have to do so at the request of the Minister, into the conditions which obtain in regard to supply and distribution of any kind of goods.
Deputy Costello raised the point whether "supply" covers manufacturers. I hope it does. I hope that the operative word "supply" covers all transactions from the manufacturer to the wholesaler and from the wholesaler to the retailer and that "distribution" covers the retail end of it. I do not see why the progress of a commodity from the manufacturers direct to the retailer or from a manufacturer through a wholesaler to the retailer should not be brought under the term "supply" and I assume that it will be so brought.
Eventually after the commission report, and make certain recommendations, if they are of opinion that the Minister should make an Order under Section 8, they shall in their report recommend accordingly and indicate the form of the Order that they recommend. That will come before the House or the Minister may lay a copy of the report before the House. But the Minister need not bring the whole of the report or the whole of the recommendation before the House. I suppose that can be amended on the Committee Stage.
The Minister having considered the report of the commission may, under Section 8, by Order amongst other things, prohibit specified arrangements or agreements. That I think again is a matter that we should directly approach ourselves and deal with by legislation. Then there are additions to what the Minister can do by Order whether the commission reports for or against them, and without further reference to the commission. There is a confused trail as between what the commission may do and what the Minister may appropriate to himself or what the Minister cares to tell them to do but the additions which the Minister may make are purely a matter for himself. That I think is entirely wrong. Whenever there is a recommendation from the commission, followed by an Order from the Minister, then we should get the full reports so that we can know what are the additions the Minister is making of his own and what it is the commission is recommending.
Let me compare this scheme with that of the British Monopolies Commission. It is more or less the same line of country. That commission was set up in 1948 and they have produced four reports since then. They produced a report on dental goods, they produced a report on the electrical lamp industry, they reported on insulated wire cables and reported on rainwater goods which, I think, is the technical term. In addition there was a report made about resale price maintenance. That did not come from this particular commission but from a committee known as the Resale Price Maintenance Committee. It was in the course of a discussion on that that the then President of the Board of Trade, Sir Hartley Shawcross, later Attorney-General, said that the commission's machinery had proved much too slow and that with the present rate of progress, it might take 15 years to get a report on any of the 55 subjects that had been suggested for reference to it.
We have that example before us—the fact that in four years only four reports were received from the British commission and the fact that the President of the Board of Trade stated that it would take 15 years to get another report on any of the articles referred to it. We are, neverthless, going to follow along the same lines. I want to know why we should not tackle these abuses along the lines proposed in the 1947 Bill. There certain practices were declared to be offences with regard to price regulation and trade restriction. It was laid down that "no body of persons shall regulate or attempt to regulate a minimum price for a commodity of service." What is the objection to declaring here and now that price-fixing by a combination of persons is illegal?
The Minister dealt with this in his speech, and Deputy Declan Costello referred to part of his speech which sounds hollow, that is the part of it that occurs in columns 822-23 of the Official Report of the Debates. At the bottom of column 822, the Minister is reported as saying that "the Associated Chambers of Commerce, in the course of their discussion with me, indicated that they would prefer a Bill which schedules and makes illegal clearly defined practices, leaving the enforcement of that legislation to the courts." That is the Minister's statement of what the Associated Chambers of Commerce represented to him. His own statement, starting at the bottom of column 822 and continuing into 823, is:—
"All the possible alternative methods of tackling this problem were considered before the present Bill was approved. No doubt it would be possible to legislate a general prohibition of unfair competition, of restrictive practices, of resale price agreements and leave it to the courts to decide whether a particular action was contrary to law."
He goes on to say that the course recommended by the Chamber of Commerce would not provide a much more satisfactory means of redress than existed at the moment because somebody had apparently told the Minister that certain contracts which are restrictive of trade are held to be contrary to the public interest and the only thing that happens is that the courts will not enforce them. Was there not the same provision in the 1947 legislation? The 1947 Bill proposed to make these practices an offence, and if a person were brought before the courts charged with this offence the courts would not stop to inquire whether it was contrary to the public interest, but they would say: "It is an offence," and they would look for the penalty clauses. The maximum penalty on summary conviction under that Bill was £500 and £5,000 in the case of an indictable offence.
The Minister passed very lightly from this aspect of the matter to deal with other points. He said:—
"The lawfulness of any practice could only be determined by litigation, and only when some aggrieved citizen decided to put himself to the hazard of litigation in order to assert his rights."
Then he said that such proceedings would be long and costly, and the knowledge that it would be long and costly might easily deter many traders from asserting their rights. "The more powerful the interest involved," he said, "in maintaining restrictive trade practices and the more profitable those restrictions were, the more certain it would be that the person who initiated litigation under such a law to secure his rights would be harassed by every legal device. A verdict in his favour would be appealed from court to court, and even if, when all legal processes had been exhausted, the individual secures a verdict, the law would be settled only in his particular case." That is entirely wrong, as the Minister must realise. It is the Attorney-General who prosecutes if a certain practice is declared to be an offence in general terms, and the individual who lays the information hazards nothing. The Attorney-General prosecutes, and the private litigant has nothing to lose by it. The private litigant lays the information against the individual who seems to be guilty of an illegal practice. That would be investigated. Once the evidence is collected, and the matter declared to be an offence as was intended in 1947, then there is a prosecution, and there is none of this going from court to court. It would be a question of declaring what the law was in a particular case. A prosecution would be taken against certain individuals. They would be fined and the law clarified by that decision. That would apply to every other person who offended against the law.
There was more talk in columns 823 and 824 about the great ingenuity that would be displayed by traders in trying to get around certain practices. Suppose the commission reports, say, against a resale price maintenance. Is the Minister going to throw up his hands because people will be ingenious enough to find a way out? Surely it is not beyond the bounds of possibility to get a formula to cover that? If it is thought desirable to move from the area of the civil law to that of the criminal law, the only thing is that the criminal law ought to be declared under pretty definite general rules. Then let the Attorney-General prosecute all and sundry who have committed an offence. I shall endeavour, by amendment, to reinstate the 1947 proposal in this legislation and to say that, within that reservation, there might be an arrangement made, even a price-fixing arrangement, that might be regarded as something to be tolerated in certain special circumstances, but that the public ought to be warned about these special circumstances. That reservation ought to be approved by the Minister, who would then have to bear responsibility for having given approval to the arrangement. The reasons for doing so ought to be made public.
In England, they have come to the conclusion that resale price maintenance is bad. It was so bad that in June, 1951, the then President of the Board of Trade said the Government had decided to give effect to the recommendation of the Committee on Resale Price Maintenance, which was that the collective enforcement of the practice of resale price maintenance should be made illegal. The Government promised a White Paper on the matter. It was published on June 19th.
In case it might be thought that there would be any difficulty in getting a formula here, we have the formula explained in that White Paper, and the legislation which the Government proposed. The White Paper explains that the legislation which the Government proposed to introduce would (1) make it unlawful to "operate or take part in the operation of collective measures designed to ensure that goods shall be sold at or above specified retail prices" and (2) forbid manufacturers to "indicate, recommend or prescribe" any prices except maximum prices for the resale of their goods; and, finally, make it unlawful to "give any indication of the resale price unless it is clearly stated that the price indicated is a maximum".
The Minister takes resale price as one of the things which he regards as inimical to the public welfare. Why hesitate to declare it illegal and make it an offence? The 1947 Act wanted to make it an offence to regulate, or attempt to regulate, a minimum price for commodities or services, or to restrict or attempt to restrict trade in a particular commodity or service except there was an arrangement of a particular type. If the Minister were to declare that illegal, he would, I suggest, be giving the public some confidence in the measure. At the moment all they can see is great delay, a good deal of vexatious supervision and a good deal of costly administration with no great result. I suggest that he would be giving an earnest of his bona fides by letting the public believe that something was intended in regard to restrictive practices. There have been certain restrictive practices. If it is found that we ought to declare these illegal, I do not see why we should not do it. If they operate in a harmful way, why not declare them illegal before this legislation leaves the House, and leave it afterwards to the Attorney-General to prosecute in the public courts of the country?
There is one other matter. The courts have found themselves hampered in their dealing, in the way in which I think the public would like, with restrictive practices by the law as laid down in certain decided cases. There was a particular case which excited a good deal of attention in the early part of this year. It was the case of Connolly against Loughney and McCarthy, and was tried before Mr. Justice Dixon. Judgment was delivered on June 13, 1952. The points which came before the judge drew certain observations from him. He said the law could be stated in two propositions. The first was "a combination of two or more persons wilfully to injure a man in his trade is unlawful and, if it results in damage to him, is actionable". The second proposition was that "if the real purpose of the combination is, not to injure another, but to forward or defend the trade of those who enter into it, then no wrong is committed and no action will lie, although damage to another ensues".
That is the fortification for certain types of restrictive practices which are known to be in operation in the country. A trade combination which to-day deals with people in that way knows that if it goes to court it can rely on these propositions. There is some argument about the phrase "the real purpose of the combination". Traders tell me they would not object to the courts being given freedom to decide cases if they were protected by that phrase. Others have suggested that a formula might be found to prevent the court considering itself bound by those cases so that it would be free to decide whether such a practice was a practice that did damage and injury to a man in his trade. Of course, there would be other difficulties where the public interest would come in. I imagine traders would rather have that than this legislation.
It should not be beyond the powers of draftsmanship to get a formula which would mean that in deciding cases of actionable wrong, say, wilful injury caused to a man in his trade, that it should not be a defence to be relied upon that the predominant, the real, motive of the combination was to forward or defend the trade of those who entered into the combination. If that were so, then people like Mr. Connolly would face litigation almost with the certainty that they were going to be beaten. He must have been well advised, on the trilogy of cases against him, that he could not succeed in this action. Nevertheless, he decided to disclose what were the methods by which this organisation was acting. Incidentally, I do not think that that organisation would object to the proposal which I am making, because I believe they have the view that even if that defence were not in their favour, the judge nevertheless on the merits of the case would be forced to decide in their favour. That is a matter which could then be litigated in the courts. I suggest that we should remove that difficulty.
Let us in this legislation say that in cases of a type where injury is done to a man in his trade resulting in damage that that shall be no defence. Then you will give two avenues of approach. You make certain restrictions illegal and the Attorney-General can prosecute if the thing goes far enough. It is definitely inside the terms of the offences to be created by the Bill. If it is not so bad, a private person would have his rights, although, of course, he would face a pretty expensive course of litigation. But you do make this piece of legislation real. On the one hand, you get the criminal side of the courts going and the Attorney-General prosecuting for offences. On the other hand, you make it easier for a person to attack trade combinations which injure his business. They will have to justify their activity and they will not be allowed to justify it on this old matter, that the real purpose of the combination was the futherance or defence of the trade of those combining. We should try to get a formula and put it in so that we will have this piece of legislation with something in it to deal with these practices in a proper way.
I must confess that I am at a loss if I take the things that were objected to in England before the Monopolies Commission was set up. There is a good deal of repetition about the phrases used. There was one speech made referring to a variety of malpractices. This speaker said:—
"A substantial fraction of British industry in the period between the two wars was in a calamitous—a fatal —state. It was comfortably dying on its feet and carrying with it into unemployment and decay a growing part of the creative energies of the nation as a whole. For with the decline of industry there went a decline of real enterprise, of thinking, planning, invention—a decline in boldness and the spirit of adventure—a decline in the level of politics, home and foreign, that nearly brought us to destruction."
The legislation was first thought of by the Conservative group. It was then taken up by the Labour people and was eventually introduced by a Labour Government and then carried on by the Conservative Government. One of the Conservatives said:—
"The greatest danger of monopoly lies in the direction of inertia and inefficiency rather than profiteering; but restrictions to protect inefficiency are not by their nature more virtuous or less destructive to social well-being than those designed to exact high prices."
Amongst the matters thought to be destructive of well-being were those that made for high prices or were put forward merely to protect inertia or inefficiency. They speak of practices of an obviously anti-social character like boycotts, deferred rebates, and stop lists. Later, another group was given by another speaker such as exclusive dealing arrangements, restricted entry into industry or trade Finally, there were other things which more directly pertained to monopolies and are not the subject of consideration here.
I would not profess to be able to find a formula immediately, but surely it is possible to find one. The Minister refers to things of the boycott type, stop lists, exclusive dealing arrangements and restricted entry into business. These are clearly anti-social, and the Minister said he did not believe there was any justification for them. Why should they not be declared illegal? I personally could prepare amendments which would make this Bill meet the price resale maintenance and the matter that I dealt with with regard to the civil courts taking away this line of defence, that the predominant aim was the good of society and not to do harm, and even if harm occurred it was incidental.
Journal after journal, such as the Economist, the London Times and the Manchester Guardian and speakers from both sides, Conservative and Labour, dealt with this. I pick out these things which have been characterised as being alien to the idea of industrial efficiency and enterprise. They spoke of things leading to decay. Some of them are described, such as boycott, stop lists, exclusive dealing, restricted entry into trade. Finding a formula for these things would not cost a draftsman very much time. What is the objection in principle to making these illegal in the sense of being made an offence, always reserving the possibility of an arrangement sanctioned by the Minister who will then take the responsibility for that arrangement? Why not make them illegal practices, and let the Attorney-General prosecute, and let us get something in the nature of reality brought into what is only a bit of shadow boxing and pretence?
In addition to that, I should like such a body as the Industrial Development Authority to examine certain evil practices. I do not know that you can declare them illegal at the moment, but there is room for examination. I want to avoid any costly administration by a new authority. The Vocational Organisation Commission in their report called attention to certain things which they described as evils. They spoke of the capitalisation of licences and tariffs. They spoke of occasions when Government assistance had been described as goodwill and capitalised at a very high figure. They drew particular attention to the prospectus sent out by Ranks (Ireland) Limited, in which they made a special feature of the fact that they had milling licences, and that these were transferable. They drew attention to the fact that Government aid in different ways was being capitalised by certain people, who came into industry here, and the capitalisation was very heavy.
There is the case referred to of a building which was on the market for sale at a very low price and which was bought by one firm which would benefit very largely under the legislation with regard to packing certain goods here. That building probably changed hands at quite a low figure. Having done that, a new value was set up because a protected business was to be carried on in this ancient building. That building was then put at a very high value and written up as if it had changed hands at a very high figure and the goodwill arising from Government assistance in regard to the packing business was written up at a very high figure. The dividends had to be declared on that capital, a wholly fictitious capital, and the prices that were charged had to be such as would give a dividend of a reasonable type—on capital that did not exist. Those are restrictive practices that certainly affect the cost of living as much as a great many of the other things referred to by the Minister. Those things should be examined. If they could be examined by the authority we have in existence at the moment instead of by a new authority set up for the purpose we would save money and get as good results as would be got by the other authority, the members of which we do not know but who will be subject to immediate dismissal even as far as the chairman and the permanent members are concerned.
When we were the Government the question arose of the milling millers and their malpractices in the country. We found that certain things were being allowed to them, that they got a certain allowance for depreciation of capital and that they were allowed to throw in at the last moment certain sums of money as if it were capital. We got the report which the body of which Mr. Justice Lavery was chairman produced for us and we investigated the matter so as to get those malpractices stopped. I do not think that that is being examined any longer even though that report was in existence which exposed a good deal of malpractice leading definitely to an unauthorised charge for foodstuffs.
I come back to a point I made incidentally. I am against temporary commissions. That is why I would prefer to declare that certain things were illegal, make them matters of defence in civil actions and let the courts work. On principle, as I have always stated and state again, I stand always for the reign of law, for the system of free and open courts with public inquiries for each case, for the system of the independent judiciary with equal justice openly administered to every person. That is a thing which has come down to us in these years as the fruit of many, many centuries of agitation, controversy and even revolution. The system of free and open courts was a great system and I doubt if it is possible to better it. It may be said, with regard to this particular matter, that you need not merely independence and impartiality but an understanding of a particular problem, but balance, impartiality, independence and the understanding which our judges cannot be said to lack in commercial matters against the type of commission which is contemplated here with every member at the disposal of the Minister, appointed by him, with emoluments changeable at any time, up or down, the power to dismiss any one of the members lying in the Minister's hands. I wonder would such a commission be better than judges who are declared independent, who are put in a position which renders them independent through the emoluments they get and the tenure they get, who are asked by the Constitution to decide matters openly except on the very rare occasions when the Constitution allows them to hear cases in camera. Is that system not better than an ad hoc commission with every member subject to dismissal and under control in every inquiry that commission are asked to make? Those are the reasons why I have such a favourable view of the court system, certainly a view that must be favourable to the court in opposition to what is presented to us here as the alternative. I am all the time alert to this. Certain things should be made offences and let the courts work. Let the individual take action in a civil matter.
Deputy Dr. Browne is in favour of the measure. He spoke of it as the third and possibly the last chance which private enterprise is going to get in this country. He is the man who stood—even though he tried to get away from it—for socialised medicine in this country. We had correspondence over the summer about certain views he expressed when he questioned whether farmers' land was their private property or was held by them as tenants of the State. Notwithstanding, he recommends this as the third and possibly the last chance which private enterprise will get in this country. Of course, it is nothing like that. Private enterprise will go on when Deputy Dr. Browne's Bill has been forgotten in the country. The best way to reinstate private enterprise and to back private enterprise up is not by backstairs methods, by secret inquiries, or by reports which will come to this House which are not the full results of inquiries by the commission. We do not know what may be hidden from us or what may be revealed in those reports. Surely the freedom of the courts is the best atmosphere to blow on this matter. We should declare certain things illegal and make them offences. If we have not enough information to do that for every malpractice we should declare that x, y and z are illegal and deal with the rest later. That would give the private litigant a better chance, and if we have obstructions at the moment we should clear them away. If you do that you will have a means of action which is not present at the moment, and you will have a chance of doing something effective and immediate to stop practices which we have got to accept are prevalent and very objectionable at the moment.
