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Tuesday, 28 August 1906

Senator BEST (Victoria) .- I do not agree with my honorable friend who has just resumed his seat, that this clause puts any unfairness upon commercial trusts. The honorable senator's first objection is that there is no reason why a trust, which, according to him, may or may not be beneficial or non-injurious, should be treated differently from an individual. I reply that there is a most obvious and decisive reason. We are aware that commercial trustshave been formed for the purpose of defeating legitimate trading, and securing monopolies, and that, having secured monopolies, they have used their power in their own interest. This Bill defines what a commercial trust is, and in so doing it has regard to the growthof commercial trusts through their various stages. In the United States the first stage was an agreement by means of which persons endeavoured to secure and control trade. The Courts, however, interfered, and said that these agreements were in restraint of trade, and consequently could not be permitted to be made. After that, persons desiring to monopolize trade transferred their stock, which was tobe held under a declaration of trust for certain purposes. To meet such arrangements, the words "as understood in equity" are inserted in this Bill. According to law, those persons who held stock in their own name were the legal owners, but as they executed a deed of declaration of trust, the beneficiaries under the declaration are included when we refer to a trust " as understood in Equity." This second scheme was also defeated bv the Courts. The third scheme was the creation of what was called holding companies; the effect of which was that they did not come within the terms of the judgments in the previous cases referring to agreements and declaration of trusts, but formed a separate company for the purpose of buying interests or taking over interests in various other companies. By this means a company or commercial trust was created, and illegitimate trading. was thereby secured. The Bill has been drawn for the express purpose of defeating illegitimate efforts on the part of commercial trusts. If a great monopolistic concern of this kind enters into a deliberate scheme to crush an Australian industry by unfair competition and unfair dealing, it is essential to the efficacy of a measure which seeks to prevent anything of the kind that the words objected to should be retained.

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