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Tuesday, 3 July 1906
Page: 960


Mr WATSON (Bland) . - It seems to me that some honorable members who believe in the efficacy of this kind of legislation to limit the power of trusts to take advantage of the community as a whole, are making an error iri attempting to restrict the definition of " commercial trust." In America, notwithstanding the apparently explicit character of the Sherman Act, the experience has been that it is extremely difficult to bring within the definition of the law the agreements and arrangements of trusts. In this connexion I may be pardoned for quoting an extract from the work issued this year by Mr. T. C. Spelling upon Trusts and Monopolies in the United States. He says -

There have been such few agreements in a form to be dealt with under that Act, because as soon as it was passed, those desiring to monopolize or restrict Inter-State commerce found other methods for doing so than by making such agreements. It is doubtful if there is to-day a single institution ot business arrangement within the inhibitions of that Act, notwithstanding that trade, transportation, and manufactur ing monopolies are more numerous and powerful than ever before. What is called the "Beef Trust" is not. a trust at all, but rather a "pool." It is a secret pool, difficult or impossible to be suppressed, or even hindered, by judicial remedies or proceedings, but it is not a trust.

I say that this writer, who, as a lawyer, can speak with some authority upon the subject, as well as others, whose opinions I have been able to find in various publications - and I have read two articles in the Journal of the American Academy - concur in saying that the Sherman Act has failed mainly because of the difficulty of bringing within the definition of the law these pools, or trusts, or combinations which operate to the detriment of the public. Therefore it seems to me that those who desire that this legislation shall be given a fair opportunity of proving successful should make the definitions as wide as possible. As the Attorney-General has pointed out, it does not matter how wide a definition may be, because, after all, it is governed by the. offence to which the law applies. It is not the fact that certain combinations are " pools," or are working under an agreement - as was instanced by the honorable and learned member for Northern Melbourne in regard to football clubs - which makes them commercial trusts, but it is the fact that they are banded together for a specific object to the detriment of the public, for the restraint of trade, or for the purpose of injuring an industry. It is the class of offence which governs the matter, and not the definition under which it comes. It seems to me therefore that when the deputy leader of the Opposition proposes to omit the term " agreement " as coming within the definition of a "commercial trust," we should have regard to what class of offence is possible under an agreement. It does appear to me that there is a possibility - I do not say a probability, because in the light of our experience we are not justified in assuming that there is a probability - of the coal vend either in Newcastle, Illawarra, or the Western district of New South Wales acquiring a power - and taking advantage of it - to injure the public by putting up the price of that commodity beyond a reasonable maximum. If that were done surely the honorable member for Parramatta does not contend that the vend should be outside the pale of the law, and that the public should have no opportunity of obtaining redress? I am satisfied that he would not put forward a proposition of that kind for one moment. Yet the effect aimed at - so far as the amendment can secure it - is to allow an agreement to go without any possibility of prohibition, so far as the law is concerned. An agreement may be just as harmful to the public as any other form of pooling or combination, and I trust that the Minister will adhere to the clause in its present form. As I intimated during the debate upon the second reading of the Bill, I have no great faith in the efficacy of this class of legislation, but I do say that it is to the interest of the community that every opportunity should be afforded of proving whether or not it is of value. I am, therefore, ready to assist those who believe in it to put in this clause every safeguard to prevent the possibility of offenders against the law escaping when the public indignation is aroused against them. I say this to them, " Make the mesh as small as you will ; tighten it in every possible direction, and I am willing to assist you." At the same time I warn those who believe in this kind of legislation that if they leave these definitions obscure there will be a very great danger that it will fail .to achieve even the small measure of success which has attended the operation of the Sherman Act in America.







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