motor fuel, pottery, standard boot and shoe scheme, tweed cloth,
wool and worsted yarns, wool, and the wool-top-making trade.
The Complaints Committee undertook the investigation of specific complaints arising out of transactions or sales other than retail sales. In practice the Complaints Committee became, like the Central Committee itself, a panel, working almost exclusively through sub-committees or tribunals. The procedure was analogous to that of local committees, the complaint being first considered in camera by a sub-committee called the Preliminary Investigation Committee, who, if they were of opinion that the complaint did not give sufficient particulars or did not disclose prima facie grounds for hearing the complaint, had power (after giving the complainant an opportunity of being heard) either to dismiss the complaint forthwith or to require the production of further or better particulars or grounds of complaint within a stated period, failing which the complaint was dismissed. If the Preliminary Investigation Committee were satisfied that a prima facie cause of complaint was disclosed, a tribunal was appointed[1] to hear the case, seven days' notice being given to the parties of the time and place fixed for the hearing. The tribunal had power either to dismiss the case, or (if they were satisfied that an unreasonable profit had been made) to order the seller to repay to the complainant any amount paid by him in excess of the price declared by the tribunal to be reasonable; further, the tribunal might take proceedings against the seller before a court of Summary Jurisdiction. The hearing of all complaints before the tribunal was normally in public, subject to the discretion of the tribunal in particular cases, and the parties could conduct their own cases or be represented by counsel or otherwise. As in the case of local committees, trade competitors or persons otherwise personally interested were disqualified from adjudicating on the tribunal.
The Complaints Committee also investigated specific transactions brought to their notice, even where there was no formal complaint; e.g. cases referred to the Board of Trade by local committees where a complaint against a retailer had been dismissed, but it appeared probable that profiteering had taken place at some earlier stage of distribution or manufacture. The following figures show the number of matters referred to the Complaints Committee and the manner in which they were dealt with:—Complaints lodged or specific transactions referred to the committee, 607; profiteering found to exist, 73; number of prosecutions undertaken, 24; number of convictions obtained before the magistrates, 17; fines imposed, £815; costs ordered, £205.
The Committee on Trusts was charged with the duty of obtaining such information as is specified in Section 3 of the Profiteering Act, 1919, which required the Board of Trade to “obtain from all available sources information as to the nature, extent, and development of trusts, companies, firms, combinations, agreements and arrangements connected with mining, manufactures, trade, commerce, finance, or transport, having for their purpose or effect the regulation of the prices or output of commodities or services produced or rendered in the United Kingdom or imported into the United Kingdom, or the delimitation of markets in respect thereof, or the regulation of transport rates and services, in so far as they tend to the creation of monopolies or to the restraint of trade.”
This section embodied a recommendation of the departmental committee appointed by the Minister of Reconstruction “in view of the probable extension of trade organizations and combinations, to consider and report what action, if any, may be necessary to safeguard the public interest,” which reported in 1919. It is to be noted that the Act gave no power under which any coercion could be exercised on a trade combination except in so far as it brought itself within the penal clauses of the Act by charging unreasonably high prices. Parliament appears to have taken the view that powers of this kind ought to be the subject of further permanent legislation, and that the temporary powers of enquiry and publication given by the Profiteering Act should make it possible by preliminary investigation to get together a body of facts which would be of great value when permanent legislation on the question of trade monopolies was introduced. The numerous reports by sub-committees of the Committee on Trusts constitute in fact such a body of information. They show, on the one hand, that many of the big combinations now existing have been of public benefit; that by economies in working and efficient organization of manufacture, buying, and selling, they have been able to keep prices at a lower level than they must otherwise have attained. On the other hand, instances of abuse of monopoly power have been brought to light, and, in general, many of the reports are in favour of the provision of some kind of statutory power, under which action could be taken if a strong and close organization controlling the whole or nearly the whole of an essential trade or industry adopted a policy contrary to the public interest.
The following is a list of the investigations on which reports by the Committee on Trusts have been published as Parliamentary papers:—dyes and dyestuffs, dyeing, finishing, bleaching and printing, electric cables, electric lamps, explosives, farriery, fish, fixed retail prices, fruit, glassware, iron and steel products, laundry prices, meat, milk, oil and fats, pipes and castings, road transport rates, salt, sewing cotton, soap, tobacco, uniform clothing, vinegar and yeast. Reports on the following subjects by sub-committees jointly appointed by the standing committees on Prices and Trusts have also been published:—bricks, cement and mortar, dyeing and cleaning, light castings, stone and clayware, slates and roofing materials, and timber.
The Profiteering Act was to remain in force for six months only. It was, however, continued for a further three months by the Profiteering (Continuance) Act, 1919, and again for a further twelve months (until May 19 1921) by the Profiteering (Amendment) Act, 1920. The Amendment Act was largely concerned with improvements of machinery in points of detail where experience of actual working had disclosed defects. It contained, however, in Section 1 an important new provision, the object of which was to encourage the various trades and industries to take into their own hands the business of checking profiteering.
Section 1 reads as follows:—
(1). Where any persons or associations of persons appearing to the Board of Trade to represent a substantial proportion of the persons engaged in the production or distribution of any article or class of articles to which the Profiteering Act, 1919 (hereinafter referred to as ‘the principal Act’), is applied, submit to the Board of Trade a scheme limiting the profit to be allowed on the manufacture or distribution of the article or class of articles at all or any stages of manufacture or distribution, the Board of Trade may, if they think it expedient, approve the scheme, and, where any such scheme is so approved, any profit sought or obtained in connexion with the sale of any article to which the scheme relates, which does not exceed such profit as is allowed by or under the scheme, shall not be deemed unreasonable for the purposes of section one of the principal Act.
(2). If the Board of Trade are satisfied that any scheme so approved secures an adequate supply to the home market of any articles or classes of articles to which the principal Act is applied, the Board of Trade may by order exempt producers who comply with the scheme from any general investigation under section one, subsection (1) (a) of the principal Act in respect of those articles or classes of articles and any articles of a similar description.
The preliminary work of investigation and negotiation in connexion with schemes submitted under this section was undertaken by the Central Committee, the final approval or disapproval resting, of course, with the Board of Trade. Owing to the unexpectedly rapid fall of markets and alteration in the general trade outlook in the latter part of the year 1920, conditions were not very favourable for profit-limiting schemes. Very few were put forward; of these some were withdrawn or not proceeded with, and only two[2] (relating to men's ready-made and made-to-measure clothing and to the retail sale of coal in the London area) were actually approved by the Board of Trade.
The foregoing is a brief review of the principles on which the Profiteering Acts were based, the machinery by which they were worked, and the nature of the work. The Acts were denounced as harassing the small retail trader while enabling the profiteer on a large scale to escape; but complaints against the harassing nature of the Acts came from all quarters, wholesaler, retailer, and manufacturer alike. Although it is possible that investigations may in rare cases have caused hardship to particular interests, this can hardly be held to outweigh the valuable results in helping to dispel misconceptions and suspicions by publishing facts. The figures already quoted with regard to complaints would indeed seem a sufficient answer to the charge that trade was unduly harassed. On the other hand the deterrent effect of the Acts must not be overlooked. From the point of view of checking profiteering, the mere existence of the penal clauses of the Acts and of the machinery for their enforcement was undoubtedly of great value. As regards the absence of any definite standard of a reasonable rate of profit, the original Profiteering bill was criticized in Parliament on the ground that it gave no clear definition of the offence. This criticism was met to some extent by the proviso that a rate of profit not exceeding the pre-war rate should not be deemed unreasonable; and in the Amendment Act the position was further defined by making it clear that the standard of comparison to be aimed at was the percentage rate of net profit, not gross profit, thus
- ↑ Originally by the Complaints Committee, but under the amended regulations of Aug. 7 1920 by the Chairman of Central Committee.
- ↑ Reports on these by joint sub-committees of the Standing Committees on Prices and Trusts, and also on the working of the standard boot and shoe scheme (which was not technically a scheme under Section 1), have been published as Parliamentary papers.
