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Tuesday, 31 May 1904

Mr HIGGINS - I do not think that the matter : was so put by the Prime Minister. It is very ; easv to make a correction now. The impression ' conveyed by the Prime Minister was that, from my humble position, I had expressed contempt for the great series of decisions of the American Judges.

Mr Deakin - I did not intend to convey that.

Mr HIGGINS - The effect of the Minister's remarks was as I have stated.

Turning back to page 1050, I find that the actual words which I am reported to have used are these -

I must submit with great deference to the honorable and learned member for Northern Melbourne any citation from American authorities, after the wholesale fashion in which he dismissed them. . . . The honorable and learned member for Northern Melbourne was unbridled in the contempt which he expressed for American

Mr Higgins - I was not present when the honorable and learned gentleman made the speech from which he is now quoting.

Mr DEAKIN - No; and, therefore, the honorable and learned gentleman was dependent upon the printed report for his information as to what I said. By an unfortunate slip of the printer, however, in the last line, the word "American" was, in the proof number, used in place of the word "Australian." So far as I know, the honorable and learned gentleman has never expressed dissent except in an abstract way, at the relation which American decisions bear to the American Constitution; but he has brushed them aside somewhat contemptuously, so far as they bear upon the interpretation of the Australian Constitution. "American" was an obvious misprint for "Australian," which I corrected as soon as the proof number of Hansard appeared, and the corrected passage now appears in the permanent record. With the explanation that I referred only to his comments on the American decisions as affecting Australian decisions, I submit my reference was not unfair. The honorable and learned member had said -

Concerning American decisions, I have long held the opinion that they represent what the Judges thought the Constitution ought to contain rather than what it does contain.

Then, referring to our particular argument, he said -

However, I do not think those cases have anything to do with this matter.

That is to say, " I do not think these cases have anything to do with the construction of the Australian Constitution, especially in regard to conciliation and arbitration."

Mr Higgins - That is, so far as the Conciliation and Arbitration Bill is concerned.

Mr DEAKIN - The honorable and learned member, at another stage, said -

The Prime Minister has attempted to apply to our circumstances the United States decisions as to taxing Federal and State incomes, and h:>'. given us the benefit of an elaborate argument, which, I understand, has led him to the conclusion that we should violate some mystic Federal principle if we were to include States public servants within the operation of the Bill. I confess that I do not see what the principle adopted in America with regard totaxing Federal incomes by the State, or State incomes by the Federal power, has to do with the interpretation of our Constitution so far as it relates to our power of legislation in regard to conciliation acid arbitration.

So that the difference between the honorable and learned member and myself is that, whilst I quoted a large number of American decisions, which I thought applied to that particular part of the Constitution, the honorable and learned member, in reply, said that he did not think they had any bearing upon the question. In my reference to him I put it, perhaps, with too great generality that his remarks related to the application of the American decisions to the Australian Constitution. I understand that he stands upon the narrow construction that his remarks related only, and specifically, to the provision in the Constitution relating to arbitration and conciliation. That being so, I at once qualify my remarks to the same extent, and say that I do not desire them to have any wider bearing. The honorable member in the remarks which I have just quoted, certainly contended that the United States cases did not apply in this particular instance, and other speakers contended that they did not apply in any instance. Some honorable members argued that the taxing cases which related to the Federal and State Governments of the United States taxing each other's agencies and instrumentalities had no .bearing on any part of our Constitution. They took a wider view than did the honorable and learned member. Now, fortunately, we have in the judgments of the High Court, as reported in the newspapers, an indication of the weight which that tribunal is inclined to attach to American cases. In the Sydney Daily Telegraph of April 27 th, page 10, Mr. Justice Barton is reported, in connexion with what is known as the Sydney rate case, as having said : -

Mr. Wisepointed out that in some judgments reference was made to the possible consequences of decisions which would give licence to invasions of the sphere of the Federal Government, consequences which might amount to the dissolution of the American Union. Mr. Wise inferred that the judgments of the time were given in fear that contrary decisions might bring about that result, with its dread attendant in the shape of civil war. Attentive perusal of the great deliverances would dispel the notion that consequences which were pointed out as possible were the impelling reason of the utterances. In discussing questions of the relative powers of the Union and the States, the exposition of their Constitution by American jurists, whether in their judgments or their commentaries, had always been founded on the principles of construction which had been equally adopted as guides by British lawyers.

I quote these remarks first because they serve as an introduction to the judgment of the Court, delivered by the learned Chief Justice, who said -

There could be no doubt.that the right of taxation was a right of sovereignty. It might be exercised upon all persons, and in respect of all property, within the jurisdiction of the sovereign power which exercised it. It followed that if the authority which assumed to create such a delegation did not itself possess the power the delegation was void, since -the spring could not rise higher than the source. In a constitutional instrument, defining and limiting the . powers of constitutional authorities, the word "tax" must be construed in the wider sense, and a prohibition of the imposition of a tax must be held to. include a prohibition of any such imposition by a delegated authority, by whatever name the tax was called. It was manifest, from the whole scope of the Constitution, that just as the Commonwea1,th and the States were regarded as distinct and separate sovereign bodies, with sovereign powers limited only to the ambit of their authority under the Constitution, so the Crown, as representing those several bodies, was to be regarded, not as one, but as several juristic persons, to use a phrase which the idea. The term "Crown," as used in the Sydney Corporation Act, must be taken to mean the Crown in its capacity as representing the State of New South Wales. The argument, therefore, sought to be founded upon the assent of the Crown, given through the Governor of New South Wales to the taxation of Crown lands, failed, since land vested in the Commonwealth, or the Crown in right of the Commonwealth, was not Crown land within the meaning of the Sydney Act. If the tax was considered merely as a tax upon the Commonwealth, regarded as a juristic power, or upon the officers as persons - a view which he thought erroneous - other considerations would arise. In that view the question for decision would be whether a State or a delegated authority within a State, had power to affect the Commonwealth or ils officers in the performance of the duties cast upon them by the Constitution, or by the laws of the Commonwealth. The answer to this question depended upon the further question, whether, under the Constitution of the Commonwealth, the jurisdiction of the States extended to the Commonwraith regarded as a juristic person, or to the officers in the performance of their duties as such officers. On this point his opinion was sufficiently expressed in the judgment in the case of D'Emden v. Pedder.

That extract is not altogether apposite, or solely apposite, to the question of the weight which is to be given, or is likely to be given, by the High Court to American decisions. I shall come to that presently. I read the extract by way of introduction, because it has very important bearings, particularly in reference to the Crown as possibly consisting, so to speak, of juristic persons, the Crown acting through the Commonwealth being one juristic person, and the Crown acting through the States Governments being another juristic person. In the course of the debate on this question, we had a very interesting difference of opinion between honorable and learned members. The honorable and learned member for Bendigo the honorable and learned member for Corinella, and the honorable and learned member for Indi, on the one side considered that the fact that the States servants were servants of the Crown, as acting through and represented by the States, of itself constituted a vital difference between the extent to which any Commonwealth Act could be taken to apply to them, and the manner in which it could be applied to private persons who were not in the service of the Crown.

Mr Higgins - The honorable and learned member for Indi did not give an opinion.

Mr DEAKIN - Upon that point he did.

Mr Higgins - He did not go so far as that.

Mr DEAKIN - The honorable and learned member himself took the other side, and disposed of the Crown as lightly as he dismissed the American decisions. Under the epithet "pedantry," or something of that kind, he swept it out of his consideration ; but the other honorable and learned members to 'whom I have referred laid great stress upon that point. . I quoted the extract from the judgment of the High Court as leading up, not only to the decision in the case of D' Emden v. Pedder, but also as bearing upon a line of argument to which the honorable and learned member may yet be called upon to attach more importance than he has hitherto been inclined to do. I did not enter upon it at any great length on the previous Occasion, because I thought it was involved in a certain amount of obscurity) and also because I wished to avoid merely legal argument in this Chamber as much as possible. We have now, however, reached a stage at which merely legal argument is likely to- become a foundation for the consideration. of important constitutional principles, and I desire to refer honorable members to the judgment in the case ofD'Emden v. Pedder, for the opinion of the High Court as to the manner and extent to which American decisions can be used in the ' interpretation of our Constitution. I hope that honorable members will excuse me if I trespass upon their patience by reading a very large part of that judgment, because I think its proper place is in the pages of Hansard, where it will be available to honorable members, who will require to repeatedly refer to it in considering, not only this constitutional question, but many others.

Mr Higgins - For the information of honorable members we propose to circulate copies of that judgment.

Mr DEAKIN - I am very glad to hear that. I presume that the AttorneyGeneral means " official " copies.

Mr Higgins - Yes. Copies of the judgment after it has been revised by the Justices.

Mr DEAKIN - I had thought of suggesting the adoption of the same course. In the case of Pedder v. D' Emden, which is commonly known as the Tasmanian stamp case, the High Court considered the weight which should properly attach to United States decisions. Still quoting from the Sydney Daily Telegraph, I find that the Court said -

We have had the benefit of considering numerous decisions of the Supreme Court of the United States upon analogous questions arising under the United States Constitution, beginning with the celebrated case of McCulloch v. Maryland (4r., Wheaton, 316), decided in 1819, in which Chief Justice Marshall, delivering the unanimous judgment of the Court, enunciated the doctrines which have ever since been accepted as establishing upon a firm basis the fundamental rules governing the mutual relations of that great Republic and its constituent States.

The Attorney-General will forgive me for reminding him that it was that very principle which he referred to as a " mystical Federal principle."

Mr Higgins - No, no. That was a very different matter.

Mr DEAKIN - I think it was the same. The judgment proceeds -

The Attorney-General for Tasmania did . not, indeed, suggest that that case was not good law in the United States, but he endeavoured to distinguish the provisions of the United States Constitution from those of the Constitution of this Commonwealth by referring to sections 107, 108, and 109 of the Constitution. He was not, however, able to point out any material difference between the provisions of those sections and the provisions of the Tenth Amendment of the United States Constitution. And we are equally unable to discover any such difference. Some cases were cited to us, in which it has been suggested that decisions upon the construction of the United States Constitution afford no guidance in the construction of other Federal (Constitutions, such as that of the Canadian Dominion and that of this Commonwealth. In the case of Bank of Toronto v. Lambe (12, A.C., 575), in which the case of McCulloch v. Maryland had been cited before the Judicial Committee of the Privy Council, the Committee, so far from depreciating the authority of that case, intimated their willingness to follow the guidance of the great American Chief -Justice in a similar case, but pointed out that the principles laid down in

Mccullochv. Maryland threw no light on the question then before them, which was whether a particular form of taxation fell within the express words of the Dominion Constitution, by which the exclusive power to impose direct taxation was conferred upon the provincial Legislatures. It is not easy indeed, to discover the purpose for which Mcculloch v. Maryland was there cited. We ure not, of course, bound by the decisions of the Supreme Court of the United States. But we all think that it would need some courage for any judge at the present day to decline to accept the interpretation placed upon the United States Constitution by so great a Judge so long ago as 1S19, and followed up to the present day by the succession of great jurists who have since adorned the Bench of the Supreme Court at Washington. So far, therefore, as the United States Constitution and the Constitution of the Commonwealth are similar, the construction put upon the former by the Supreme Court of the United States may well be regarded by us in construing the Constitution of the Commonwealth, not as an infallible guide, but as a most welcome aid and assistance. There is, indeed, another consideration which gives additional weight to the authority of the United States decisions with regard to matters in which the two Constitutions are similar. We have already, in discussing the language of section 51 of the Constitution, referred to the inference to be drawn from the fact that a Legislature has deliberately adopted in its legislation a form of words which has already received authoritative interpretation. We cannot disregard the fact that the Constitution of the Commonwealth was framed by a Convention of representatives from the several Colonies. We think that, sitting here, we are entitled to assume - what, after all, is a fact of public notoriety - that some, if not all, of the framers of that Constitution were familiar not only with the Constitution of the United States, but with that of the Canadian Dominion and those of the British Colonies. When, therefore, under these circumstances, we find embodied in the Constitution provisions undistinguishable in substance, though varied in form, from provisions of the Constitution of the United States which had long since been judicially interpreted by the Supreme Court of that Republic, it is not an unreasonable inference that its framers intended that like provisions should receive like interpretation.

Of course the bulk of my argument originally was directed to show that the resemblance between our circumstances and those of the United States is strictly one of substance and not of form. Upon that one connecting principle I based the long series of extracts from American decisions which I read to this House. That is to say,_ the very essence of any Federal Constitution is to be found in the established principle that the means and instrumentalities of the Federation and of -the States - which includes their officers, their servants, and all their operations - shall be preserved from interference and control the one by the other.

Mr Watson - Except so far as the Constitution provides.

Mr DEAKIN - Of course. Wherever specific provision to the contrary is made in the Constitution, we are bound by it. But when, as in this case, there is no specific provision, that great essential principle comes into play. It was upon that principle that I based the whole of my case, and upon that view of it that I justified every extract which I read to this House. My opinion in this connexion is further fortified by the judgment which I have just read, and by another portion which I propose to read. These clearly show that the mind of the High Court is working in the same direction, that its Justices recognise the fundamental principle of all Federal Constitutions, and it seems to me that they should logically apply it in this particular instance, as they have done in others.

Mr Carpenter - Would not the honorable and learned member test a case if a doubt existed?

Mr DEAKIN - Yes, but even if we were convinced that we have the power that is claimed, " I hold that the circumstances have not arisen which would justify an exercise of it. I have not yet done all the justice that I wish to do my honorable and learned friend. He took exception to my associating him with the cumbrously named doctrine of unification. He protested against being classed amongst the advocates of a unitary as contrasted with a Federal Government. I have not attempted to justify my own memory upon the matter by looking up the official report of the debates in the Federal Convention. I gave the general effect of the impression which was left in my mind, but if the AttorneyGeneral does not accept my classification of him I do not press it. It seems to me, however, that if we make the provisions of this Bill applicable to the railway servants of the States we may as well include all public servants, because having once destroyed the principle upon which I have laid such emphasis, nothing else stands in the way. Of course I admit the significance which attaches to the word " industrial." When once we take up the position of the Attorney-General and are prepared to make all the States subordinate to the majority rule of the Commonwealth - whether that is accomplished bv one little step or by many is to me a matter of indifference - we have passed the Federal boundary and become advocates of a Constitution which is more or less of a unitary character, and which sooner or later will plunge us into complete unification. That is only my reading of the position. But it is my clear, deliberate, and distinct reading, and I still hold to it, although I have, of course, no desire to impose it on the honorable and learned member. In attempting to describe his attitude as an antagonist of the principle of equal representation in the Senate - and I am sure that he has not altered his opinion - and of many other proposals in the Constitution when it was before the people, I referred to him as an advocate of the unitary principle; but if, in doing so, I mistranslated his position in the slightest degree, I, of course, withdraw the remark. On the question of unification, the judgments given by the High Court throw, at all events, a little light. Mr. Justice O'Connor, in the Sydney rating case, said -

From the very nature of the Constitution, and the relation of the States and Commonwealth in the distribution of powers, it became necessary to provide that the sovereignty of each within its sphere should be absolute, and that no conflict of authority within the same sphere should be possible.

That is simply stating, in very clear and concise language, the great doctrine already referred to, and laid down by the United States Supreme Court, through the lips of Marshall, in 1819. But in the decision given by the Court, in the Tasmanian stamp case, it seems to rae that we approach very closely the particular point which is now engaging the attention of the Committee - the application of the Marshall doctrine to the proposal that public servants of the States shall be brought within the provisions of this measure. I must again crave the patience of honorable members whilst I read extracts from that judgment. Their great importance will, I hope, justify their length. The Chief Justice said -

In considering the . respective powers of the Commonwealth and of the States,, it is essential to bear in mind that each is, within the ambit of its authority, a sovereign State, subject orly to the restrictions imposed by the Imperial connexion and to the provisions of the Constitution, either expressed or necessarily implied. That this is so as regards the Commonwealth, apart altogether from the express provisions of the Constitution, appears too plain to need elaborate argument. It is only necessary to mention the maxim, quanda lexalquid concedit concedere videturet Mud sine quo resipsa valerelion potest. In other words, where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective. 1 his is, in truth, not a doctrine of any special system of law, but a statement of a necessary rule of construction of all grants of power, whether by unwritten constitution, formal written instrument, or other delegation of authority, and applies from the necessity of the case to all to whom is committed the exercise of powers of Government.

If that means anything, it appears to me to say that the States of the Commonwealth are within the ambit of their authority, sovereign States, and that if it had been necessary to add a grant of anything, to make them sovereign they could not have been so styled.

Mr Crouch - There was no grant to the States ; the grant was made to the Commonwealth.

Mr DEAKIN - If a grant is made to the Commonwealth, which also by express enactment leaves to the States all rights not so granted, it is equivalent to the regranting of something already possessed by the States. It repeats, so to speak, the grant to the States, defining and protecting it for the future. If there be one thing more than another necessary to the sovereignty of a State, it is the control of its own officers, means, and agencies. The doctrine that has been laid down in unmistakable language in this judgment would be defeated and deprive?! of all effect if, while the States' were glorified with the title of " sovereign," and, apparently, endowed with a large ambit of power, the Parliament of the Commonwealth were left free to intervene between them and the sovereign agencies which they employ, and, if it so thought fit, to intervene for the express purpose of destroying those agencies. If we have the power to interfere in regard to one little point, we have the power' to interfere in regard to all. If the States have abandoned something essential to their sovereignty in one particular, they have abandoned it in regard to everything. The name is one which can not be justified. The judgment proceeds -

And without recourse to this doctrine of universal application, the express terms of the Constitution lead to the same conclusion. The words of section jr : " The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to " the several matters enumerated, are not used for the first time in that instrument. The same, or almost exactly similar, words were used in the Constitutions pf - the Australian and Canadian colonies, and it has always been held that under the authority conferred by them the colonial Legislatures had within their territory, subject to their jurisdiction, sovereign authority, absolute and uncontrolled, except so far as it was restricted by the Constitution itself. (See Powell v. Apollo Candle Co., 10 A.C., 282.) Now, when a particular form of legislative en.actment which has received authoritative interpretation, whether by judicial decision or'. by a long course of practice, is adopted in the framing of a later statute, it is a sound rule of construction to hold that the words so adopted were intended by the Legislature to bear the meaning which has been so put upon them. This consideration alone is sufficient to .show that the Commonwealth has, with respect to all matters enumerated in the Constitution as within the ambit, of its authority, sovereign power, subject only to the limitations already mentioned. Now, a right of sovereignty subject to extrinsic control is a contradiction in terms. It must, therefore, be taken to be of the essence of the Constitution that the Commonwealth is entitled, within the ambit of its authority, to exercise its legislative and executive powers in absolute freedom, and without any interference or control whatever, except that prescribed by the Constitution itself.

In this case, of course, the Court was called upon to declare the application of this doctrine when it was appealed to in the interests of the Commonwealth and to protect the Commonwealth, as against the aggression or encroachment of the States. But it seems to me that we have only to substitute the word " State " for " Commonwealth " - and in the United States the doctrine has been held to be reciprocal - to exactly describe the case before us. If there be anything that partakes of extrinsic control, and is entirely foreign to the idea of sovereignty, it is the control of tha servants, and of all the agencies, that attach to that so-called sovereignty. The judgment continues -

There is, however, a large class of cases with respect to which a similar power is for a time reserved to the States. With respect to these matters there is, consequently a possibility of conflicting legislation. This contingency is dealt with by section 109 of the Constitution, which provides that when a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall to the extent of the inconsistency be invalid.

I do not think I need read more than another sentence or two appearing later on in the judgment -

It follows that when a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or interfere with the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative. And this appears to be the true test to be applied in determining the validity of State laws, and their applicability to Federal transactions.

Let us again reverse those words. Are not we in these cases attempting to give to our legislative authority an operation which, if it is valid, will fetter control, and interfere with the free exercise of the- executive power of the States? Is the condition here laid down fulfilled which says that such an attempt is invalid and inoperative unless specially authorized by the Constitution. Can we say that the general words of sub-section xxxv. of section 51 convey so express an authorization that they enable us to destroy the sovereignty of a State over its own agencies and employes? Passing from that point, these judgments, if they do nothing else, ought to have the effect of relieving us of some prevalent illusions. For instance, it was sought to be maintained that in the passage of this Bill we should be merely adding another Court to the existing Courts, and that consequently we should not be trenching on the sphere of the States, because the assumption which necessarily followed that statement was that the Bill created no new duties or obligations. The argument was used to rebut my contention that the Arbitration Court - being given control of the hours of labour, conditions of employment, wages, and various other matters all specified in the interpretation clause - had it in its power to increase, either by a small or by an immense sum, the cost of managing the State Departments. It increased the cost of those Departments to the State, which would be required to find the necessary money, if additional employes were ordered to be employed, if shorter hours were worked, and more hands needed to be called for, or if any rises of wages were to be paid. I pointed out that a decision of the Court might have the effect of relieving the States of part of their burden of taxation if it reduced the cost of a Railway Department, just as necessarily as it would increase the burden of taxation by every additional requirement which it made.

Mr Groom - The honorable and learned member did not lay down as a general rule of construction that every Act which caused an increase of expenditure was therefore unconstitutional ?

Mr DEAKIN - No ; that would be preposterous, and I did not think it necessary to rebut that view. We have it in our power here, by legislation, to dispose of the whole sum of money which under the Constitution is set apart for us; and as, under the Constitution, we return to the States what we do not spend ourselves, every increase of expenditure on Federal objects, no matter how legitimate, does operate as a reduction of the receipts of the States. With that we have nothing to do. ' The Constitution made us masters of one-fourth of the Customs and Excise revenue, and any other sums which we might raise by our own taxation. Of those we dispose freely, and it is only because of the temporary operation of what is sometimes termed the Braddon clause that our expenditure affects the amount which we .may return to the States, and not the amount which we must return. But in this arbitration award we shall not deal with our money at all. We do not pay out any money. We impose a burden on somebody else, and we order them to find the money.

Mr Chapman - What would happen if the .State Parliament declined to vote the money ?

Mr DEAKIN - I followed that argument before, and do not desire to repeat my observations. If the State Parliament decided to ignore the award, we should need a Colorado incident to endeavour to bring it into effect. But, putting aside such an improbable contingency as that, the fact remains that the power to make awards, raise wages, and alter the conditions of labour, means a power to direct a State to increase its taxation. That power is derived under this Bill, not in the part which creates a Court, but in the part which requires that that Court shall be allowed to order whatever payment it pleases to think necessary, in the , interests of equity and justice, to those persons who bring their causes before it. No such legal obligation exists until that obligation is legally enforceable, but it will exist under this Bill. If that view has not penetrated, as it ought to have penetrated, to the minds of those who discuss our proceedings outside, surely the unfortunate remarks of the Chief Justice of New South .Wales, which were quoted by the right honorable member for Swan, at page 1648 of. Hansard, show, quite apart from any sentiment that they display, what he declared to be the legal effect of such legislation. I need not read his remarks, except his assertion that it did interfere with the liberty of action of employer and employed, that the State Act did create new crimes unknown to the common law, that it did deprive the employer, to a certain "extent, of the conduct of his own business, and vested it in a tribunal-. No one can say that the mere creation of a Court would have done that. His Honour is not alluding to the creation of a new Court which left liabilities and obligations as they were, but is stigmatizing, in what appears to me to be injudicious language, the effect of the State Arbitration Act in its' imposition of fresh obligations, and new penalties for what hitherto have not been offences. I trust, therefore, that whatever else his obiter dicta may have done, they will disabuse the mind of even the man in the street of any suggestion that this is merely the creation of a tribunal, instead of being, as it is, the creation of a tribunal, plus the creation of a new charter of industrial rights,, industrial obligations, and penalties for their .breach, necessarily of a severe character. If we have a law, and it requires to be made effective, we must provide penalties. This Bill obviously goes far beyond the introduction of a new tribunal. If that was all that it did, there would be very little interest in it here or outside.

Mr Crouch - If there were no offences there would be no occasion for Courts in criminal cases.

Mr DEAKIN - I am not speaking of the necessity for offences. I am saying that if this Bill meant only the creation of a new tribunal, which was to deal with cases which at present go to the ordinaryCourts when they relate to industrial matters, just as there has been in Great Britain a Commercial Court, in which none but commercial cases are 'taken - if this was a Court merely to try industrial cases under the old laws and old obligations, there would be very little interest taken in the Bill ; it would mean very little to any one, either here or outside. But it is because it does so much more than create a Court, that our attention is focussed on it, and that that of the public is bound to be. I propose to read another extract from the judgment in the Tasmanian stamp case in order to show that, probably, I was not so far out when, in moving the second reading of the Bill, I quoted a part of the American judgment, which is set out in the report of that case. The High Court says -

We should be prepared, therefore, if it were necessary, and if we found ourselves unable otherwise to come to a clear conclusion, to accept the doctrines laid down in the following passage of the judgment of the Supreme Court of the United States, delivered by Marshall, C.T-, in McCulloch's case in 1810 (and since that time often spoken of by that Court as axiomatic), as applicable to the interpretation of the Constitution of the Commonwealth : -

Then they proceed to read Marshall's judgment; and it is so important and valuable in its bearing upon Federal affairs, that I will take the liberty of burdening the Committee with it -

The people of a State give to their Government a right of taxing themselves and their property, and, as the exigencies of government cannot be limited, they prescribe no limits to the exercise of this right, resting confidently on the interest of the legislator, and on the influence of the constituents over their representative, to guard them against its abuse. But the means employed by the government of the union have no such security, nor is the right of a State to tax them sustained by the same theory. Those means are not given by the people of a particular State, not given by the constituents of the Legislature, which claim the right to tax them, but by the people of all the States. They are gi, en tv all, for the benefit of all; and, upon theory, should be subjected to that government only which belongs to all. It may be objected to this definition that the power of taxation is not confined to the people and property of a State. It may be exercised upon every object brought within its jurisdiction. This is true. But to what source do we trace this right? It is obvious that it is an incident of sovereignty, and is co-extensive with that to which it is an incident. All subjects oyer which the sovereign power of a State extends are objects of taxation; but those over which it does not extend are, upon the soundest principles, exempt from taxation. This proposition may almost be pronounced self-evident. The sovereignty of a State extends to everything which exists by its own authority, or is introduced by its permission.

That is what I previously read to the House -

But does it extend to those means which' are employed by Congress to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable that it does not. Those powers are not given to the people of a single State. They are given by the people of the United States, to a Government whose laws, made in pursuance of the Constitution, are declared to be supreme. Consequently, the people of a single State cannot confer a sovereignty which will extend over them. If we measure the power of taxation residing in a State by the extent of sovereignty which the people of a single State possess, and can confer on its Government, we have an intelligible standard applicable to every case to which the power may be applied. We have a principle which leaves the power of taxing the people and the property of a State unimpaired, which leaves to a State the command of all its resources, and which places beyond its reach all those powers which are conferred by the people of the United States on the government of the Union, and all those means which are given for the purpose of carrying those powers into execution. We have a principle which is safe for the States, and safe for the Union. We are relieved, as we ought to be, from clashing sovereignty, from interfering powers, from a repugnancy between a right in one Government to pull down what there is an acknowledged right in another to build up, from the incompatibility of a right in one Government to destroy what there is a right in another to preserve. We are not driven to the perplexing inquiry, so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse, of the power. The attempt to use it on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single State cannot give. We find, then, on just theory, a total failure of this original right to tax the" means employed by the government of the Union for the execution of its powers. The right never existed, and the question whether it has been surrendered cannot arise. But, waiving this theory for the present, let us resume the inquiry,' whether this power can be exercised by the respective States, consistently with a fair construction of the Constitution? That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one Government a power to control the constitutional measures of another, which other, with respect to those verv measures, is declared to be supreme over tha't which exerts the control, are propositions not to be denied. /

I need hardly stop to point out' the endless parallels. Honorable members have only to substitute, when Marshall speaks of the Federal Government, the State, and to reverse the position - to imagine the Commonwealth taxing the States, instead of the States taxing the Federal Government, as in this case - and most of the argument and most of the language applies, in mv view.

Mr Frazer - Does the question of the power of taxation arise?

Mr DEAKIN - Inevitably. The gift to the Arbitration Court of the power to make awards which shall bind a State is meaningless, unless it covers the power to increase, as well as to decrease, the payments of a State.

Mr Higgins - That is all indirect. It may lead to an increase of taxation, or it may not.

Mr DEAKIN - In my judgment, honorable members cannot stop there. Our endowment in the Constitution is not to create a Court at all. The power is to Conciliate and Arbitrate 'in relation to industrial disputes extending from one State to another. There need be no Court. We can appoint ourselves a Court. We can appoint the Federal Government a Court. We can sit here, if we have this power, and vote to the public servants of any State any sum we like, which sum we shall not have to find, but which the State affected will be called upon to find. That is direct taxation by a body which has not to find the money.

Mr Higgins - If we resolve to build a new post-office, it may mean an increase of the taxation of a State.

Mr DEAKIN - But only by the exercise of the special powers conferred upon us by the Constitution, and for a time.

Mr Higgins - That begs the whole question.

Mr DEAKIN - In no way ; because the increase of taxation, which falls upon a State from the building of a post-office, is under Federal Acts. The post-office must be paid for out of Federal money, and it is only because the money happens to come from the same pockets that it may be said to come out of the pockets of a State.

Mr Higgins - It comes out of the pockets of the State, because the State has to pay it.

Mr DEAKIN - That is only a temporary matter. It comes out of the pockets of their citizens, but .that is under a special provision of the Constitution, which applies only for a limited time, although it may be extended indefinitely. The fact remains, that the money in that case is paid by us, and has to be provided by us by some means constitutionally available. In the other case, although the money is voted by us, it has to be found by another body. We, in the one case, take the odium - if there be any odium - of finding the money, because we spend it. In the other case, we order some one else to find the money. We vote the money to be paid by some one else, who has to bear the odium of finding it. Marshall, in his judgment, proceeds to say -

But all inconsistencies are to be reconciled by the magic of the word " confidence." Taxation, it is said, does not necessarily and unavoidably destroy. To carry it to the excess of destruction would be an abuse, to presume which would banish that confidence which is essential to all government. But is this a case of confidence? Would the people of any one State trust those of another with a power to control the most insignificant operations of their State Government? We know they would not. Why, then, should we suppose that the people of any one State should be willing to trust those of another with a power to control the operations of a Government to which they have confided their most important and most valuable interests?

Mr Higgins - We cannot control where there is only one State ; where there are two States concerned we may.

Mr DEAKIN - Where there are two States concerned we may, but we cannot where there is only one State concerned. Marshall- proceeds, lower down - I am omitting a sentence or two -

This, then, is not a case of confidence, and we must consider it as it really is. If we apply the principle for which the State of Maryland contends to the Constitution generally, we shall find it capable of changing totally the character of that instrument. We shall find it capable of arresting all the measures of the Government, and of prostrating it at the foot of the States. The American people have declared their Constitution, and the' laws made in pursuance thereof, to be supreme; but this principle would transfer the supremacy, in fact, to the States. If the States may tax one instrument, employed by the Government in the execution of its powers, they may tax any and every other instrument. They may tax the mail ; they may tax the mint; they may tax patent rights; they may fax the papers of the Custom-house; they may tax judicial process; they may tax all the means employed by the Government to an excess which would defeat all the ends of government. This was not intended by the American people. Thev did not design to make their Government dependent on the States.

Of course, I cannot push that magnificent piece of argument to the same extent. Marshall was dealing with the limited power of taxation possessed by the Commonwealth and the States within their several spheres, whereas I am speaking of the power which incidentally, but essentially, may imply, and must imply, taxation, and which has no meaning if it does not cover the power of taxation.

Mr Fowler - Does the honorable and learned member think that the High Court in dealing with a case under this Bill would consider the ulterior effect of its judgment? The High Court would decide the question of constitutionality, and the ulterior effect might or might not mean taxation. Would it be within the purview of the Court to consider the ulterior effect of its judgment?

Mr DEAKIN - The honorable member is asking me how the Court would, and ought to decide. In my opinion, the Court ought to consider, and would consider, what the honorable member calls the ulterior effect; but it must be remembered that this is only my opinion.

Mr Fowler - Ulterior effects are not usually considered in the judgment of a Court.'

Mr DEAKIN - Calling them "ulterior" effects does, not alter them. The effect may be to destroy the sovereignty of the States by stepping in between the States and their employes - by stepping in between the States and all the means and agencies which the States use which can be brought under the word " industrial " as it is used in the section - so that the Court may determine the conditions of employment, hours of labour, wages, periods of probation, leave, when a man may refuse to work or when he may not, and what are the penalties - in which case the mastership and. control of all the industrial agencies, on which the States depend, are taken out of the hands of the States and placed in the hands of another body. How do we make the effect less by calling it " ulterior " ? There is an effect, and it seems to me a vital effect ; and whether it be called " ulterior " or by some other name, the effect remains. In fact, the Court itself, having finished the quotation from Marshall, goes on to say -

The learned judges who formed the majority of the Supreme Court -

That means the Supreme Court of Tasmania, from which this was an appeal. seem to have been under the impression that the doctrine of McCulloch's case had been considerably modified by later decisions. This is, however, a misapprehension. Although questions have arisen in some cases whether the facts brought the particular case within the doctrine (see Bani v. Mayer, 7. Wall, 16, 25), neither the authority of the judgment nor the accuracy of the statement of the law contained in it has ever been questioned in the United States, nor have the doctrines enunciated in it ever been qualified. It is true that in Osborn v. Bank of the United. States (9 Wheaton, 738), decided five years later, the Court was asked to reconsider its opinion in the case of McCulloch v. Maryland. But the reconsideration asked for, and granted, extended only to the question whether the Bank of the United States was an instrumentality or agency of the Republic in such a sense as to render the taxation of its notes by a State an invasion of the sphere of the national government. So far from combating the doctrine that Federal instrumentalities are not subject to State control, counsel for the bank conceded that " the States cannot tax the offices, establishments, and operations of the National Government " (9, Wheaton, 765-6), and so fully granted the position as to state it in terms which seem to us to apply strikingly to the present case...... We are fortified in our conclusion by the fact that the doctrines laid down in McCulloch's case have been adopted and followed in the interpretation of the Constitution of the Dominion of Canada by the Courts of the provinces of Ontario and New Brunswick since the year 1878, and that their decisions, though uniformly adverse to the provincial Governments, have not been made the subject of appeal either to the Judicial Committee or to the Supreme Court of Canada. (See Le Prohon v. Ottawa, 3 Ont., A.R. 520, and the other cases cited by the A.G. for the Commonwealth.)

I think the Attorney-General, when he referred to the American decisions, also added that they had not been accepted as an authority in Australia, but, so far, had been overruled by the States Supreme Courts, and had not been recognised by the Privy Council. I think that now the AttorneyGeneral will admit that the Australian High Court, at all events, does not take that view, but does recognise the American decisions.

Mr Higgins - I was 'very guarded, and merely said that "up to the present" the decisions had not been accepted.

Mr DEAKIN - The Attorney-General is always guarded, but he will not be able to take the same view now.

Mr Higgins - Certainly not.

Mr DEAKIN - The ' judgment proceeds -

In no American or Canadian case that we can find has it been denied or even doubted " that the Constitution and the laws made in pursuance thereof are supreme; that they control the constitutions and laws of the respective States, and are not controlled by them." Nor has it been in any way questioned : " First, 'that a power to create implies a power to preserve. Second, that a power to destroy, if wielded by a different hand, is hostile to, and incompatible with, these powers to create and to preserve. Third, that, where this repugnancy exists, that authority which is. supreme must control, not yield to, that over which it is supreme." (Marshall, C.J., 4, Wheaton, at page 426.) These declarations which are so obvious as to be almost truisms, have found clear expression in the Constitution Act itself, which, in its fifth section, commands that "This Act and all the laws made by the Parliament under the Constitution shall be binding on the Courts, Judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State."

I do not know that I could advance my argument further by calling attention to the several points of difference and many points of agreement which, it seems to me> . are to be found between the case which was before the High Court and the case which is now before the House. To me the par"allel is complete. Of course, in saying that, I rely on the fact that express words require, in my opinion, to be used to bind the State under sub-section xxxv. A very lucid classification of the constitutional powers under section 51 was given by the honorable and learned member for Corinella during the recent debate. The honorable and learned member distinguished those cases in which the power is clearly intended' to be absolute although the State is not mentioned, those in which the State is clearly not intended to be included and: specific reference is therefore made to the State, and those in which it may be open to argument whether the State is or is not intended to be covered. I have always admitted that sub-section xxxv. is open to argument, but to my mind it is only so open when regarded from a strictly technical point of view. It seems to me that, looked at constitutionally, and in its place as one of the powers of the Commonwealth, and having regard to the sections which are inserted in order to guard the powers of the States - taking a broad view of the Constitution as a whole, and of the necessary doctrine which must be adopted in order to enable both the central and States Legislatures and Executives to perform their work - the proposal put forward by the Government would, if adopted, imply such a breach of that doctrine, and such an invasion of the integral rights of the States in their most vital part, that I find myself unable to attach more than a slight weight to the fact that, technically, the section does not set out, as it might have set out, in express words 'that it is not intended to apply to States public servants. It appears to me that the whole weight of implication, both regarding them as servants of the Crown and as necessary agencies of the States, or having regard to the great doctrine of Marshall, so often upheld and continually reiterated, requires that this proposal being repugnant to that doctrine, ought not to be entertained by this House, and would not, I think, be entertained by the High Court. But, before I conclude, 1 should" like to read one other passage from this judgment which' has been referred^ to, a constitutional classic, as, in my opinion, it deserves to become, because it deals indirectly with the judgment of the Supreme Court of this State.

It has been suggested, although the point was not pressed by the Attorney-General for Tasmania, that the doctrines enunciated in McCul-" loch's case are not applicable to the Commonwealth by reason of the power of veto reserved to the Crown by the Constitution.

That was the view adopted by tie Tasmanian High Court, following the decision of the Victorian Supreme Court in Wollaston's case. The judgment proceeds -

It is, however, the duty of the Court, and not of the Executive Government, to determine the validity of an attempted exercise of legislative power. The assent of the Crown cannot, nor can the non-exercise of the power of veto, give effect to an invalid law. And it would be to impose an entirely novel duty upon the Crown's advisers if they were to be required, before advising whether the power of veto should be exercised, to consider the validity under the Constitution of the provisions of each Act presented for the Royal Assent.

That, as already said, is the function of the Judiciary. And, even if such a duty were cast upon the Executive Government, it could neither relieve the Judiciary of their duty of interpretation nor affect the principles to be applied in that interpretation. It is convenient at this point to advert to another misapprehension into which the learned Judges who formed the majority of the Court seem to have been led. They appear to have thought that, accepting the doctrines of McCulloch v. Maryland as sound law, it is a question in each case whether the attempted exercise of State authority actually impedes the operations of the Federal Government - in other words, that the interference must, in its extent, be such as to cause some actual obstruction or hindrance.

Now, by interjection, I have gathered that some honorable members opposite raised that very view in reply to the argument which I am now reading. This is how the High Court deals with it -

Were this the true point of view, the validity of a State law would depend on a question of fact to be determined, presumably, by a jury, who would be charged to inquire whether the attempted control or interference amounted to a substantial obstruction. It is, however, manifest that ' the extent of an interference is quite a different thing from the existence of interference in fact. A man's enjoyment of a large estate is not appreciably diminished by the occasional passage of a stranger across an unfrequented part of it. But if the stranger passes under a claim of right there is a substantial interference with the owner's right of property. So, the power claimed for the State of Tasmania is, in its nature, in conflict with the exclusive power of legislation given to the Commonwealth over its own departments, and the greater Or less extent to which it may be exercised does not enter into the inquiry concerning its existence. Applying then the test already enunciated, does the Tasmanian Stamp Act, assuming it to be applicable to the case,' interfere with or exercise control upon the action of a Federal officer in the discharge of his duty to the Commonwealth ?

They proceed to answer that, and later on they continue -

Before passing from this branch of the subject, the case of Bank v. Mayor (7 Wallace, 16, t868), already referred to, may be mentioned, in which it was pointed out, in a passage which commends itself to our judgment, that taxation of any subject-matter necessarily implies control, and also the case of Crandall v. Nevada (6 Wall, 35), in which it is shown by very cogent 'argument that, the question in such cases is not the extent to which a tax interferes with or controls freedom of action, but whether there is any power to tax. If ,the power exists, no Court can inquire into the propriety of its exercise. In several of the American cases cited to us this doctrine has been elaborated, and it has been shown - as is, indeed, almost self-evident - that a power to tax, whether it is exercised to the extent of one penny or 10s. in the pound, is equally a power to tax ; that, if conceded at all, it must exist in fullness; and that if -exercised to its utmost limits it might operate to the destruction or practical prohibition of the thing or transaction in respect of which the tax is imposed. These considerations lead to the inevitable conclusion that the Tasmanian Act in question, if construed as applying to receipts given by a Federal officer to the Federal Treasurer in the course of his Federal duty, would be an interference with him in the exercise of that duty, and would therefore be invalid. It is, however, in our opinion, a sound principle of construction that Acts of a Sovereign Legislature, and, indeed, of subordinate Legislatures, such as municipal authorities, should, if possible, receive such an interpretation as will make them operative and not inoperative.

The question which, by interjection, was raised in this House, was how the demand by a State Government, that a twopenny stamp should be placed on a receipt by a Federal officer for his salary, can be considered an invasion of the Commonwealth power. The last extract I have read supplies the reason. If you can tax to the amount of twopence, you can tax to an indefinite amount, because what the Court is concerned with, is not the propriety or amount of the taxation - that is a matter for the Legislature, or for the authority created - but with the power to tax. If 'the Court once concedes the power to tax, its operation must be unlimited. In precisely the same way, to fall back upon the same illustration, it may be a question of this Chamber constituting itself an authority in matters of conciliation and arbitration, and raising wages by a single farthing, or a single shilling; because, if we have this power to deal with the servants of a State at all, we possess it absolutely. Instead of adopting the method, which we have proposed here - of creating a Court, and commending these questions to the justice and equity of that Court, we might dispense with such a Court, and substitute other considerations than those of justice and equity, directly embodying our own view as to what ought to be done in such circumstances. We should then posses the power, either by way of increase or reduction, to interfere to any extent with the hours, salaries, and cost of the public servants of the States. If we possess it at all, we possess it altogether, and no Court can put any limit to its exercise. I have, for what I hope are not improper purposes, probably wearied, and certainly lessened the number of my hearers, by the long extracts which I have made from these judgments. The Federal questions involved appear to me to possess such a magnitude of meaning that. I offer no other apology for making those quotations. I may have wearied the Committee, but at all events I have now taken advantage of the official record of the debates of this House to place within the reach of honorable members what appear to me to be the most cogent parts of some of the first judgments of the High Court of Australia, which will probably remain among the greatest judgments the Court will give for a long time to come. It appears to me that they show that, in contesting this proposal as I do at every stage on constitutional grounds, I have done no more than was my duty to those who sent me here, to the Federal Constitution by which we are bound, and to this House, which ought' to be warned against those possible steps beyond its own boundaries which may lead to its action being rendered nugatory by judicial procedure, and which then will have brought it into conflict with other organizations representing our own electors in another sphere. This Bill, it has been jocularly remarked, though brought in for conciliation, has had the most stormy and most dissonant passage that could possibly be conceived. We lost an old and valued colleague, and we lost the Bill itself in the last Parliament because of this clause. We have lost a Ministry in this Parliament.

Mr Higgins - But we have gained another, and a very good one.

Mr DEAKIN - Not in this respect. If they had adopted our views we should have gained another. As it is, we have lost the provision of caution which we made, and we may lose more. Honorable members opposite must see that they are putting the whole of this Bill in peril by insisting upon the insertion of this proposal, because on this question, and, so far as I know, on this question only, they 'are forcing into the ranks against them men who, on this measure in all its cardinal principles - and indeed, so far as I know, in all its main details - are entirely in its favour. They are proposing to insert in the measure what certainly is not essential in order to make it effective, which can be withdrawn and still leave ' it, one of the most beneficial measures ever passed by this or any other Parliament. Pass it, relating as it does to every- dispute extending beyond a single State which may occur throughout all the realms of private employment, and you pass it in such a form as will enable it to deal with every dispute that has ever occurred in Australia up to the present time - until recently, it might be said, everything that looked like a possible dispute extending beyond a single State. You will have passed a measure which will meet the public demand where it is keenest, because the urgency is greatest. Otherwise you will imperil and overload it to benefit classes of the community some of which are already dealt with by Arbitration Acts of the States, all of which can be so dealt with, whose members, whatever their grievances, would not assert that they are comparable with the grievances which the Bill was in the first instance introdued to remedy. These call for redress at a very early date. That is why I appeal to honorable members opposite to consider if it is a reasonable course which they are following. They have it within their power, I believe, to pass the measure without material amendment.

Mr Higgins - Does the honorable and learned member seriously suggest that we should at this stage abandon the amendment now before the Committee?

Mr DEAKIN - I would have the Government say to its followers that, realizing the value of the Bill, they are discharged from their obligations in respect to the amendment, so that the House may be free to pass a measure which every one wishes to see passed, without an addition which involves a dangerous constitutional problem, and which, if valid, will precipitate a conflict with the States which we do not desire, and for which we are not prepared.

Sir John Forrest - We have already asked them not to do it.

Mr DEAKIN - I am reminded that this is not the first appeal that has been made to honorable gentlemen opposite. It is an appeal which I have made at every stage- of the consideration of the measure, and I repeat it now only because I feel so strongly upon the subject. In following the course which they are now adopting, honorable members opposite are not treading the path of practical wisdom, but are allowing the substance to be sacrificed for the shadow. If the Government were content to pass the measure as it stands, and to deal with these classes of the community by a separate Bill, all the objections which I have urged against their present action would still have force, with one exception, and this is that the passing of the measure now before us would not be imperilled. However, they must be the judges of their own action. It is deliberate action, and I, therefore, feel it idle to make a further appeal. They will admit that I am not taking this course because I adopted it before, and that I am not persisting in an opinion merely because it is my own. Weigh the matter as I may, listen as I have listened to every argument urged in favour of the amendment, the more I study the whole issue the more I think the proposal fraught with danger to the Commonwealth, both as a matter of expediency, and still more as a matter of principle. As the result of my ripest consideration, and of an examination of the judgments to which I have referred, I must record my unhesitating and unequivocal opposition to the amendment.'

Mr. HIGGINS(Northern MelbourneAttorneyGeneral). - I have first to thank the honorable and learned member for Ballarat for his kind endeavour to remove any misapprehension which may have arisen with regard to my attitude as to the decisions of the great American jurists. To come to the substance of his speech, I cannot understand his anxiety to prevent the inclusion in the Bill of a provision which, at the worst, will, in his opinion, be harmless, since he feels confident that as soon as it is tested by the High Court the decision will be given that we had no power to put it into the measure; though, with his usual frankness, he admits that there is a doubt on the subject. But, notwithstanding this view, he has, in grave tones, prognosticated a cataclysm. I understand him to f ear that there will be almost a civil war in the States if the amendment is carried. He read an extract from a report of the strike in Colorado, with which I was pleased, because I thought the moral to be drawn was that anything was better than the position of affairs permitted where there is no Court of Arbitration. But instead of drawing the moral thatwe should experiment even, to prevent such disasters, he wound up with the suggestion that at this time of day, after one Ministry has been displaced and another come into office upon the issue, we should abandon the amendment.

Sir John Forrest - The Government have already abandoned part of it - that relating to the public servants.

Mr HIGGINS - Whatever faults we may have, we shall not be so dastardly as to adopt such a policy. We believe in 'the amendment, and intend to push it. If honorable members have changed their minds in regard to it, let us know it; We have made the Conciliation and Arbitration Bill the first business to bring before the House.

Mr Deakin - But we are given to understand that the amendment is not a Government one in the sense of involving the fate of the Administration.

Mr HIGGINS - We have brought it forward for consideration at the first opportunity. Honorable members have voted for it once, and will, no doubt, do the same thing again. The principal point made by the honorable and learned member was that the amendment is an invasion of States rights. I have turned the words over in my mind again and again, but I do not understand what he means by them. I deny that in this Constitution the State has any rights. The only rights the Constitution recognises are the rights of the people, under different classifications. There is no State right. There is simply a right in the people to express themselves in the two Houses of the Parliament, one of which we may call the States' House and the other the people's House.

Mr Mcwilliams - The States have a right to all the powers which they have not conceded under the Constitution.

Mr HIGGINS - They have the right to retain all that they have not conceded ; but in this Parliament there are no States rights. The States rights, that is the powers of the States, are all reserved to them, and are exercised by the local Parliaments. If the amendment would seriously damage States rights, if it would be an invasion of them, why have not the States spoken against it? But we have had an election upon the issue, and the result has been that more members have been returned who favour the amendment than there were in the former Parliament who favoured it. Under the Constitution a States' House - the Senate - is provided to look after what are called States rights, to see that there is no trenching upon the separate rights and powers of the States. But if there is any contrast between the House of Representatives and the Senate, it is that there is a greater majority in favour of the amendment in the Senate than there is in this House. What is the reason for the great anxiety of the honorable and learned member for Ballarat to prevent the passing of the amendment? He has read passages from the great judgments of Marshall and others about " fettering," " controlling," and " interfering with" the States agencies and instrumentalities, but he is trying to push the . application of those cases and great utterances to extremes. If you said to six children, " Here are some lollies," and the fond parent came along and said, " No ; it is for me, not for you, to give them lollies," would that be an invasion of the rights of the children? The test is: "Are you, by the action you are taking, hampering the States, or are you helping them?" The theory underlying the power of conciliation and arbitration is that it will provide a means of helping, not of hampering, industries. Does the honorable and learned member mean to say that he regards an Arbitration Court as an obstacle to industry, as something which is calculated to hamper or injure industry ? I apprehend not. Heis a sincere advocate of Arbitration Courts for the purpose of helping industries, both employers and employes. It may be right or wrong.

Mr Deakin - If the honorable and learned member's argument is correct, as I put it, we do not need a Court at all. There is no obligation to create a Court.

Mr HIGGINS - No, there is no obligation.

Mr Deakin - I am entirely in favour of this form of exercising our power, but we have much greater powers which it might be proposed to use in a way of which I would not at all approve.

Mr HIGGINS - One of the means of promoting conciliation and arbitration is by creating a Court, and that seems to be the common-sense course to adopt under present conditions. If that device is a good thing for private industries, it may be a good thing for States industries. If it may be a good thing for public industries, why should we not give the King the benefit of it? The position which I have taken up under the Constitution is not that subsection xxxv. necessarily includes the States, but that it may or may not include the States. The question is, however, whether in making a law under that sub-section we are necessarily compelled to exclude from its operation all public servants. We are dealing with a Constitution, not with a law, and in making laws we must remember that not'only the two Houses of Parliament are concerned. If honorable members will look at sectionI of the Constitution they will find that all our laws are made by the King, the Senate, and the House of Representatives. From the point of view of the law, the King has the right to interfere and exercise his power of pressure with regard to the making of our laws. Therefore, when we find that we have power under the Constitution to provide for conciliation and arbitration with regard to industrial disputes extending beyond the limits of any one State, and that the authority involves the power to create Courts of Conciliation and Arbitration, then, and then only are we required to consider the question : " Ought we to apply this to the case of the King's servants as well as of those engaged in private enterprises?"

Mr Mcwilliams - Is the amendment necessary ?

Mr HIGGINS - Yes, because we ought to make it perfectly clear that we intend to include States servants. If the King's servants were not specially mentioned in this Bill it might be urged with more or less force that they were not to be affected. I do not mean to say that that argument would be absolutely valid, but I think it is our duty, when making laws, to do what we can to prevent questions from arising under them. Therefore, we propose to include in the Bill a provision that it shall apply to the King's railway servants, and to others of his servants who may be engaged in industrial enterprises. We have, under the Constitution, a number of powers- One power is to legislate for conciliation and arbitration without any express limit beyond that which provides that our control shall be exercised only over disputes extending beyond anv one State. We are also empowered to legislate in regard to banking and insurance. In the two latter cases it is expressly provided that our legislation shall relate only to banking other than State banking, and to insurance other than State insurance; and inasmuch as the Constitution does not provide that our control by means of Conciliation and Arbitration Courts shall be limited to disputes other than disputes in which public servants are engaged, we are entitled to include public servants within the operation of the law which we are now making. There is one point in regard . to which I think that the honorable and learned member for Ballarat has been under the glamour of Marshall's judgments for some time. I regret that he has allowed these judgments - if I mav say so respectfully - to influence his mind too much. If he were to approach this subject free from such influence, I believe he would come to the conclusion that- there is nothing, in the Constitution to forbid us to apply this law to the railway servants.

The honorable and learned member will find that Marshall's judgments) and the decisions which are based upon Marshall's views, are all founded upon the principle that one Government is not to hamper the operations of the other. Various expressions are used) such as " fettering," "controlling," " interfering with" ; but we may look through all the cases without finding one instance in which the Federal Government was held not to be entitled to help a State Government, or in which a State Government was held not to be entitled to help the Federal Government. The whole theory underlying sub-section xxxv. of section 51 of the Constitution, is that conciliation and arbitration helps industries - helps employers as well as employes. Would ito not be helpful to the Railway Commissioners if they knew that -none of their employes could strike, except under a penalty. Under the measure, as drawn by the late Government, railway servants were free to strike. It was provided in clause 6 -

No person or organization shall, on account of any industrial dispute, do anything in the nature of a lock-out or strike.

Now, " industrial dispute, " according to the definition clause of the Bill, meant only a dispute in which private employers were concerned. I ask, " Why should we not give to the Railway Commissioners, and to the States Governments through them, the advantage of a provision which will prevent their employes from striking?" Had some such legal restraint been imposed upon the Victorian railway servants in the unhappy events of last year, had they felt that they could appeal to a Court of Arbitration for the redress of their grievances, and had the Railway Commissioners been secure in the knowledge that any of their employes who went upon strike would be guilty of an offence and liable to a penalty, that strike, with its lamentable results, would not have occurred. We should not have been called upon to endure the loss which was sustained consequent upon the check which was given to business operations and the stoppage of our mails. I know, from personal experience, that letters which were going northwards were delayed considerably, and that very serious complications ensued.

Mr McLean - Have not the States themselves power to make these laws if they want them ?

Mr HIGGINS - They have not the power to deal with disputes which extend beyond their own territorial limits.

Mr McLean - But cannot they deal with disputes which occur within their own borders ?

Mr HIGGINS - The honorable member's interjections are always pertinent, and I shall deal with that point presently. I regard provisions which are designed to secure conciliation and arbitration in industrial disputes, not as being calculated to hamper the States, but rather as being calculated to assist them. Until the honorable and learned member for Ballarat shows that their effect is to hamper the States in their operations he has no justification for applying the American authorities which he has cited. It is true that in America the Courts have decided that a State cannot tax a Federal officer upon his income, or levy a tax upon Federal notes. Similarly it has been held that a State cannot levy a tax upon any sort of Federal bonds, instrumentalities, or agencies. If a tax were imposed upon bonds their value would - decrease, and the Federal power, when borrowing again, would have to accept a less sum for its bonds. But I would point out that in every case in which decisions have been given against this power of dealing with instrumentalities, they have been based upon the ground that the interference has been by way of restraint, or hindering, or hampering. The speech of the honorable and learned member for Ballarat was largely composed of legal quotations. The more I heard of it, the more I regretted it. I think it is a pity that long discussions should take place in Parliament upon legal matters - upon what is within the scope of the powers conferred by the Constitution, and what is not. The more closely I watch the work of this Parliament 'the more I am convinced that it is detrimental to the advance of Australia that we should continually be pulled up by the question, " Is this within the letter of the Constitution, or is it not?"

Sir John Forrest - If the AttorneyGeneral argues one way in the Court and another way in Parliament, his position is rendered rather awkward.

Mr HIGGINS - I have not argued one way in Court and another way in this House, but even had I done so I should not feel my position an awkward one, because I have observed that the right' honorable member for Swan speaks in one fashion when he occupies a seat upon this side of the House and in another fashion when he is in Opposition.

Mr Mcwilliams - Is it not very regrettable that the legal aspect of this question was not discussed at the Federal Convention ?

Mr HIGGINS - There was plenty of discussion upon legal matters in the Convention - indeed, there -was too much of it. It is a pity that this matter was not discussed, but it is a fault of the Constitution, which we cannot overcome, except by adopting a more elastic power of amendment. The honorable and learned member for Ballarat spoke of the impossibility of the Commonwealth controlling States agencies. He said that, under the Constitution, we could not control those agencies. But it is obvious from several sub-sections of section 51 of the Constitution, that the Commonwealth is to control those agencies. For instance, with regard to railways, we have power to control States railways for the purposes of naval and military defence. That may necessitate extra taxation being imposed upon the States, by involving additional expense In the working of the railways, the laying down of heavier rails, and a larger supply of rolling-stock.

Sir John Forrest - We should have to pay the States, I suppose?

Mr HIGGINS - Not necessarily.

Sir John Forrest - I think so. It would be unfair to make them work for nothing.

Mr HIGGINS - All I contend is that there is full power for us to control the States railways for the transport of the Naval and Military Forces of the Commonwealth. We can also compel the States railways to carry our mails. Moreover, every tax that we levy interferes with States agencies. The States can impose direct taxation only ; but we can levy taxation either by direct or indirect methods. We have power to impose direct taxation, and if we levied a direct tax of a certain sort, it would pro tanto diminish the power of the State to levy taxation. That, again, might be said to constitute an interference with a State agency, but, nevertheless, we have power to so intervene. The whole matter resolves itself into a very simple one. Seeing that there is a restraint upon our power to enact banking laws which interfere with State banking, and upon our power to legislate upon insurance matters, to be implied by sub-section xxxv. of section 51 of the Constitution, that a similar restriction is applicable to a law for arbitration which prevents it from being extended to disputes in which the public servants of a State are involved ? The right honorable member for Ballarat pointed out that, by adopting the proposal of the Government, the Commonwealth may increase the cost of a State Department. Of course it may. But it may do that in many directions. Let us suppose, for example, that we determined to build a post-office in Tasmania. The carrying out of that work would involve a debit of the cost of the building against Tasmania.

Sir John Forrest - Only temporarily.

Mr HIGGINS - No. The . law would remain until it was changed by us.

Mr Deakin - No. That part would remain only until we settled the method to be adopted in paying for the transferred properties.

Mr HIGGINS - As far as the Constitution is concerned, that provision would remain until we made an alteration in it.

Sir John Forrest - It would remain for five years only.

Mr HIGGINS - It must remain for five years, but after the lapse of that period it will remain until we make other provision.

Mr Deakin - The section in the Constitution which provides for debiting the cost of any Commonwealth building to the State in which it is erected, will remain only until we decide upon the means to be adopted in paying for the transferred properties.

Mr HIGGINS - Is the honorable and learned member aware that when the Commonwealth erects a new post-office the cost can be debited against the State in which it is built ?

Mr Deakin - That is only until we have settled the system to be adopted in regard to the transferred properties.

Mr HIGGINS - Every new undertaking upon which we enter by virtue of our powers may or may not mean an increase in taxation.

Mr Deakin - Not in this way.

Mr HIGGINS - If we have to choose between an increase of taxation involved by creating an Arbitration Court to deal with wages, and an increase of taxation as the result of strikes, . such as those which have occurred in Colorado, I prefer the former. In industrial, as in other matters, any peace is, in the long run, much cheaper than war. The mere fact that under this Bill the Court might decide to increase wages, and that that increase might mean increased taxa tion is not, in my opinion, a reason for saying that there is no power to create a Court that would apply to the different States.

The honorable and learned member must look, not at indirect, but only at direct results. We cannot be prevented from building a new post-office, and yet by erecting one we might compel a State to remove its Government quarters to' another part of the town, or practically force it to transfer its buildings to the. next site. But we have nothing to do with considerations of that kind. They are not touched by the Constitution. The question is whether, by virtue of what we do, there is anything directly and necessarily hampering the operations of a State. I do not think that it is a question of taxation. The honorable and learned member for Ballarat has been much impressed by the judgment in the Tasmanian stamp case ; but I take it that he will not find anything in it that goes beyond the American decisions, that if the Federal power is able to operate in one sphere, and the State power to operate in another, then, in the absence of any express power being given under the Constitution, the Federal power cannot affect the State power. I do not intend to discuss this matter at any length, for I believe that we have all made up our minds on the subject ; but I would appeal to my honorable and learned friend to say why, if he is so confident of the meaning of the provision in the Constitution on which we rely, he is not prepared to leave the matter to the decision of the High Court. He was a main instrument in the creation of the Court, and knows that this question can be left with confidence to the decision of that tribunal. In order to obtain the ruling of the Court, it would merely be necessary to apply to have some . penalty inflicted or some award applied. It would be necessary only to ask the High Court to apply these powers, or to ask an inferior Court to do so, and on the decision of the lower Court the question could be brought before the High Court of the Commonwealth and determined. The whole question could be tested without any friction. If this proposal is in itself a good thing, why should we not accapt it, and test whether there is power to adopt it ?

Mr Mcwilliams - But could not the point be tested by dealing with the public servants of the States in a separate Bill ?

Mr HIGGINS - I do not think it would be well to do anything of the kind; I think the honorable member will admit that it would certainly not become us to do anything of the sort, and that we should be breaking our pledges if we were to say to our constituents - " We were in favour of a provision of this kind, but omitted it from the Bill." The honorable and learned member for Ballarat has urged that we should exhibit the best practical wisdom by dropping this proposal. I feel satisfied, however,, that he would not say that the Government would show the best practical wisdom by doing so ; that he would not ask us to be such dastards -even if we thought that it would be a good thing to do so - as to put it aside at the present stage. We could not do that. . It seems to me that inasmuch as there are so many persons anxious for this ' provision, we shall display the best practical wisdom by passing it and leaving it to the highest ' Court to determine whether or not it is constitutional. Having regard to the pledges given at the last elections, and knowing the pressure which electors brought to bear upon candidates in connexion with this matter, I feel that there would be a tremendous Outcry if the proposal were dropped at the present stage, and that we should incur a very grave responsibility if we neglected to push this measure through by all the means and influence in our power. I am amazed to find that so many lawyers hold that we have not the power to give effect to this proposal. In view of their opinion, it would be idle for me to refuse to admit that there must be some doubt on the point ; but until I heard these honorable and learned members I did not entertain the slightest doubt in regard to it. I gladly recognise at the same time that they are as a body at least as competent as I am to judge. I feel that if honorable members still feel any doubt in the matter it would be important that a test case should be brought about as soon as possible, in order that the decision of the High Court might be obtained.

Sir WILLIAM LYNE (HUME, NEW SOUTH WALES) - How could we bring about a test case?

Mr HIGGINS - By attempting to enforce a penalty or to apply an award.

Sir John Forrest - By creating a strike extending beyond the boundaries of any one State.

Mr HIGGINS - The right honorable member's influence is so great that I feel sure he would be able to at once create a strike. In Western Australia, at all events, it would merely be necessary for him to put up his finger, and, if he desired it, there would at once be a strike.

Mr Mcwilliams - How could we have a test case?

Mr HIGGINS - I have not thought that matter fully out; but, if there were a strike, and an application were made under the provisions of clause 6 for the imposition of a penalty, the Court would be asked to say whether the law was valid.

Sir William Lyne - That would not take place until a serious position arose.

Mr HIGGINS - I admit that this measure is to operate only in relation to serious matters; but I feel little doubt that by arrangement between the parties some facts might easily be admitted upon which a test case could be brought before the Court. I would only say in conclusion that if we are to adopt the best practical course, we should leave out of consideration the fine arguments of law that we have heard, as well as the great utterances of Chief Justice Marshall and others to which reference has been made, and, without regard to what the lawyers say, go forward on lines which we think most expedient, without regard to even our own views of the law, but simply going on the question of expediency. Let us fight it out on that question - is it advisable or not ? Let those who are in favour of the view that it is expedient go on one side, and those who are against that view, go on the other side, and then let us leave the point as a doubtful one, to the Court to decide, as early as possible.

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