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Wednesday, 23 June 1915

Mr HUGHES (West Sydney) (AttorneyGeneral) . - I move -

That this Billbe now read a second time.

I think we should have the point to which I just now referred cleared up. I do not want the discussion to last any longer than necessary. I remember that on the last occasion time was not afforded me sufficient to deal with the matter, nor did other honorable members fare better. I am quite in. favour of extending the time limit to an hour and a half,but if any honorable member objects to it, it cannot be done. I hope that if I am only ten minutes over the time there will be no objection.; but I shall try to beten minutes under the time.

This is the third occasion on which I have had the honour to introduce these proposals for the amendment of the Constitution. The laws as now proposed are substantially as originally presented to the House in 1911. The Trade and Commerce proposal now stands in the form in which it was presented in . 1911 ;the-exemp- tion of trade and commerce on State railways, which was inserted in the 1913 referendum, has been deleted. It is proposed to ask the electors to approve of these amendments as soon as the rolls can be prepared and the provisions of the Constitution and the Electoral Act complied with. I believe the people will approve of them. They are certainly very necessary in the interests of the community; and it is most desirable that they should secure the approval of the people at the earliest possible moment.

Mr Watt - I rise to order. The AttorneyGeneral, in introducing the Bill, is apparently dealing with other measures. As you, sir, have ruled that the only measure before the House is the measure dealing with the Trade and Commerce powers, I submit that the honorable member must confine his remarks to it.

Mr SPEAKER - I pointed out, when on any feet, and the honorable member would have heard it had he been listening, -that it was not possible actually to confine a member to a particular amendment, because a number of them overlap one another to such an extent that it would be almost impossible for me to restrict the debate to any one. In the circumstances, it is for me to say -whether in my opinion an honorable member isoverstepping the limits of debate. I shall try, so far as I am able, to confine the Attorney-General, and honorable members also, to the exact issue before the Chair.

Mr HUGHES - A comparison ofthe votes cast on the two previous occasions on which the proposals were submitted to the electors in 1911 and 1913 affords almost conclusive testimony of the extent towhich the people now recognisethe necessity for amending the Constitution. In 1911, the majority against the "Monopolies" amendment was 247,724, or 19.8 per cent. of the aggregate vote polled. In 1913 - two years later - the majority against it had been reduced to 24,782 out of an aggregate poll of 2,033,251, or a majority of only 1.2 per cent., as against a majority of 19.8 per cent. two years before. To put it in another way, whereas in 1911 in a small poll of 1,248,226 electors, or 53.31 of those entitled to vote, only 488,668 voted for the amendment, and '736,392 against it; in 1913, in the greatest poll ever recorded, where 2,033,251 persons voted, or 73.66 per cent, of those entitled to vote, 917,155 voted for the amendment, and 941,947 against it. As there were 171,658 informal ' votes, or more than seven times the number necessary to have given a majority for the amendment, it is more than probable that a majority of the electors did actually approve of it. Circumstances have since arisen which make these amendments of the Constitution much more necessary than in 1911, or even in 1913. In presenting the proposals to the House, the task before me is at once easier and more difficult than it was in 1911. I had then only to explain our position under the Constitution and the nature of the amendments; but today I have also to explain and deal with many representations both of the purpose and scope of the amendments, and to deal with some recent utterances of honorable members of this House which have given rise to- the impression amongst the people outside that this Parliament is already clothed with the powers which we are seeking by these means to obtain. I must remind honorable members, at the outset, what the powers of this Parliament really are. This is a Parliament of enumerated powers. We are the creature of a Statute. It is to that Statute that we must look for all our powers. If they are not there, we do not possess them. Our position is fundamentally different from that of the States, which were originally sovereign powers, and could pass any laws they pleased. Their powers to pass laws were as limitless as the powers of the community itself. They could express, in terms of legislation, anything that they thought proper in the interests of the community. The States have those sovereign powers still, save to the extent to which they have been limited by the Constitution of the Federation. In order to understand what are our powers, we have to look at a document. We have to look at the Constitution to see what we may do. The States have to look at the Constitution only to see what they may not do. We must look at the Constitution to see what we can do, but we cannot do all there set out. For the experience of fifteen years has shown that many powers, apparently conferred upon the Commonwealth, are not really possessed by this Parliament. In short, many of that imposing array of powers set out in section 51, and other parts of the Constitution, are but shadows of powers. The States are in no such position. They are sovereign, save to the extent to which they are limited by the Constitution, and the real limitations imposed on them are few. They need look at no document, but may pass such legislation as the circumstances demand. The High Court has been created for the purpose of interpreting the Constitution, and preventing the States and Commonwealth from exceeding the powers allocated to them. The High Court is, of course, not a legislative body. Its functions are purely judicial. Its duty is not to make laws, but to declare what the laws are. In its function of interpreter of the Constitution, it has to say what our powers are, and not to say now we should use them. It is very necessary, at this juncture, to remind honorable members of this point, and I shall revert to it later. I have said that the High Court is the interpreter of the Constitution. When, therefore, we are asked what our powers are, we have not only to look at the Constitution as it stands, but to look at it in the light of the rules of interpretation which the High Court has laid down, and in the light of the decisions which the Court has made in accordance with those rules. If, then, we are asked what the powers of the Commonwealth Parliament are, we have to say that they are those enumerated in the Constitution as interpreted by the High Court. Beyond that we cannot go, for the High Court is the final arbiter of our powers. What the High Court says our powers are - those are our powers. What the High Court says the Constitution means - that it does mean. It is very necessary that I should, at every stage throughout this discussion, impress upon the minds of honorable members exactly the position in which we find ourselves. We are a most progressive community. No country is able to point to progress at a more rapid rate or in directions more varied than this Commonwealth during the last fifteen years. Trade and the manner of its development, manufactures, and general progress of the Commonwealth in one way and another, have been astounding. All oyer the world there has been tremendous development. Every day ancient institutions are tumbling into the dust, new ones more suited to a progressive age are taking their place. Yet we are told that this country should govern itself according to a system of laws which was an anachronism at the time we adopted it, and which is now totally unsuited to our purpose, and which has been rendered less fit for our present purpose by the narrow interpretation placed upon the Commonwealth powers by the High Court and the Privy Council. This brings me directly to the consideration of the proposed constitutional amendments themselves. These amendments in their form and substance are based upon sound principles and upon the teachings of experience. They aim, not at dealing with the symptoms of the malady from which the Constitution suffers, but at the eradi-' cation of the disease. What is the disease from which the Constitution suffers? It arises from the illogical and unscientific allocation of the powers between the Commonwealth and the States. We have followed too slavishly the model laid down by the framers of the American Constitution. In their day, no doubt, they did what was wise and possible, but their day is not our day. The instrument which was sufficient for their purpose is quite inadequate for ours. They were legislating for a small community of men engaged in almost primitive occupations, isolated in groups far removed from one another, and carrying on their several businesses without order or that systematization arising out of, and necessary to deal with, the tremendous complexity of modern methods of production. There were special circumstances in the American Confederation which compelled the adoption of a compromise. But I say without hesitation that the American Constitution never was fit even for the purpose for which it was intended, and is certainly unsuited for a community living under twentieth century conditions. The chief cause of the difficulty has always been the allocation of powers between States and Commonwealth upon lines which do not permit of a clear line of demarcation being drawn between them. I have said that it is the ' function of the High Court to draw that line of demarcation, and say, " This power belongs to the Commonwealth, and that power belongs to the States." But how is the High Court to. do that fairly if it is beyond the power of mortal man to say where a power begins and where it ends?

There is neither logic, sense, nor reason in the division, for example, of the trade and commerce power. Commerce is a subject which, in its very nature, cannot be divided. Commerce is a national matter. It is intercourse. It begins , where intercourse begins and ends where intercourse ends. That is to say, commerce is, in its operation, coterminous with our territorial limits ; and to attempt to circumscribe its operations, and to declare that in such-and-such a district commerce must be subject to one law, and in another district to another law, is but to invite confusion and trouble. We have followed slavishly in the footsteps of the framers of the American Constitution in this respect. The American reports are full of cases irreconcilable, hopelessly confusing, and absurd, as a result of efforts to distinguish between what is State commerce and what is Inter-State commerce. If honorable members will look at what commerce is, they will see how utterly . impossible it is to distinguish between what is State commerce and what is Commonwealth commerce - to say what is Inter-State commerce and what is Intra-State commerce. You send a parcel from Albury to Wagga. That is Intra-State commerce, subject to State law. You send the same parcel from Albury to Wodonga, just across the Murray River, and that is Inter-State commerce, and so subject to Commonwealth law. You send a letter from Sydney to Melbourne, or you send a letter from Sydney to Wagga, and both are under the same law. Surely it would be as rational' and logical to say that there should be a postal law governing the delivery of postal articles within a State, as well as a law governing postal deliveries between States, as it is to say that there should be separate commercial laws governing commerce inside a State and between States? You cannot draw a line between commerce within a State and commerce passing from one State to another. No such distinction is possible. This illogical and unscientific division of power' of trade and commerce in the Constitution not only prevents us from dealing with commerce inside the -prohibited sphere, but hampers us in dealing with commerce inside the sphere that is covered by the Constitution. We may not deal with commerce inside a State, but we may deal with trade and commerce between the States. The result is that we cannot effectively deal with trade and commerce at all. I have said that, in my opinion, trade and commerce is an object of national concern. It cannot now, if it ever could, be dealt with adequately by the States. No doubt there was a day when trade and commerce trickled in tiny rivulets from hamlet to hamlet, when the needs of communities were supplied from within, when inside little districts, sparsely inhabited, everybody found his needs supplied by local producers. But that day has gone, and now we see a cataract of commerce massing from one end of the earth to the other, a tremendous and ever-widening stream, flowing hither and thither from one corner of the earth to the other, and yet it is contended that the control of this national and ever-broadening stream of our commercial industrial life can be regulated by the laws of a hundred States through which it flows. Clearly the ideal commerce law is one recognised and observed by all nations, and to that ideal we are fast advancing. But until we reach it, our ideal most certainly must be national control over commerce. A distinguished writer, Prentice, in his Commerce Laws of the Constitution, says -

It is obvious, then, that the line between the State and Federal power with reference to commerce is an arbitrary one. There is no economic or commercial distinction which even roughly corresponds with State boundaries. Commerce is a whole, and a power to regulate commerce, if complete and unlimited by an arbitrary line of division, must extend to all commerce, wherever conducted. Such a power Congress does not possess. The Constitution, in fact, established an arbitrary limit to Federal jurisdiction.

The consequence is that we find ourselves at the present day unable to take the first step in dealing with the great commercial interests of this country. We cannot even make a general company law. There are some who do not grasp the importance of commerce, who regard it as a thing apart - a thing that concerns the man in the office, the clerk in the store, or, possibly, the manufacturer in his factory. But commerce is so correlated with industry - for commerce is the handmaid of industry - that it touches every corner of our daily lives, so that, when we come to deal with any sphere of human activities, we find ourselves hopelessly fettered unless we have control of commerce. Commerce affects every person in the community, and affects "him closely. The farmer is vitally affected by the freight he has topay upon the transport of the commodities he requires, and upon the produce which he sends away. The producer is vitally concerned in the facilities for transport from the place, where he produces his goods to the market in which he finally disposes of them. The shopkeeper, themerchant, the artisan, the housewife, every section of the community, live dependent upon commerce in one way or another.

It is perfectly obvious that the regulation of commerce is a matter which must be in the hands of the National Parliament, and in order that it may be in the hands of that Parliament the power must be conferred upon it .in general terms. The whole subject-matter must pass to this Parliament. That is the point which I desire to emphasize. The chief reason for the trouble from which we have suffered since the inception of the Commonwealth is that, in the allocation of powers as between the Commonwealth and the States, the whole subject-matter has. not been allocated either to the Commonwealth or the States respectively. It would be infinitely better if the Commonwealth possessed only one-half of the, powers it is supposed to possess, if it had control of the whole, subject-matter of those powers. If it had such control, there could be no litigation, no uncertainty, no clashing of powers. The functions of the High Court would then be merely to determine whether any particular Act was within one of these powers. If it was, clearly it would be constitutional. If not, then obviously it would be ultra vires of the powers of this Parliament. But when the High Court is called upon to decide, not only whether the Commonwealth has power to deal with a particular matter, but whether it has power to deal with it in the way in which the Parliament has dealt with it, confusion becomes worse confounded. It is not too much to say that the chief reason why the High Court -has pruned down our apparent powers by a series of decisions in .constitutional cases arises from the fact that we have insufficient control over trade and commerce. This brings me to a point, the importance of which can scarcely be exaggerated, one which not only diagnoses the trouble from which we are suffering, but points out the nature of the remedy which must .be applied to it. The nature of the disease is that the whole of the subject-matter, is not handed to the Commonwealth, or the- States, as the- case may be. The remedy lies in making a fresh allocation of powers along those lines. It is essential this be done without delay, for the scope of our authority which, should grow, with the passage of time becomes, actually more restricted through, the decisions of the High Court. I will explainthe reason for this: The High Court, in interpreting, the- Constitution, has laid down a rule which has had the effect of. narrowing, mostunfortunately, the powers of this Parliament. The rule may be referred to as the doctrine of the limitation of powers. I direct the attention of honorable members to that doctrine, and invite them to follow closely the effects of its application to the various powers enumerated in the Constitution. I have said that if we wish to know what our powers are we shall have-, not only to look at the Constitution-, but to look at it in, the light of its interpretation by the High Court. InRex v. Barger, the doctrine of the- limitation of powers was first enunciated. Ithas the effect of applying the words of limitation in one section of the- Constitution, not only to the section in whichthey occur, but to other sections in- such- a way that where there is ambiguity in one- section, the plain words of the Constitution in another section are regarded as insufficient, and there is thus superimposed on the Constitution a presumption in favour of the States. The effects of theapplica- tion of the- doctrine have been most important and far -reaching. In the case of

Rex.v. Barrier- the Excise Machinery case - the Court said, in effect -

It is clear that this Act is a regulation of the conditions of labour which wo hold to be reserved' to the States. The only enumerated power of. theCommonwealth which, can possibly come within it is- taxation-., and it is- not clear that it is within taxation, therefore the reserved power ofthe State prevails.

That is to say, wherever there is a doubt, it is always determined in favour of the States and never in favour of the Commonwealth; whenever there is ambiguity, it is never resolved in favour of the Commonwealth, but always in favour of the States. It follows,, therefore, that the doctrine has: so narrowed our powers that when we ask what those powers are we cannot ascertain by looking at the Constitution, for the mere fact that powers are enumerated in the Constitution is only prima facie evidence that the- substance of any power so enumerated, is- really vested in the Commonwealth. But let me amplify the effects, of the doctrines In interpreting the enumerated powers, the High Court has- laid it down -

The Constitution as a whole, and especially section 107, was held to reserve to the States control of the internal or domestic affairs- of the States, except as far as they came within one of the enumerated powers of the Commonwealth.

Section 107 reads -

Every power of the Parliament of a Colony whichhas become or becomes a State shall, unless it is by this Constitution exclusively vested in the Parliament of the- Commonwealth or withdrawn from the Parliament of a State, continue as at the- establishment of the Commonwealth, or as at the admission or establishment of the State; as the case may be.

That is the principle on which the reserve powers of the States stand, or, at any rate, by which they are guaranteed. In the Attorney-General v. The Brewery Employees Go., the words " Trade Mark " were held not to include the workers'' trade- mark provided for by the Act- of 1905,. because-, as set out by the Chief Justice -

In my opinion, it should, be regarded, . as a . fundamental rule in the construction of- the Constitution that where the intention to reserve any subject-matter to the States, to the exclusion of the. Commonwealth, clearly appears, no exception from that reservation can be admitted' which is not expressed in clear and' unequivocal words. Otherwise the Constitution will be made to contradict itself, which upon a- proper construction must be impossible.

So it was held that we have no general power to make a law on trade marks. I invite honorable members to look at paragraph x-viii. of section 51 of the Constitution, which says, in plain words,, that -

The Parliament shall . . . have power to make laws for the peace; order, and good government of the Commonwealth with respect to-

Copyrights, patents or inventions and designs, and trade marks.

Here power to make laws on trade marks isdefined in clear terms; yet our power to make laws with regard to trade marks is limited by the reserve powers of the States. And so, with almost every other power of the Commonwealth. The trouble arises through a division of the subjectmatter, and the consequence is confusion and uncertainty. Again, in the case of Huddart Parker v. Moorehead, similar principles were applied to the interpretation of the scope of paragraph xx. of section 51. I direct the attention of honorable members to the provision which says that the. Commonwealth Parliament shall have power to make laws with respect to -

Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.

Those words are clear, unambiguous, apparently leaving no doubt that we have full power over both foreign corporations and corporations formed within the limits of the Commonwealth. Yet it was held that we have no such power, because our power would impinge upon and impair the reserve powers of the States in that regard. The Chief Justice said -

It is a corollary to this rule that, if there he an exception from the reservation, the extent of the exception must be equally clearly and unequivocally expressed, and that, so far as the exception does not extend, the reservation remains in full force. I cannot accept the doctrine that if an invasion of the sphere of the State is admitted for a limited purpose, the reservation altogether disappears. The invasion is only permitted so far as it is necessary to enable the power in question to be exercised, and the extent of the permitted invasion is determined and limited by the same necessity.

In the Workers Trade Mark case, SIS I pointed out, the Court found an a priori doubt whether this was a trade mark, and held that the reserve power as to internal commerce prevailed. But if we had had full power over trade and commerce the prohibition would not apply. It is in this way that the limitation in paragraph 1 of section 51 has been used in interpreting the scope of the powers. The effect of this doctrine of limitation is that while the words " among the States " remain in paragraph 1, read in conjunction with section 107, the Court has now laid it down as a test to be applied to all legislation by this Parliament that, unless there is set forth in the enumerated powers, clearly and unequivocally, a power in the Commonwealth which invades State power, this reservation in favour of the States should prevail. A recent decision of the High Court has emphasized this point, and as the matter is fresh in the minds of the people, the full effect and meaning of this reservation will be more clearly appreciated. Honorable members will recollect the

Wheat Acquisition case. They know what interest the case aroused, with what impatience the judgment of the Court was awaited, with what feelings the judgment when delivered was received. I ask them to remember that no amendment of the Constitution will be of any service to the community unless it gives power, and not merely the shadow of power, to the Commonwealth. We must not fool the people again with mere words. Section 92 of the Constitution says -

On the imposition of uniform duties of Customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

To those who understand the English language, those words mean what they say, namely, that trade should flow freely all over the Commonwealth, and that nothing should prevent it so doing. It is certain that, had the people of this country thought that they did not mean that, this Parliament would never have been sitting here to-day under this Constitution, for the Constitution would never have been accepted by the people. The High Court acknowledges that the words mean what they say, but it asks, "What do they say?" According to the Court, the Constitution declares that commerce shall be free; but it does not affect the power of the States to acquire and control the subject-matter of commerce. The position is as though it had been enacted that the pipe from the reservoir to a tap must be kept clear and free from all obstructions, but that the Court had held that there was nothing to prevent the commandeering of the water in the reservoir. Sublimely confident in his charter, the ratepayer turns on his tap, holds his pannikin under it,but nothing comes out of the tap. When no water comes through, he complains to the Water and Sewerage Board, who reply, " The conditions have been fulfilled; the pipes are kept free." " But," he would object, ' ' no water is to be obtained." "Show us," they would say, " where it is guaranteed that water must run through the pipes. Show us where the acquirement of the water in the reservoir by some person who will not permit it to run through the pipes is prohibited ? ' ' He cannot show it, nor can we. But the electors feel they have been deceived : that they have a shadow where they thought they were solemnly assured of the substance. Plain words have become the sport of dialecticians, and the Constitution is the happy hunting ground for the never-to-be sufficiently venerated members of my honorable profession. The Constitution was given to the people of this country, and accepted by them, as plain men and women who desired to enlarge their powers of self-government. When we declared that trade should be absolutely free, what we had in our minds was that, instead of our opportunities being circumscribed by the narrow limits of a State, they were to extend, without hindrance, throughout the length and breadth of this great island continent. I take it that here was a pledge, solemn and unconditional, that in times of scarcity, should they occur, we would all be in the same boat; not that within the boundaries of one State there should be plenty, of which the less fortunate outside would not be allowed to partake. If there were general scarcity throughout Australia, we should have to do what we could to meet the common needs; but we have a right to complain when, under a charter of Federal liberty, we are told that the right remains with some to take advantage of relative plenty while others are compelled to suffer because of relative scarcity.

Mr Watt - The Bill does not cure that nor touch it at all.

Mr HUGHES - Yes, it does. I prefer not to amplify my remarks at this stage; but I state, definitely and emphatically, that the proposed Trade and Commerce amendment, if approved by the people, will have this effect: The Commonwealth right of eminent domain in respect of the acquirement of property will extend over the whole sphere of the subject-matter of State commerce. Our right of eminent domain will be paramount to that of the States, so that if the States, after the proposed amendment has been adopted, were to exercise their power of acquisition, the Commonwealth could acquire from them, willy-nilly, in the same way as from private citizens, what they had acquired from others. So much is quite clear. But unless and until the limitation in our trade and commerce power is deleted, section '92, guaranteeing freedom of trade between the States, is a rotten reed. Until we have the full trade and commerce power, there will be end less litigation, and the edifice of our authority must rest on an uncertain and tottering foundation. The foundation of our authority must be broadened until it rests on the whole trade and commerce power; otherwise, the constitutional edifice must always be in danger of collapsing like a pack of cards. I say advisedly, that had I to choose between this power and all the others, I would select this power, because without it we cannot progress as a nation. The other powers are supplementary to it, and without it would not help us very much. The limitation of time imposed upon speeches prevents me from dealing at great length with these matters, but I wish very briefly to touch on the other proposed amendments.

Mr Watt - I direct your attention, Mr. Deputy Speaker, to the statement of the Attorney-General, that he proposes to deal with Bills that are not now before us. which I think is unparliamentary.

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