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Wednesday, 29 August 1906


The CHAIRMAN - I do not think that the honorable senator would 'be in order in moving such a motion in Committee.

Senator Lt.-Col.GOULD (New South Wales) [5.38]. - I think it would be rather novel if an honorable senator were permitted to get up in the middle of a debate and move that a document be printed. I presume that Senator Croft read the document with the idea that it would be printed in Hansard, and that honorable senators should have an opportunity to read it. But we have something much more important to consider than whether a particular agreement is reasonable or unreasonable. What I wish honorable senators to determine is whether it was ever contemplated that under the Commonwealth Constitution there would be any difference in the treatment of different bodies under, the laws that we saw fit to enact. For my present purpose I assume that the provision we are now considering is within our powers under the Constitution, although later on I shall show that according to my view it is entirely beyond them. I assume, for the sake of argument, that it is within our powers, and I then take up the position that the Constitution was not .granted to us in order that we might differentiate in our laws between corporations and private individuals, or between private individuals and States. I think it will be admitted from a review of the whole scope of the Constitution that it was never intended that we should pass any legislation which would differentiate in its operation in any way whatever. If honorable senators will turn to paragraph ii. of section 51 of the Constitution they will find that it reads -

Taxation ; but so as not to discriminate between States or parts of States.

So that in that respect our legislation, whatever it may be, must be uniform in its application. But if the contention of honorable senators is that we can read one paragraph of the section into another, it might be contended that paragraph 11. can be read into paragraph xx. dealing with foreign corporations, and trading or financial coporations formed within the limits of the Commonewalth in such a way as to provide that those corporations might be the subject of taxation in a special way. It is contended that paragraph 1. of section 51 can be read into paragraph xx. so as to enable us to controlthe operations of corporations trading within a State. If that reasoning be sound it might be contended that we could have one form of taxation applicable to private individuals and another applicable to corporations and trading companies. Honorable senators will agree at once that that would be unjust.


Senator Trenwith - We can have taxation of corporations as corporations just as we have taxation of publicans as publicans.


Senator Lt Col NEILD (NEW SOUTH WALES) -.-Col. GOULD.- We specially tax the publican because we give him special privileges with respect to the sale of liquor, and so on, that are not given to other persons. But would it not be very unjust to say that we shall put a special tax upon corporations which shall not be imposed on individuals or persons in partnership who have not registered themselves as corporations? There might be a partnership of ten, twenty, or thirty individuals who would escape such taxation, whilst if they agreed that it would be better that they should become incorporated, the same people would become liable to the taxation. If honorable senators will look at section 99 of the Constitution they will find that it is there provided that -

The Commonwealth shall not by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.

There, again, we have evidence of the spirit of the Constitution - that there should be no preference and no differentiation. It may be contended that that deals only with one particular set of matters in connexion with the States themselves. But if it be the intention of the Constitution to prevent the States from being unfairly dealt with, surely it is equally the intention that individuals and corporations should be placed in the same position?


Senator Trenwith - We do not propose to deal unfairly with anybody.


Senator Lt Col GOULD .- Isay that in this Bill we are being asked to go against the intent and spirit of the Constitution. I am assuming, for the sake of argument, that what is here proposed can be clone, but I say that it is against the spirit of the Constitution to attempt to do anything of the kind.


Senator Best - Does the honorable and learned senator contend that we could not levy a special tax upon a foreign corporation ?


Senator Lt Col GOULD .- I say that it is not the intention of the Constitution to give us the power to deal differentially in our legislation.


Senator Best - Does the honorable and learned senator commithis reputation to the contention that we have not the power to impose a special tax on a foreign corporation ?


Senator Lt Col GOULD - If Senator Best had followed my argument he would have seen that I am contending that it is unjust, and that it is entirely against the spirit and intention of the Constitution to make any discriminaton either in respect of taxation or any other matter. At present I am assuming that the Commonwealth Parliament has the power to do what is proposed. By-and-by I propose to point out that in my view we have no such power. I need not weary honorable senators by going through the various sections of the Constitution, but we know that originally the object of Federation was to enable the Commonwealth authority to have power to deal with all matters of general concern affecting the States forming the Federation. It was not intended that we should interfere with States rights, except where that power is specifically set forth, and it is set forth only with respect to matters which can be better dealt with by the Commonwealth than by the individual States, which would perhaps adopt diverse legislation to deal with the same subject.


Senator Best - We are not interfering with States rights, but are exercising our powers under the Constitution according to the honorable and learned senator's own assumption.


Senator Lt Col GOULD .- I am assuming that we have the power proposed, but at the same time I am pointing out that the spirit and intention of the Constitution are that the Commonwealth Parliament shall take in hand only such matters as can be better dealt with by it, as representing the whole of the States, than by the individual States. These are matters of universal concern affecting outside persons, and upon which it is better that our legislation should be uniform. In this case I ask whether it is fair or just to say to the persons forming a corporation, " Because you are a corporation you shall be placed under certain limitations and restrictions which would not apply to you if you were trading as individuals " ? I say at once that it is against the spirit and intention of the Constitution that we should pass any legislation of the kind. I say further that it is a most unwise thing for us to do. If the proposed law is within our power, it is still unwise for us to attempt to pass it, for the simple reason that by so doing we shall be discriminating, and may bring about a conflict between the Commonwealth and the States. While we may possess very great powers, it will be admitted that it is better that they should not be pressed to the breaking point, causing difficulty and friction. In view of the feeling existing between the Commonwealth and the States at the present time, it is well that the rights of each should be respected. I now come to consider whether what is proposed is really within our powers under the Constitution, and, with all due respect to Senator Best and the authorities cited by that honorable and learned senator, I think that we are here being asked to go entirely beyond our powers. Senator Baker, dealing with the question the other day, referred to the history of the paragraphs of section 51 of the Constitution, and, dealing with paragraph xx., explained that the omission of the reference to the " status " of foreign corporations and trading or financial corporations formed within the limits of the Commonwealth was only regarded as a drafting amendment.


Senator Trenwith - Each one of the thirty-nine paragraphs of section 51 confers legislative power absolutely.


Senator Lt Col GOULD - Of course it does : but the question is how far it confers power.


Senator Trenwith - Where no limitation is expressed, as far as we like to go.


Senator Lt Col GOULD - Senator Baker told us that the whole of the debate with respect to paragraph xx. of section 51 had been with regard to the status, position, and creation of corporations, and that when the matter was taken on a step further, and the alteration made, it was accepted as a drafting amendment, and was never meant to cause a departure from the original intention of the framers of the Constitution. Senator Drake, in his contribution to the debate, also quoted largely the history of the matter, going back to the Convention of 1891. We have, therefore, had the intention of the framers of the Constitution in this matter placed clearly before us. I admit at once that where a section of a Statute is absolutely clear and distinct the Court will construe it according to the words used, assuming that the Legislature intended the ordinary construction to be placed on those words. It then becomes necessary to inquire whether there is any doubt or difficulty in regard to the matter, and I ask honorable senators if there is any doubt or difficulty here. If there is, we may depend on it that it will not be taken to drive the law to an extreme; but, on the contrary, an attempt will be. made to bring everything into harmony. If we are dealing with trade we have only limited powers. Whatever subsequent paragraphs of the section may provide with respect to foreign corporations, and trading and financial corporations. I hold that, so far as our power to deal with trade and commerce is concerned, it is covered and controlled by paragraph 1 of section 51 of the Constitution. Senator Trenwith may shake his head. But looking at paragraph1. of section 51, under which we are given power to make laws for the peace, order, and good government of the Commonwealth with respect to-

Trade and commerce with other countries and among the States -

I hold that we are limited by that paragraph in our legislation dealing with trade and commerce.


Senator Trenwith - Each one of the thirty-nine paragraphs of section 51 gives us the power to legislate for the peace, order, and good government of the Commonwealth.


Senator Lt Col GOULD .- With respect to what?


Senator Trenwith - In this instance foreign corporations and financial trusts. The honorable senator has mentioned only one of the paragraphs of the section.


Senator Lt Col GOULD - The intention of the Constitution was to give us the power to legislate with regard to trade and commerce, and that power of legislation is limited to trade and commerce with other countries, and among the States. That is the provision under which this Bill has been introduced at the present time.


Senator Best - I, for one, do not admit that.


Senator Trenwith - It is introduced under section 51, which includes the whole of the thirty-nine articles.


Senator Lt Col GOULD .- Then will the honorable senator tell me that it would be reasonable to deal in this Bill with the question of " Naturalization and aliens," which I find in paragraph XIX. of section 51 ? Of course, each of these paragraphs is intended to be taken separately. When honorable senators tell me that, by virtue of paragraph xx. we can bring about a different system of dealing with trade and commerce than that specified in paragraph 1., I submit, with all due respect, that if ever the matter is decided by the High Court, those who hold that view will find that they are absolutely wrong. I admit that in this I am adopting the dangerous course of prophesying before the event. Paragraph xx. gives the power to make laws for the peace, order, and good government of the Commonwealth with respect to -

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

But I say that our power, so far as trade and commerce is concerned, is unmistakably limited by paragraph 1. of section 51. If we had not the power given us under paragraph 1. to deal with trade and commerce with other countries, and among the States, we should not be able to deal with trade or commerce at all under this Bill.


Senator Best - Oh !


Senator Lt Col GOULD - I say we should not, because we have provision as to what we can do in connexion with trade and commerce set out in paragraph 1.


Senator Trenwith - We are dealing with the Constitution as it is.


Senator Lt Col GOULD - That is so; but every honorable senator is aware that the Commonwealth Parliament is a limited

Parliament. It does not exercise supreme control over the whole of the Commonwealth, as the Canadian Parliament does over the whole of the Dominion of Canada.


Senator Trenwith - It does within the limits of section 51.


Senator Lt Col GOULD .- We have supreme power within the limits of section 51, but perhaps the honorable senator will agree with me that if paragraph xx, ofsection 51 had been omitted, there would have been no provision under which foreign trading corporations could be dealt with. On the same line of reasoning we derive our power in regard to trade and commerce from paragraph 1. If, apart from paragraph 1. we have any power to deal with trade and commerce, as Senator Best would lead us to suppose, then the moment it was exercised it would introduce a limitation, and that limitation could not be extended by any indirect process of reasoning. I feel quite satisfied that under the trade and commerce power we cannot deal with either men or corporations when they are merely trading within the limits of a State, because that jurisdiction is reserved to the State. I hope that honorable senators will treat all persons and bodies alike as far as they possibly can.


Senator Trenwith - In the Bill, every one who becomes a corporation will be treated in exactly thesame manner.


Senator Lt Col GOULD .- The honorable senator knows as well as I do that if a number of persons form themselves into a partnership they can enter into exactly the same class of trade or business as a corporation. He holds that, because they have not become a corporation, therefore they arenot liable to the penalty prescribed for an offence under the Bill ; but a corporation is so liable. Does he not perceive that a corporation is merely a collection ofpersons who, for business purposes, get themselves incorporated by Act of Parliament or registered under a Joint Stock Companies Act? It is manifestly unjust to enact that, because those persons have formed themselves into a corporation, they shall be liable to certain restrictions in trade to which they would not have been liable if they had remained merely a partnership. It may be argued that there is a difference of opinion on that point, and that, therefore, we should enact the legislation and leave it to the High Court to determine its constitutionality. I entirely object to legislating on that line. We, as representatives of the people, ought to satisfy ourselves first that a proposal is reasonable, and, secondly, that, if reasonable, it comes within the scope of our legislative powers. In my opinion, this proposal is unreasonable, and contrary to the spirit of the Constitution, and, therefore, it should not be enacted. I go further, and contend that it is beyond the powers conferred upon us by the Constitution, and that even if it were not. it would be most dangerous and undesirable, if it were passed, in its present form.







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