Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Constitution - Royal Commission - (1927-28) - Minutes of Evidence - Report with appendices


Download PDF Download PDF

8·97

1929.

(SECOND SESSION.)

PARLIAMENT OF COMMON.vVEALTH OF AUSTRALIA.

REPORT

O F TH E

ROYAL COMMISSION •

ON TH E

CONSTITUTION, T OGETHER WITH

APPENDICES AND INDEX.

Presented by Command, 21 st November, 1929; ordered to be printed, 13th December, 1929 .

[Cost of Paper.- Prcparatlon not given ; 900 copies; approxim ate cost of printlng and pubibhing, £503 .]

Printed .and Published for the GOVERNMENT of the COMMONWEALTH of A USTRALIA by H. J. G R EEN. Government Printer, Canberra. No. 16.-;-F.l251.- PRICE 16s. 9n.

· lll

THE CoMMONWEAL'rH OF AusTRALIA,

REPORT ON THE CONSTITUTION.

CONTENTS.

I. Preliminary II. The Sections of the Report III. The Constitution as determining the Powers and affecting the Relations of the Commonwealth and the Sta.tes . . . . . . . .

IV. The Commonwealth, the States, and the Territories V. The Government of the Commonwealth .. · VI. The Government of the States .. VII. The Acquisition and Government of the Territories VIII. The Legislative Power of the Commonwealth

IX. The High Court and the Judicial Power of the Commonwealth X. External Affairs XI. The Defence of the Commonwealth XII. Taxation XIII. Appropriation of Revenue

XIV. Trade and Commerce. Freedom of Tra;de Commerce and Intercourse

PAGE

1

4

6

19 23 57 60 70 88 ll2 119

127 137

among the States 141

XV. Navigation and Shipping 151

XVI. Industrial Powers 160

XVII. Health 168

XVIII. Qo-operation between the Commonwealth and the States 176

XIX. The Financial Relations ot the Commonweahh and the States 187

XX. Subjects specifically mentioned in the Letters Patent, and other subjects 205 XXI. The Alteration of the Constitution 228

XXII. General Recommendations 240

XXIII. on specific subjects 248

XXIV. Supplement and recommendations by one or more members of the Commission 271

APPENDICES

INDEX

899

iv

APPENDICES.

PAGE

A.- Commonwealth of Australia Constitution Act 305

B.- The li'inancial Agreement, dated the 12th December, 1927, between the Commonwealth and the States 330

C.-The Report of the Inter-Imperial Relations Committee, 1926.-Extracts 348

D.-Federal Taxation Acts and Regulations.-List of cases in which Federal Taxation Acts and Regulati.ons have been challenged before the High Court 356

E.- Customs Duties on goods imported by State Governments.-Extracts from correspondence in 1924 between the Prime Minister of the Commonwealth and the Premier of Western Australia 361

F .- The power of altering the Constitution under Section 128 of the Constitution.-Opinion of Mr. Owen Dixon, ICC. 365

G. - List of exhibits 367

COMMONWEALTH OF AUSTRALIA..

GEORGE THE FIFTH, by the Grace of God of Great Britain, 11-e land and the B1·itish Dominions beyond the Seas King, Defender of t he JPaith, Emperor of India:

TO our trusty and well-beloved THE HoNORABLE JoHN BEVERLEY PJ

CoLEBATCH, K.B., C.M.G.y· MAURICE BoYCE DuFFY, Esquire, J.P. y· THE HoNORABLE DANIEL LAURENCE McNAMARA, M.L.C.

GREETING:

KNOW ye that ll' e do by these Owr Letters Patent, issued in Our nanw by Our Deputy of Our Go.vernor-General of Our Commonwealth of AustTalia, acting with the advice of Our Federal E xecutive Council, and in pursuance of the Constitution of Out· said Commonwealth, the " Royal Commissions Act 19Q2cl912," and all other powers him thereunto enabling, appoint you t o be Commissioners to inquire into and 'repod upon the po we'rs of the Commonwealth undm· the Constitution and the working of the Constitution since F ed eration j

to recommend constitutional changes considm·ed to be desirable y. and, in particular, to examine and report ttpon the following subjects from a

constitutional point of 1)iew :-( i) A. viation. ( ii) Compnny law, (iii) Health, ( iv) Industrial powers,

( v ) Interstate Commission, (vi) Judicial power, ( vii) Navigation law, (viii) New States,

( ix) T.a xation, and ( x) Trade and comme1·ce:

AND WE APPOINT you the said JoHN BEVERLEY PEDEN to be the Chairman of the said Commissione1·s :

AND WE DIRECT tha.t, for the purpose of taking evidence, four

Commissioners shall be sufficient to constitute a quorum, and may proceed with the inquiry under these Our Letters Patent:

AND WE REQUIRE you with as little delay as possible to t·e p01"t to OU?· Governor-General of Our said Commonwealth the result of your inquiries into the matters entrusted to ·you by these Our Letters Patent :

IN TESTIMONY WHEREOF We have caused these Our L etters to be made Patent, and the Seal of Our said 0Qmmonwealth to be thereunto fi xed.

WITNESS our trusty and well-beloved the Honorable Sir WILLIAM HILL IRVINE, Knight Commander of Our Most Distinguished Order of Saint Michael and Saint Ge01·ge, Ou1· Deputy of Our Govet·nor­ General and Commander-in-Chief in and ot:er Our Commonwealth of Australia, this eighteenth day of August, in the year of our Lord • One thousand nine hund1·ed and twenty-seven, and in the eighteenth

year of Our Reign.

By His Excellency's Command, S. M. BRUCE, Prime Minister.

W. H. IRVINE,

Deputy of the Governor-General.

ENTERED on 1·ecord by me, in R egister of Patents, N o. 56, pag e 24, this eighteent), day of August, On e thousand nine hun d1· ed and twenty-seven. F. STRAHAN.

901

THE CoMMONWEALTH OF A

ROYA_ L COMMISSION ON THE CONSTITUTION.

Report of the Commissioners.

Toll is Excellency the Right Honorable JOHN' J_.AwRENCE, B ARON SToNEHAVEN, a, JJ,femb er of His Majesty's Most Honorable Privy Council, Knight Grand Qross of the Dis­

tinguished Order of Saint M ichael and Saint Geor,qe , Com]Janion of the Distinguished Service Order, Governof'-. ·General and Commander-in-Chief in and over the

Commo-nwealth of Australia.

MAY IT PLEASE YOUR ExcELLENCY:

.we have the honour to report to Your Excellency the result of our inquiries into the matters entrusted to us by Letters Patent dated the 18th day of August, 1927.

I.-PRELIMINARY.

The Letters Patent. The Letters Patent diTected us to inquire into and report upon the powers of the Commonwealth under the Constitution and the working of the Constitution since Federation; to recommend constitutional changes considered to be desirable; and in particular to examine and

report upon the following subjects from a constitutional point of view:-1. Aviation. 2. Ooinpany l\}w. · 3. Health.

4. Industrial powers. 5. Interstate Commission. 6. Judicial power. 7. Navigation law.

8. New States. 9. Taxation. 10. Trade and Commerce.

The directions to into the powers of the Commonwealth a11d the working of the Constitution made i.t our duty to obtain such informa­ tion in regard to these matters as appeared to be of sufficient importance, whether the result of our investigation might or might not indicate any need for constitutional changes. At the same time the duty of recommending any constitutional changes considered to be desirable made it necessary for us. to note specially any facts relating to the existing powers of the Commonwealth and the working of the Constitu­

tion that seemed likely to throw light on the question wh ether, and if so, in what respects the Constitution should be altered.

The enumeration of the ten subjects specifically mentioned in the Lette:rs fatent . did not appear to limi_t the scope of the investigation which it, was our duty to make or to restrict the nature or range of the recommendations that we were at liberty to submit, as the directions

to inquire into the powers of the Commonwealth and the working of

9o r ··"t 0

2

the Constitution, and to make recommendations, were expressed in wide and general terms. Accordingly we have received and considered evidence on some questions-for example, questions in regard to aborigines and forestry-which do not come within the speci:fied subjects, and we· have r eceived and considered evidence not only on proposals to alter various provisions of the Constitution without destroying its federal character, but also on the question whether the present system should be replaced by a scheme of unitary government.

The Inquiry. At the :first public sittings, which were held at the Seat of Govern­ ment, a memorandum was read by the Chairman drawing attention to the uature of the duties assigned to the Commission, expressing its desire to have the help and co-operation of everyone who was· in a position to give assistance, and announcing its intention to take evidence in each of the States. Publicity -vvas given to these statements through

the press at the time and before the sittings in each State. ·Throughout the inquiry the Commission sought to obtain evidence, and to afford opportunities for evidence being given, on all matters within the terms of reference. It issued invitations and requests to representative bodies, individual witnesses and various Commonwealth

and State Departments- in the ca.se of State Departments after communications had been addressed to the State Prf;)miers expressing the desire of the Commission to · receive such · evidence as their Govern­ ments might see :fit to place before it, and asking that officers of their Governments might be to give evidence. The representative

bodies included the industrial organizations of employers and employees :registered under the Commonwealth Conciliation and Arbitration Act, the industrial organizations employers and employees in each State, the Employers' F ederations, the Chambers of Commerce and Chambers

of Manufactures in the principal cities of the Commonwealth, the Institutes of Accountants, the Institutes of Secretaries, the Insurance Institutes, the associations representing the legal profession, the women's organizations, the Oonst]tutional Associations, the Australian Natives Association, the political associations, and the associations advocating the creation of new States.

Invitations were sent to the surviving members of the Federal Conventions, and to a number of other persons whose knowledge ' and expe.rience 1vould assist the work 'of the Commission. General invitations were issued through the press in each State to persons who desired to give evidence on any matter within the scope of our inquiries.

Evidence was taken at the Seat of Government, at the capital of each State, and at Launceston, Armidale, Rockhampton and Townsville. The visits of the Commission to each State afforded opportunities to persons who desired to give evidence, enabled the Commission to obtain evidence which it ·would have been difficult or impracticable to procure in. any other way, ·and gave the Commission the advantage of hearing the affecting the interests of each presented within the State.

c9ncerned and of being in :;t position to estimate the value and weight of relating to the conditions in different parts of the

Commonwealth.

In South Australia a case was presented on behalf of tlie Stutt Government, and in each of the other States the State Government permitted its officers to give evidence, though in some instances they were not to be asked to express opinions on questions of policy, and in Victoria the Premier then in office expressed his regret that he was unable to accede to . the r equest that the Permanent Head of the

Department of Public Health and the Chairman of the Victorian Forests Commission should be permitted to give evidence. The Commission examined 339 witnesses and obtained a large body of valuable evidence, which in many instances was the outcome of great

ability, special ki1owledge and wide experience, and could only have been presented in the manner in which it was after the witnesses had devoted much time and thought to its preparation. It would be an invidious task for us to select the names of those whose evidence was a specially important contribution to the work of the Commission, but it is fitting that we should mention that we had the advantage of hearing an account of the provisions of the Constitution, and of various aspects of its working, from Sir Robert Garran, Solicitor-General for the Commonwealth, who vvas intimately associated with the framing of qonstitution, and whose experience of its working since Federation

1s umque. Apart fi·om the great assistance which the Commission received from officers of the Commonwealth and the States who prepared information on numerous matters connected with the working of the Constitution, many facilities, including convenient accommodation for sittings, were g·iven to Commission, whenever the occasion arose, through the courtesy of State Governments, Presidents and Speakers of State Houses of Parliament, and civic and other public authorities.

The Commission had the advantage of the assistance of counsel, Mr. H. S. Nicholas, whose presentation of the issues and the evidence was marked by conspicuous 'ability and fairness, and whose addresses, printed with the evidence (pp. 4, 1662), were a valuable and illuminat­

ing study of the interpretation and working of the Constitution, and of the proposals for its alteration. Mr. Nicholas appeared before the Commission at the Seat of Government and in each of the States. The Commission also desires to record its appreciation of the serviees of :Mr. J _. G. Hardman, LL.B., who has zealously and efficiently carried out the administrative and other important work involved in his duties

as Secretary to the Commission. The Commission held 198 sittings for l he examination of witnesse!!, the consideration of evidence and the preparation of this report.

905

II. THE SECTIONS OF THE REPORT.

In order to give a clear and orderly ac count of the · various mattere that com e within the scope of the report, with such comments as may be needed to indicate the importance of each matter in relation to the Constitution or to any. proposals for its alteration, it seems to us to be essential, or at least desirable, in the first instance, to make a brief suney of the Constitution as determining the powers and affecting the relations of the Commonwealth and the States, and to state shortly the more important facts with respect to the te rritory, the . population, and

the go vernment of the Commonwealth and the States and Territories. Sections iii., iv., v., vi. and vii. of the report, which deal with these matters, include some of th e more important facts with r espect to the working of the Constitution, the more detailed consideration of the powers of the Commonwealth and the discussion of other aspects of the working of the Constitution being reserved for later sections.

·Sections viii. an d ix .. deal with essential elements of the federal system of the Commonwealth-the powers of legislation conferred on the Commonwealth Parliament, and the judicial power of the Common­ wealth with the High Court as the interpreter of the Constitution .

. . Sections :x., xi., xii. ·and xiii., which deal with external affair-s, defence; taxation, and appropriation of revenue, give an account of the relations of the Commonwealth with the r est of the Empire and with foreign countries, explain how the powers of the Commonwealth in regard to defence and taxation have been interpreted by the High Court, discuss the purposes for which r evenue may be appropriated, and describe how the powers of the Commonwealth have been exercised in the conduct of external affairs, the establishment of the defence system, and the conduct of the finances of the Commonwealth.

·.Sections xiv., xv. and xvi. examine the operation of the

provisions of the Constitution with r espect to trade and commerce, freedom of trade comme1;ce and intercourse among the States, navigation and shipping, and industrial disputes. Section xvii. deals with the work of the Co:rn monwealth in conuexion with public health, some aspects of which come within the quarantine powe r. Some of these matters come within the subj ec ts specifically r eferred to the Commission,

but in view of the importance of all of them in the, working of the Consti tu tion it is con venient to deal with them before considering the questions :which sections xviii. and xix. are concerned.

Sections xvm. and xix. are primarily concerned with the

working of the Constitution, and describe the co-operation and fina ncial relations of the Commonwealth and the States.

Section xx. deals with the ten subjects specifically referred ·to the Commission and with other matters on which a report appears to be desi rable, so far as they are not sufficiently dealt with in the previous parts of this report

Subject to one exception, sections iii.-xx. embody the result of our inquiries into the powers of the Commonwealth under the Consti­ tu tion and the working of th e Constitution since Federation. The

exception is in regard to the power of altering the Constitution. The questions -relating to the alteration of the Constitution are dealt with in section xxi.

The general recommendations made by the majority and by the minority in regard to a system of gov ernment for Australia are set out in section xxii. _ -The recomm endation s made unanimously or by majority in regard to

specific subjects are se t out in section xxiii. __ 'S ectio'n 1 contai!ls supplements and recommendation s by one or mo\·e members of the Commission.

I ,

i -

907

-I

III. THE CONSTITUTION OF THE COMMONWEALTH AS DETERMINING THE POWERS AND AFFECTING THE RELATIONS . OF '-THE COMMONWEALTH AND -THE STATES.

Federation.

The establishment of the Commonwealth, on the :first day of January, 1901, set up a new order of things. The new political organizatioii of Australia determined the constitutional powers of the Commonwealth and the States. It brought into existence a new set of relations for the States, both as between the Commonwealth and the States and as between the States themselves, and affected not only their political but also their economic and :financial _position. Before Federation New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania, ·were separate self-governing Colonies. Each Colony had been in existence, independently of the others, for many years. New South Wales and Victoria had had responsible government from 1855, South Australia and Tasmania from 1856, Queensland from 1859, and Western Australia from 1890. Each Colony had its own Consti­

tution, with its own Parliament, Executive Government and Courts, and each had its mvn :fiscal system. The people of the six Colonies agreed to unite in an indissoluble Federal Commonwealth, under the Crown of the United Kingdom, on the terms set out in the Constitution. Legal effect was given to the Constitution by an Act of the Parliament of the United Kingdom, the Commonwealth of Australia Constitution Act, and the Commonwealth came into being on the day appointed in the Proclamation under that Act. The six Colonies became States of the Commonwealth, but each preserved its identity- as a sel{governing community. In replacing the system of separate Colonies by a system of federated States the Constitution provided for the government of Australia as a whole. Henceforth the people of Australia and the people of its several States were to be governed in accordance with the Constitution as the fundamental law for both the Commonwealth and

the States, though each State retained its own Constitution except so far as it was altered or controlled by the Constitution of the Common­ wealth. As the States already had their own organs and powers of self-government, the Constitution was primarily concerned with the organs and powers of the central government. The powers _ of the central government are often spoken of as the powers of the Common­ wealth as distinguished from the powers of the States.

The more impo1'tant provisions of the Constitution. It will, we think, be convenient in giving an account of the existing powers of the Commonwealth and the working of the Constitution, and in explaining the nature of any constitutional changes considered desirable, to refer briefly in the :first place to the more important provisions of the Commonwealth of Australia Constitution Act, and of the Constitution, whieh is a distinct part of that Act, so far as they need to he borne in mind in connexion with the task assigned to the

Commission. ·These provisions relate to (a) the operation of the Act and of laws made by the Parliament of the Commonwealth; (b) the Parliament, the Executive Govern_ ment and the J o! t4e

7

Commonwealth; (c) the distribution of legislative powers between the Commonwealth and the States; (d) the economic and financial position . of the States in relation to the Commonwealth; (e) freedom of trade commerce and intercourse among the _ States; (f) the creation of new

States; and (g) the alteration of the Constitution. A copy of the

Commonwealth of Australia Constitution Act, incorporating the amendments of the Constitution, is appended to this report for

convenience of reference (Appendix A).

The operation of the Constitution and Laws of the Commonwe'alth . .

The Commonwealth of Australia Constitution Act, which consists of nine sections, usually referred to as the "covering clauses", and which sets out in the ninth of these clauses the one hundred and eight sections of the Constitution, contains an express provision with

respect to the operation of the Act and of the laws made by the

Parliament of · the Commonwealth. The Act itself, that is, both the covering clauses and the Constitution, and all laws made by the Parliament of the Commonwealth under the Constitution, are 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 (covering clause 5). The area within which the Act and Common­ wealth legislation may operate is, in general, the . area w:ithin the territorial limits of the Commonwealth, including the land and, at all

events for most purposes, the territorial waters of the States and Territories. Outside territorial limits the laws of the Commonwealth are to . be -in force on aU British ships, the Sovereign's ships of war excepteP,, whose first port of clearance and whose port of destination

are in the Commonwealth ( covering clause 5). The Parliament may give its legislation an extra-territorial operation in other cases, if the power to do so is conferred on it by the Constitution or any British Act expressly or by necessary implication (16 C.L.R. at p. 703).

Legislative, Executive and J u.dicial Powers.

The legislative, executive and judicial powers of the Commonwealth are vested, or are to be vested, in separate organs of government-the legislative power in a Federal Parliament, the executive power in the Sovereign, and the judicial power in the· High Court, and certain other courts (ss. 1, 61, 71). The Constitution, howeve r, does not make a

complete "separation of ppwers ". It is not true that each of the powers is vested in a separate organ in such a way that a power vested in one organ can be exercised by that organ only, and cannot be conferred upon any- other organ. The power to make regulations and

ordinances can be delegated to the Executive by the Parliament (Roche v. K ronheimer, 29 C.L.R., p. 329). But the Parliament cannot either take away from the High Court jurisdiction assigned to it by the Constitution (Tramways case (No. 1), 18 C.L.R. 54), or assign to the

High Court any duty which is not judicial (in re Judiciary Act and the Navigation Act, 29 C.L.R. 257). Nor can the Parliament vest judicial power except in a Court within the meaning of sections 71 and 72 of the Constitution (Alexander's case, 25 C.L.R. ·434; the British Oil Company's case, 35 C.L.R. at pp. 432, 433).

909

The Parliament of the Commonwealth. The Parliament consists of {be Sovereign, the Senate

and the House of R epresentatives (s. 1). A Governor-General

appointed by the Sovereign is to be His representative in the Commou­ wealth (s. 2). When a proposed law, after being passed bv both

H ouses, is presented to th e Gov ernor-General for the royal asse;1t, the Gover !lor-General assm]ts in · the Sovereign's 11ame. The Governor­ Gelleral cannot be fettered b,y any instructions in regard to asse nting, withholding assent, or rese rving bills. He is to act in these matters according to Ids di scretion, but subject to the Constitution, under which bills affecting the prerogative of the Crown to grant leave of appeal to the Privy Council must be reserved for; the royal assent (ss; 58, 74). i\.n Act may be disallowed by the Sovereign within one year from the G:overnor-General's assent (s. 59). ·

The Senate is com posed of Senators for each State, directly chosen by the people of the State, voting, :until the Parliament otherwise provides, as one elec torate. Until the otherwise provides,

there are to be six Senators for each of the six original States. . The Parliament may make laws increasing or diminishing the number of Senators for each State, but the principle of equal representation of each of the original States is to be maintained and no original State is to have less than six Senators. The Senators are to be chosen for a term of six years and are to retire by rotation, half at the end of every three years (ss. 7, 13). The term of service of a Senator is to begin on the first day of July following his election, except where there is a dissolution of tlie Senate (under section 57), when it is to begin on the first day of July preceding his election, and the election to fill vacant

places is to be made within one year before the places are to become vacant (s. 13, as amended by Constitution Alteration (Senate Elections) 1906). Provision is made for filling casual vacancies (s. 15). The House of Representatives is composed of members directly chosen by the people of the Commonwealth, and the number of such

members is to be, as nearly as practicable, twice the number of the Senators. The number of members chosen in the several States is to be in proportion to population, but five at least are to be chosen

'in each original State ( s. 24). The Parliament may make laws

increasing or diminishing the number of members of the House of Hepresentatives, but this power is subject to the fundamental conditions set out in the Constitution (s. 27). The two to one J'atio of the number of the 1t1 embers of the House of Representatives to the number of the Se11ators must be maintained, the clistribu.tion of the members of th e H ouse of Representatives l.Jetwe.en tho States must continue to be in proportion to the population of each State, and the minimum repre­ seiJtation of five members for each original State must be preserved.

The life of a House of R epresentatives is for three years from the first meeting · of the House, unless there is · a dissolutiQn ( s. 28). A

dissolution will, in general, apply only to the House of Representatives, bu t both Houses may be dissolved simultaneously in the circumstances set out in section 57. In the first Parliament the number of members of the House of Representatives for each State was to be as 'follows:­ New South Wales, twenty-six; Victoria, twenty-three; Queensland, nine; South Australia, seven; vVestern five; Tasmania, five

(s. 26).

. The qualification of electors of Senators in each State is to be

the same as the qualification for electors of members of the Hous.e of Representatives. At each election an elect:or can vote only once. This restriction applies to the election of members of either House. The Parliament may prescribe the qualification of electors, but ·no adult

who has or acquires a right tosote at elections for the more numerous House of the Parliament of a State is, while the right conttinues, to be prevented by any law of the Commonwealth from voting at elections of either House of the Parliament of the Commonwealth (ss. 8, 30, 41). The qualifications of a Senator are to be the sanie as those of a member

of the House of Representatives (s. 16). The Parliament may prescribe the qualifications of a member of the House of Represe.ntatives (s: '34). A person who is subject to any of the disabilities mentioned in ;section 44 cannot be a member of either House. A member of either House,

who becomes subject to any of those disabilities, or who becomes disqualified under section 45, is to forfeit his seat. The Parliament may make laws for ·determining questions with respect to qualifications, vacancies, and disputed elections (s. 4 7).

The relations of the two Houses in regard to legislation are defined by the provisions of the Constitution with respect to money bills and a double dissolution. Except as to money bills, the Senate has equal power with the House of Representatives, but if there is a. deadlock,

the House of Representatives may bring about a double dissolution. The Senate's power in regard to money bills is subject to certain restrictions, and at the same time the Senate is protected against tacking. The Senate cannot (a) originate a taxing bill or an

appropriation bill; (b) amend a taxing bill or a bill appropriating revenue or moneys for the ordinary annual services of the government; or (c) amend any bill so as to increase any proposed charge or burden on the people. It can, however, at any stage return to the House of

Representatives any of the bills which it cannot amend, with a request for the omission or amendment of any item or provision, and the House of Representatives may, if it thinks fit, comply with the request, with or without modifications (s. 53) . The House of Representatives c;annot coerce or embarrass the Senate by tacking or by the form in which money bills are sent to the Senate. An appropriation bill for the

ordinary annual services of the government is to deal only with such appropriation ( s. 54). A taxing Act can deal only with the imposition of taxation. If it contaj1 1s a provision dealing with any other

ma-tter, the provision is of no effect. Except in th e case of an A.ct imposing duties of customs, or of excise, a taxing Act can deal witl1 one subject of taxation only. An 1\ct imposi11g duties of customs can deal with duties of customs only. An Act imposing

duties of excise can deal with duties of excise only (s. 55).

To ov€rcome a deadlock between the two Houses in matters

with respect to which their powers are co-ordinate, the House of Representatives may send a bill to the Senate twice, either in the same session or in successive sessions, with ari interval of three months between the two occasions, and if there is .still a deadlock both Houses may be dissolved simultaneo usly. If the dispute continues after the

election, the questions involved may be decided at a joint sitting. The House of Representatives cannot force a double dissolution in the laat months of its own life (s. 57).

911

10

The Constitution authorizes the Commonwealth Parliament to eomplete the scheme of government in accordance with the Constitution and to provide for many things necessary or convenient for ita working. The matters which come within these powers include (a) the franchise

(ss. 8, 30); (b) electorates and elections (ss. 7, 9, 29, 31); (c) the Departments of State for the Commonwealth (ss. 65, 66); (d) the Public Service (s. 67); (e) appeals to the High Court (s. 73); (f) appeals from the High Court to the Privy Council (s. 74); (g) original jurisdiction of the High Court (s. 76); (h) creation of Federal Courts

( ss. 71, 72) ; ( i) investing State courts with federal jurisdiction ( s. 77 (iii) ) ; and (j) making the jut'isdiction of Federal Courts exclusiv_ e of the jurisdiction of State Courts (s. 77 (ii) ). In regard to some of these matters the power to make laws is conferred on the Parliament in general terms, but in regard to others the power can only be exercised

within certain limits and subject to certain conditions.

The E xecutive Power of the Commonwealth. The executive po\ver of the Commonwealth is exercisable by the Governor-General as the Sovereign's representative, and extends to the execution and maintenance of the Constitution, and of the laws of the Commonwealth (s. 61). There is to be · a F ederal Executive Council to advise the Governor-General in the government of the Commonwealth. Its members are chosen and summoned by the Go,1ernor-General, and hold office during his pleasure (s. 62). The Governor-General may appoint Ministers, holding office during his pleasure, to administer Commonwealth Departments, but a Minister must have a seat in Parlia­ ment, or obtain a seat within three months (s. 64). It is clearly

implied that the principle of r esponsible government is a fundamental element in the Constitution (Baxter's case, 4 C.L.R. at pp. 1105-1107; the Engineers' case, 28 C.L.R., at pp. 146-148).

The Judicial Power of the Commonwealth. The judicial power of the Commonwealth is exercisable only by the Courts mentioned or referred to in section 71 of the Constitution. These are a Federal Supreme Court, call ed the High Court of Aus­ tralia, such other Federal Courts as the Parliament creates, and such other Courts as it invests with federal jurisdiction. The Justices of the High Court and of Courts created by the Parliament cannot be removed except in the way provided in ·section 72, that is, by the Governor-General, acting with the advice of the Executive Council, on an address from both Houses of the Parliament in the same session, praying for removal on the ground of proved misbehaviour or incapacity. The judicial power of the Commonwealth consists of the appellate jurisdiction of the High Court, and the jurisdiction over the matters mentioned in sections 75 and 76.

The High Court has both appellate and original jurisdiction. As an appellate tribunal it is the head, within Australia, of both the Federal and State judicial systems. It is a Federal court of appeal from Federal Courts .and from State Courts exe rcising federal juris­ diction; an Australian court of appeal from the State Supreme Courts; and a court of appeal, but as to questions of law only, from the Inter­ State Commission (s. 73). As a Federal court of appeal it may entertain

11

appeals from any Justice or Justices exercising the original •jurisdiction of the High Court, and appeals from any other Federal Court or

from any State Court exercising federal jurisdiction. Any such appeal may be excluded by legislation of the F ederal Parliament. As an Australian court of appeal it can entertain appeals from the Supreme Court of any State, or from any other Court of a State from which

at the establishment of the Commonwealth an appeal lay to the Privy Council, and accordingly may decide matters arising under the laws of any State. The Commonwealth Parliament cannot exclude an appeal to the High Court from the Supreme Comt of a State in any matter in which at the establishment of the Commonwealth. an appeal lay frol.n

that Court to the Privy Council (s. 73). In matters arising under thP laws of a State a litigant has the choice of appealing from a State

Supreme Court either to the High Court or to the Privy Council, and the Commonwealth Parliament has no power to prevent him from appealing direct from the Supreme Court of a State to the Privy Council.

Where an appeal is taken to the High Court either as a Federal or an Australian court of appeal, there is no appeal as of right to the Privy Council (s. 73). There may, however, be an appeal from the High Court to the Privy Council (a) on any question as to tho

limits inter se of the constitutional powers of the Commonwealth l;lnd those of any State or States, or as to the limits inter se of the con­

stitutional powers of any two or more States, if the High Court certifies that the question is one which ought to be determined by the Privy Council; and (b) in other cases, whether they involve constitutional questions or questions of Federal or State law, if the Privy Council itself grants special leave. The Commonwealth Parliament may make laws limiting the matters in which such leave may be obtained, but any bill

passed for this purpose must be reserved by the Governor-General for the royal assent ( s. 7 4).

The original jurisdicticm of the High Court can only extend to the matters mentioned in: sections 75 and 76. Section 75 confers original jurisdiction on the High in matters (a) arising under any treaty; (b) affecting consuls or other r epresentatives of other countries; (c) in which the Commonwealth, or a person suing or being sued on behalf of

the Commonwealth, is a party; (d) between States, or between residents of different States, or between a State and a resident of another State ; (e) in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth. Under section 76 the Federal Parliament may confer' original jmisdiotion on the High Comt in any matte r (a) arising under the Constitution or involving its

interpretation; (b) arising under any laws made by the Parliament; (c) of admiralty and maritime jurisdiction; (d) relating to the same subject-matter claimed under the laws of different States .

The Commonwealth Parliament may (a) define the jurisdiction of any :Federal Court other than the High Court; (b) define the extent to which the jurisdiction of any Federal Court is to be exclusive of that which belongs to or is invested in the Courts of the States; (c)

invest any Court of a State with federal jurisdiction ( s. 77). In each case jurisdiction can only be conferred with respec t to matters mention ed in sections 75 and 76, but apparently may be either original or appellate F.l25L-2

913

12

jurisdiction. The Parliament may aJso make laws conferring rights to proceed against the Commonwealth or the States in respect of matters within the limits of the judicial po wer (s. 78; Commonwealth v. New South Wales, 32 C.L.R. 200).

The trial on indictment of any offence against any law of the Com­ monwealth is to be by jury (s. 80). This provision extends only to an offence made triable on indictment, and do es not preclude the Common­ wealth Parliament making an ofience triable otherwise than on indict­ ment (R. v. Bernasconi, 19 C.L.R. at p. 637).

The distribution of Legislative Powers between the Commonwealth and the States. The power to make laws in Australia is distributed between the Commonwealth and State Parliaments in accordance with "the legisla­ tive compact made between the Commonwealth and the States"

(Attorney-General for the Commonwealth v. Colonial Sugar Refining Ltd., 1914 A.C. at p. 256; 17 C.L.R. at p. 655). Selected or

enumerated po-vvers are vested in the Commonwealth Parliament, and the residual powers remain with the State Parliaments (ss. 51, 52, 107). Lists of the matters with respect to which the Commonwealth Parlia­ ment may m ake laws are set out in sections 51 and 52, but other sections also confer po vvers of legislation on the Commonwealth Parliament

(e.g. ss. 76, 77, 78, 102, 112).

With respect to certain matters the Commonwealth Parliament only may make laws, and in regard to these matters it is said to have an exclusive power. With respect to certain other matters either the Commonwealth Parliament or a State Parliament may make laws, and in regard to these matters the Commonwealth Parliament is said to have a concurrent power. vVhere the Constitution has not vested a power exclusively in the Commonwealth Parliament or withdrawn it from a State Parliament, the powers of a State Parliament continue

as at the establishment of the Commonwealth (s. 107). With respect to matters which do not come within either the exclusive or the con­ current of the Commonwealth Parli.ament, the State Parliaments only may make laws, and in regard to these matters they are saiQ. to have an exclusive power (the Sugar Company's case, 17 C.L.R. at p. 653;

the Eng·ineeTs' case, 28 O.L.R. at p. 154).

The distinction between the concurrent and exclusive powers of the Commonwealth Parliament does not limit its powers or affect the scope of its legislation. Matters within its. concurrent powers are only left to the State Parliaments so long as the Commonwealth Parliament does not see :fit to supersede or exclude State legislation. A State Parliament has, for instance, concurrent power to make laws with respect to marriage and divorce. It has been free to do this from the establishment of the Commonwealth, as the Commonwealth Parliament has not, except for the special purpose of the M atTimonial Causes

(Expedih:onary Forces) Act 1919, legislated on these matters. The Com­ monwealth Parliament may at any time enter the field and indicate, expressly or impliedly, that ·its legislation is to be the only law within the field. It may at any time vacate a field, but so long as it occupies it, a State Parliament is excluded to the extent to which the :field covered by Commonwealth legislation.

13

Any valid Commonwealth law has supremacy over a State law. Under section 109, ·when a law of a State is incon13istent with a law of the Commonwealth, the latter prevails and the former is, to the extent .of th-e inconsistency, invalid. The most obvious application of this

section is to la,vs within the concurrent field, but the section is not limited to such laws. It applies to every valid Commonwealth law (the Engineers' case, 28 C.L.R. at p. 155). Two enactments may be incon­ sistent although obedience to each of them may be possible without disobeying the other. The vital question is whether a Commonwealth

Act on its true construction is intended to cover the vvhole field. If it is so intended, the inconsistency is 'in giving effect to a State Act, the Commonwealth legislation is intended to exclude State legislation (Cowburn's case, 37 C.L.R. at pp. 478, 489).

The financial prov·isions of the Constitution. The "compact" between the Commonwealth and the States includes the financial provisions of the Constitution, and in particular those which are grouped in Chapter IV. under the heading of Finance and Trade. They deal, among other matters, with (a) the control of customs and excise; (b) the appropriation of Commom':ealth revenue and the distribution of surplus revenue among the States; (c) the grant of financial assistance to any State; and (d) the taking over of State debts.

The Commonwealth Pariiament has a general power of taxation, but not so as to d:scri:ininate between States or parts of States (s. 51 (ii) ). It has an exclusive power of customs and excise taxation (s. 90). This power became exclusive as from the -Sth October, 1901 (Customs Tariff 1902, s. 4), and thereupon the States could not continue or set up any barrier against interstate freetrade, though there \li7as a special provision

under which Western Australia might, during the next five years and subject to certain limitations, have its own tariff for goods passing into that State and not originally imported from beyond the limits of the Commonwealth ( s. 95).

All Commonwealth revenue is to form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth. The appropriation is to be in the manner and subject to the charges and liabilities imposed by the Constitution ( s. 81). The manner of appro­ priation is prescribed by s. 83, that is, appropriation is to be made "by law". The charges and liabilities include the cost of collection, the salary of the Governor-General and the sa1aries of the Justices of the High Court and other Federal Courts ( ss. 82, 3, 72). For the first ten years at least they also included the obligation imposed by the "Braddon clause" (s. 87), under which the Commonwealth was not to apply more

than one-fourth of the net customs and excise revenue towards its own expenditure, and was to pay the ba, ance to the States, or apply it

towards the interest on State debts, in accordance with the provisions relating to different periods within the duration of the clause (ss. 87, 89, 93, 94). .

The first charge is the expenditure for the collection, management and receipt of the Consolidated Revenue Fund, and in the first instance Commonwealth revenue is to be applied to the payment of Common­ wealth expenditure (s. 82). Once the charges and liabilities are

provided for, together with, it seems, the obligations imposed on the

915

•

•

14

Commonwealth by the financial agreement recently made between the Commonwealth and the the Commonwealth Parliament may appropriate the whole of the Consolidated Revenue Fund, if it sees fit, "for the purposes of the Commonwealth," and any_ money· lawfully appropriated for such purposes will not be surplus revenue distributable among the States. What is a Commonwealth purpose is an important question which has not yet been settled by any decision of the High Court and will be discussed later in this report, but if all the Common­ wealth revenue is duly appropriated, though not actually spent, there is no surplus (New South Wales v. The. Commonwealth, 7 C.L.R. 179).

The basis on which surplus revenue of the Commonwealth was to be distributed among the States for the first five years after the. imposition of uniform customs duties was fixed by the Constitution (ss. 87, 89, 93). After the experience gained in the working of the system during that period the Commonwealth Parliament was to be at liberty to alter the basis ( s. 94). This power could be used during the remainder of the period contemplat-ed by the "Braddon clause", but section 94 is not limited to the initial stages of Federation. It does not guarantee to the States that there will be any surplus, but if at any time there is a surplus in the sense explained in New -South Wales v. Commonwealth

(7 C.L.R. 179), that is, a sum not stated by law to be needed for

Commonwealth purposes, it is, according to one view of the meaning of the section, to be -distributed among the Sta:tes by monthly payments on such basis as the Commonwealth Parliament thinks fit, or, according to the rival view, it may be so distributed. The first mentioned of these views was, it seems, taken by all the five Justices of the High Court, who decided New South Wales v. The Commonwealth, though the point was not fully argued, as it was not necessary for the actual . decision

(7 O.L.R. at pp. 188, 196, 199, 202, 205).

The Oommonw€alth Parliament may grant financial assistance to any State on such .terms and conditions as the Parliament thinks :fit. This power continues during a period of ten years from the establishment of the Commonwealth and thereafter until the Parliament otherwise provides (s. 96). Its nature and were considered by the High

Court in Victoria v. The Commonwealth (38 C.L.R. 399) in connexion with the Federal Aid Roads Act 1926, which authorized the execution by or on behalf of the Commonwealth of an agreement with each State to make ayailable to the State a sum of money, for the construction and reconstruction of certain classes of roads, subject to the terms and conditions of the agreement, including the carrying out of the work by contract as the general method of construction. The validity of the Act was contested by three States on the ground, amongst others,

that the terms and conditions referred to in section 96 are financial terms and conditions unless they are terms and conditions falling one of the legislative powers in section 51, and also on the ground that if one State only received money from the Commonwealth the Act would give preference to one State over other States in contravention of section 99. All the members of the Court were unanimous in holding

that the Act is valid. "It is plainly warranted by the provisions of sec. 96 of the Constitution, and not affected by those of sec. 99 or any other provisions of the Constitution, so that exposition is unnecessary" (ibid at p. 406) .

15

The Commonwealth Parliament may take over from the States their public debts, or a proportion of those debts in accordance with section 105, which until its amendment in 1910 applied only to debts existing at the establishment of the Commonwealth. It may convert, renew, or consolidate the debts or any part of the debts. The States are to

indemnify the Commonwealth in respect of the debts taken over. The ·interest payable in respect of the debts is to be deducted and retained from the portions of the surplus revenue of the Commonwealth payable to the several States, or if such surplus is . insufficient, or if there is no

surplus, the deficiency or the whole amount is to ,be paid by the several States (s. 105). Apparen tly during the currency of the financial agreement recently made between the Commonwealth and the States, this section is to be read subject to the terms of that agreement.

Under section 105A, inserted by Constitution Alteration (State Debts) 1928, the Commonwealth may make arrangements with respect to the public debts of the States, and to Commonwealth and State borrowing. These powers include the making of agreements with respect to taking over State debts, management, payment of interest and provision and management of sinking funds, consolidation, renewal, conversion and redemption, and indemnification of the Commonwealth.

They also include the making of agreements with respect to borrowing by the States or by the Commonwealth or by the Commonwealth for the States. The Commonwealth Parliament may make laws for validating an agreement made before the commencement of the section. It may make laws for the carrying out of an agreement. An agreement may be varied or rescinded by the parties. An agreement or variation is to bind

the parties, notwithstanding anything contained in the Commonwealth Constitution or in a State Constitution or in any Federal or State law. The powers conferred by the section are not limited in any way by the provisions of section 105.

Freedom of trade commerce and intercourse among the States.

Trade commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, are to be absolutely free (s. 92). Section 92 came into operation as soon as uniform customs duties · were imposed, though there was a temporary provision with

respect to goods previously imported into one State and passing into another State within two years after the imposition of such duties. The view which was expressed in some of the earlier judgments of the High Court that the section binds both the Commonwealth and the States has been overruled, and it has now been held that the sole purpose of the

section is to prevent a State Parliament legislating so as to interfere with the freedom prescribed by the section (James v. South Australia, 40 C.L.R. at p. 41). The scope of the section has been considered by the High Court in a number of important cases which involved

questions as to the validity of State legislation, so far as it concerned trade commerce or intercourse among the States, in regard to a variety of matters, including, for example, price-fixing, · marketing of dried fruits, safeguards against the introduction of cattle affected or supposed

to be affected by disease, and the coming in of persons who have served a sentence f<;>r cri:JTie ip fl,nother State.

•

16

New .States. Power to establish new States is conferred on the Commonwealth Parliament by s. 121, but where an existing State is concerned no portion of its territory is to be taken for this purpose without the consent of its Parliament. The sec tion deals also with the admission of new States to the Commonwealth, that is, the admission of communities which are outside its territor ial limits, while the establishment of new States refers to areas within those limits. A new State may be established out of either Federal or State Territory (covering clause 6, s. 124), but at the establi shmen t of the Commonwealth, and until Papua was placed under its authority in 1905, the only territory to which section 124 could apply was State territory. The Commonwealth Parliament may of its motion create a new State out of F ederal territory, whether it is territory surrendered by a State to the Commonwealth, or territory placed by the Sovereign under its authority, or territory otherwise acquired by it, but probably this power does not extend to the Seat of Governme11t

(ss. 111, 122, 125). Where a new State is created out of State territory, it may be formed by separation of territory from a State, or by the union of two or morr. States, or by the union of parts of two or more States, but only with the consent of the Parliament of any State affected (s. 124). Upon the establishment of a new State the Common· wea lth Parliament may make or impose such terms and conditiolls, including the extent of representation in either House of the Parliament, as it thinks fit (s. 121). The Parliament is 110t restricted by the

provisions with respec t to the minimum representation· of original States in the House of RepresEntatives, or the equal representation of origiHal States in the Senate, and apparently it might even depart, in the case of new States, from the principle in section 24 that representation in the House of Representatives is to be proportionate to population. There are special provisions in section 123 with respect to the alteration of the limits of a State. The section is apparently intended to cover cases other than those contemplated in sections 121 and 124, and not to restrict the powers couferred by those sections, but its effect is not quite clear.

Before Federation the boundaries of New South Wales, Victoria, South Australia, Queensland, Western Australia and Tasmania, as well as of certain other self-governing colonies named in the schedule to the Colonial Boundar-ies Act, 1895, might be altered under the provisions of that Act by Her Majesty the Queen by order-in.-couucil or by letters patent, "provided that the consent of a self-governing colony shall be required for the alteration of the boun,daries thereof". After the passing of the Commonwealth of .A.ustralia Constitution Act, the

Colonial Boundaries Act, 1895, was not to apply to any colony which became a State of the Commonwealth (covering clause 8), as the Constitution made its own provisions for the alteration of the boundaries of States and the creation of new States.

Alteration of the Constitution. A distinction is to be drawn for some purposes, including that of alteration, between covering clauses 1-8, under which the Commonwealth was established and effect given . to the Constitution, and covering clause

9, which embodies in the Act the provisions of the Constitution. The

17

powers of alteration ·contained in the Constitution do not extend to covering clauses 1-8, and their provisions, so far as they r emain in force, can only be altered by the British Parliament (Colonial Laws Validity Act, 1865, s. 2). The Constitution expressly left a number of matters

to the decision of the F ederal Parliament (ss. 7, 8, 9, 14, 16, 49, 50, 71, 73, 74, 76, 77, 78, 79, 94, 96, 101, 102, 112) , and many provisions of the Constitution only r emain in force "until the Parliament other­ wise provides" (ss. 3, 7, 10, 22, 24, 27, 29, 30, 31, 34, 38, 46, 47, 48,

65, 66, 67, 87, 93, 97, 108). .All these provisions, though some in part only, may be changed by the Commonwealth Parliament without formally altering the Constitution. Where a provision of the Con­ stitution cannot be changed in this way, it may be altered by the method

prescribed in section 128 . The provisions of that section are discussed in section xxi of this report . . Here it may be stated broadly that the Constitution may be altered by a bill which has been passed by an absolute majority of each House, or in certain circumstances by an absolute majority of one House, and which on submission to the electors by referendum has been approved by the requisite majorities in fonr States and in the Commonwealth. In the case, however , of certain . alterations, approval in the State or States affected is also r equired.

There have been three alterations of the Constitution. By Con­ stitution Alteration (Senate Elections) 1906 the term of service of a Senator is to begin on the first day of July following his election, except where there is a dissolution of the Senate, when it is to begin on the first day of July preceding his election. The necessary amendments for

this purpose are made in section 13 of the Constitution. By Constitution Alteration (State Debts) 1909 the words restricting the power of the Commonwealth Parliament to taking over public debts of the States "existing at the establishment of the Commonwealth" are omitted from section 105 of the Constitution. By Constitution Alteration (State

Debts) 1928 the Commonwealth is empowe red to make agreements with the States with respect to the public debts of the States, and with respect to borrowing by the States or by the Commonwealth or by the Common­ wealth for the States.

The Constitution as the pact of umon and as an instrument of

gov ernment.

The Constitution has two aspects and serves a two-fold purpose. It is the pact of union, and an instrument of government (the Sugar Company's case, 1914 .A. C. at p. 156, 17 C.L.R. at p. 655; the Engineers' case, 28 O.L.R. at p. 142; the Union L abel case, 6 C.L.R. at p. 533). .As

regards the government of the States it does not do much more than provide for the continuance of the Constitution of each State subject to the changes involved in the terms of un ion (s. 106). .As regards the central government it is not a detailed code-the intention "is rather

to outline principles than to engrave details" (State of Tasmania v. Commonwealth, 1 C.L.R. at pp. 338, 348, J7tmbunna Coal Mine v. Victo·rian Coal Miner·s' Association, 6 O.L.R. at p. 356), and it leaves the Commonwealth Parliament to complete the scheme in accordance

with those principles ( cf. ss. 7, 8, 9, 29, 30, 31, 65, 66, 67 , 71, 72, 73 , 74, 76, 77).

919

•

•

18

The relations of Federal and State Authorities to. individuals. The Constitution does not attempt, except to a very limited extent, to define the relations of either Federal or State authorities to

individuals. The one clear exception is in to religion. The

Commonwealth is not to make any law for establishing any religion, or for imposing any religious obseivance, or for prohibiting the free exe'rcise of any religion, and no religious test is to be required as a for any office or public trust under the Commonwealth

(s. 116). Section 41, under which an adult person who has or acquires a right to vote under a State franchise is not to be excluded from the Commonwealth franchise, applies only while that right continues, and its operation niay have been limited to the state of affairs existing in the initial stages of the Commonwealth (evidence, p. 102). Section 80 merely ensures that where an offence is made triable on indictment, the

trial shall be by jury (R. v. Bernasconi, 19 C.L.R. at p. 637; ex parte Carrigan and Brown, 41 C.L.R. 128). Section 92 is restricted to interference with freedom of trade, commerce, and intercourse among the States (James v. South Australia, 40 C.L.R. at p. 41). Section · 117,. under which a British subject, resident in any State, is not to be

subject in any other State to any disability or discrimination which would not be equally applicable to him if he were a British resident in such other State, applies only where the disability or discrimination is based solely on residence in another State (Davies and Jones v. State of

Western Australia, 2 C.L.R. at p. 47). Except so far as these sections, or some of them, may be regarded as being in the nature of the

"guarantees " which are to be found in other written constitutions, the Constitution does not aim at protecting the people of the Commonwealth or the States against the exercise of legislative p0wers. It resembles the American Constitution in the principle adopted for the distribution of powers between the Federal and State Parliaments, but it differs from the American Constitution in refraining from prohibitions designed to prevent the misuse of powers, and addressed to both Federal and State Parliaments.

The interpretation of the Constitution. The main principles by which the High Court will now be guided in interpreting the Constitution are those which are stated in the Engineers' case (28 C.L.R. 129), and which appear to stress the fact that the Constitution was enacted by a British statute rather than its origin and nature as a federal compact under which communities formerly independent of each other were to continue to exercise powers of self-government within their respective areas, while at the same

time the authority of the central government, within its sphere, was to extend throughout those areas (Commonwealth v. Colonial Combing Spinning and Weaving Co. Ltd. 31 O.L.R. at pp. 439-441). In applying the rules of construction applicable to British statutes the Court will discard any doctrine of mutual non-interference formulated in its earlier _judgments, or in the decisions or dicta of the American courts.

19

IV. THE COMMONWEALTH, THE STATES AND THE TERRITORIES.

The · 0 ammon wealth.

The Commonwealth of Australia Constitution Act did not merely create new governmental machinery in Australia. While the States continued as self-governing communities subject to the Constitution, a new self-governing community, formed by the union of the people of

the six States, came into existence. "By the Act a new State or nation was created, armed with paramount power not only to settle the more important internal affairs 1:elating to the common interests of the united people, but also to deal with all political matters arising between

them and any other part of the Empire or (through His Majesty's Government) with any foreign power. That appears to me the obvious meaning of sec. iii. of the Act, which -declares that on and after a day appointed by proclamation the people shall be united in a

Federal Commonwealth under the name of the Commonwealth of Australia. On that day, Australia became a single entity and no longer six separate States in the family of nations under the British Crown, and the external responsibility of Australia . vested

immediately in the Commonwealth, which was armed with the para­ mount power necessary to discharge it" (see despatch from the Secretary of State in 1903, Parliamentary Papers (Commonwealth) 1903, p. 1164; cited in the Constitution of the Commonwealth, Harrison Moore,

2nd edn., p. 72).

The Parli;:tment of this "new State or nation " may , make laws under the Constitution which will bind the people of every State, and every part of the Commonwealth (covering clause 5). Whatever may be the precise meaning of "part of the Commonwealth" ( cf. Buchanan v. The Commonwealth, 16 C.L.R. at p. 330), or the difference between

the powers of the Commonwealth Parliament to legislate for the · Com­ monwealth, including the States, and its powers to legislate for the Territories which have been acquired as "dependencies" under section 122 of the Constitution, that Parliament may make laws which will operate throughout the areas of the States and the Territories.

The area within Australia.

The area of the Commonwealth, including the six States, the Northern Territory, and the Federal Capital Territory, but not including the Territories outside Australia, comprises in all about 2,97 4,581 square miles, of which the mainland alone contains about 2,948,366 square miles. Australia is therefore slightly less in area than

the United States, four-fifths of the area of Canada, and more than three-fourths of the area of Europe. Of this area about five-thirteenths, or 1,149,320 square miles, are situated within the tropical zone. This tropical area is situated within the States of Queensland and Western Australia and within the Northern Territory. Of the State of Queens­

land 359,000 square miles are within the tropical zone, and 311,000 within the temperate zone; of the State of Western Australia 364,000 square miles are within the tropical zone, and 611,920 square miles

921

20

within the temperate zone. Of the Northern Territory 426,320 square miles are within the tropical zone, and 97,300 square miles within the temperate zone. No portion of any other State is within the tropical zone.

The States. The States differ greatly in area. The area of New South Wales is, in square miles, 309,432; Victoria, 87,88·1; Queensland, 670,500; . South Australia, 380,070; Western Australia, 975,920; Tasmania,

26,215.

The States also differ widely in climate and rainfall. The following table extracted from the Commonwealth Year-Book for 1928 (p. 43) illustrates these diversities-AVERAGE ANNUAL RAINFALL DISTRIBUTION.

New

Annual South

Victor:a. Queens- <::out.h Northern Weswrn Tasmania Total Ratnrall. Walos.(a) land. Aust.ralia. Terr.tnn·. (b) (b) --------- ------------sq. miles. sq . ml'cs. sq. miles. sq. miles. sq . miles. sq. miles. miles. sq. mifP.s. Under 10 inches 48,749 Nil 80,496 310,660 140 500 486,952 Nil 1,0117,357 10 ·15 inC'hes .. 78 4!)4 19 2"0 81 .549 36,460 132.781) 255,092 Nil 603,605 15-20 .nches .. 55,762 13,492 l11,R33 19.940 f\3.026 9!,101 304 358 458 20-25 mchos 45,140 14.170 143 610 8,62Q 40,157 44,340 3,844 308,881 25-30 inches .• 30.539 15,:.79 99.895 3,258 41,608 31,990 3.016 225.885 30-40 inches 33.557 14,450 61.963 1,036 37,642 59,520 5,027 213,195 Over 40 iuches 18,171 10,923 91,154 96 58,907 3,925 11,247 194,423 --- Total Area •• 310,372 87,884 670,500 380,070 523.620 975,920 23,438 ?,u7J,R04 {'1) Including Federal C'apital Territory. available. (b) Over an area of '/.,777 sQuare miles no records are From the same source, page 44, it appears that in the extreme north nearly the whole of the rainfall occurs in the summer months, while little or . no rain falls during the winter; in the south-west, on . the other hand, the summer months are dry and the winter months are very wet. The estimated population of Australia on the 31st December, 1928, was 6,336,786, divided as follows :-New South Wales, 2,445,280; Victoria, 1,760,964; Queensland, 916,689; South Australia, 579,348; Western Australia, 405,873; Tasmania, 216,563; Northern Territory, 3,982; Federal Capital Territory, 8,087. Of the population of New South Wales, it is estimated that on 31st December, 1928, 1,127,470 lived in Sydney and suburbs, and 102,550 in Newcastle and suburbs; of the population of Victoria, 1,000,000 lived in Melbourne and suburbs; and of the population of South Australia, 330,217 lived in Adelaide, the percentages of popula­tion within the capital cities in these three States being respectively 46.11, 56.80, and 57.00. In Western Australia the corresponding per­centage is 48.36; in Queensland, 33.66, and in Tasmania, 26.20, the percentage of the total population of Australia living within the capital cities being on that date 47.65. ·

21

The following table· supplied by the Commonwealth Bureau of Census and Statistics shO\VS the average number of persons employed in factories in each State for the years 1922-23 to 1927-28, the per­ centage of the Australian total so employed in each S tate, and the

number per 10,000 in each State over the same series of years. FACTORIES-EMPLOYM EN T. 1922-23 TO 1927-28. "' . I I' .

Routh

I T"monla. Year. N

AVERAGE NUMBER.

1922-23

152,266 1.52,625 34,6!)5 19,0fl7 10,324 412,410

1923-24 159,674 156,162 44,948 37,271) 19,712 12,219 429,990

1924-25 . 165,760 154,158 48 ,922 38,3;i3 21,758 10,998 430,949

174,101 1n2.9.'>fl 50,496 40,0;) 1 22,142 11,171 450.920

1926- 27 183,193 161,6:39 48,133 . 42,164 20,424 11,694 467,247

1927-28 182,659 l(l0,J55 (a}48,000 40,045 21 ,313 (a}463,508

PERCENTAGE ON AusTRALIAN ToTAL.

1922-23 36.92 37.01 10.!)3 8.41 4.63 2.50 100.00

1923-24 37.13 36.32 10.4!) 8 .67 4.59 2.84 100.00

1924-25 37.68 35.04 11.12 8 . 72 4.94 2.50 100.00

1925- 26 38 . 61 3:3.92 11.20 . 8.88 4.fl1 2.48 100 .00

1!126- 27 39.21 34.60 10.30 9.02 4.37 2 .50 100 00

1927-28 39.40 34.60 (a}l0.36 8.64 4.60 2.40 100.00

PER 10,000 OF POPULATION.

1922-23 .. 701 960 556 676 562 481 734

1923-24 .. 723 961 554 710 566 f)57 748

1924-25 .. 7:l5 930 586 712 598 505 749

19t5-26 .. 757 908 586 726 595 515 7!l3

1926- 27 .. 780 944 54.6 744 54 f) 76;)

.. 761 921 (a)534 696 543 516 (a) 743

(a) Estimat.ell-suLject to revMon.

The follo·wing table taken from the C om rnn n u..,ea lth Y ear-B oo k l !)28, (p. 919) shows the distribution of the population within the States accord ing to occupations on 4th April, 1921, the date of the last

Commonwealth Census:-PoPULATION-OccuPATloNs, CENsus OF 4TH APRn., 1921, (ExcLrSIVE oF F ULL-BLOOD ABORIGl.NALS}.

StatPs Territories.

\

-)

Orct.pa+ion.

\\ T as-

'"'" I

Australia.

I. T'rol esJ;;ions;l.. ll. .JIPIIlf'S1iC' ••

HI. l'omrllf'r('ial.. IV. Transport anti ( ·umrnurtt-!'ation ..

Y lndu,.tria ..

VI l'rinJfiTV l' ro-d•H ·f'r'l ••

Yll . lnderPnllent

'fota !'read· \\ • •

\'Ill. ..

Tot.at

1\:e" Routh \' i•'toria. Fed . \\'all's. 'ar••l . t ralia. tr:llia n.auta. eTII. Cap.

--------------

78,004 f\ 0 ,732 2(i.08 1 }:" •. 898 1 165 557 201.88 7

81 8f>8 58.2!H :!8 .1< 18 ] !l.fll\(1 1.U45 71 2HUlfl2

1:3\1,044 108,190 43,H9 3:'.. 936 21 ,959 10,263 190 36 355.76 7

R4,719 53, 4-1-5 2 9 .833 Hl.'iOi 6 .08;) 270 42 2()8 .2'22

28 :>,6fi5 23.f,829 d5 fi23 63,fi4U 794 22.ti O:l 205 72: ,3 16

208 ,93 fi 109. 11 9 tfl ,:3 99 2 9,9 11 1. ? 9 >1 3 15 5:•9.7:>0

8 09!) ; ,r !Jl 1.2•!() 8 l :i RI O I :!ll,ti67

-----------88 () =-l25 32:1 .2 -J.q 205,C.2f> 14 '1.!\ :!6 81.n5 ' 2.!'>\.1 4 L2'21i .HI t,2u ,n+t i suo.:.8s 1'

923

·22

The Territories.

Of the Territories, governed wholly or in part by the Common­ wealth, four are outside Australia. Of these, two, ·Papua 2nd the Mandated Territory of New Guinea, are largely undeveloped and in­ completely explored. Papua and New Guinea are wholly within the tropics. Papua has a total area of about 90,540 square miles, of which plantations occupy about 61,370 acres. It has a· white popula­ tion of 1,428 and a native population officially estimated at 275,000, of whom approximately 7,500 are employed under contract. The Mandated Territory has an area of approximately 91,000 square miles, of which 423,175 acres are occupied by plantations, and of this area 195,538 acres have been planted. . It has a white population of 2,300, an Asiatic population of about 1, 700, and a native population roughly estimated at 435,000, of whom 28,253 were on the 30th June, 1928, employed as indentured labourers. · The Island of Nauru had, on the

1st April, 1928, a population of 131 Europeans, 1,051 Chinese, and 1,297 N auruans. The population of Norfolk Island· on the 30th June, 1928, was 902. The amount expended by the Commonwealth in the year 1927-1928 on territories outside Australia was £76,436, exclusive of £52,051 for mail services.

23

V.-THE GOVERNMENT OF THE COMMONWEALTH. The Establishment of the Commonwealth. The Commonwealth of Australia Constitution Act received the royal assent on the 9th July, 1900. By section 3 of this Act it was provided that it should be lawful for the Queen with the advice of the

Privy Council to declare by proclamation that on and after the day therein appointed, not being less than one year after the passing of the Act, the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, and also, if Her Majesty was satisfied that

the people of Western Australia had agreed thereto, of Western Australia, should be united in a Federal Commonwealth under the name of the Commonwealth of Australia. The proclamation authorized by this section was issued on the 17th September, 1900, the people of Western Australia having previously agreed thereto, and thereby the Commonwealth was established as from the 1st January, 1901.

On the 29th October, 1900, a Commission was issued appointing the Right Honorable the Earl of Hopetoun the first Governor-General of the Commonwealth of Australia. ·

Immediately after the Commonwealth was established the Depart­ ments of Trade and Customs were taken over. The first administration of the Commonwealth took office on the 1st January, 1901, there being eight 1finisters holding portfolios, and

one without a portfolio. '

The first Executive Council was summoned by the Governor-Gener:al in accordance with section 62 of the Constitution. The Governor-General with the advice of the Federal Executive Council then established seven Departments of State, and appointed officers to administer them in accordance with section 64 of the

Constitution. The notifications of the above-mentioned executive acts were signed by Sir Edmund Barton, who had formed the first Federal Ministry, and the sev:en officers appointed to the seven departments of State were the first Ministers of State for the Commonwealth, and with two other Ministers constituted the first Federal Ministry.

Of the four departments of the Public Service in each State, the transfer of which to the Commonwealth the Governor-General was authorized to bring about by proclamation, posts, telegraphs, and telephones and the departments of defence in each of the States

were transferred on the 1st March, 1901. The remaining two depart­ ments mentioned in section 69 have not been taken over, oecause it was found that in the States there were not separate departments exactly corresponding to the terms used in the Constitution-( a) "lighthouses, lightships, beacons, and buoys"; and (b) "quarantine." It followed

that the power of legislating for posts, telegraphs, and telephones was, since 1st March, 1901, exclusively a Commonwealth power, whereas the the States retained the concurrent power of legislating for lighthouses, lightships, beacons and buoys, and quarantine, except in so far as their

legislation might be inconsistent with the law of the Commonwealth. Upon the passing of departments to the Commonwealth the officers of the transferred departments became subject to the executive government of the Commonwealth, with pension rights against the

24

Commonwealth, in respect of the whole of their respective periods of service, the Commonwealth having a right to claim from the Sta.tes that proportion of the pension payable, which the period of each officer's service with the State bore to his whole period of service.

The first Parliament _ of the Commonwealth was summoned by proclamation, dated the 29th April, 1901, and was opened on 9th :May, 1901. The House of Representatives was composed of repre­ sentatives of the in the numbers prescribed by section 26 of the

Commonwealth Constitution, and was elected in accordance with laws passed by the States. The Senate was elected in pursuance of writs issued by the

Governors of the respective States, and in accordance with passed by the States.

The Imposition of Uniform Duties of Customs. By the Customs Tariff 1902 it was enacted that the time of

the imposition of uniform duties of Customs was the eighth day ·of October, 1901, at four o'clock in the afternoon. Until the date and time mentioned the tariffs enforced and collected by the Commonwealth had been those enacted by the States before Federation, and goods imported into any State on passing thence into another State became liable to any duty chargeable on the importation of such goods into the Com­ monwealth, less any duty paid in respect of those goods on their importation into the Commonwealth, each State being debited with expenditure incurred in that State, and with a p0rtion .of the whole expenditure of the Commonwealth. The object of these provisions was to prevent goods, whatever their ultimate destination, from being attracted to that State which imposed the lowest duties on imports. The provisions did not apply to goods imported into Australia after the imposition of uniform duties of customs alld excise.

A.fter the imposition of uniform duties of customs and excise, the provisions of section 92 of the Constitution <"arne into force, whereby it was provided that trade commerce and intercourse among the States should be absolutely free, and the book-keeping period began whereby each State was credited with duties of customs and excise on goods consumed within its borders, rather than on goods imported into it or ma·nufactured within its borders.

The power of the Commonwealth to impose duties of customs and excise, and, subject to the qualifications in favour of the States contained in section 91 of the Constitution, to grant bounties on the production or export of goods, thereupon became exc1usive, and ali laws passed by

the States relating to such duties or bounties ceased to have effect, subject to the proviso that any grant of or agreement for a bounty made prior to the 30th June, 1898, should not be affected.

Departments of State, and other Offices and Departments.

The seven departments of State established on the 1st J amiary, 1901, were the following :-The Department of External Affairs, the Attorney-General's Department, the Department of Home Affairs, the Department of the Treasury, the Department of Trade and Customs, the Department of Defence, and the Postmaster-General's Department.

25

In addition to making provision for the tra11sferred departments, the Parliament in 1901 provided for the appointment of an Auditor­ General and for the establishment of trust funds.

Subsequently other departments were established and officers appointe<,! under the authority conferred on the Governor-General in Council by section 64 of the Constitution, or by the exercise of the powers of legislation conferred on the Parliament by sections 51 and 52. The following departments were created by minutes, and

Ministers of State were appointed to administer them :-The Prime Minister's Department, 1st July, 1911; the Department of the Navy, 12th July, 1915; the Repatriation Department, 28th September, 1917; the Department of Health, 7th March, 1921; the Department of

Markets and Migration, 16th January, 1925; and the Department of Industry, lOth December, 1928. Of the departments established on the 1st January, 1901, the Department of External Affairs was re-named as from the 14th

November, 1916, when it became the Home and Territories Department, and some of its functions were taken over by the Prime Minister's Department; and the Department of Home was re-nam'ed as

from the 14th November, 1916, the Department of Works and Railways.

On the 21st December, 1921, the present Department of External Affairs was established, and the Department of Defence took the · place of the Departments of Defence and of the Navy existing on that date.

The Department of Markets and Migration was re-named as from the 19th January, 1928, the Department of Markets, and, as from lOth December, 1928, the Department of Markets and Transport.

The Home and Territories Department was re-named as from the lOth December, 1928, the Department of Home Affairs.

The Departments as at present established, set out in the order 111 which they have been created or re-named, are the following:-the Department of the Treasury; the Attorney-General's Department;

the Postmaster-General's Department; the Department of Defence; the Department of Tr·ade and Customs; the Prime Minister's Department; the Department of External Affiairs; the Department of Works and Railways; the Department of Repatriation; the Department of Health; the Department of Home Affairs; the Department of Markets and Transport; the Department of Industry. The Department of Works and Railways is now in fact ca11 ed the Department of Works, though in view of certain statutory references to · the Minister fo1: Works . and the Minister administering the

d epartment retams the title of Muuster for Works a n'd Railways.

In some instances more than one department is administered by the same Minister.

927

26

In the exercise of powers of legislation conferred on it· by sections 51 and 52, the Parliament has established offices or departments other than Departments of State. A Commissioner of Patents was appointed in 1903, and the officer was appointed Registrar of Trade-marks and Copyrights in 1905. Subsequently to the passing by the Common­ wealth Parliament of the Acts relating to these subjects, the correspond­

ing State departments were taken over by the Commonwealth. A department of Census and Statistics was established in 1905, but did not supersede the State departments, except by subsequent agreement between the Commonwealth and an individual State. The control of

all lighthouses, beacons, and buoys was assumed by the Common­ wealth in 1915, and was placed under an officer who was directly to the Comptroller-General of Customs. From 1st July,

1927, the Commonwealth Lighthouse Service was .amalgamated with the Commonwealth Navigation Service, to constitute the Marine Branch of the Department of Trade and Customs. The Tariff Board was established in 1921, to assist the Minister

in- the administration of matters relating to trade _ and customs. The Development _ and :Migration Commission was established in 1926, to inquire into and deal with proposals for the distribution of loan moneys under the Migration Agreement with the Imperial Govern­ ment, and for other purposes.

An Inspector-General of _ Bankruptcy was appointed in 1927, for the purpose of supervising the administration of Bankruptcy Act

1924-1928. Among the bodies or councils of which the appointment cannot be traced directly to any of the powers enumerated in sections 51 and 52, are the Institute of Science and Industry and the Council for Scientific

and Industrial Research.

The High Court of Australia. The High Court was established on the 5th October, 1903, with three justices. Two additional justices were appointed in the month of October, 1906, and the number of justices was increased to sevel? in

the months of February and March, 1913. The principal registry of the High Court is to be at the seat of

government, but the .High Court has held, and continues to hold sittings in each of the capital cities of the States, thereby bringing one of the chief organs of the Federal Government, at intervals, into the mi ds t of th.e citizens of each State.

-The Inter-Slate Cornm1:ssion. The . Inter-State Commission \Vas established by the Inter-State Commiss{on Act 1912, a bill for the appointment of the Commission introduced into the Senate in 1909 having been abandoned, but at the present time there are no Commissioners.

The Parliament. In exercise of the powers to legislate on matters affecting itself the Commonwealth Parliament has, inter alia, made laws with respect to the qualification of electors, the qualification of members, the electorates for the House of Representatives, the filling of periodic and casual vacancies in the Senate, the system of voting, compulsory enrolment, and compulsory voting.

27

The Franchise. Under sections 8 and 30 of tb.e Constitution the franchise is to be the same· for both Houses of the Commonwealth Parliament, and no person is to have more than one vote. Under section 41 of the Constitution no

adult person who has or acquires a right to vote at elections for the more numerous House of the Parliament of a State is, while the right continues, to be prevented by any law of the Commonwealth from voting at elections of either House of the Parliament of the Com­ monwealth.

Section 41 has not been interpreted by the High Court-1Vfurama.ts' case ( 32 C.L.R. 500) was decided on another ground-and the meaning of the section is not free from doubt (see Quick and Garra.n, pp. 484-487; Harrison Moore, 1st edn., pp. 108-109; 2nd edn., pp. 126-127).

There are no words in the Constitution which expressly provide that the section is to have only a limited duration, e.g., that is to apply only to persons who had a right to vote under a State franchise at the time when the State laws which governed the :first elections after Federation

were superseded by the enactment of a uniform franchise throughout the Commonwealth (cf. s. 30, and the fourth paragraph of s. 128). In practice the section has been interpreted, by the instructions issued to Electoral Registrars, as meaning that the right to vote under a State franchise "must have been acquired by lawful enrolment as an elector for the more numerous House of the P arliament of the State prior to

the passing of the Commonwealth Franchise Act 1902, and that in order to be entitled to Commonwealth enrolment the elector concerned must have continuously retained his right to such State enrolment". It may be noted in regard to the franchise under the Commonwealth Electoral

Act.1918-1928 that the only effect of section 41 of the Constitution is to preserve the right of a person who but for that section would be

disqualified as an aboriginal native of Australia, Asia, Africa, or- the Islands of ·the Pacific except New ZCilaland.

By the Commonwealth Franchise Act 1902, section 3, it was provided that, subject to certain disqualificatjons, the following persons should be eligible to vote at any election for ei ther House of Parliament, namely, all persons not under twenty-one years of age, whether male or female, married or unmarried- (a) who have lived in Australia for six months continuously, and (b) who are natural born or naturalized subjects of the King, and (c) whose names are on the electoral roll for

any electoral division. ·

. By section 4 of that Act the following persons were disqu alified:-­ ( 1) persons of unsound mind; ( 2) persons attain ted of treason; and (3) persons convicted of any offence, and either u nde_r sentence or subject to be sentenced for any punishable by the law of any

part of the King's dominion s by imprisonment fo r one year or longer; and ( 4) · any aboriginal native of Australia, Asia, Africa, or the I slands of the PaciP.c, .- excep·t N ew Zealand, unless he is entitled under section 41 of the Constitution.

Women were admitted to the franchise in 1894 in South Austr alia, in 1899 in Western Australia, in 1902 in New South Wales, in 1903 in Tasmania, in 1905 in Queensland, and in 1908 in Victoria. F.l25l.-3

929

28

The Commonwealth F ranchise Act 1902 was repealed by the Com­ mo nwealth Electora.Z A ct 1919 (s. 3). Adult suffrage was continued by section 39 of the latter Act, under which, subject to certain disquali­ fications, all persons not. under twenty-one years of age, whether male or female, married or unmarried, who hftve lived in Australia for six months continuously, and are natural-born or naturalized subjects of

the King, are to be entitled to enrolment.

In addition, the following persons were to be entitled to enrolment during the continuance of the then present state of war and for a period of three years thereafter, namely, all persons who ·were or had been members of the Forces within the meaning of the Commonwealth

Electoral (War-time) Act 1917, and who had lived in Australia for six months continuously, and wer e natural-born or naturalized subjects of the King.

By sub-sections ( 4) and ( 5) of the same section ( s. 39), the dis­ qualifications of section 3 of the Commonwealth Frnnchise Act 1902 re-enacted.

By section 2 of the Cornm ontuealth Jj}l ectoral Act 1925 two further exceptions were made to the provision which disqualifies aboriginal natives of Australia, Asia, Africa, and the Islands of the Pacific (except New Zealand). Under these exceptions such a person may be entitled to have his name placed on or retained on the roll and to

vote, not only where he is so entitled under section 41 of the Constitu-6on, but also (a.) if he is a 11ative of British India, or (b) if he is

a person to whom a certificate of naturalization has been issued under a lavv of the Commonwealth or of a State, and that certificate is still in force, or if he is a person who obtained British nationality by virtue of th e issue of any certificate.

By the Commontuealth .Electoral (vVar-time) Act 1917-1911} pro­ vision was made for the enrolment of members of the Commonwealth Forces under the age of twenty-one, and for the voting of members of the Forces on active service. By the Commonwealth Electoral ( liVar­ ti rne) Act 1917 it was also enacted that with certain specified exceptions every naturalized British subject who was born in an enemy country should be disqualified from voting. The exceptions. included (a) any member of the Forces serving outside Australia; (b) any person who

was or had been a member of the Forces, or had applied for enlistment been rejected, or was a parent, or the wife, brother, or sister of D

person ·who had been a member of the Forces, or had been rejected: ( c) any person who had been, at any time during the then present war, a member of the Parliament of the Commonwealth or of a State; (d) any person who satisfied the presiding officer that he ,v-as a Christian, and either a Syrian or an Armenian. By .section 2 it was enacted that this Act should apply in relation to elections for the Senate

and general elections for the House of Representatives held during the then present war, or within six months thereafter. This Act was repealed by the Comrnonwealth Electoral (TV ar·tirrte) Repeal A cl 1920.

The Commonwealth Parliament is the only Parliament in Aus­ tralia of which both Houses are elected by universal adnlt suffrage. Queen.,land, however, has on e House only.

29

_of Members of Pa.fliament.

By section 95 of the Commonwealth Eledoral Act 1902 it was · that to entitle a person to be nominated as a senator or membeT

·of the -House of Representatives, he must be qualified under the Constitution to be elected as a senator or member of the House of Repre­ sentatives. The qualifications fixed by the Constitution are set out in section 34, and the disqualifications in section 43 and 44 of the

Constitution. To these disqualifications the Parliament' of the Common­ wealth has added, by section 96 of the Co nvrnon·n,ealth Electoral Act 1902, that "no person who is at the date of nomination, or who was at any time within fourteen days prior to the date of nomination

a· member of the Parliament of a State shall be _ capable of

being nominated as a . senator or as a member of the House of

Representatives."

Apparently the Constitution contemplated that some persons would he. members of State _ and Commonwealth Parliaments, as Ministers for a State were expressly exe1npted from the provision disqualifying persons who hold an office of profit under the Crown ( s. 44 Gf the

Constitution), States saw fit to disqualify members of the Com­ monwealth from being elected to the State Parliament, and

the Commonwealth Parliament retaliated -vvith section 96 of the Commonwealth Electoral 1902. The provisions of that section are re-enacted in seetions 69 and 70 of the Common·wealth Electoral Act 1918. It was suggested before the Commission that the principle of

these disqualifications is open t0 criticism, as the electors should have the right to elect, if they see fit, a member of a S tate Parliament to the Commonwealth Parliament, or a member of the Commonwealth Parliameri.t to ·a State Parliament.

The qualifications of a member of the Commonwealth Parliament are more fully set out in section 4 of the Comnwnwealth Electoral Act 1925. He must (a) be of tho full age of twenty-one 3rears; (b) be a

subject of the King, either natural born or for at least five years

naturalized under a law of the United Kingdom or of the OorlOI.mon­ wealth; (c) have been for three years at least a resident w1th1n the Jimits of the Commonwealth, as existing at the time when he is chosen; and (d) be either-(i) an elector entitled to vote at the elec tion of a member of the House of Representatives; (ii) a p erson qualified to become such elector; or (iii) a person who lives in the Terri tory for the

Se,at of Govern:rn_ent and has so lived for a period of one month.

Section 70 of the Common wealth• Electoral A ct 1918, providing for the disqualification of members of the State Parliament, was re -stated by section 2 of the Commonwealth BlecioTal A ct 1921, witb the addition of a provisio11 to the effect that "no person who h as resigned from the

Parliament of a State and has the right under th e law of the State if not elec'ted to the Parliamen t of the Oouimomveal th to be re-elected to the Parliament of the State without the holding of a poll" be

capable of being nominated as a senator or as a member of the House of Representatives.

This provision was inserted to frustrate an attempt made by State Parliaments to evade sectio.n 70 of the Common wealth Elecloral Act 1918.

931

30

Section 44 (iv) of the Constitution provides that any person who "holds any office of profit under the Crown shall be incapable of being chosen or of sitting as a senator or member of the House of Represen­ tatives." Witnesses before the Commission that this provision

imposed a hardship on members of the civil service. Some urged that it should be amended either by allowing a civil servant to contest a seat and to postpone his resignation until after his election, or by the sub-section altogether. Others urged that a civil servant should be

allowed to return to the service at the end of his parliamentary term.

Electm·ates for the I! ottse of Repr·esentati-ves. By the Commonwealth Electoral Act 1902 provision was made for the election of members of the House of Representatives by single­ member constituencies, each State being distributed into a number of electoral divisions corresponding with the number of members to be chosen in the State, and one member being chose:p. in each division

(s. 12). This provision is now repeated in the Commonwealth Electoral 1918-1928, s. 15.

The Constitution itself provides by section 24 for the ascertainment of a quota for the purpose of arriving at the number of members to be chosen in each State, subject to a proviso for the minimum representa­ tion of original States. This quota is ascertained by dividing the

number of the people of the Commonwealth by twice the number of senators. The number of members to be chosen in each State is then determined by dividing the number of people in the State by the quota, and if on the division there is a ::-emainder greater than one half of the quota, one more member is to be chosen in that State. The machinery for

giving effect to section 24 of the Constitution is provided by the Repre­ sentation Act 1905. The population of the Commonwealth, and of each State, is to be ascertained at the times and in the manner prescribed by the Act, and the representation of the States may be adjusted once in every five years. In 1901 the population .quota, that is, the quota ascertained by dividing the · population of . the Commonwealth by seventy-two, was 52,514; in 1906, 55,595; in 1912, 61,547; in 1922, 75;230; in 1927, 85,494.

At the time·of the first election for the Commonwealth Parliament the number of members chosen in each State was :-New South Wales, twenty-six; Victoria, twenty-three; Queensland, nine; South Australia, seven; Western Australia, :five; Tasmania, :five. The number of members

chosen in each State at the election in 1928 was :-New South Wales, twenty-eight; Victoria, twenty; Queensland, ten; South Australia, seven; Western Australia, :five; Tasmania, five; Northern Territory, one. Tasmania would not be entitled to choose :five members but for

the provision in section 24: of the Constitution that in each original State :five members at least shall be chosen. There was no need for an adjustment of the representation· in 1926, but there may be need for an adjustment in 1931. ·

For the purpose of each State into electorates it was

0nacted by the Commonwealth Electo.ral Act 1902 (s. 15, as amended by the Act No. 26 of 1905) that a quota should be ascertained by

dividing the number of electors in the State by the number of members of the House of Representatives to be chosen therein. This provision now repeated in the Commonwealth Electoral Act 1918-1928, s. 18.

31

The distribution of a State into electorates is made by three Distri­ bution Commissioners appointed by the Governor-General, of whom one is to be the Chief Electoral Officer or an officer having similar

qualifications, and another the Surveyor-General of the State or an officer having similar qualifications, if his services are obtainable. The Commissioners · are directed to take into account (a) community or diversity of interest; (b) means of communication; (c) physical

features; (d) existing boundaries of divisions and subdivisions; and ( e) State electoral boundaries. Subject to due consideration being given to these matters the quota of electors is to be the basis for the distribution. The_ Commissioners may adopt a margin of allo_wance, to be used whenever necessary, but the quota is not to be departed from to a greater

extent than one-fifth more or one-fifth less. The report of the Com­ missioners is to ·be laid before both Houses of Parliament, and if both HousBs approve, the Governor-General may proclaim the electorates. If either House does not approve, the Minister ·may direct the Com:­ missioners to propose a fresh distribution (Commonwealth Electoral Act 1918-1928, ss. 16-25).

A redistribution of the electorates in .any State may be made (a) whenever an alteration is made in the number of members of the House of Representatives to be elected for the State; (b) whenever in one­ fourth of the divisions of the State the number ·of the electors differs from a quota ascertained in the manner provided in the Commonwealth

Electoral Act to a greater extent than one-fifth more or one-fifth less; and (c) at such other times as the thinks fit ( 0 ornr

monwealth Electoral Act 1918-1928, s. 25).

There have been three redistributions since the establishment of the Commonwealth, in 1906, 1912, and 1922. In 1906 New South Wales was entitled to one more, and Victoria to one less, than its original number of members. In 1912 Victoria was entitled to one less, and

Queensland to one more than in 1906. In 1922 Victoria was entitled to one less, and New South Wales to one more than in 1912: Redis­ tributions were required accordingly. No use has yet been made of the provision under which the Governor-General may, if he thinks nt, direct a redistribution in cases other than those in which there has been a variation in the number of members for a State or in the number -cf electors in one-fourth of its divisions.

Enrolment and Voting. Enrolment of electors was made compulsory by the Commonwealth Electoral Act 1911 (27th March, 1912), and voting was made com­ pulsory by the Commonwealth Electoral Act 1924.

In 1901 the percentage of electors who exercised the franchise was 53.04 for the Senate, and 55.69 for the House of Representatives. In 1917 the percentage, being the highest at any election -prior 'to 1925, was 77.69 for the Senate, arid 78.3 for the House of Representatives.

In 1922 the percentage was 57.95 for the. and 59.36 for the

House of Representatives. In 1925 the percentage was 91.31 for the Senate; . and 91.39 for the House of Representatives. In 1928 the __ w:;:1s_ 93.61. _for the 93.64 for ., the House of _

Representatives,

933

32

The enrolment in each electoral division at the time of each redis­ tribution in 1906, 1912, and 1922, was as follows [Exhibit 30] :-

NEw SouTa WALES.

1906.

Enrolment

1903

e1ertion.

.

M ctropolitan Divisions.

(New Division) ..

C. tCJk (New Division) .. ..

Lalley .. .. 34,361

East Sydney .. .. 35,018

Lang .. .. 38,896

Martin (New Division) ..

Nepean (New Division) ..

North Sydney .. 39,037

Parkes .. .. 36,855

Parramatta .. .. 28,038

Reid (New Division) .. ..

South Sydney .. 31,765

Warringah (New Divi- sion) . . .. ..

Wentworth .. .. 31,362

West Sydney .. 25,787

Extra- :Metropolitan Division8.

Barrier .. .. 19.277

Bland .. .. 20,861

Canobolas .. .. 20,256

Calare {New Division) ..

Cowper .. .. 25,568

Darling .. .. 15,268

Eden-Monaro .. 22,330

Gwydir .. .. 22.360

Hnme .. .. 2:!,219

Hunter .. .. 26,9fi3

lllawarra .. .. 27,419

Mac'\uarie .. .. 20,460

Newcastle .. .. 35,655

New England .. 26,759

Parramatta .• .. ..

Richmond .. .. 18,986

Riverina .. .. 18,16:-l

Roberts..>n .. .. 22,330

Werriwa .. .. 21,066

Total .. .. 687,049

Quota Limits-MR.ximum Minimum ..

Before As

Redi<;tri- R ridistri-bution. buted.

.. ..

.. 26,400

32,783 27,620 31,ll3 27,994

37,549 25,986 .. ..

.. 25,921

38,589 25,916 36,804 26,363 37,906 26,339 . . ..

31,263 27,162

. . ..

31,694 25,594 24,394 28,040

19,992 21,461 19,814 } ... 20,083 .. .. 24,040 26,488 24,895 14,168 21,495 21,147 22,412 22,032 23,732 21,464 23,233 28,200 25,055 26,575 25,266 20,846 23,028 32,629 27,408 26,484 24,444 .. .. 22,054 22,054 15,993 22,318 21,961 24,857 21,257 24,249 ---673,282 673,282 25,895 31,074 . 20,716 • Sub-Metropolitan.

1912. 1922.

Before As Before As

Redi stri- R edistri- Redist.ri· Redlstri-bution. buted.

.. ..

35,733 37,794 38,765 37,753 35,428 38,049 47,353 37,822

. . . .

41,252 37,134 49,828 37,995 46,274 37,959 39,851 37,428

.. ..

34!873 37,553

.. . .

46,982 37,802 33,111 37,402

22,264 29,269 .. ..

.. ..

33,092 31,307 37,119 35,536 28,899 30,091 22,712 31,278 34,338 33,606 27,884 31,422 35,840 34,532 30,060 35,118 24,344 31.863 32,186 35,137 31,416 32,618

. . . .

34,!)96 33,794 33,030 32,107 29,488 31,353 28,565 32,022

935,744 935,744

34,657 41,588 27,726

but ion. buted.

.. 40,499

39,340 41,308

39,089 42,349

37,730 43,130

51,496 41,004

.. 40,634

60,396 ..

56,337 41,302

72,439 40,450

63,055 * . . 39,737 47,782 40,895

. . 40,019

56,028 40,579

31,934

23,635" . .

. . . .

31,035 37,588

37,022 37,722

24,465 36,546

28,667 38,311

30,140 37,559

33,143 37,604

40,423 38,907

48,046 ..

35,424 37,758

47,741 39,931

32,067 38,487

. . 39,956

35,658 37,737

33,737 36,831

33,208 37,573

35,343 37,6!)9

1,105,380 1,J05,380

•39,478 4:7,373 31,583

' - '.

Enrolment

Divi'lion. 190R

electipn

Metropolitan Divisions.

Balaclava .. .. 34,412

Batman ... .. ..

Bourke .. .. 34,921

Fawkuer .. .. ..

Henty .. .. ..

Kooyong .. .. 39,359

Maribyrnong .. ..

Melbourne .. 26,753

Melbourne Ports .. 31,893

Northern Melbourne .. 35,542 Southern M!lllbourne .. 35,793 Yarra .. .. 37,199

E:dra-Jf etropolitan

Ballaarat .. .. 30,281

Bendigo •• .. 25,320

Corangamite, • .. 23,849

Corinella .. .. 20,792

Corio .. .. 25,531

Echuca .. .. 20,221

Flinders .. .. 27,461 '

Gippsland .. .. 19,536

Gram .. .. 21,734

Indi • .. .. 19,228

Laanecoorie .. 19,954

:Me;nd.a .. .. 21,969

.. .. 20,970

Wannon .. .. 23,103

Wimmera .. .. 16,691

Tot.al .. 612,472

Qupta. Limits-Maximum )finimum ..

33

VICTORIA.

1906.

Before Redistrl-bution.

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

t

As

Redistri-bute(l. ·---

28,969 28,2l9 28,753 31,348

..

30,014 30,244 29,506 29,237

..

..

28,180

28,342 28,616 27,738 ..

28,416 27,387 26,358 26,549 26,236 27,541 26,175 26,969

..

26,120 25,509

616,426

28,019 33,623 22,415

1912.

Before As

Rf'distri-

bution. buted.

4:1,345 32,385 33,314 35,829 45,031 34,423 42,962 35,453

. . 32,537

41,695 34,335 42,155 34,095 34,055 36,758 35,736 36,573

.. ..

. . ..

28,575 37,014 '

25,891 36,011 29,354 34,957 30,042 34,612 .. . .

31,924 33,918 29,794 34,796 33,436 33,318 28,071 34,555 27,709 35,397 28,460 33,895 23,544 ..

29,782 ..

. . ..

28,117 33.758 36,609 32,482

727,601 727,601

34,648 41,578 27,718

t Figures not shown in Committee's Report.

1922.

Rf'fore Redbtri-!Jution.

46,746 37,101 57,045 39,972 67,452 53,811 51,427 34,280 44,353

..

..

40,140

32,874 30,050 34,913 ..

38,884 34,501 42,248 36,758 . 29,458

30,982 ..

..

..

34,385 38,314

855,784

42,789 51,347 34,231

,\s

Rf'distri-buted, ----

43,783 44,867 44,605 44,810 43,913 45,749

47,659 47,410 . .

. . 47,633

40,316 41,196 39,144 . . 40,422 39,883 42,306 41,317 . . 38,071 . . . . .. 39,823 39.327 855,784

935

Enrolment

Division. 1903

election.

. Metropolitan Divisions.

Brisbane .. .-. 34,142

Lilley (New Division) ..

Oxley .. .. 31,326

Extra-Metropolitan Divisions.

Capricornia .• .. 21,624

Darling Downs .. 24,155

Herbert .. .. 25,685

Kennedy .. .. 19,703

Maranoa .. .. 16,865

Moreton .. .. 27,267

Wide Bay .. .. 26,313

Total .. 227,080

Quota Limits-Maximum · Minimum . .

QuEENSLAND.

1906.

Before As

Redistri- Redistri- bution. buted.

34;009 - 28,992 -.. . .

31,694 28,867

20,669 23,971 25,927 26,119 26,119 20,359 22, 111

18,186 23,038 28,216 28,053 28,993 25,695 .

234,172 234,172

26,019 31,223 20,815

1912.

Before As

Redistri- Redistri- bution. buted.

35,793 - . 33,934 . .. 31,263

38,605 . 31,679

35,392 31,115 37,548 32,890 39,461 33,086 20,709 30,56[? 35,282 27,64f? . 36,,V8 32,7.50 . 34,680 28,960 .

313,888 .313,88$ .

'

31,388 37,665 25,111

..

SoUTH AusTRALIA.

(No Redistribution in 1906 or 1912.)

Enrolment

1903

elel'tion.

M etropoUtan Division.

Adelaide .. .. 24,273

Boothby .. .. 25,199

Hindmarsh .. .. 24,446

Extra-Metropolitan Divisions.

Angas .. .. 24,045

Barker .. . . 23,035

Grey .. .. 22,548

Wakefield .. .. 24,229

Total .. 167,775

Quota Limits-Maximum Minimum . •

I

1906. 1912.

Before As Before . .

Redistri- Redistri· Redistri- bution. buted. bution. buted.

\

' .. .. . . ..

.. .. .. . .

.. .. .. ••i

!

.. .. .. . .

.. .. .. . .

.. .. .. . .

.. .. .. . .

.. . . .. ..

1922.

Before Redistrl- bution.

-- 43,383 -52,611 49,762

. . ·-

33,128 37,231 43,157 26,5J7 31,346

391,70·9·.

39,171 47,005 31,337

As

Redistrl- .buted •

. .. 39,198 . 38,924 42,206

42,587 40,263 40,055 34,760 33,242 ·.: 39,436

41,038

391,709

1922.

ore

Redistri- bution.

34,017 49,539 52,835

30,376 39,798 33,256 34,362

274,183

39,169 47,003 31,336

As

Redistri- buted.

41,718 38,487 41,658

38,471 39,646 35,444 38,759

274,183

Enrolment

Division. 1903

ele,.tion.

'

Metropolitan Division.!.

Fremantle .. .. 19,51 .1

.. .. 27,105

Extra;.Metropolitan ' Divisions.

Coolgardie .', · .• 21,686

Dampier (New Division) ..

Forrest (New Division) ..

Kalgoorlie .. .. 23,208

Swan . .. .. 25,432

..

Total ..

Quota . Limits-Maximum Minimum.: .

35

WESTERN AUSTRALIA.

1906.

Before -Redistri- bution.

21,417 28,224 -·

· 19,031 ..

..

22,173 25,354

116,199

As

Redistri- buted.

22,924 24,523

. 22,624 . .

. .

22,173 23,955

23,240 27,888 18,592

TASMANIA.

1912.

Before As

Redistri· Redistri· button. buted.

24,968 29,617 33,556 30,358

24;177 . ..

.. 30,467

.. . .

20,255 31,103 48,997 30,408

151,953 151,953

30,391 36,469 84,313

(No Redistribution in 1906 or 1912.)

I

! '

. Division. Enrolment 1903 elertlon.

;

ltf dropolitan Division. '

Denison ... ..

;

Extra-M Divisions. ·

Bass .. .. 17,571

Darwin .. .. 16,111

Franklin .. .. 16,261

Wilmot .. .. 15,718

Total "82,268

Quota ••

Limits-Maximum Minimum ••

1906. 1912.

Before As Before As

Redistri· Redistri- Redistrl- Redistrl- butlon. buted. bution. buted.

. .. .. .. . .

.. .. . . . .

.. .. .. . .

.. .. . . . .

.. .. .. . .

.. .. .. . .

1922.

Before As

Redistri- bution. buted.

44,888 34,598

39,124 34,717 ·-· -

..

30,771 ..

18,527 33,785

167,095 ---

33,419 ' 40,103 26,735

..

..

33,207 32;272 32,301

167,095

1922.

Before Redistri- · butlon.

27,901

22,660 . 17,391 22,849 17,817

108,618

21,724 26,069 17,379

As

Redi!!t.rl· buted.

22,597

21,254 22,188 20,957 21,622

108,618

937

The followin g

stat

e ment

[

2 5 ] shows

in

regarcl

to

each

State,

in

1901, 1906, 1912, 1922,

anrl1927-the

population;

the

number of members of

the

Hou

s e of

Representatives;

the

electoral population;

and

the

average

number

of electors

in

each

division.

/'

1906

Redistr

.ibut

i on. 1912 Redistribution. 1922 Redistribution. 1927.

State.

Nurn- Aver a

ge

Num- Average Num- Average Num- Average

Num- Av¢rage

ber

Number

ber

Number

ber

Number

b e r

Number

ber

Number

Popul a tion . of

El ec tors Population. of Electors Population. of

El ec

tors

Popnlation

. of

El e ctors Population. of Elec t ors

M e m-

pl'>r

Mem·

per Mem-

per

M e m-

per

Mcm-

pPr

b e rs. Division. bers. Division. bers.

· Divi s ion. ·

bers. Division. bers. Divi'lion.

----

(a)

..

1,354:,846

..

..

1,483,393

..

. .

1,646,734

..

. .

2,099,763

..

..

2,370,623

. .

. .

N.S.W.

..

26 12,677

..

27 24,666

..

27 ' 34,657

. .

28 39,478

..

28

46,055

( b)

..

329.615

..

..

665,978

..

. .

935,744

..

. .

1;105,380

..

..

1,289,534

. .

(a)

..

1,201,070

..

..

1,214,098

..

. .

1,315,551

..

. .

1,531,529

..

..

1,726,445

. .

. .

Victoria

..

23

ll,307

..

22 27,942

..

21

_ 34,648

. .

20

42,789

. .

20 4!l,242

(b)

..

- 260,053

..

..

614,732

..

. .

727,601

..

..

855,784

.. ..

984,830

. .

. .

(a)

..

498,129

..

..

506,938

..

. .

594,514

..

. .

747,620

..

. . .

894,444

..

. .

Queensland

..

9

ll,682

..

9

25,370

..

10

31,388

. .

10

39,171

10

' 44 , 112

(b)

..

105,144

..

..

228,326

..

••

I

313,888

.. .

.

391,709

..

..

441,122

..

. .

(a)

..

363,157

..

..

372,768

.. ..

408,558

..

..

495,336

..

..

570,900

. .

. .

Sth.

Aust.

..

7 21,895

..

7 27,588

..

7 34,832

. .

7

39,169

..

7 44,657

(b)

..

153,268

..

..

193,118

..

..

244,026

..

..

274,183

. .

..

312,599

. .

. .

(a)

..

184,124

..

..

247,072

..

..

274,841

·-

..

328,475

. .

..

385,043

. .

. ..

West.Aust

;

..

5

18,208

..

5

23,050

..

5

, 30,391

. .

5 33,419

..

5

38,701

(-b)

i!

. . .

91.043

..

. .

115,254

..

..

151,953

. .

..

167,095

..

..

193,504

. .

..

(ll)

172,4'75

.. ..

178,627

..

..

191,211

..

..

213,877

..

208,179

..

..

Tasmania

..

5 7,774

..

5

18,042

..

5 "

21,349

..

5

21,724

..

5 21,855

(b) ·

j

..

38,870

..

'

..

90,209

..

..

106,746

..

..

108,618 :

..

109,275

. .

(a)

..

3,773_,801

. ..

..

4,002,893

..

..

4,431,409

.. ..

5,416,600

. .

6,155,634

. .

. ..

Com'wth.

..

75 ; 13,040

..

75 25,435 75

33,066

..

15

38,703

75 44,411

(b)

. - .

977,993

..

..

1,987,617

..

1

Population

quota,

i.e.,

Total

Population

divided

by

72

(twice

the

number

of Senators)

..

2,479,958

Year

1901. 52,514

..

..

Year

1906. 55,595

2,902,7n9 Year

1912.

61,547

. .

. .

3,330,864

..

Year

1922. 75,230

Year

1927.

85,494

NoTE.-ln

the

year

1901,

women were

not

enfranchised

in

the

States

of New

South

Wales,

Vitltoria,

Queensland,

and

Tasmania.

(a)

Total. (b) Electoral.

..

t.:J 0)

The area of the electoral divisions in Dece-mber, 1922, the date of the last redistribution, was as follows [Exhibit 26] :,-1. New South Wales. A. METROPOLITAN DIVISIONS.

Barton Cook Dalley East Sydney (exclusive of Lord Howe Island) L l}ng

Martin North Sydney Parkes Reid

South Sydney Warringah Wentworth West Sydney

B. ExTRA-METRO;POLITAN Div:;:siONS. Oalare Cowper Darling Eden-Monaro Gwydir Hume Hunter

Macquarie Newcastle . New England .. Parramatta

Richmond Riverina Robertson W€rriwa

Lord Howe Island

[I. V idoria.-

Total

A. 1'IETROPOUTAN DIVISIONS.

Balaclava Batman ·. Bourke Eawkner

Henty Kooyong Maribyrnong Melbourne .Melbourne Ports Yarra

Square Miles. 52.0 11.2 4.0

10.4 4.4 55.2 18.4 10.0

63.2 14.8 116.4 8.0

6.4

12,185.0 10,060.6 151,284.0 17,586.0

32,665.!' 10,624.0 896.0 5,350.4

76.8

15,667.2 405.2 7,321.6 24,651.0 14,413.0

5,836.8

309,427.0 5.0

309,432.0

Square Miles. 7.5 21.9 12.3

7.0 42.1 21.8 15.1

9.8 10.4 3.7

939

38

B. ExTRA-METROPOUTAN DrvrsiONS. Ballaarat Bendigo Corangamite ..

Corio .Echuca Flinders Gippsland

Indi Wannon Wimmer a

III. Queensland.

Brisbane . Capricornia Darling Downs Herbert

Kennedy Lilley Marano a Moreton

Oxley Wide Bay

IV. Soruth Australia.

Adelaide An gas Barker Boothby

Grey Hindmarsh Wakefield

v. W este1'n· Australia.

Forrest Fremantle Kalgoorlie Perth

Swan

Total

Total

Total

Total

2,102.4

. . 3,371.0

. ,..

8,461.0 2,461.0 8,268.0 1,923.0 16,408.0 10,715.0 13,024.0 20,999.0 "

Square Miles. 45.6 57,889.0 7,330.0 72,565.0 294,985.0

246.7

217,937.0 3,438.7 194.0 15,869.0

670,500.0

Square· Miles. 12.8 7,672.8 18,822.6

16.8

338,403.0 53.0 15,089.0

380,070.0

Miles.

40,220.0 79.5

909,121.0 19.5 26,480.0

975,920.0

VI. T asmawia.

Bass· Darwin Denison Franklin

Wilmot

VII. Northern Territory.

-Northern Territory

Total

Square Miles. 3,34'7.0 6,640.3 . 5.7 6,100.0 10,122.0

26,215.0

Square Miles. .. 523,620.0

The number of electors in each' electorate on the 30th September, 1927, was as follows [Exhibit 31] :+ \

Division. Enrolment. Division. Enrolment.

State of New South Wales. State of Victoria.

Barton 59,304 Balaclava 54,183

Caiare 40,955 Ballaarat 38,208

Cook 42,669

Cowper 38,987 Batman 66,781

Dalley 41,464 Bendigo 39,000

Darling · 40,039 Bourke 56,576 East Sydney 38,822 Eden-Monaro 40,518 Corangami te 40,675 Gwydir 38,737 Corio 1:9,546 Hume 41,176 Hunt-er 49,846 Echuca 41,542 Lang 45,006 Fawkner 45,288 Macquarie 39,192 Flinders 59,971 Martin 58,201 Newcastle .. 50,753 Gippsland 44,127 New England 40,414 7:0,997 North Sydney 53,537 Parkes 53,663 Indi 39,369 Parramatta 54,762 _ 62,156 Reid Maribyrnong 52,952 Richmond 41,665 Riverina . . 43,830 Melbourne 44,529 Robertson 40,808 Melbourne Ports 45,978 South Sydney 51,954 Warringah . 48,524 Wannon .. 41,512 Wentworth 53,346 Wimmer a 47,858 Werriwa .. 43,291 Yarra 43,582 West Sydney 37,219 984,830

941

The number of electors in each electorate on the 30th September, 1927, was as follows [Exh·ibit 31]-continucd.

Divis:mi. Enrolment. Division.

·State of Queensland.

Brisbane . . 41,155

Oapricornia 46,370

Darling Dovms 40,804

Herbert 52,252

Kel'medy 30,795

L illey . 52,255

1v1aranoa 31,766

Moreton Oxley \Vide Bay

46l536

45,443

441,122

State of South A ·ustralia.

Ad elaide .Angas . Barker

Grey H indmarsh Wakefield

43,763 48,498 46,808 47,254 36,226 53,107 36,943

312,599

State of lV estern Forrest Fremantle Kalgoorlie Perth

Swan

Franklin Bass Darwin

Denison Wilmot

State.

.New South Wales Victoria ..

Queensland South Australia Weste.rn . Australia Tasmania

The Nttmber of Members of the H of Representatives.

Enrolment.

Australia. 40,847 40,026 28,463 38,540 ' 45,628

193,504

22,623 21,577 22,054 22,238 20,783

109,275

. Summary for Commonwealth .

' . 1,289,534 984,830 441,122 312,599 1!J;J,504 109,2'i 5

. 3,330,864.

It was urged before the Commission that the number of members of the House of Representatives shopldbe i_ ncreased for various .reasons, the main arguments being (a) that the ele-ctoral quota has very much in creased since the number was fixed at 75; (b) that it is for members of certain electorates of great size to understand properly

the nee ds of their own constituent&; (c) that owing to the small size of the State elec torates, there are greater · opportunities of expressing the point of view of the States than for· expressing the p-oint of view uf the Commonwealth; (d) that a House of 75 is too small to avoid the risk of having an undesirably large proportion of members who support

•

41

a government attached to it as Ministers or Assistant Ministers, or in­ some way benefiting by government patronage, as, for instance, as members of the Public Works Committee, or the Public Accounts Com­ mittee; and (e) that the risk of having such a proportion is likely

to become. more serious a.s the business of the Commonwealth becomes more complicated, and the necessity arises of appointing a large number of Assistant Ministers. An increase in the number of members of the House of Representatives was recommended by the Chairman of the

royal com:rp.ission on the :finap ces of Western Australia.

The Duration of the }] ouse of R epresentatives. It was urged before the Commission ·that the t erm of the House of Representatives should be extended to four years, :five years, or six . years, from three as· at present :fixed by section 28 of the Constitution.

An extension to :five years was recommended by the Chairman of the royal commission on the :finances of Western Australia. It was claimed by witnesses that three years was too short a term for any national Parli.ament, portion of that time being taken up in settling down after an election, and part of the time in preparation for

a new election, and that during a further portion no business is done owing to the necessity of the Prime Minister attending an Imperial Con­ ference. It was also urged that in the Commonwealth Parliament members for widely scattered constituencies have no opportunity of

studying their electorates· during a term of three years qnly. Some of the witnesses assumed that if the term of the House of Representatives were extended, there would be a prop0rtionate extensioli of the term for the Senate. Others thought that the term for the

Senate should remain at six years, and should not be determined by doubli:qg the period :fixed for · the House of R epresentatives or by endeavouring to make the time for holding the elections for both Houses coincide.

The term of the American and Mexican Houses of Representatives is two years; of the Swiss National Council and the Esthonian State Assembly, three years; of the French Chamber of Deputies, the German R eich stag, and the Austrian National Council, four years; of the British

House of Commons, the Canadian House of Commons, and the South A.frican House of Assembly, :five years; and of the Irish Free State, six years.

The Senate. The Senators for each State are elected by the people voting as one electorate. No use has been made of the provisional power of the Parliament of the State of Queensland under section 7 of the Con­ stitution to make laws for dividing that State into divisions for the

purpose of electing Senators, or of the powe r of the Commonwealth Parliament under that section to depart, if it sees fit, from the

principle of " one State one Senatorial elector ate." T?e times of elections of Senators fo r each State have been determmed by the State .Parliaments, and no difference has arisen between State and Commonwealth authorities, the practice being that the Governor­

General informs the Governors of the States upon what day the elections for the House of R epresentatives will be held, and what will be the places, and the of the. States :fix the

and polling places for the Senate electiOns The franchiSf'

is the same as for the House of Representatives .

948

42

Under the Oommonwealth Electoral Act 1902 the voter had to vote for the full number of candidates to be elected, by putting · a cross opposite the name of each candidate for whom he voted, and the candidates to the number required to be elected · who received the greatest number of votes were to be elected ( ss. 150, 161). This

system was continued until 1919, though preferential voting was intro­ duced for elections to the House of Hepresentatives in 1918 ( cf. the Commonwealth Electoral Act 1918, ss. 123, 124, 135 (7) ) . . The Com­ monwealth Electoral Act 1919 provided for preferential voting in elections to the Senate. The voter has to indicate his first and sub­ sequent preferences in respect of the prescribed number of candidates,

and may indicate further preferences . The prescribed number of candidates means twice the number of candidates to be elected, plus one, or if there are fewer candidates than that number, the total number of candidates. Under the Commonwealth Electoral Act 1922 (ss. 4, 11), the names of candidates of the same party may be grouped in the ballot-papers. The system of preferential voting is designed to ensure, as far as possible, that the party, or combination of parties, which secures the highest number of votes for one of its candidates at the

election of Senators shall gain all the places vacant at that election. This system is said to have been adopted at the request of a number of Senators. It gives no room for the representation of minorities. A bill embodying the principle of proportional representation for elections to the Senate was at one time prepared, but proportional has not been introduced, and the preferential system

referred to above is still in force under the Commonwealth Electoral Act 1918-1928 (ss. 123, 135).

At an election of Senators, casual as well as ordinary vacancies may be fill ed. Under the Senate Elections Act 1903, those of the elected candidates who obtained the lowest number of votes were to fill the casual vacancies. By the Senate Elections Act 1922, a distinction is drawn between a short casual vacancy-for a period terminating on the 30th June following the election, and a long casual vacancy-for a

period terminating after that day. A senator-candidate who desires to be capable of being elected to fill a long casual vacancy may resign for this purpose and hi.s resignation will be conditional upon his being elected to fill such a vacancy. A short casual vacancy is to be filled by

the first candidate, not being a senator-candidate, who is elected under the system of preferential voting to fill a periodical vacancy, i.e., an ordinary vacancy, and a long casual vacancy is to be filled under that system after the periodical vacancies have been fill ed.

Casual vacancies are filled, prior to a general election, by the Parliament of that State among whose representatives the vacancy has occurred. In some instances a candidate has been elected of the same party as the Senator whose place is vacant, although he has not

belonged to the same party as the majority of the members of the State Parliament, but this system has not been generally followed.

The term for which a Senator is elected in an ordinary case begins on the 1st July following his election, though after a dissolution it begins on the 1st July prior to his, election. The election to fill vacant places must be held within one year before the places become vacant.

•

43

The constitutional alterations to section 13, by which these pro­ visions were inserted in the Constitution, wer -e intended to secure, as far as possible, that elections for the Senate and the House of Repre­ sentatives might be held on th-e same day, except when the House of Representatives is dissolved more than one year· from the expiration

of its term of three years, and that the elections ;might be h eld in the autumn rather than in the spring or early summer, one object being to avoid the expense of holding a separate election for the Senate, and the other to meet the views which were expressed after the election in December, 1903, that March or thereabouts wo uld be mor e convenien t for

the electors, especially in agricultural districts, than November or December, or even October. In the debate on the bill by which the proposed alterations wer-e submitted to the people it was urged that the alterations could not ensure that the elections for the two H ouses

would be held on the same day, and that under the alterations there would be the risk of having members in the Senate w.):w had been reject-eg at the elections and whose term of office was an.<''lrt to expire (P.D. 1906, p. 3745). In the result, both elections h ave been held on the same date though not always in the autumn. In 19 28 they were __ _held in November. On sever.al .occasions .Senators have been entitled to

sit and vote for some months after being defeated at the polls. F or the same period Sen ators elected have not been able to take their seats, and it is possible that befor e they can do so, m-easures on which they expressed themselves at the elections may have been disposed of by

Parliament.

Relations of the Senate with the House of R epresentatives. The relations of the Senate with the House of Representatives depend mainly on sections 53-55 of the Constitution r elating to :finlmce, and on section 57 relating to deadlocks.

In 1914 an attempt was made under section 128 to induce the Governor-General to submit proposed amendments of the Constitution to a referendum, after r esolutions had been passed by the Senate in the manner prescribed by the second paragraph of that section, although

the Ministry holding a majority in the H ou se of Representatives would not act on these r esolutions. This attempt failed, the Governor-General being guided by the advice of his 1J:inisters. It has been said of sections 53 and 55 that they r ep resent one of the vital compromises of the Constitution whereby an adjustment was made so as to permit of responsible government as understood in British

communities, that is, the responsibi lity of tl1e Ministers of the Crown to the r epresentatives of thA nation considered numerically, and at the same time to gu ard the S hnate from finuncial coercion iri its repre­ sentation of the nation organized in States. Of the two section s, section

53 is for parliamentary guidan0e only, and section 55 supplies a test of the validity of Acts imposing taxation which may be applied by the Courts. A list of the in which the High Court h as considered the

question whether an Act of the Common we alth Parliament in frin ges section 55) will be found in Appendix D. The nature of the power of the Senate to make or request amend­ ments has been discussed in resolu tions of both Houses, firstly as to the

right of the Senate to press its requests (s ee Harrison Moor e, 2nd F.l25I.-4

945

44

edition, page 148), and, secondly, as to the right of the Senate to make amendments which would increase charges on the people. The first occasion on which this arosB was in 1903 in debates on the

Sugar Bounty Bill, which provided for the payment of a bounty to all growers of sugar, in the production of which white labour only was employed, and ap1)ropriated and made payable out of the consolidated fund whatever sum '"'as required for that purpose. The Senate made

an amen dment extending retrospectively the time over which the bounty was payable and thereby incr-easing the number of persons entitled to the bounty. In the House of Representatives, the Prime Minister moved to disagree with the amendment as inconsistent with sBction 53 of the Constitution, in that it increased a charge or burden on the people, and the House accepted the motion. In the Senate it was

finally res olved no t to insist on the amendment, and the proposal was re-submitted to the House in the form of a reques t which was conceded (see Harrison Moore, page 149).

A list of the more recent requests of the Senate is set out below, toE, ether vvith the replies of the House of Representatives:-

Vot P." BtHl ProcePtlin ··s Paf!t- on whirt.

SrhcdLie appears.

202-203

136

145

344

429

183

Date •.

20th December, 1911

15th December, 1914

15th December, 1916

26th September, 1917

6th November, 1918

20th December, 1918

21st May, 1920

Title of Bill an·1 Natu:e of. Requcat.

Customs Tariff 1911.­ Thirty-one requests for alterations in duties,

altered wording of items, &o.

Land Tax Bill 1914.-8ix requests for amendments in rates of tax Supply Bill(No. 3) 1916-17.

-ltequt"st for reduction of total amount of vote with conseqnenhal

amendments in Schedule

Income Tax Bill 1917.­ Two requested amend­ ments which would have the effe ct of exempting · _ certain persons from tax Enie.·tainm.ents Tax Bill

1918.:._,R.flguested amend­ ment to exempt certain children's payments from Ta x

Income Tax Bill191R.--lte­ quested amendment to reduce tax in certain

How of.

Some requests agreed -to, one to, one

made with modmca­

tion. Request disagreed to not pressed by Senate, and modification agreed to Requested amendments made

R equested amendments not made. Senate pressed

req nest ; Bill laid aside ; another Bill brought in, giving effect to requested reduction, and passed by

both Houses. Requested amendments made

Requested amendments made

Requested , amendment made

cases ... .._ ....

War Gratuity Bill 1920 Requested a.mendments

(No. 2). - Requested made

amendments to alter rate of gratuity in certain cases

45

A list of the more r ecent requ es ts of the Senate is set out below, together with the replies of the House of Representatives-conlinved.

Votes and Proceeding• Page O> which Senate•s

Sched•le appears.

713-732

855

771

126

202

.

Date.

13th October,

1921

9th Decem her,

1921

11th November, 1921

15th September, 1922

11th Oc tober,

1922

Title of !' ill anti Noture of Request.

Custorn.s Tariff Bill192l.-92 requested amend­

ments for alterations in the tariff

Appropriation Billl921-22. Request to increase a

salary vote and to reduce another salary vote

Exdse Tariff Bill 192!.­ Requcst for alteration in an item .Meal Expurt Bounties Bill .

-Requests for amend­ ments to extend

payment of bounty Superannuation Bill.-Re­ quest for amendments to extend superannuation

benefits. (This is a case where both req uests and amendmen1s were made in the same Bill)

How disposed of.

Some requested amendments made, some made with modifications, and others not made. Certain re­

quests press('d or modi­ fied by Senate. Bill

returned by House of

Representatives with

question raise d as to right of Renate to press rPquests, and with original re­

ques ted amPndments

made, ronde with morlifi­ cations. made as modified by 8Pnate, nnd not made. President made statement re unusual terms of

message, and Senate

passed motion tha t action of House of RcpresPnta­ t ives in receiving and

dee.li ng wi th reiterated requests is in compliance with crmstitutional rights of Senate. 1\fodifitations

ronde by House nf Repre­ sentatives agreed to, and remaining requests not further pressed by Senate. Requested a mendmenp; not

made, but Senate' s re­

ques t for the increase

given effect t o in new Bill (Supplementary Appro­ priation ). Remaining

request pressed by Senate, but nnt made bv House of Representatives. Con­ ferenee of of both Hons<'S a ppointed

to deal with matter in

di sngreemtnt ; in vi ew of . t hi s, req nest not further prosse d Requested amendment

made

Requested made

Requested made

amendments

nmendmen ' s

947

46

A list of the more recent requests of the 8enate is set out below_. together with the replies of the House of Representatives-continued.

Votes and Proceedings Pagf' on which Senate's

Schedule appears.

391

199-201

242

520- 521

Date.

9th September, 1924

25th June, 1926

23rd July, 1926

23rd March, 1928

Title of Bljl and Nature of Request.

Wine Export Bounty Bill.­ Request for amendment to extend payment of bounty Customs Tariff Bill 1926.­

Nineteen requests for alterations of duties,

alterations in wording of items, &c.

Judiciary Bill 1926.-Re­ quest to vary conditions of pensions of justices Customs Tariff Bill1927.­

Nine requests for altera­ tions of duties, alterations in wording ofitems, &c.

How d!Jposed of.

Requested made

amendment

Some requested amendments made, others made with modifications, and one not made. Senate agreed to modifications and did not press requested amend­ ment not made Requested amendments

made

Some requested amend­ ments made, others made with consequential modifi­ cations. Senate agreed to consequential modifi­ cations

It ha.s b-een said that the objects for which the Senate was established were two :-(1) to act as the States House, and (2) to act as a chamber of revision. It was urged in evidence that either the Senate should be abolished or its constitution radically amended. It has been further said ( cf. II arrison M a ore) pp. 613, 614) that the failure of the Senate to act as a States House gave the Premiers' Conference added

importance at a time when the financial relations of the States and the Commonwealth were undetermined and wer-e about to come before Par­ liament or the people for reconsideration. It is probable that the term "States House" needs definition. It capnot be assumed that the Senators were intended to oppose all pro­ posea- increc ases of Commonwealth pow-ers or even thaf they were in enaea- to an · the- :fi·na:ncial claims of_ the or

not they were thought to be in the interests of the. of Austr_alia.

I

B'Ut--it may ·oe said that-the Senate -has , judged many such proposals and claims from a party standpoint, and that in doing so it has not fulfilled its function of a States House and a chamber of revision. This result has followed from two factors, which w-ere not entirely foreseen by the founders of the Constitution___;the deepening of party

feeling consequent on the predominance of industrial issues even in Federal elections, and the rigidity of party organization which in almost every Stat-e has made it impracticable for a candidate to succeed unless he se cured the endorsement of one party or another. It ha.s thus happened that parties have been divided on the same lines in the Senate as in the House of Representatives, and that, as the House of R epresentativ-es has the power to make :md unmake Ministers, the Senate has lo s.t in authority. No doubt the Senate may block legisla­ ·i;ion when it has a majority opposed to the government of the day, but

47

such a majority must as a rule be composed for the most part of

members serving the second portion of their term of six years, and in such a case the greater authority would attach to the Hous.e which represents the most recent expression of the popular will.

It may not be safe to assume, however, that party divisions will \ continue to follow their present lines. There were signs during the inquiry by this Commission that there might b.e a grouping of the States which depend mainly on primary production ilt of

c · tere. ts. If such a grouping did take place, the Senate would

gain a new importance, and the less populous States would there exercise an influence, by reason of their equal representation, which they could not exercise in the House of Representatives.

At the Senate does give the less populous States repr.e­

sentation at tlie Seat o overnment and in Commonwealth Ministries greater t an-tlteycoulaotita_ m on and does to ;ome

e.Xterrreounteract-·t:lfee:ffect of a concentration of people in the two great cities. Moreover, it does enable a State to exercise an influence on matters in which it is particularly interested. It has been suggested that the Senate would be better qualified to act as a chamber of revision

if repres,entation were given to minorities under a system of pro­ portional representation. At present, although parties may be almost equally divided in the constituencies, one party may so far predominate in the Senate that there may be no opportunity for the presentation of

different points of view. On the other hand, it is said that a State

should speak with one voice, and that the Senate can act as a States House only if all the representatives of that State are chosen from one party.

Reform of the Senate. Suggestions for amending the constitution of the Senate will be found in the evidence of Dr. Watson, page 226, Professor Shann, page 457, Sir James Barrett, page 693, Sir Edward Mitchell, page 756,

Senator Ogden, page 921, and Mr. Melbourne, page 1536.

These proposed amendments rriay be divided into two classes-(a) those which aim at a change in the method of election or in the com­ position of the Senate ; and (b) those which aim at the abolition of the Senate and the substitution of some other body more directly represen­ tative of Stttte governments. In the first class wer e proposals for fixing the age of electors for the Senate at 30 or 35 years, and of

fixing the, age of persons eligible for election at 30 or 35 years.

In support of these proposals the examples of other modern Constitu­ tions, such as those of the South African Union or of the Irish Free State, were quoted. In the same class of proposals were those of Dr. Watson that in elections for the Senate rural districts should have more mt.rnerous representation than they would be enti tied to on a

population basis, and that the States should be divided for purposes of the Senate elections into a number of electoral districts. The proposal that elections for the Senate should be h eld on some system of propor­ tional representation was put forward by Sir James B arrett with a view

to making the Senate more truly r epresentative of all parties in the State and not merely of the party which has a, majority; however slight, at the time when elections a:re held.

949

48

In the second class were proposals put forward by, amongst other witnesses, Profess or Shann and Mr. Melbourne. Professor Shann at page 466 expressed himself as follows:-"I think that the most hopeful direction in which to amend the

Constitution of the Senate is in the way of making it represen­ tative, possibly, of the governments and parliaments of the States. That is to say it should be representative of bodies organized for the purpose of government rather than representative of a popular vote. If we followed in that direction we would have the encouraging precedent of the United States Senate during the period of its greatest prestige and activity, of the Bundesrath of the Imperial German Constitution, the R eichsrat of the present German Con stitution , which is a constitution much admired by constitutional lawyers, and of the Senate of the French Republic, which is represe ntative of the communes of France, that is to say, the little local governing units". Mr. Melbourne developed the p arallel with the present German Constitution in greater detail. H e advocated the establishment, in place of the Senate, of a Council of States, which should consist of

representatives of State governments with the power of initiating legislation, and of delaying legislation for a limited time, and he advocated the addition to the Constitution of provisions for holding a referendum at the instance of the Council of States on proposed laws other than those for the amendment of the Constitution.

The establishment of the OornmonweaJth Par·liament in addition io the State Parliaments. The establishment of an additional Parliament of 111 members must, necessarily, have absorbed the service of some men who would have found a public career in State politics. The continuance of six State Parliaments must, necessarily, have absorbed some men who woul d have become members of a single national Parliament, had the Parliaments of the States been abolished. This division of interest and of service has become more noteworthy and more important than . it

would other wise have been, sinre industrial questions have come to be the main question dividing parties in both Cmpmonwealth and Statf Parliaments. It was also urged before the Commission that this division of interest had the effect of weakening the interest of the electors in politics and of diminishing the authority of parliamentary i-nstitutions.

Again it was said that the Commonwealth Parliament bad become less qualified to exer cise wide powers of government since it had ceased to sit in one of the large centres of population, and the importance of a Parliament being in close touch with public opinion was urged before the Commission.

It may also be suggested that the possibility of competition •between State and Commonwealth Parliaments in offering gifts or concessions to the electors is a danger to the political life and to the economic stability of Australia.

These are all effects of the working of the Constitution which must be taken into account in deciding whether the powers of the Common­ wealth should be or whether a unified government should be

substituted for a Federal system in Australia.

49

The Executive Power of the Commonwealth. Section 61 of the Constitution marks out the fi eld of the executive power. This power is exercisable by the Governor-General as the Sovereign's representative, and under section 2 of the Constitution the

Governor-General is to have, subj-ect to the Constitution, such powers and functions as the Sovereign may be pleased to assign to him. The Governor-General is not a general agBnt of the King. He is a special agent with power to carry out the Constitution and the laws, and such powers and functions as the King may assign to him. The Executive has no po we r to enter into contracts, except such as are

authorized by Parliament, and except, possibly, contracts rendered necessary in the routine administration of a governmen t department, and it does not acquire that powe r merely because Parliament has appropriated money for the purpose of the contracts (Commonwealth

v. Colonial Combing, Spinning and W eaving Co. L td., 31 C.L.R. 421; Oommonwealth v. Colonial Ammunition Co . Ltd. 34 C.L.R. 198) . The Commonwealth Parliament is limited to the powers conferred on it under the Constitution, and therefore cannot authorize a contract except in the exercise of those powers. If the interpretation of section 81 of

the Constitution, acted upon by succeJsive Commonwealth Governments, is incorrect and that section is construed as a restrictive section, an d not a section authorizing the Commonwealth Parliam ent to appropriate money for· all purposes thought· _ to be ben efic ial to the people of Australia, a number of contracts entered into by the Commonwealth may be of doubtful validity.

The division of powers indicated in sections 1, 61 and 71 of the Constitution, does not prevent Parliament passing legislation which shall come into force 'upon the decision or finding of a specified Minister or official, and which has been described as conditional legislation.

Within the limits of the Constitution the Commonwealth Parliament is a body of :plenary powers and has the same power of delegation the Parliament of a State. ·

Legislation is therefore valid, which under the Customs Act 1901-1925 gives to the Governor-General the power of saying what articles shall be prohibited imports or exports, and which gives to the Minister for Customs the power of fi xing the classification of goods.

Legislation is also valid which gives to a Minister the powe r of passing regulations, which do or may affect the rights of parties. This was assumed to be the law without argument, when the regulations under th-e War Precautions Act fi xing the price of bread were attacked in 1916, and was declared to be settled law in 1921, when the regula­

tions which determined rights under the Treaty of Peace with Germany· were attacked on the ground that they involved the exercise of legisla­ tive power by the Executive (Farey v. Bun>ctt, 21 C.L.R., 433; Roche v. Kronheimer, 29 C.L.R., 329).

Responsible Government. During the Convention Debates of 1891 it was predicted that, if responsible government were made part of the Co nstitu tion of the Com­ monwealth, either responsible government would be des troyed, or the

Commonwealth ·would cease to be a fed eration. Both tenus may need further definition than they r eceived in 1891, or have received since.

951

50

Responsible government has · existed, inasmuch as Ministers have been members of Parliament, the existence of Ministries has been sustained by a majority in Parliament, and the Governor-General has acted on the advice of his Ministers.

The constitutional position of the Governor-General may be illus­ trated by the grant of a double dissolution on the request of Mr. Cook in June, 1914, and by t.he summoning of Mr. Hughes to be again Prime Minister after his resignation in 1917. The Governor-General retains the right to refuse a dissolution to a Prime Minister after defeat in the House of Representatives, and has exercised . that right on the 17th August, 1904 (Mr. J. 0. Watson), on the 5th July, 1905 (Mr. G. H. Reid), and on the 27th July, 1909 (Mr. Andrew Fisher).

In the one case in which recourse was had to the alternative pro­ cedure in section 128 under which the Governor-General may submit a proposed law to the electors after it has been passed by one House and two attempts have been made to obtain the concurrence of the other House, the Senate sought to have the bills which had been rejected at the referendums of 1911 and 1913 again submitted to the electors. The Governor-General, acting on the advice of his Ministers, declined to submit them (Parliamentary Debates, 1914, Vol. lxxiv, p. 2420). Apparently the Governor-General regarded himself as bound to accept the advice of his Ministers. One view is that the alternative procedure is intended to give a majority of the States an opportunity, through their equal representation in the Senate, of getting proposals for the alteration of the Constitution before the people, notwithstanding that the proposals may not be approved by a Commonwealth Ministry. The other view is that the responsibility of Ministers for Commonwealth expenditure makes it proper that the Governor.-General should not commit the Commonwealth to the expenses of a referendum except on

the advice of Ministers. If, as seems probable, the precedent set in 1914 is followed in future cases; it may be regarded as an instance of responsible government prevailing over a federal principle in a Con­ stitution which seeks to combine them.

The prediction that responsible government would destroy federation rests on the theory that a system of government is not a federation unless the House, in which the States are represented as States, enjoys equal power with the House for which the members are elected on a population basis. Since measures imposing taxation must originate in the House of Representatives, and since no Ministry may remain in office unless it has a majority in that House, it is clear that the Senate and the House of"Representatives do not enjoy equal authority. But it does not appear that for that reason Australia has ceased to be a federation, since the States cannot be deprived of the powers left to them by the Constitution except by an amendment of the Constitution approved by a majority of the electors and a majority of the States.

The Commonwealth Bank. The Commonwealth Bank Act 1911 was assented to on the 22nd December, 1911, and came into force on the 15th July, 1912, by virtue of a proclamation published in the Gazette on the 13th July, 1912. The Australian Notes Act 1910 came into force oii the 1st November, 1910, and was subsequently amended by the Australian Notes Act 1911, which came into force on the 1st July, 1912. The Bank Notes Tax Act 1910 1vas assented to on 10th October, 1910, and came into force on the 1st July, 1912.

51

By the last of these three .Acts it was provided that a tax at the raw of 10 per cent. per annum should be levied on all bank notes issued or re-issued by any bank within the Commonwealth and not redeemed. The effect of this Act was to prevent any bank, other than theCommon-.wealth Bank, from issuing notes, although not strictly prohibited from

doing so. The Australian Notes Act 1910-1911 provided for the issue of Aus­ tralian Notes and Treasury Bills, the appropriation of moneys derived from the issue of Australian Notes to a trust account, and the appli­ cation of the proceeds of the sale of Treasury Bills in the redemption of Australian Notes.

The effect of this Act was to enable bank notes to be issued by the Australian Notes Board, until the functions of that Board were trans­ ferred to the Commonwealth Bank. The Commonwealth Bank Act 1911 is divided into seven parts. Part II. provides for the establishment of a Commonwealth Bank, to be called the Commonwealth Bank of Australia. This Bank is to

have the power to carry on the general business of banking, but not the power to issue bank notes. It is to have a capital of one million pounds to be raised by the sale of debentur:es, and the Treasurer of the Com­ monwealth may make advances to the Bank for administrative purposes, the funds for these advances being appropriated by the Act.

Part III. provides for the management of the Bank by a Governor and Deputy Governor and for the appointment of bank officers. Part IV. consists of general provisions and provides for the disposal of the net profits of the Bank, one half to a reserve fund and one half for the

repayment of advances and the redemption of the debentures or stock, but so that where the amount available for redemption exceeds the amount of debentures or stock in circulation, the excess may be used for the redemption of Commonwealth deb.ts or State debts taken over

by the Commonwealth. Part IV. also provides that the Commonwealth shall be responsible for the payment of all moneys due by the Bank. Part V. provides for the establishment of a Savings Bank Department of the Commonwealth Bank, and for the employment, by arrangement, of Commonwealth officers as agents of the Bank. Part VI. provides for

the issue of debentures, and Part VII. for the punishment of miscel­ laneous offences, and for the making of regulations. The Commonwealth Bank Act 1911 was amended in 1914, 1920, 1924, 1925, and 1927.

The principal object of the amending Act of 1914 was to enable arrangements to be made whereby the Savings Bank Department might take over the Savings Banks of the several States on such terms and conditions as might be thought fit.

The amending Act of ·1920 dealt with the issue of Australian Notes by the Commonwealth Bank. It repealed the A ustral1:an Notes Act 1910-1914, and provided for the establishment of a Note Issue Depart­ ment of the Commonwealth Bank, the appointment of a Board of Directors for that Department, the transfer of the assets and liabilities of the Treasurer under the Australian Notes Act 1910-1914, and

the issue of Australian Notes. The amending Act provides for the maintenance of a gold reserve of not less than one-fourth of the amount of the Australian Note Issue, and for the furnishing of weekly returns

953

52

by the joint stock banks of the value of the notes held by those banks, and it empowers the Governor-General in an emergency to authorize the transfer of the control of the Australian Note Issue from the Bank to the Treasurer for such period as is specified by proclamation.

The amending Act of 1924, which came into force on the lOth October, 1924, provides for the appointment of a Board of Directors in addition to the Governor and Deputy Governor, and that the capital of the Bank shall be twenty million pounds. It also provides for the

settlement of balances between such banks as are specified by proclama­ tion to be conducted through the Commonwealth Bank, and for the supply of banking statistics by the joint stock banks to the Treasurer. The amending Act of 1925 provides for the establishment of a R.ural Credits Department of the Bank, for loans to this department by the Treasurer up to a total of three million pounds, for the payment to this deparbnent of 25 per cent. of the net annual profits of the Note Issue Department, and for the issue of debentures by the Bank for the purposes of rural credits. The amending Act further provides fo·r the making of advances by this department, upon the security of primary produce placed under the legal control of the Bank, to the Bank or

other banks, to co-operative associations and to such other corporations or incorporate bodies ·as are specified by proclamation. It directs that the funds of the Bank shall not be used in the business of the R.ural Credits Department, except so far as advances may be made to that

department, and that of the net profits of the Rural Credits Depart­ ment. one-half shall be placed to the credit of the Rural Credits Develop­ ment Fund to be used, in such manner as the Board directs, for the promotion of primary production.

By the .amending Act of 1927, which came into force on the 9th June, 1928, the provisions of the Acts of 1911 and 1914 relating to the Savings Bank Department of the Commonwealth Bank are amended. A Commonwealth Savings Bank of Australia is established, to be managed by a Commission consisting of a Chief Commissioner and two other Commissioners7 and the appointment of this Commission, hy the Board of Directors of the Bank. The amending Act also provides that the Oommon·wealth Savings Bank shall have the same power to make arrangements with State Savings Banks as was formerly exer­ cisable by the Commonwealth Bank, and that arrangements made by the Commonwealth Bank with the States of Queensland and Tasmania

shall he binding on the Common·wealth Savings Bank. The Common­ wealth Savings Bank is empowered to invest any meneys held by it, inter alia, i11 advancing money in arcordanre with the Common-wealth Housing Act 1927 for the purchase or erection of dwelling houses and for the discharge of mortgages on dwelling houses, and in advancing money for the erection of warehouses or storage facilities intended for the -vvarehousing or storage of primary products. ·

The Commonwealth Housing Act 1927 (since amended by Act No. 10 of 1928) provides for the creation of a Housing Fund. This fund is to consist partly of money set aside by the Commissioners of the Bank for the purpose, the discrp,tjon of the Commissioners bring strictly limited by the Act, and partly of money borrowed by the Treasurer in such a manner that the Housiitg Fund shall at no time exceed twenty mnlion pounds. Loans from the Housing Fund are to be made only

53

tO -approved authorities . • These approved authorities must have power to. make advamccs for dwelling houses up to 90 per cent. of the valuation of the security, but not beyond a maximum amount of £1,800 to any one person. It is also required that the system administered by the

authority shall not entitle one person to more than one loan, and that the loan is to enable him to build a house in which he will reside or to redeem a mortgage over a house in ·which he does reside.

It was said in evidence that the establishment of a Savings Bank Department of the Commonwealth Bank was objectionable on two grounds-(1) because it imposed unnecessary expense on the community, there being already Savings Banks in existence in each State; and (2)

because it reduced the amount available for development in each State. Further, it was claimed that the States have been unduly handicapped in competition by the Commonwealth tnking over the Post Office Savings Banks, the Post Offices having formerly arted as agents for the State

Savings Banks. This competition exists in all the States, except Queens­ land and Tasmania. The rate of interest paid by the Commonwealth Savings Bank is the same as that paid by the State Savings Banks) althoug·h until recently the rate paid by the Commonwealth Savings Bank in New South Wales, Victoria and South Australia was slightly lo-wer than that paid by the State Savings Banks.

In the States of Queensland and Tasmania 70 per cent. of ail new money is made available to the State Government at a rate 1 per cent. above the rate of interest paid on deposits, and the assets taken over from the Queensland State Savings Bank include a number of long­ da.ted government bonds. Offers of arrangements with the other

States for taking over State Savings Banks have been made and con­ sidered, but without success. It was said in by the Governor

of the Commonwealth Bank that if the State Savings Banks were taken over, the facilities offered to investors in the country · districts would be no less than they are at presf>nt, and it appears from the evidence of Mr. 0. F. Hudson (p. 1210) that inN ew South Wales there has bee 11 a

steady progress, notwithstanding the competition· of the Commonwealth Savings Bank. It is the policy of the Board _of Directors, even in those States in which botli Commonwealth and State Savings Banks exist, to invest within each State as far as possible the moneys deposited in that State.

The Commonwealth Housing Act was ·criticized as an intrusion on the functions of the States, and ·as an instance of that form of com­ petition which forces one or other government to go beyond the limits of "\Vhat is economically defensible. The Act had not been proclaimed when evidence on the subject was given, but it was explained that the Commonwealth Savings Bank would make advances to those State

authorities whose powers were within the limits described by the Act, and that those authorities would make advances to individual builders or owners. In New South Wales the housing authority is the Govern­ ment Savings Bank; in S_ outh Australia, it is the State Bank; in Western Australia, it is the Workers' Homes Board, and in the Federal Territory, the Federal Capital Commission.

With regard to Commonwealth loans, the Bank acts as agent, keeps the Inscribed Stock Ledger, and accepts applications. In Australia the Bank does the whole of the work connected with the raising of a loan

955

for the Commonwealth, and it floated most o,f the War Loans. In London it also acts as agent, obtains advice, and consults the under­ writers and the High Commissioner. The Commonwealth Bank does the banking business of the Govern­

ments of South Australia, Queensland, and Tasmania, both in Australia and England; it does the banking business of the Government of Western Australia, in Australia, and some of the business of the State of Victoria. It has done a very large business in financing municipal

institutions, after a careful scrutiny of the objects of a proposed loan and of the security offered; and through its Rural Credits Department it has made advances to co-operative societies and pools. The total of these advances is about £2,000,000, and there have been no losses. The Commonwealth Bank has 87 branches. Its profits are dis­

tributed as to 50 per cent. to the reserve fund of theBank, and as to 50 per cent. to the Treasurer for payment to the sinking fund for the redemption of Commonwealth loans. Cheques drawn on the Bank are not exempt from stamp duty imposed by the laws of a State, but the

Bank is not liable to make returns required of ordinary joint stock banks by the State of Queensland.

The Inter-State Commission. The powers and functions of the Inter-State Commission are defined in sections 101, 102, and 104 of the Constitution; they include such powers of adjudication and admiuiatration as the Parliament deems necessary for the maintenance within the Commonwealth of the pro­ visions of the Constitution relating to trade and commerce, and of all laws made thereunder, and certain powers relating to rates on State railways which may be found to involve a preference or discrimination against any State. · The provisions of the Constitution relating to the appointment of the Inter-State Commission are mandatory, but those provisions relating to trade and commerce are not exclusive. The Inter-State Commission was not intended to supersede executive action or judicial control, or to have a branch of the civil service to execute its decrees.

Before the Inter-State Commission was appointed it was proposed at the Premiers' Conference of 1909 that the Commission should have power to prevent unfair competition between States caused by differences in State industrial legislation or the awards of State Industrial Courts. A provision giving effect to this proposal was included in a bill for the establishment of an Inter-State Commission introduced into the Senate in 1909, but afterwards abandoned. The Inter-State Commission Act 1912 was assented to on the 24th December, 1912, and is still in force.

The Act is divided into five parts. The first part consists of definition'S; the second part provides that the Commission shall consist of three members of whom one shall be of experience in law, that the Chief Commissioner shall receive a salary of £2,500, and the other Commis­ sioners a salary of £2,000 each, and that two Commissioners shall be a quorum for the transaction of business and have all the powers of the Commission.

Part III. of the Act relates to investigations by the Inter-State Com­ mission, and is divided into two sections-as. 16 and 17. By section 16 . the Commission is charged with the duty of investigating all matters which in its opinion require investigation in the public interests affecting

55

(a) the production of and trade in commodities; (b) the encourage­ ment, improvement, and extension of Australian industries and manu­ factures; (c) markets outside Australia, and the opening up of external trade generally; (d) the effect and operation of any Tariff Act or other

legislation of the Commonwealth in regard to revenue, Australian manufactures, and industry and trade generally; (e) prices of com­ modities; (f) profits of trade and manufacture; (g) wages and social and industrial conditions; (h) labour, employment, and unemployment;

( i) bounties paid by foreign countries to encourage shipping or export trade; (j) population; (lc) immigration; and (Z) other matters referred to the Commission by either House of the Parliament, by resolution, for investigation. By section 17, the Commission is empowered to

investigate a number of questions relating to rivers. Part IV. of the Act prescribes that all rates fixed by any common carrier :for any service rendered in respect of inter-state commerce, or which affect inter-state commerce, shall be reasonable and just, and gives the Commission power to deal with rates fixed by State railway

authorities or other State authorities within the limits prescribed by sections 102 and ·104 of the Constitution. '

Part V. purports to confer on the Commission judicial powers, and to give the Commission jurisdiction to adjudicate upon (1) preferences by a State or common carrier; (2) the justice or reasonableness of any rate in respect of inter-state commerce; (3) anything don e or omitted

by any State or by any State authority or by any common carrier or by any person in contravention of the Act or of the provisions of the Constitution relating to trade or commerce. The Commission is also empowered to fix rates for the future, to amend regulations, to impose penalties, and itself to initiate proceedings. ·

The portion of the Act which purported to confer judicial powers on the Inter-State Commission was declared invalid in 1915, by the High Court, on an appea1 from a decision of the Inter-State Commis­ sion, which by a majority had issued an injunction restraining the State

of New South Wales from enforcing the Wheat Acquisition Act 1914, on the ground that that Act was an infringement of section 92 of the Constitution (State of New South Wales v. Commonwealth, 20 C.L.R., at pp. 64-65.) In that case Sir Samuel Griffith, C.J., said:-

' " The functions of the Inter-State Commission contemplated by the Constitution are executive or administrative, and the powers of adjudication intended are such powers of determining questions o:f fact as may be necessary for the performance of its executive or administrative functions, that is, such powers of adjudication as are incidental and ancillary to those functions. For instance, if a Federal law imposed obligations as to structures or appliances

to be used in connexion with inter-State railway traffic, and entrusted the duty of carrying out those provisions to the Inter­ State Commission, it might empower the Commission to determine the question whether in any particular case the provisions of the

law had been observed 'in point of fact, and, if they had not, to demolish the structures or forbid the use of appliances contravening the law and for that purpose to use any necessary force, or to invoke the aid of a Court of law to ensure obedience to its order." At the time of and prior to this decision, the Commission had one other

application before it, was about to J?roceedi?gs relating

to inter-state rates, and 1t had conducted mqmnes mto tanff proposals

957

with a view to framing. a tariff w'hic'h should be consistent in all its . '!'he Comm_ission continued to conduct inquiries, including

mto the P!ICes. of commodities and an inquiry into the trade

relations of Austraha w1th the Islands of the Pacific, conducted by the qhi_ef Com_missi?n er . .c A ,bill was. introduced in 1919, after much pre­ hmmary dtscuss1on, 10r tne creat10n of a Court of Commerce through the Inter-State Commission, but 1vas abandoned after its first reading.

One of the Commissioners r esign ed in 1918, and .no appointment was made in his. place. The Commission ce as ed to exist in fac t when the two remaining Commiss ioners came to the end of their respective terms of office.

A full statement of the views of the Commissioners ou the ·scope and value of the Inter-State Commission will be found in a letter from the Chief Commissioner to the Hon. W. A. Watt, the Acting Prime l1inister, dated the .26th July, 1918, and printed at p. 177 of the

evidence.

· Portion of the work assigned to the Inter-State Commission, is no w carried out by Boards or Commissions appointed for definite and limited purposes, e.g., the Tariff Board and the Development and :Migration Commission. Some of the grievances caused by differential railway rates have been removed by an agreement between the Railway Com­

missioners of the several States, and by the extension of the Yictorian railway system into the south-western Hiverina, although there appears to be still ground for the belief that goods are attracted away from their natural ports, both by classification for freight purposes, and by the building of railway lines to a point short of the State boundary.

Witnesses before this Commission claimed that the Inter-State Commission could do very valuable work in directions other than those indicated in the Act of 1912. Suggestions were made that the Inter-State Commission should inquire into all proposals for making grants to States, and into hnvs place some States at a disadvantage

as compared with others, although th-ey do not infringe the provisions of the Constitution, and generally should keep Parliament informed as to the effect of Commonwealth laws and institutions. It was said that if these suggestions were justice vvould be done to the States,

and danger of competition for the votes of the States would be removed from the political life of the Commonwealth. It was further suggested '\ ha_t there would be. ample work f?r such body, in co.nducting whiCh are now earned out by bod1es· appomted for a s1nglc mquuy.

Alternative suggestions for the appointment of expert economists, either as officers of the Bureau of Censi1s and Sta:tistics, or · as direct advisers to the Government, vvere also made by I'Vitnesses before this Commission.

The re-instatement of the Inter-State . Commission was strongly re­ commended by the royal commiss:on which inquired · into the finances of Western Australia. The royal commission appointed to inquire into the finances of South Australia also recommended the establish_,. rnent of the Inter-State Commission or of an independent body, ap­ pointed for a limited period, for the purpose of considering and advising on applications for grants by States.

VI.-THE GOVERNMENT OF THE STATES. Internal administration. The States at the establishment of the Commonwealth were already organized for all the purposes of self-government within the British Empire. Since the establishment of the Commonwealth, the State of

South Australia has surrendered the Northern Territory to the Com­ monwealth, and the State of New South Wales h as surretidered the Federal Capital Territory and an area of land at Jervis Bay to the Commonwealth. With these exceptions the boundaries of the States

remain unaltered, but the State of New South Wales has by agreement with the State of Victoria allowed that State to build and administer railways within portion of its territory, and the Commonwealth, by the Northern .A.ustralia Act 1926, has provided machinery by which

portions of Western Australia or Queensland, with the consent of those · States, may be administered as portions of North Australia. Each State after the establishment of the Commonwealth retained its own Constitution, including the power of amendment, subject to the Federal Constitution. The manner in which the power of amend­ ment may be exercised varies in the several States. This power has

been exercised in all the States since the establishment of the Common­ wealth, the most noteworthy instance being the abolition of its Legisla­ tive Council by the State of Queensland. Certain bills passed by a State Parliament must be reserved for the royal assent under the. AustJ·alian States Gonstittdion Act, 1907, an Imperial Act which provides that the following bills shall be reserved for the signification of His Majesty's pleasure thereon, n amely, an.y

bill which alters the ConstitutioL. of the Legislature of a State, or affects the salary of the Governor of a State, or is, under any Act of the L egislature of the State passed after the passing of the Australian States Constitution Act, -1907, or under any provision contained in the

bill itself, required to be reserved. Apart from this Act, and apart from any instructions given to the Governor of a S tate by His Majesty, the power of amendment of the State Constitutions is unfettered. it was suggested in evidence before Commission that the Com­ monwealth should have the right of vetoing alterations in the Con­ stitution of a State, or that State Constitutions should be provided for in the Commonwealth Constitution, or that no amendment should be valid unless confirmed by a vote of the electors on a referendum.

Each State has its own Governor, who is appointed by the Imperial Government. The Crown is one and indivisible in the Commonwealth, but acts through Commonwealth and State agencies. A State may be subject to a law of the Commonwealth, although the Crown is not

mentioned in the Commonwealth Act. A State may be sued in a Commonwealth Court without its consent, and it has been said that for that reason the States are no longer properly described as sovereign States (The Commonwealth v. New South Wales, 32 C.L.R. 200).

The position of the States relatively to that of the Commonwealth has been adversely affected by a nurn ber of decisions of the High Court. Among the most important of these decisions nre-(1) The King v. Sutton ( 5 C.L.R. 789) and Attorney-General for

New South Wales v. Collector of Customs (5 C.L.R. 878), in which it was held that the Commonwealth had power to levy duties of

customs on the importation of goods by a State.

959

58

(2) State of New South Wales v. The Commonwealth (7 C.L:R. 179), in which it was held that the Commonwealth was entitled to appropriate the surplus of revenue unexpended in any one year, without being bound to distribute any portion of that surplus among the States.

(3) 'The Engineers' Case (28 C.L.R. 129), in .which it was held that an award of a Commonwealth Court would apply to employees in State industries, and in which the High Court discarded the doctrine of mutual non-interference between the Commonwealth and the States, holding that the powers of the Commonwealth Parliament are to be ascertained in accordance with the rules of construction applicable to statutes, and that no prohibition against the exercise of those powers can be implied from the federal nature of the Constitution, nor can a

possible abuse of those powers narrow their limits.

( 4) McArthur v. State of Queensland (28 C.L.R. 530), in which it was held that a State could not :fix the price at which goods subject to a:n inter-state co:Q.tract might be sold within that State.

(5) Clyde Engineering Co. v. Cowburn (37 C.L.R. 466), in which it was held that an award of the Commonwealth Court of Conciliation and Arbitration was a law of the Commonwealth, and would over-ride a law of a State inconsistent with the award.

The States retained the control of civil and criminal justice, which was described in the Federalist as the most powerful, most universal, and most attractive source of popular obedience and attachment. They are thus responsible for the enforcement of Commonwealth as well as of State laws, with a few minor exceptions, and the Common­ wealth Government depends on the police forces of the States for the enforcement of its laws relating to Commonwealth instrumentalities, to the enforcement of industrial awards and to trade and commerce with other countries. The State Parliaments are the only Parliaments that have power to pass laws relating to industrial conditions, except in relation to trade and commerce with other countries and among the States and to navigation and shipping, and they have the control of ed·ucation, health, land settlement, development, and internal communications.

Since industrial questions have entered largely into the politics of Australia, State politics excite the keenest party feeling and popular interest, the industrial economic and financial position of Australia depends very largely on the decisions of State Parliaments. The financial relations of the States and the Commonwealth are discussed elsewhere in this report.

Relations of the States.

On the establishment of the High Court any differences between the States which were capable of decision on legal principles became cognizable by the High Court (cf. South Australia v. Victoria, 18 C.L.R. 115), and no appeal lies from a decision of the High Court to the Privy Council on a question relating to the limits of the constitutional powers of any two or more States inter se, without a certificate of the High Court.

59

The States in their external relations. In the 1891 draft of the Federal Constitution it was provided that the Governor-General should be the sole channel of communication between the Governors of the States, and the Imperial Government.

This provision did not appear in subsequent drafts, and does not appear in the Constitution. Governors of the States now communicate in all State matters with the Imperial Government, through the Secretary of State for the Dominions, and the royal assent to reserved bills is communicated by the Secretary of State to State Governors. T wo

of the States, South Australia and New South Wales, claimed the right to attend the Imperial Conference of 1907. Their ·claim was con­ tested by the Prime Minister of the Commonwealth and was denied by the Secretary of State for the Colonies, mainly on the ground that

the Commonwealth was not the agent of the States, and that the

subjects to be considered at the conference were mainly of Common­ wealth concern. The States have subsequently been consulted by the Imperial Government on subjects in which they are directly interested, and they retain the right of independent recommendation for honours.

The British Government, however, has consulted the Commonwealth, whenever it has been asked by a State to obtain redress of the

grievances of one of the citizens of the State from a foreign country, and the Commonwealth has nominated the representatives from Aus­ tralia at conferences held under the auspices of the League of Nations. The States still exercise the right of separate representation in London, through Agents-General, and there has always been co-opera­

tion between the Agents-General for the States and the High Commis­ sioner for the Commonwealth. Although the Commonwealth Loan Council has become the borrowing authority on behalf of the States and the Commonwealth, and the Commonwealth has begun to assist

in or to control the marketing of primary products, a number of

witnesses before the Commission expressed the view that it would be to the advantage of the States to continue their separate representation i11

11.,.1261.-5

961

60

VII.-THE ACQUISITION AND GOVERNMEN T OF THE TERRITORIES.

The T erritories of the Commonwealth are the following :-Papua, the Northern Territory, Norfolk Island, New Guinea, and the F ederal Capital T errito ry. The Commonwealth has power to make

laws for the government of any territory surrendered by any State to and accepted by the Commomvealth or of any territory placed by the Sovereign under the authority of and accepted by the Commonwealth or otherwise acquired by the Commonwealth. Of the T erritories men­

tioned above, the Northern Territory and the Federal Capital T erritory were surrendered by States ; P apua and Norfolk Island we re placed by . the Sovereign under the authority of and accepted by the Common­ wealth; New Guinea was otherwise ac quired. Naur u is a territory administered by an administrator appointed by the Australian Govern­ ment by agreement with the governments of the United Kingdom and New Zealand. The power of the Commonwealth Parliament to legislate for any of these territories is that of a quasi-sovereign State and is not fettered by any of the limitations or restrictions imposed on the Parliaments of the State and the Commonweal th by the Con­ stitution. The Commomvealth Parliament may, therefore, legislate for the territories with respect to education and land settlement, it may

declare that any Act of the Commonwealth or a State is to be binding on any territory, or it may confer on the Governor-General in Council or an y local officer the po wer of legislating by means of ordinances or regul ations. The Parliament may also, notwithstanding the pro­ Yisions of section 71 of the Constitution, authorize an appeal to the High Court from a judgment given by a Court of a territory, which is not a Federal Court within the meaning of that section, and this

power has been exercised in relation to the Mandated Territory of New Guinea, as well as in r elation to the Northern Terr itory,

P apua, and Norfolk Island ( cf. Porter v. The King, 37

O.L.R. 432). Notwithstanding the provisions of section 80 of the Constitution a person accused in a territory of an offence triable on. indictment is not necessarily entitled to a jury (R. v. Bernasconi, 19 C.LR. 629). Th e provisions of section 92 do not apply to trade

bet·ween a Territory and a State, but similar provisions have been incorporated in theN orthern A1tstralia Act 1926, and may apply against the T erritory .

It has been said, however, that the Commonwealth Parliament has no power to provide for the surrender of any area of a territoi·v once acquired by the Commonwealth, nor the State any power to it,

except after referendum. The Commonwealth, if this is so, cannot surrender to the State of N ew South Wales a portion of the Federal Territory which the Federal Capital . Commission has no desire to acquire and which could be conveniently administered as part of the :Municipality of Queanbeyan. It is possible that the same difficulty may occur i r1 couuexion with the Northem Territory.

By the State and T erTitorial L aws and R ecords Reco,qnition Act 1928 th e same recognition is to be given to the laws of the Tenitories ::s to the laws of the Common wealth and the States .

61

Papua. Prior to the 6th :March, British New Guinea vvas a Cr owu

Colony undel an Administrator, subject to the <;'0n trol of the Governor of acting on the advice of his Ministers. In support of the

administration a subsidy was paid by tho three Colonies, Queensland, New S outh Wales and Victoria. By Order in Council of the 6th

March, 1902, followed by Letters Patent of the same month, the possession was p!acad under· the authority of the Commonwealth. These L etters Patent were to cease to have effect as soon as the Commonwea lth Parliament made laws for the Government of the possession, and the

Gover nor-General signified by proclamation that this had been done. Pending the issue of this pr oclamation the Governor-General was to be at liberty to exercise the powers formerly exercised by the Governor of Queensland.

The A ct 1905, })aSRed by the Commonwealth Parliament to provide for the administration of the T erritory, was assented to on the 16th November, 1905, and came into force on the 1st September, 1906. The T erritory is governed by a Lieutenant-Governor with an Executive

Coun cil and a Legislative Council which includes five non-official repre­ sentatives nominated by the Lieutenant-Governor, of whom one is nominated as representing Christian Missions. A su bsidy, which is now £50,000 per annum, is paid by the Commonwealth Government.

Ordinances may be made by the Legislative Council subject to the provisions of the Papua Act 1905-192-1, for the peace, order and good government of the T errito ry, hut ce ;·tain ordinances must be r eserved for the signification of the Governor-G eneral's pleasu re thereon. These

ordinances are enumerated in section 41 of the P apua Act 1905- 1924, and include ordi1JmJccs relating to the sale or disposition of lands by al!original natives, to native labour, or to the introduction or immigra­ tion of aboriginal natives of Australia, 1\.sia, Africa, or any Island of

the Pacific. The Jjeutenant-Govemor must r eport at monthly inter valt:> to the Minister. Among the ordinances to which assent has bee n givcu is one providing for the exclusion of coloured labour from overseas. The Navigation Act, which was originally pnssed by the Oommqn­

ll'ealth Parli ament in 1912, but was not proclaimed nntil after the war, w::ts extended to Papua and the Ma udated Territory of New Guinea iu 192 1. 1\ ccordiugl y until after the amending Act, which was pa ssed in 192[1, 110 vessels, except those which complied with the conditions a pplicable to the A ustmlia11 coasting trade, could carry passengers or cm·go between any port of Papua or the Mandated Territory and a ny other Australian por t. Under the 'amending Act, No. 8 of 1925, the operation of the coastal provisions of the Navigation A ct was suspe nd ed by proclamation from the Jst September, 1925.

By the Customs T a·rif/ (Paptw and Gt:inea 1?26,

assented to on the 15th February, 1926, certai Jl goods 1mporterl Into Aust ralia direct from New Guin ea or Papua, if within ei ther

of these Tenitories, arc to be free of duty. These goods are specified .in a schedule to the Act, and nrc coffee, dri ed fruits, frrsh frui ts, fungi , ginger, Hangoo11 beans. coro-n nts. and seeds.

'/' he N m·thrwn T eTrit01·y. The Northern T err itory i:3 r eferr ed to in covering clause 6 as being with South Australia an orjginal part of the Commonwealth. The Nor.tbern Territory had been snnexecl to So uth Austrsli a fro m Ne"·

963

62

South Wales by Letters Patent of the 6th July, 1863, which contained an express power of revocation and amendment. An agreement for the surrender to and acceptance by the Commonwealth of the Territory was made on t!:J.e 7th November, 19 07, subj ect to the approval of the Parlia­ ment of the Commonwealth and of the State of South Australia. The

Commonwealth Parliament gave its approval by the N o·rthern T Mritory Acceptance Act 1910, the Parliament of South Australia by the Northern 'l'erritory Surrender Act 1907, which was assented to on the 14th May, 1908. The Territory was transfe1:red to the Commonwealth

by proclamation issued on the 1st January, 1911. By the agreement the Commonwealth undertook (a) to become responsible for the debt of the State of South Australia in r espect of the Territory; ( b) to construct the transcontinental railway running north and south ; (c) to pay the price of the existing Port Augusta Railway. The State of South Australia undertook to allow the Commonwealth

to construct a railway running westerly through South Australia to Western Au stralia. ·under the Northern T erritory Acceptance Act 1910 (s. " 7), all laws in force in the Northern Territory at the time of the acceptance are to

continue in force, but may be altered or repealed by or under any law of the Commonwealth. These laws are the laws of the State of South Australia, and they have remained in force except so far as altered under the provisions of the Northern Territory (Administration) Act

1910 (cf. Buchanan v. The Commonwealth, 16 C.L.R. 315;

McKinnon v. The King, 40 C.L.R. 21 7.) That Act provides for the appointment of ap. Administrator and of other necessary officers, and for the application of certain Acts of the Commonwealth Parliament to the Territory. It also empowered the Governor-General to make ordinances

having the force of law in the Territory, to be laid before both Houses of the Parliament and to be subject to disallowance by a resolution of either House as provided in the Act. The Act was to commence on the day :fixed by proclamation for the commencement of the Northern Territory Acceptance Act 1910 .

. Under the Northern Territory Representation Act 1922 the Nor thern Territory has one representative in the Parliament of the Commonwealth, who is to sit in the House of Representatives, to be qualified to take part in all debates but not to vote on any qu estion, and not to be qualified to act as Speaker or Chairman of Committees.

By the Northern Australia Act 1926, which came into force on the 1st February, 1927, certain sections of the above-mentioned Acts were repealed and important changes were made in the administration of the Territory. The preamble to this Act recites that it is expedient that,

in anticipation of and with a view to the making of provision for the establishment of a measure of self-government in the Northern Territory, further provision be made fo r the development and govern-ment of the Territory. The Act is divided into five parts. .

In the first, Central Australia is defined as that part o{ the Territory situated south of the twentieth parallel of south latitude, and North Australia as that part of the Territory situated north of the twentieth parallel of south latitude.

Part II. provides for the establishment of a North Australia Com­ mission of three Commissioners, appointed for :five years each, with a limited discretion as to making official appointments. One of the duties

63

of the Commission is to prepare a scheme for the development of the Territory as Boon as practicable after its appointment. No expenditure is to be incurred by the Commission except as authorized by the Minister. No railway is to be . authorized by Parliament except in pursuance

of an Act of the Parliament, and no public work the estimated cost of which exceeds £25,000, is to be authorized by Parliament except in pursuance of an Act the bill for which has been introduced into the Commonwealth Parliament by or on behalf of the Minister.

The third part gives power to the Commonwealth to make an agree­ ment with any State which adjoins the Northern Territory for the application to a. :Part of that State contiguous to the Northern Territory of all or any of the measures of development contemplated by the Act,

and for the representation of the contiguous State on the Co=ission. Part IV. is divided into four divisions. The first division prescribes the method of dividing the Northern Territory into North Australia and Central Australia, and provides for the transfer of officers and for the continuance, after division, of the existing courts pending further arrangements. The second division empowers the Governor-General to appoint a Government Resident for N ortb Australia, and provides for

the establishment of an Advisory Council consisting of the Resident and four members, two appointed by the Minister for three years and two elected by residents in North Australia having the same qualifica­ tions and disqualifications as electors for the Rouse of Represen tatives.

Division 3 makes a similar provision for Central Australia. Division 4 provides for the application of certain Acts of the Commonwealth Parliament to North and Central Australia, and empowers the Governor-General to make ordinances for the government of North and Central Australia. An ordinance is to have the force of law, but is to

be laid before both Rouses of Parliament and is to cease to have effect if either Rouse passes a resolution disallowing the ordinance of which notice has been given within fifteen sitting days of its being laid before the House.

In pursuance of this Act Commissioners have been appointed and have made the prescribed reports, but no arrangements have been made with a contiguous State as provided in Part III. of the Act. Division 4 of Part IV. also provides that trade, commerce and inter­ course between North Australia, Central Australia and the States, shall be absolutely free, that the revenues of _North Australia and Central Australia, other than the revenue of the Commission, which shall consist of charges for services, and moneys appropriated or borrowed for development, shall be paid into the Consolidated Revenue Fund, and

that there shall be paid out of the Consolidated Revenue Fund for expenditure in or on account of North Australia and Central Australia such sums as may be appropriated by Parliament for this purpose. Under Part V. the Governor-General may make regulations for

the purposes, amongst others, of conferring certain powers on the Commission, and of more accurately defining those conferred on it by the Act.

Norfolk Island. Prior to the 1st July, 1914, Norfolk Island was administered by the Governor of New South Wales . On the 1st July, 1914, Norfolk Island was placed under the authorit;r of the Co=onwealth. The

965

I

64

N01folk IsLand Act 1913 provides f or the acceptance of N oi·folk as a territory under the au thority of the Commomvealth and for the government thereof. By that Act the Governor-General is empowe red to make ordinances and to appoint such judges, magistrates, and other officers as he thinks necess ary, the ordinauces to ce t.tse to have effect if disapproved by a resolution of which notice has been given within

thirty days after the ordmance has be en laid before Parliament. A right of appeal to the High Court is given from the decision

of the Judge or Chief 1l1agistratei and on the appeal legal argument may be presented in v.rriting so that the parties need appear or be

otherwise r epresented. Traffi c in intoxicating liquor is prohibited. The Island is administer ed through the Prime :Minister's Department by an Administrator and Chief Magistrate. There is an Advisory Council of twelve members, of who m six are elected by the residents, and six

appointed by the Administrator. The powe r s and duties of this Coun cil are defined by Ordinance No. 2 of 19 25 . The Council may transmit to the Administrator for submission to the Minister proposals for new ordinances or for the r epeal or amendment of existing ordinances, and may itself make by-laws on certain local matters.

New G'uinea. New Guinea is held by the Commonwealth under mandate approved by the Council of the League of Nat ions, dated the 17th December, 1920. The mandate recites that His Majesty for and on behalf of the Commonwealth of Australia had agreed to it, and artide two

of the mandate grants to the mandatory full power of administration and legislation over the Territory an integral part 9f the Common­ wealth of Australia and power to apply the laws of the Commonwealth of . Australia to the Territory subject to such local modifications as circumstances may . require. The acceptance Qf the mandate by His Majesty is authorized. by the Imperial Act, 9 & 10 Geo. V., c. 33,

and the Treaty of Peace Act 1919 ( cf. M aink:a v. Custodian of Expro­ priated Property, 34 C.L.R. at p. 300). The New Guinea Act 1920 was passed with the object of making provision for the of

the mandate to be issued, and of making immediate provision for the civil government of the Territory. The Act gives the Governor­ General power to appoint an Administrator and to define his p_owers. It also gives the Governor-General power to make ordinances subject

to their being disallowed by r-esolution of either House of Parliament, of which notic-e has been given within fifteen days of their being laid before Parliament. The Act also contains in section 15 a number of guarantees in accordance with the mandat-e and the Covenant of the League of Nations, and a direction that the Governor-General shall in each year make an annual r eport to the Council of the League of Nations containing full information as to the measures taken to carry out the requirements of that and as to the well-being and

progress of the native inhabitants of the Territory. Prior to the commencement of the New Guinea Act 1920, New Guinea had been under military occupation, and a great many ordinances and other enactments had been given the force of law by the.

military authorities. These ordinances and enactments were for the most part r eplaced by ordi;nances made . by the Governor-General, and a number of Acts of the Commonwealth were applied to the Territory.

65

Certain of the ordinances made by the Governor-General conferred on the Administrator a power to make r egulations or issue proclamations. This power has been frequently exercised. Inquiries have been addressed from time to time by the Mandates Commission of the League of Nations

to the Commonwealth as the holder of a mandate, particularly with regard to the liquidation and disposal of ex-enemy property, the recruitment and employment of native labour u nder the indenture system, and the application of the Immigration Act 1901 -19 25 . The

Commonwealth also of its own motion appointed an offi cer, who had held the position of Chief Native Commissioner of Kenya Colony, to inquire into and report on matters affecting the welfare of the natives, and his rep ort was forwarded by the Commonwealth Government to the

Mandates Commission of the League. As regards the profits from the operations of the Expropriation Board it was found on inquiry by the Mandates Commission that they had not been paid into the Consolidated Revenue Account of the Commonwealth, and that in the year 1922-23 the Commonwealth hacl made a special grant of £10,000 to be expended exclusively on medical services, and that in each of the years 1925-26 and 1926-27 it had made a grant of £10,000 to be expended in the interests of the aboriginal natives.

As regards the recruitment of indentured labour it appeared that the mandatory power had found the system in operation when its military occupation commenced, and in its r eport on its ninth session the Commission noted with satisfaction the appointment of an inspector

of native labour and the offer of the mandatory power to furnish the Commission with a summary of this officer's reports. The Commission had asked "whether in view of the paucity of the population and its stationary or decreasing character" the mandatory power would be

prepared to contemplate the application of a less restricted immigra­ tion policy than that which it applies in its own territory. On this point the Commonwealth would make no concession, apparently be­ lieving that any relaxation of the Australian immigration regulations

in respect of a territory administered under one of the " C " class of mandates might weaken the case for maintaining these regulations in respect of the Commonwealth itself. The Mandates Commission also criticized the application of the Navigation Act of the Commonwealth

to the l1:andated Territory as not in accordance with economic equality. · The "C" mandates do not provide for economic equality nor do the relevant provisions of the Covenant of the League of Nations, but the application of the Navigation Act to New Guinea was cancelled by a proclamation as from the 1st September, 1925 (see Toynbee, Su.rvey of · International Affairs, 1926, pp. 398 et seqq.)

By the Customs Tariff (Papua and New Guinea Pref erenc e) 1926, as already mentioned in connexion with Papua, certain goods imported into Australia direct from New Guinea or Papua, if produced within either of these Territories, are to be free of duty.

For the purpose of improving the efficiency of the civil service in the Mandated Territory the Commonwealth Government has instituted a system of cadetships, with a probationary period of two years' systematic training in the to follo wed in the cas e of

candidates by a course of tra1mng In anthropology at the U mvers1ty of Sydney. Education is carried out under the Education Ordinance of 1922, partly by the and p artly by Missions ( ee Toynbee,

Survey of International 1926, p. 405).

967

66

Nauru. A mandate for Nauru was granted to the British Empire and .came into operation on receiving the approval of the Council of the League of Nations on the 17th December, 1920. The mandate is of the "C " class, but differs from other mandates of that class inasmuch as it was not granted to that one of the Allied Powers whose seat of government is situated nearest to the Territory subjecf to the mandate. Prior to the issue of the mandate an agreement dated the 2nd July, 1919, had been made between the Governments of the United Kingdom, the Com­ monwealth of Australia and the Dominion of New Zealand, which was approved by the Parliament of the Commonwealth by the Nauru Island Agreement Act 1919, assented to on the 28th October, 1919. The

agreement provided for the appointment of an Administrator, that the term of office of the first Administrator should be for five years, that he should be appointed by the Australian -Government and thereafter in such manner as the three Governments might decide, and that he should have power to make ordinances for the peace, order and good government of the Islan d. The agreement in addition provides for the appointment of a Board of Commissioners to consist of three members, one to be appointed by each of the governments which

is a party to the agreement. The title to the phosphate deposits and to all land and buildings used in connexion therewith is to vest in the Commissioners, the title of the former owner, the Pacific Phosphate Company, being converted into a claim for compensation, which has now been paid. The deposits are to be worked and sold under the direction, management and control of the Commissioners, but they are to dispose of the phosphates for the purpose of the agricultural requirements of the United Kingdom, Australia, and New Zealand, so far as the same shall extend and at a price calculated so that the proceeds of sale will cover working expenses, cost of management, administrative expenses, sinking fund, ·and other purposes. The proportions in which each of ·

the parties to the agreement is to receive phosphates is :fixed by the agreement, and each of the three governments concerned binds itself not to interfere with the direction, management, or control of the business of working, shipping, or selling the phosphates.

The first Administrator was duly appointed by the Australian Government and assumed duty in June, 1921. His appointment was afterwards renewed for a further term of :five years, to date from the expiration of his first appointment. By a supplementary agreement between the three parties to the agreement it was laid down that the responsibility for the exercise of the British · Empire mandate over Nauru should lie with that one of the three parties which had appointed the Administrator in office at any given moment. Questions by the League of Nations Commission relating to the administration of Nauru are therefore answered by the accredited representatives of Australia in the presence of the accredited representatives of New Zealand and the United Kingdom, whenever these representatives are available at Geneva at the same time. The Government of Australia reports on the administration of the Island to the League of Nations, and in the report for 1925 it was stated that "the functions of the Commissioners so far as Nauru is concerned, are limited to the business connected with the phosphate deposits. The Administrator is responsible for all matters pertaining to the government, moral and social labour

67

conditions, &c.,. of all people on the Island-the British Phosphate Commission being treated, from a governmental point of view, as if it were a private company."

The Seat of Government. Section 125 of the Constitution provides that the seat of govern­ ment shall be determined by the Parliament, and shall be within terri­ tory which shall have been granted to or acquired by the Common­

wealth, and shall be vested in and belong to the Commonwealth, and shall be. in the State of New South Wales, and be distant not less than 100 miles from Sydney. By the S eat of Government

Act 1904 (the Dalgety Act), the Commonwealth Parliament determined that the seat of government of the Commonwealth should be within 17 miles of Dalgety, in the State of New South Wales, and should contain an area of not less than 900 square miles and have access to

the sea. To that decision objections were taken by the State of New South Wales, and the Act of 1904 was in consequence repealed. In 1908 a bill was introduced defining the area to be · acquired from New South Wales with greater clearness, but re-affirming the decision

to build the capital in the neighbourhood of Dalgety. Before this bill was disposed of, an open exhaustive ballot was held in the House of Representatives to decide which of eleven capital sites should be chosen for the seat of government. After the ninth ballot the district of Yass­

Canberra was chosen, and a bill to give effect to this decision was introduced by the succeeding government. This bill was passed as the S eat of Government Act 1908. That was followed by the Seat of Go vernment Acceptance A ct 1909, which came into force by proclama­

tion on the 22nd January, 1910. This Act ratified and confirmed an agreement made on the 18th October, 1909, between the Commonwealth of the one part and the State of New South Wales of the other part by which the State agreed to surrender and the Commonwealth to accept

the Yass-Canberra territory as Federal Territory, within which the Seat of Government is established. On the 12th March, 1913, an official ceremony took place to mark the initiation of operations in connexion with the establishment of the Seat o£ Government, and the selection of Canberra as the narrie of the capital city wa s announced. In 1915 the Commonwealth also acquired sovereign rights over about 28 square miles of land and water, at Jervis

Bay, which were acquired by the Commonwealth from the State of New South Wales to provide a site for a naval college and a port for the Federal Territery. In 1914 a line between Canberra and Queanbeyan in the State of

New South Wales was opened for goods traffic, and on the 15th October, 1923, the line was thrown open for pass-enger traffic. The line was worked by the Railway Commissioners of N ew South Wales for and on behalf of the Commonwealth until the 1st July, 1928, when

the management was taken over by the Commonwealth Railway Commissioner. On the 24th March, 1927, the Senate and the House of R epresen­ - tatives, which had sat in Melbourne since the establishment of the

Commonwealth, resolved that the next meeting of Parliament should be at Canberra on the 9th May, 1927. On that day Parliament House

'! I I ,I

1

68

at Canberra was officially ope11ed. The sittings were brief, largely owing to the transfer from Melbourne not being sufficiently advanced, and the session was not resumed until the 28th September, 1927. It was not thought expedient for Parliament once having sa t in Canberra to sit

again in Melbourne.

The :first Act dealing with the administration of the Seat of

Government was the S eat of Government (Adm-inistration) Act 1910, which came into force on the 1st January, 1911. That Act gave the Governor-General the power to make ordinances having the force of law in the Territory, but subject to disallowance by a resolution of either House of Parliament, of which notice has been · given within

:fifteen sitting days after the ordinance in question had been

laid before Parliament. It also provided that certain New

South Wales Acts, of which the most important were the

Local Govemment Act 1906 and the Acts relating to industrial dis­ putes, should not apply to the Territory, and that certain Acts of the Commonwealth· Parliament, of which the most important wns the Commonwealth Conciliation and Arbitmtion Act 1904-1910, should apply. With these exceptions the laws in force in N ew South Wales on the 1st J anuary, 1911, applied as if they ·were laws of the Territory.

The Territory was administered by Commonwealth Departments un til the end of 1924. By the Seat of Government (Administmtion) A ct 1924, which came into force on the 1st. J an uary, 1925, .as amended by the Seat of Government (Administration) Act 1926, which came

into force on the 3rd September, 1926, the administration of the Territory was entrusted to a Federal Capital Commission of three members, to be appointed by the Governor-General, one of whom was to be the Chief Commissioner. The Commissioners have po wer to manage Crown lands not required by the Commonwealth for any public purpose, and have generally the po we rs of a local government body, including power to levy r ates. They have power to borrow money, if the Parliament consents by a resolution of both Houses, and the ·Treasurer may borrow money on behalf of the Commission, if authorized by an Act of Parliament or by a resolution of both

Houses. The Governor-General may make regulations for the purpose, amongst others, of more accurately defining the powers conferred on the Commission by the Act.

This system .l:tas been modified by the Seat of Government (Ad­ ministration) Act 1928, which came into force on the 29th December, 1928, and under which one Commissioner with limited powers is to be elected by owners and occupiers of property in the Territory. With this exception there is at present no elective body in the Territory,

and the citizens have no franchise. The laws in force in the Territory are those of New South Wales as they existed in 1911, with the excep­ tions already noted. The New South Wales Department of Public Instruction continues to provide educational facilities, the cost bein g paid by the Commission. By an ordinance of 1927, which came into fo rce on the 28th September, 1927, a police force has been established, the work of policing the Territory having previously been carried o::.: by member s of the police force of New South W a1e.r. -

69

Industrial disputes are determined by a form of wages board, which consists of an independent chairman and of representatives of both parties to the dispute. Pending the appointment of a local magistrate ordinary. litigation takes place before the New South Wales magistrate

sitting at Queanbeyan, but difficulties have arisen with regard to the service and execution of process and the r ecovery of debts. It has been suggested that should Parliament sit elsewhere than at Canberra, laws passed during such sittings might be invalid. This suggestion does not seem to be warranted by any provision of the

Constitution. Section 125 provided that the Parliament should sit at Melbourne until it met at the Seat of Government, and althou gh b.'· section 5 the Governor-General may appoint such times for holding the sessions of the P arliament as he may think fit, he is no wber r·

empowered to appoint the place at which these sessions shall be held . Jt appears to be clear that Parliament was not intended to sit else­ where than at Canberra, after it had once met there, but the sa nct ion for these provisions appears to be political and not legal.

971

70

VIII.-THE LEGISLATIVE POWER OF THE COMMONWEALTH.

The Commonwealth of Australia Constitution Act and other British Statutes. The legislative power of the Commonwealth depends primarily on the Commonwealth of Australia Constitution Act, which embodies and gives legal effect to the Constitution. In regard to various matters, however, power to make laws is conferred on the Parliament of the Commonwealth, as well as on the legislatures of other parts of the Empire, by a number of British statutes, including, for example, the

Colonial Courts of Admiralty Act, 1890 (s. 3), and the Merchant Shipping Act, 1894 (s. 736).

The constitutional status of the Commonwealth as a self-governing Dominion. From a legal point of view the powers of the Commonwealth Parliament are subject to the right of the Crown to withhold assent to any bill reserved by the Governor-General, or to disallow any Act within one year after it has received his assent (ss. 59), while

in virtue of the supremacy of the British Parliament any legislation passed by the Commonwealth Parliament may be repealed or varied at any time by an Act of the British Parliament . .. In fact, however, in virtue of the equality of status which, from a constitutional as distinct from a legal point of view, now exists between Great Britain and the seif-governing Dominions as members of the British Common­ wealth of Nations, and on the principles which are set out in the report submitted by the Inter-Imperial Relations Committee to the Imperial Conference in 1926, it would not be in accordance with con­ stitutional practice either for British Ministers to tender advice to the Crown against the views of Australian Ministers in any matter appertaining to the affairs of the Commonwealth, or for the British Parliament to pass legislation applying to the Commonwealth without

its consent. This statement of principles was not intended to apply to provisions in any constitution or statute which expressly require bills to be reserved for the royal assent. Provisions of that nature are to be considered by an expert committee, which is to meet shortly and is to make r ecommendations, after inquiry, concerning existing statutory provisions which require reservation of Dominion legislation for the

assent of His Majesty or authorize the disallowance of such legislation.

The government of the. Commonwealth and the Territories. Plenary .powers. The Commonwealth Parliament may make laws for the peace order and good government of the Commonwealth with respect to the matters which come within the enumerated powers (ss. 51, 52). It has an indepen­

dent and general power to make laws for the government of the Territories (s. 122; Bttehanan v. Commonwealth, 16 C.L.R. 315; R. v. Bernasconi, 19 C.L.R. 629). The difference in scope between its powers in regard to the Commonwealth and its powers in regard to the Territories does not affect the plenary nature of the authority conferred by the

enumerated powers. The Commonwealth Parliament is not a delegate of the British Parliament bound to exercise all its functions itself and

71

without power to entrust any of them to other persons or bodies. The principle as to the nature of self-government affirmed by the Privy Council in Powell v. Apollo Candle Co. (10 A.O. 289-290) in regard to the State legislatures before Federation applies equally to the

Commonwealth Parliament. Its authority is restricted by the Constitu­ tion itself, but within the limits of area and subject-matter it has powers of legislation as ample, and of the same nature, as those of the British Parliament ( cf. R. v. Burah, 3 A. C. at p. 904; Hodge v. The Queen,

9 A.C. at p. 132; the Engineers' case, 28 C.L.R. at p. 153). It may choose its own methods and means to attain any objects within its powers, and the validity of an enactment directed to those objects cannot be challenged on the ground that it is not calculated as matter

of fact or policy to secure peace order and good government (Riel v. The Queen, 10 A.O. at p. 678).

Territorial and extra-territorial powers. The Colonial Laws Validity A.ct, 1865. The powers of the Commonwealth Parliament are subject to two restrictions of a general character, one' being the principle stated by

the P:rivy Council in MacLeod v. Attorney-General for New South Wales (1891 A.C. at p. 458) as to the territorial nature of the powers conferred by the British Parliament on the legislatures of different parts of the Empire, and the other being the declaration made by the British Parliament in the Colonial Laws Validity A.ct, 1865, as to the

effect of repugnancy between enactments of such legislatures and enact­ ments of the British Parliament intended to apply to the parts of the Empire for which those legislatures have been established. On the principle stated in MacLeod's case the authority of the

Commonwealth Parliament is, in general, confined within territorial limits. Where, however, a power of the Parliament cannot otherwise be exercised effectively, as, for example, in the case of a power to expel, the power will extend beyond those limits (Attorney-General for Canada

v. Cain and Gilhula, 1906 A. C. 542; Robtelmes v. Brennan, 4 C.L.R. 395). Moreover, entry into the Oommonwealt:Q. after an offence has been committed elsewhere may, in some circumstances at least, be made an offence (P. and 0. Steam Navigation Co. v. "broken

seals" case, 1903 A.C. 471). There are, too, provisions in a number of British statutes which, expressly or by necessary implication, extend the of the Commonwealth Parliament beyond territorial

limits. These include· (a) covering clause 5, so far as it deals with British ships; (b) the provisions of the Constitution with respect to naval and military defence, fisheries in Australian waters beyond territorial limits, external affairs, and the relations of the Common­ wealth with the islands in the Pacific (s. 51 (vi); cf. Sickerdick v.

Ashton, 25 C.L.R. 506; s. 51 (x), (xxix) and (xxx)); and (c) the

provisions in various statutes dealing with matters of general concern to the Dominions, among them being the Army Act 1881 (s. 177) and the Naval Discipline (Dominion Forces) Act 1911 (s. 1). The ques­ tion of enlarging the competence of Dominion Parliaments to give their legislation extra-territorial operation was considered at the

Imperial Conference in 1926. It may be practicable for Great Britain and the Dominions to find a convenient method for giving effect to the principle which is suggested in the r eport of the Inter-Imperial

973

•. l

72

Relations Committee, that each Dominion Parliament shoulci have power to give extra-territorial operation to its legislation in all cases where such operation is ancillary to provision for the peace order and good government of the Dominion. It does not appear desirable to go beyond that principle in view of the difficulties that arise between the Dominions, or between the Empire and foreign countries.

Under the Colonial Laws Validity Act, 1865, the Commonwealth Parliament cannot override British legislation which is intended to apply to the Commonwealth either (a.) specifically, as in the case of the Commonwealth of Australia Constitution Act; or (b) in common wi th other Dominions, as in the case of the Foreign Enlistment Act, 1870 . Subject to this exception it may pass legislation inconsistent with either the statute law or the common law in force in Great Britain. The Act serves to rec oncile the autonomy of the Dominions "\vith the unity of the Empire. Any suggestion to alter the provisions of the Act will need full and grave consideration, as indeed is implied-, if n_ot expressed, in the passages of the report of the

Relations Committee which deal with the question.

Pow ers in sections 51 and 52 subject to the Constitu.tion. The powers enumerated in sections 51 and 52 are expressly made subject to the Constitution. The Commonwealth Parliament cannot, under these powers, pass legislation -vvhich goes beyond the limits which are involved in the enumeration, or beyond those which are to be found, jn the case of particular powers, in the special provisions applicable to them. The distribution of powers has been put into the Constitution by the people of Australia, and 1he Common-wealth Parliaruent cannot merely of its own motion legislate so as to alter that· distribution

(Attorney-General for the Commonwealth v. Colonial Sugar R efining Co . Ltd., 17 C.L.R. at p. 655). If its legislation exceeds the prescribed limits, it "\vill, at least to the extent of the excess, be invalid. When a. question arises whether the limits have been exceeded, it will be the duty of the appropriate Courts to determi ne the question (the Eng1:neers' case, 28 C.L.R. at p.

No implied prohib·ition against interference with State

·instr·umentalities. Each of the enumerated powers is complete in itself, and may be exercised to i ts utmost extent, without "implied prohibitiop" against any exercise which might interfere with "State instrumentalities "-for example, with State raihvays (the Engineers' case, 28 C.L.H. at pp. 146, 150-152, 157-160, over-ruling the Railway Ser'vants' case, 4 C.L.R. 488).

Before the EngineeTs' case the High Court took the view that in deter­ mining the scope of a pov.rer under a federal system of government regard wn.s to be had to the necessity of mutual non -i11terference between Federal and State authorities ( D'Ernclen v. F edder, 1 C.L.R. pp.

110-113; the Railu.•ay Se1·va-rds' case, 4 C.L.R. pp. 537-539; .A.ttorney­ General for Queensland v. Attorney-General fo r the Comm.ontucalth, 20 C.L.R. p . 163) . In the EngineeTs' case the Court · rejected this principle as involving "questions of expediency or political exigency ·which this Court is neither intended to co11sider nor equipped with the means of determining" (28 C.L.R. at p. 160; cf. pp. 144-146, 150-152, 157-159).

73

Incidental powers. Each of the enumerated powers is to be read with the provisions as to "incidental powers". Under paragraph (:xxxix) of section 51 the Commonwealth Parliament may make lavvs with respect to matters inci­ dental to the execution of any power vested by the Constitution (a) in the

Parliament; (b) in either House; (c) in the Government of the Com­ monwealth; (d) in the Federal Judicature; or ( e) in any department or officer of the Commonwealth. As regards any power of legislation, the Parliament would apparently have been able to make laws with r13spect to matters incidental to its exercise, even if par.agraph (xxxix)

\vere not in the Constitution, as the grant of a power implies that it may be exercised completely and effectually, and, therefore, that anything may be done which is necessary fo r that purpose. But the express grant of incidental povvers, which is similar to that in the American Consti­

tution, makes assurance doubly sure (G. C. Crespin & Son v. Co lac Co -operative Farmers, Ltd., 21 O.L.R. at 214). Paragraph (xxxix) also makes it clear that the incidental powers are to extend to administrative and judicial powers as well as to legislative powers (R. v. Kidman, 20

C.L.R . at p. 443). It covers a great variety of legislation-for example, criminal legislation in regard to federal matters, legislation creating an offence under one of the enumerated po-vvers and directing that a person who is accused of the offence and is within the power must prove his innocence, and legislation under which a regulation may be made fixin g

the price of bread in war t ime in particular localities ( cf. Williamson v. Ah On, 39 O.L.R. 95; Farey v. Burvett, 21 O.L.R. 433 ). But

paragraph (xxxix) has its limits. It does not confer an additional power. It does not do more than cover matters which are incidents in the

exercise of some actually existing power; it applies only in relation to p01vers which are vested in the Parliament or other Federal au thority, and not to powers which are merely capable of being acquired by an alteration of the Constitution, and it applies only in relation to a power 1vhich has been actually exercised (Colonial Suga.r R efining Co., Ltd. v.

Attorney-General f or the Commonwealth, 17 C.L.R. at 655 ; ex parte vV and Johnson, in rre Yates) 37 C.L.R. 36).

'Phe d i0tribution of powers between lhe Commonwealth and State Parliaments. In giving specific subject-matters to the Commonwealth Parliament and leaving everything else to the State Parliaments, the framers of the Constitution adopted a simple method of distribution, under which the dividing line. bebveen the Federal and State spheres is ascertained by examining the list of subject-matters assigned to. the Commonwealth Parliament. The choice between giving the specific or the residuary p011irers to the Commonwealth Parliament does not itself determine the

the relative importance or extent of the t v..r o spheres. That question depends upon the nature and scope of the specific powers. The method of . distribution adopted in the Constitution is convenient as well as simple, it leaves room fo r the principle of concurrent powers in regard , to matters 011 -vvhicb ]t is desirablE that the Commonwealth Parliament

should have power to make laws, but in regard to which it is not

desirable either to affect existing State legislation or the power of a State Parliament to pass further legislation, until the Common wealth Parliament sees· fit to occupy the field .

975

li

74

The powers in section 51. The main grant of powers to the Commonwealth Parliament is in section 51. The grant is not based on abstract principles, but is the practical solution which commended itself to the framers of the Constitution in the light of the history and circumstances of Australia, and the need for compromise in order to reconcile divergent views and obtain agreement. The powers di ff er in nature and purpose as well as in origin. Some of them, e.g ., the p owers as to defence, external affairs, naturalization of aliens, taxation ( including the control of customs), and borrowing .on the credit of the Commonwealth, are ob viously appropriate to a central legislature. Some, e.g., the powers as to bills of exchange and promissory no tes, are designed to secure the advantages of uniform law. Some, e.g ., the powers as to postal, telegraphic, telephonic, and other like services, are modelled on the provisions of the American and Canadian Constitutions, with such additions as appeared to be required in order to include modern developments. Some, e.g., the powers as to marriage and divorce, follow the Canadian precedent ·in

view of the experience of the United States through the omission to grant them to Congress. Some, e.g ., the powers as to invalid and old-age pensions, and industrial arbitration, are Australian innovations, One, namely the power in paragraph (xxxvi), which relates to matters in

respect of which the Constitution makes provision "until the Parliament otherwise provides", leaves to the Commonwealth Parliament numerous matters in regard to which it was necessary or desirable to have some provision in the Constitution from the e;;tablishment of the Common­ wealth, but it was not practicable, or not expedient, to stereotype either principles or details ( cf. ss. 7, 10, 22, 24, 29, 30, 31, 34, 39, 46, 47, 48, 49, 65, 66, 67, 73, 87).

Concurrent powers. In regard to most of the 39 matters enumerated in section 51, including, e.g., banking other than State banking, insurance other than S tate insurance, weights and measures, bills of exchange and promissory notes, copyrights, patents and trade marks, bankruptcy and insolvency, marriage, divorce and matrimonial causes, the power of the Com­ monwealth P arliament is a concurrent powe r, and the powers of a

State Parliament are not affected un til the Commonwealth Parliament occupies the :field. Bnt some of th e matters mentioned in the sectioH are from their very nature wi thin the exclusiv e power of the Common­ wealth Parliament, e.g ., borrowing money on the public credit of the

Commonwealth, fisheries in Australian waters beyond territorial limits, the service and execution throughout the Commonwealth of State process and judgments, an d the relations of the Commonwe alth with the islands of the Pacific ( cf. Quick and Garran, Annotated Constitution of the Australian Commonwealth, p. 656 ) . Some are expressly declared by other sections of the Constitution to be matters in regard to which the Commonwealth Parliament is to have exclusive power, e.g., customs and excise (s. 51 (ii); s. 90). Some are expressly withdrawn from a State, e.g., a State is not to coin money, or to make anything but gold and silver coin a legal tender in payment of debts (s. 51 (xii); s. 115).

Exclusive powers. Matters within the exclusive power of the Commonwealth Parliament are mentioned or r eferred to in section 52. Under that section the Commonwealth Parliament has exclusive powe r to m ake. laws wi th

75

respect to (a) the seat of government of the Commomvealth and all places acquired by the Commonwealth for public purposes ; (b) matters relating to transferred departments; and (c) other matters declared by the Constitution to be within the exclusive power of the Commonwealth

Parliament. This enumeration is not exhaustive, for, as already mentioned, several of the matters enumerated in section 51 are for different reasons within the exclusive power of the Commonwealth Parliament.

The determination of the sea t of government is dealt with in a separ ate section, under which the seat of government is to be within territory granted to or acquired by the Commonwealth ( s. 125). Once it is determined, as it has been, under that section, the Commonwealth

Parliament has under section 52 exclusive power to make laws for the government of the territory, a power which is similar to that in the American Constitution, the object in each case being to preclude any possibility of the freedom of action of the central government being fettered by any State.

Paragraph (i) of section 52 couples with the seat of government "all places acquired by the Commonwealth for public purposes". The High Court has not yet decided whether these words mean places acquired as territory, or places acquired as property, or both, though in

Commonwealth v. New Sonth Wales (33 C.L.R. at pp. 46, 53, 60) the question was touched on by two judges, who took .different views. Apparently the general opinion since the decision of the Supreme Court of New South Wales in R ex v. Bamf01·d (1 S. R. (N.S.W.) 33) has been that the words include places acquired as propei·ty, even though not

acquired as territory-for instance, public buildings, post offices, forts, dockyards, arsenals and aerodromes (see the evidence of Sir Robert Gan·an, pp. 108-109). The fact of any such place being acquired by the Commonwealth for public purposes and so coming within the

exclusive power of the Commonwealth Parliament does not displace existing State laws, as under s. 108 these laws continue until the Commonwealth Parliament legislates, excep t where. the Constitution has made other provision-e.g., in section 90, under which State laws .

imposing duties of customs or of excise we re to cease on :the imposition of uniform duties of customs. The H igh Court has not yet decided · whether the Commonwealth Parliament has control for federal purposes only, or whether its power completely excludes a State Parliament from legislating in regard to such places. ·

The provision in paragraph (ii) of section 52 giving the Common­ we alth Parliament exclusive power with respect to "matters relating. to" any transfened department clearly cover s matters concerning the working of the department, and in some judgments in the High Court

the provision is regarded as extending to the subjects with which the department has to deal, or at least as h elping to indicate that the

Commonwealth Parliament has exclusive powers in regard to those subjects (cf. Joseph v. Colonial Treasnrer, 25 C.L.R. 46). As to paragraph (iii) of section 52 the only matters expresely declared to be · within the exclusive power of the Commonwealth

Parliament are customs and excise duties (s. 90), bounties on the production or export of goods-subject to certain qualifications ( ss. 90, 91), and jurisdiction over a11y part of a State which is surrendered to the Common'we alth ( s. 111 ).

977

76

Powers compared with those of the Congress of the United States of America.

The Commonwealth Parliament can legislate on many matters which are outside the powers of the Congress of the United States, and on some matters which are outside the powers of the Parliament of Canada. As the powers are distributed in the American Constitution under the same method as that in the Australian Constitution, while the method in the

Canadian Constitution is different as well as complex, it is easier to compare the powers of the Parliament with those of

Congress than with those of the Canadian Parliament. The matters which are specifically assigned to the Commonwealth Parliament but which are not assigned to Congress, or are only assigned to it in part and as incident to a specified subject matter (e.g., the regulation of foreign and interstate trade), include bounties on the production or export of goods, insurance, bills of exchange and promissory notes, marriage, divorce and matrimonial causes, invalid and old-age pensions,

the service and execution throughout the Commonwealth of the civil criminal process and the judgments of the Courts of the States, the

people of any race, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws, the acquisition of railways from a State, railway construction and extension in ·a State, and conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. More-. over the powers of the Commonwealth Parliament extend to the

numerous matters in respect of which the Constitution makes provision "until the Parliament provides" (s. 51 (xxxvi) ).

Both the American and the Australian Constitutions leave internal trade and commerce to the States, and both ·have provisions, though not identical provisions, which restrict the power of the central legislature in regard to discriminatory taxation and the giving of preference by any law· or regulation of trade, commerce or revenue. Under neither Constitution has the central government power. to annul or disallow the legislation of a State Parliament. ·

In comparing the· Commonwealth Constitution with the American Constitution it is important to bear in mind not only the list . of subjects assigned to the central legislature ( cf. sections 51 and 52 of the Common­ wealth Constitution, and Article 1, sections 1 and 8, of the Constitution of the United States), but also the express prohibitions which are contained in the American Constitution but have no counterpart in '---1\.ustralia. The most important of them are set out in Article 1,

sections 9 and 10 (subject to the amendment made in clause 4 of section 9 by the Sixteenth Amendment), and in the

Amendment. Some apply to Congress, or to both Congress and the State Legislatures, but a number, including the provisions which forbid legislation impairing the obligation of contracts or the depriving of any person of property without due process of law, are specially addressed to the States. As Congress can only legislate on the subjects assigned to it, and within the limitations and subject to the prohibitions applying to its powers, the prohibitions which are addressed to the States, and which restrict the general power of legislation otherwise reserved to

them, preclude in effect any legislation in the United States of the character described in the prohibitions, unless and until the Constitution is amended, and they have in fact stood in the way of much social

11 I

77

legislation. In Austraiia, in· the absence of these prohibitions, the question in regard to similar legislation is whether it comes within the sphere of the Commonwealth Parliament or within the sphere of a State Parliament, and not whether it is beyond the competence of both

legislatures. Another fundamental' difference between the two Constitutions is in regard to prohibitions" against interference with State

instrumentalities. The Supreme Court of the United States apparently regards the principle of mutual non-interference between Federal aud State authorities as essential to the satisfactory working of the Americar: Constitution, while the High Court of A.ustralia has decided that it

inapplicable to the Commonwealth Constitution.

Powers compared with those of the Parliament of Canada. In the Canadian Constitution there are two sets of enumerated powers-a set for the Provincial Legislatures in relation to the sixteen subjects in section 92, and a set for the Dominion Parliament in rela­

tion to the twenty-nine subjects in section 91. A general or residuary power is also given to the Dominion p ·arliament in relation to all matters not coming within the enumerated powers of the Provincial Legislatures.

A valuable analysis and discussion of this complex scheme is in the' evidence of Sir Robert Garran, where an account is

g1ven of the ingenious ·attempts, by judicial decision, to reconcile two sets of mufually exclusive powers, which are found in practice to overlap. "The Canadian system has always appeared to me to be one

of extreme comple:xity, and v\7ith the permission .Jf the Commission I will read a note I · have written on this subject, which is con­ tained· in Sir John Quick's work, Legislative Powers of the Com­ mon:wealth of Australia, at page 108. As this is a technical subject,

I think the best way for me to express it is by reading the follow­ ing, which appears on page 109 :-' The provisions of the Canadian Constitution as to the dis­ tribution of power are extremely complex. The leading prin­ ciples are-(1) 'l'hat the subject-matters of Provincial legislatio11

are specific, those of the Dominion Parliament partly specific and partly residuary. · ( 2) That the powers both of Dominion and Provinces are mutually exclusive.' Instead of leaving a concurrent power in the Provinces until the legislative power 'vas exercised by the Dominion, the framers of the Canadian Oonstitution

attempted to make each set of powers exclusive of the other. The note continues-. 'Both these principles, however, require to be stated with very important qualifications. In the · first place the Constituti011

attempts to enumerate specifically some of the powers of the Dominion Parliament. We thus have two sets of enumerated powers, mutually exclusive; and yet these two :fields are found in practice to overlap. The result has been a series of ingenious

attempts, by judicial decision, to reconcile the two, with results which may be shortly stated as follo ws :-Where there is . over­ ·,apping of enumerated powers, the fi eld is "concurrent", and

979

78

where in this concurrent :field Dominion and Provincial legislation clash, the Provincial legislation to that extent gives way. Thus the specific powers of the Provinces are in a sense residuary. Dominion laws which are "ancillary" to either the residuary or the specific powers of the Dominion Parliament are valid even though they incidentally encroach on the specific powers of the

Provinces.

The following is an analysis of the mode of distribution:­ Dominion Legislative Powers. (1) General (residuary) power given by section 91-to make laws for the peace, &c., of Canada in relation to all matters not enumerated in section 92 as exclusive powers of the Provinces.

This power can only be exercised for matters national in character, and not comprised in the enumerated powers of the Provinces (Attorney-General for Ontario v. Attorney-General for 1896 A.O., p. 348) .

. (2) Jvlatters ·enumerated in section 91. These are not deemed to come within any of the sixteen classes enumerated in section 92: Attorney-General for Ontario v. Attorney-General for Canada (supra), overruling dictum in Citizens Insurance Co. v. 7-A.C., where it was held that this provision only applied to class 16 of section 92. '

(3) Matters 'ancillary' to residuary or enumerated powers.

Provincial Legislative Powers. These are matters in section 92, but exclusive of

matters enumerated in section 91. The Dominion has two kinds of legislative power-residuary and specific. The Provinces have one kind of legislative power, which is specific, but is at the same time residuary in the sense that it only covers so much of the enumerated matters in section 92 as are not included in the enumerated matters in section 91.

Concurrent Ppwers. Though there are no subject-matters of express concurrent power (with one exception relating to agriculture) the existence of what is really a concurrent :field has been established by judicial decision. "Though the enumerated powers of the Dominion and the Pro-

vinces are expressed as exclusive, 'they overlap. ,

Where there is over-lapping of enumerated powers of the Dominion and the Provinces· respectively, neither legislation will be ultra vires if the :field is clear; if on this 'concurrent' :field the two legislations meet, Dominion legislation prevails ' " (see . the

evidence of Sir Robert Garran, pp. 44-45). The Dominion Parliament has a number of specific powers which correspond more or less closely with specific powers of the Common­ wealth Parliament, including power to make laws in relation to the

borrowing of money on the public credit, defence, postal service, census and statistics, beacons, buoys and lighthouses, quarantine, currency and coinage, legal tender, weights and measures, bills of exchange and promissory notes, bankruptcy and insolvency, patents of invention and

79

discovery, copyrights, naturalization and aliens, and marriage and divorce. Under the general power of the Dominion Parliament over non-provincial subjects it may make laws in relation to some of the other matters, e.g., astronomical and meteorological observations, and insurance, which are specifica1ly assigned to the Commonwe alth Parlia­ ment. The Dominion Parliament has also some specific powers which

differ in important respects from the specific powers of the Common­ wealth Parliament, and especially in regard to trade and commerce, and taxation. The power in regard to trade and commerce is a power to regulate but not to prohibit, and it extends to internal as well as to external trade and commerce, though not to matters connected with and commerce which come within the exclusive sphere

of the Provincial Legislatures. The power to tax is free from any restriction against discriminating between provinces or parts of pro­ vinces. The Dominion Parliament has, moreover, specific powers in regard to some matters which are not assigned to the Com­

monwealth Parliament, including (a) shipping and navigation; (b) lines of steam or other ships, railways, canals, telegraphs and other works and undertakings connecting provinces or extending beyond the limits of a province; (c) lines of steamships between a province

and any British or foreign country; (d) such matters as, although wholly situate within a province, are before or after their execution declared by the Dominion Parliament to be for the general advantage of Canada or for the advantage of two or more provinces; (e) Indians,

and lands reserved for the Indians; and (f) the general criminal law.

On the other hand the Commonwealth Parliament has several specific powers which do not come, either at all or at least to their full extent, within the specific or the general powers of the Dominion Parliament. These powers of the Commonwealth Parliament include power to make laws with respect to the people of a particular rac-e, fisheries beyond territorial limits, external affairs, and relations with

the islands of the Pacific. A.s compared with the powers of the Dominion Parliament, the powers of the Provincial Legislatures are -defined within narrow limits (British North America Act, 1867, s. 92). The Dominion Govern­ ment may disallow the legislation of a Provincial Legislature (ibid., s. 90).

Powers compared with those of the Federation in the Federal R epublic of Austria.

Whatever view may be taken as to the importance or extent of the powers of the Commonwealth Parliament as compared with those of Congress in the United States, or with the Dominion Parliament in Canada, its powers are not as wide or numerous as in some of the

Constitutions which have been framed in other countries in recent years-for example, in th-e Constitution of the F ederal Republic of Austria, which was drawn up in 1919. The distribution of powers under that Constitution is described in the evidence of Professor Bailey, Professor of Jurisprudence in the University of Melbourne (p. 1407) :-

"Like our own, it is a Constitution in which the enumerated powers are those of the Federation, the residuary po we rs are those of the States. But while recogni_ zing the necessity for maintaining

981

80

the State organizations it yields far more than our own Constitu­ tion to the demand for uniformity. The powers of the Federation then, which are very great, are divided as follows:-With respect to one group of matters, the Federation has both legislative and execu­

tive pow-ers, including the power to make regulations. With respect to a second group of matters, the Federation has legislative powers, but execut1on of these laws lies with the States. With r-espect to a third group of m atters, the Federation may legislate as to fundamental principles only; the legislative power to apply them, and the executive power to enforce th-em are vested in the States.

The contents of each of these groups may perhaps be of some interest. Th-e matters with respect to which the Federation has both legislative and executive power include practically all tho matters set out in section 51 of the Constitution of the Oommon­ momvealth. But they do not stop there. Th-ey include also civil law (including company law ), the press, the law of associations and assemblies, monopolies, labour legislation (except in respect of

agr iculture and forestry), public hygiene, -food supply, including food co:ptrol, transport by rail, by wat-er and by air, including tramways declared to be Federal routes. Even the administration of ju.stice is S\vept into the Federal net.

The second group ,of matters, with respect tu which the Federal Government has full legislative power, but must dep-end on the States for the execution of its laws and regulations, embrace.s citizenship, domicile and p ersonal status, munitions, weapons and motor vehicles; housing, and sup-ervision of local taxation to

prevent double taxation or other unnecessary burdens, to prevent impediments to commercial intercourse or economic relations with for-eign countries, or between provinces or parts of provinces, and to prevent the imposition of charges which are excessive or likely to impede traffic upon or the use of public traffic routes.

Finally, through its legislative power in respect of principles, the Federal Government may prescribe the limits within which the State authorities are free to act, with r-egard to a great number of matters. They include such subjects as .the organization of the administration of States; poor relief; hospitals and nur,sing homes and health resorts; the care of mothers, infants and children; labour laws in forestry and agriculture; building and forestry, including the protection of plants from diseases and pests.

Whether this power to legislate upon "fundamental principles only" is on-e susceptible of confinement within any legal limits, or whether it will develop in s1,1ch a way as to leave the States no substantial discretion, is a matter on which no evidence seems yet procurable. To Australian eyes it looks unworkable."

Matters in respect of which the C ornrnonwealth C on.stitution makes provision until the Parliament otherwise The power conferr-ed on the Cp,mm0nwealth Parliament to make laws on matters in respect of which the Constitution makes provision

"until the Parliament otherwise provides" is important. Paragraph (xxxvi) of s.ection 51 makes it clear that the Commonwealth Parliament may legislate on the numerous matters in regard to which those word!!

81

are used. All the provisiOns governed by those words, including. the whole or part of sections 3, 7, 22, 24, 29, 31, 34, 39, 46, 47, 48, 49,

73, 87, and 96, remain in force only until the Co,mmonwealth

Parliament sees fit to vary or supersede them. So far as these pro­ visions are concerned, the Constitution is flexible, that is, the principles or details which are subject to the words "until the Parliament other­ wise provides " may-be altered by the ordinary process . of legislation, .and without the approval of the electors being obtained under section

128. Any constitution which cannot be altered as to the whol€ of its .provisions in the same way as any other law, is, strictly, a rigid

constitution in the sense made familiar by Bryce and Dicey, but the degree of rigidity may vary ind:fJfinitely, from that of a .constitution which partakes of the nature of a treaty and is unalterable except with the assent of all the parties, to that of a constitution in which almost

the whole of its provisions may be altered as easily, or nearly as easily, as any other law. The people of the six self-governing Colonies, who were agreeing to unite in a Federal Commonwealth, were accustomed to virtually flexible constitutions. The framers of the Commonwealth

Constitution had before them the Canadian Constitution, which does not provide the means for its own alteration, except for certain limited purposes, and can only be altered by the British Parliament, and the Ame·rican Constitution, which provides means for alteration but makes alteration difficult. They were confronted with the problem of safe­ guarding the pact of union, securing as much flexibility as was

consistent with the safeguards, and at the same time providing means for altering the pact in Australia without going to the British Par­ liament for fresh authority. " No doubt the Act of 1900 contains large powers of moulding the Constitution. Those who framed it intended

to give Australia the largest capacity of dealing with her own affairs, and the Imperial Act enables her to act without coming to the mother Parliament" (Attorney-General for the Commonwealth v. Colonial Sugar Refining Company Limited, 17 C.L.R. at p. 655-in the judgment

of the Judicial Committee of the Privy Council delivered by Viscount Haldane, Lord Chancellor). But apart from alteration by a

referendum under section 128, the framers of the Constitution had recourse in · a large number of its provisiop.c; to the principle of giving the Commonwealth Parliament itself power to deal with a variety of matters, including those to which the words "until the Parliament otherwise provides" apply, and sought to frame a polity which should have the merits both of a rigid and ·a flexible constitution (Dicey, Law of the Constitution; 8th edn., 1920, appendix, pp. 533-535).

Matters on which the Commonwealth Parliament may legislate, including matters affecting the Parliament itself, the executive government of the Commonwealth, and the j-udicial syste.m of the Commonwealth and the States. The CommomV,ealth Parliament may legislate on a number of matters affecting the Parliament itself, the executive government of the Com­ monwealth, and the judicial system of the Commonwealth and the States. As regards matters affecting itself it may determine whether the senators for each State are to be chosen by the people of the

State voting as one electorate or voting in some other way; increase 0r diminish the number of senators for each State, subject to the pro­ visions of the ·Constitution with respect to equal tepresentation, and

983

82

m1n1mum representation, of the original States; and · prescribe the :method of choosing senators, subject to the method b-eing uniform for all the States (ss. 7, 9). The number of th.e members of the House of Representatives is to be, as n-early as practicable, twice the number

of the senators ( s. 24). Members are to be allotted to the States on the basis of population ( ss . 24, 25). Subject to these requirements of the Constitution the Commonwealth Parliament may determine the manner in which the number for each State is to be asc-ertained, and may increase or diminish the number of the ;members of the House of Representatives ( ss. 24, 27). It may d-etermine the electoral divisions in each State and the number of members for each division, though a division is not to be formed out of parts of different States ( s. 29). It may regulate el-ections to either House (ss. 10, 31); prescribe the qualifications of electors, subject to the provisions of section 41 ( ss. 8,

30), and also the qualifications of senators and members of the House of Representatives (ss. 16, 34), though both sets of qualifications must he the same for either House (ss. 8, 16), and in the choosing of

senators or of members of the House of R epresentatives there i$ to be no plural voting (ss. 8, 30); 1 make provision with respect to the liability of a disqualified person who sits in eith-er House (s. 46); provide for the determination of questions respecting qualifications, vacancies, and disputed elections, as regards either House (s. 47); fix the quorum of

eith-er House ( ss. 22, 39) ; determine the allowance to be paid to senators and members of the House of Representatives (s. 48); and declare the powers, privileges and immunities of the Senat-e and of the House of Representatives, and of the members and the committees of each House ( s. 49).

As to the -executive goverl1iment, the Commonwealth Parliament may determine the number of Ministers of State for the Commonwealth and the annual sum to be paid out of the Consolidated Revenue Fund for their salaries, and provjd-e for the appointment and removal of officers of the public service ( ss. 65, 66, 67).

The Commonwealth Parliament may determine various matters affecting the High Court, other Federal Courts, and State Courts. It may pr-escribe the number of Justices of who;m, in addition to the Chief Justice and at least . two other Justices, the I-Iigh · Court is to consist (s. 71). It may, in a number of cases, exclude appeals to the

High Court (s. 73), and in any of the matters mentioned in section 76, including any matter arising under any F-ederal law, it may confer original jurisdiction on the High·Court (s. 76). It may create Federal Courts and define their jurisdiction (s. 71, 77 (i) ). In regard to any of the matters mentioned in sections 75 and 76, including any matter in which the Commonwealth is a party, or any matt-er between States, or any matter arising under any Federal law, it iffiay exclude the jurisdiction of any State Court ( s. 77 (ii)), and invest any

State Court with federal jurisdiction- (s. 77 (iii)). It may,

within certain limits, confer rights to proceed against the

Commonwealth or a State (s. 78). It may prescribe the

number of judges by whom the jurisdiction of any federal Court, or the fed eral jurisdiction of any State Court, is to be exercised ( s. 79). It may provide that any offence .against any law of the Commonw-ealth is to be tried on indictment or otherwise as it thinks proper. If the offence is to be tried on indictment, the trial is to be by jury, · and in

83

the Stat-e in which the offence was committed, or if it was not com­ mitted within any State, then at such place or places as thi Parliament prescribes ( s. 80). If the offence is not to be tried on indictment, the Parliament may provide for the mode of trial, e.g., for the offence to

be tried summarily by a magistrate. The powers of the Commonwealth Parliament also extend, though iu some instances with important qualifications, to the following:­ the appropriation of the Consolidated Revenue Fund (s. 81), the dis­ tribution of surplus revenue (s. 94), the grant of financial assistance

to the States (s. 96), the powers of adjudication and administration to be conferred on the Inter-State Commission (s. 101), the forbidding of pr-eference or discrimination by a State as to railways (s. 102), the taking over of State debf..s (s. 105), the making of agreements by the

Commonwealth with respect to the public debts of the States, and to Commonwealth and State borrowing (s. 105A), the annulment of the inspection laws of a State ( s. 112), the detention in State prisons of persons accused or convicted of offences against the laws of the Com­

monwealth (s. 120), the admission or -establishment of new States (s. 121), the alteration of the limits of a State (s. 123), and the

government of Territories ( s. 122).

Financial Agreements between the Commonwealth and the States. Section 105A of the Constitution, which was inserted by Constitu­ tion Altevration (State Debts) 1928, and under which the Commonwealth may mak-e agreements with the States with respect to the public debts

of the States, is important from a constitutional as well as from a point of view. An agreement made or validated under the

section will confer legislative powers on · the Commonwealth, but will at the sam-e time impose limitations on the power of the Commonwealth, and of a State, to make laws derogating from the agreement. Matters in respect of which agreements may be made are enumerat-ed in the

first sub-section, and include not only the taking over of State debts but also the borrowing of money by the States, or by the Common­ wealth, or by the Commonwealth for the States.. An .agreement made in accordance with the section, or in the case of an agreem-ent made

before the commencement of the section, validated by legislation of the Commonwealth Parliam-ent, is binding on the Commonwealth and the States during the currency of the agreement unless, under the fourth sub-section, it is varied or rescinded with the consent of all the parties. Und-er the fifth sub-section every such agreement and any such variation

is to be binding upon the Commonwealth and the States which are parties thereto, notwithstanding anything contained in the Constitution of the Commonwealth or the Constitution of the several States, or in any law of the Parliam-ent of the Commonwealth or of any State. ·

The importance of this aspect of the section may be illustrated by comparing an agreement made under the section with the Surplus R evenue Act 1910, und-er which the Commonwealth was to make per capita payments to each State for a period of at least ten years from the 1st July, 1910. The powers of the Comuwnwealth Parliament were not affect-ed by the obligations which that Act imposed on the Common­ wealth, and legally the Commonwealth Parliament could have amended

or repealed the Act before the period of ten years had expired. The Commonwealth Parliament cannot of its own motion vary or rescind an agreement made under section 105A of the Constitution.

985

84

The agreement (see Appendix B) which was made on the 12th December, 1927, between the Commonwealth and all the States, the Commonwealth being the party of the first part and New South Wales, Victoria, Queensland, · South Australia, Western Australia and

Tasmania being the parties of the second, third, fourth, fifth, sixth and seventh parts respectively, . was in the first instance. approved by the Parliaments of the Commonwealth and of the States, the approval being given before the bill for Constitution Alteration (State Debts) 1928 was submitted to the electors. After the proposed alteration of the

Constitution was approved by the requisite majorities, the agreement was validated by the Financial Agreement Validation Act 1929.

Once an agr-eement is made, · or once the agreement of the 12th December, 1927, was validated as above, it ·is not competent for the Commonwealth Parliament or any State Parliament to pass legislation which will affect the binding force of the agre-ement, unless the legisla­ tion is in pursuance of an agreement of all the parties.

Other aspects of section 105A are discussed elsewher-e in this report (see xix.-The Financial Relations of the Commonwealth and the States; and xxi.-The ... of the Constitution).

Exercise of Powers by the· C,ommonwealth Parliament. The extent to which the legislative power of the Commonwealth has been exercised in relation to any particular provision of the Constitution or to its subject-matter is indicated in the tables which

are set out in the annual volume of Commonwealth Acts, and which group the legislation from 1901 onwards under the provisions of the Constitution by virtue of or in relation to which it has been enacted, and show, in the case of those provisions of the Constitution which remain in force "until the otherwise provides," whether

any other provision has been rr ad e. ·The Commonw-ealth Parliament has exercised a great number of( powers of legislation conferred by the Constitution, including cf the powers conferred by section 51, but it has not legislat-ed with respe, t to marriage or divorce, except in the Matrimonial Ca.uses (Expeditionary Forces) Act 1919, or with respect to weights and measures. Evidence was given in this inquiry of the need of uniformity in the laws relating to marriage and divorc-e throughout Australia. Evidence was .also given of the need for establishing a Bureau of Standards in exercise of the pow-er of legisla­

tion with respect to weights and measures. It was thought at one time that the Commonwealth Parliament had power to pass a uniform Compani-es Act under section 51(xx), but owing to doubts thrown upon the power of the Commonwealth in the case of H uddart Par leer Company Proprietary Limited v. Moorehead

(8 C.L.R., 330) no uniform Companies Act has been passed, and there remain wide differences between the Companies Acts o£ the several States, some of which it is claimed afford inadequate protection to the public.

The Commonwealth Parliament has exercised the powers of legislation relating to the seat of government of the Commonwealth, and to tho·se departments of the Public Service the control of which was by the Constitution transferred to the Executive Government of the Oommonw€alth.

Certain Acts of the Commonwea-lth Parliament cannot be referi·ecl to one head of power only, -e.g., the Customs Act 1901-1925, some sections of which ma:y be based on the customs power, and some on the pPovisions in section 51. (i) relating to trade and commerce with other

countries. -<;er.tain. Acts may not bJ referable to any of the J?Owers enum-erated 1n sect10ns 51 and 52, but may be referable to section 81 of the Constitution, under which the Consoliclated R evenue Fund is to be appropriated ".for the purposes of the Commonwealth": Certain

Acts are referabl-e to the power conferred by section 122 to legislate for the government of the Territories. Numerous enactments, including provisions with 1.1espect to offences, p enalties, proc-edure and a variety of other matters, derive support from 1the incidental powers conferred

by secti0n 5Il { xxxix) . (

Regulations. TheTe is no "separation of powers" in the Constitution which precludes the Commonwealth Parliament from delegating power to make laws. An Act frequently confers a power to mak-e regulations

prescribing matters which are necessary or convenient to be prescribed f 'lr carrying out or giving effect to the Act. A power to make r-egula­ tions or ordinances is conferred in Acts passed for the government of the 'Territories, ordinances being made by a Legislative Council for Papua, and r-egulations or ordinances being made by the Gove.rnor­ General for the other Territories. In accordance with the Acts Inter­ rrgtation Act 1901-1918 (s. 10), regulations come into force, unless rr 'co·ntrary intention appears in the Act '\under which they are made, as

soon as they are notified in the Gazdte, but are to be laid before

Parliament and if disallowed in either W ious-e by a resolution of which notice has been given within fifteen sitcting days, they cease to have effect. Provision is made in the Ru :es Publica.tion Act 1903-1916 for the publication of r-egulations and >ther statutory rules. The Act

as originally enacted was modelled on an Act passed by the British Parliament in 1893, and had two objects-( a) to supply facilities for criticizing the drafts of rules proposed to be made under statutory authority, and (b) to provide for the publication of the rules when

made, but the sections by which effect was g_iven to the first of these objects wer-e repealed in 1916. The Act applies to rules, regulations · or by-laws which (a) relate to any Court within the Commonwealth, or (b) are made by the Governor-General, or any Minister, or the Inter­ State Commission, or any Government department. The stat1.1tory rules of each year are .published a-nnually in volumes similar to the volumes of statut-es, together with a table of the rules made prior to and in force at the end of the year, arranged under the Departments by

which. they are administered. Attention was drawn by several witRe.sses to th-e . extent and importance of the subordinate legislation enacted under delegated powers ( ev,idence, pp. 878, 938, 952, 1170). An incr-ease in the practice

of delegating legislative powers to executive authorities is to be found in many Parliaments in recent times, but it is generally recognized, in British countries at least, that a line can and should be drawn

between matters which ought to be dealt with by Parliament itself, and matters which may be l-eft to departmental regulation, thoue:h ()n the question where that line should be drawn in a particular case there may be 'much difference of opinion ( cf. Legislative M ethads and

86

F?rn:s, pp. 36-42, 218). It was .urged in evidence before the Com­ misslon that the delegated powers are not restricted to . the

provision of administrative machinery, but affect the liberties of the people and tend to become bureaucratic, and it was

suggested that the procedure of the English Rules Publication Act 1893 should be followed, that is, in effect, the procedure which was adopted by the Commonwealth Parliament in 1903 and discarded in 1916. Under that procedure, in the cases referred to in the Act, notice of the proposal to make the regulations and of the place where copies of the draft regulations might be obtained would be published in the Gazette at least 60 days before the regulations were made, though in cases of urgency provisional regulations might be made and might continue in force until regulations of a permanent character were made after. notice (evidence, p. 1170).

Entry upon fields of legislation not expressly assigned to the Common-wealth Parliament. ·

In the exercise of its powers the Commonwealth Parliament has been able to enter upon fields of legislation which were not expressly assigned to it by the Constitution. (1) By virtue of its control of posts, telegraphs and telephones the Commonwealth Parliament has legislated so as to prevent letters being delivered to the addresses of persons engaged in carrying on a lottery, although it has no specific power to legislate with respect to lotteries.

(2) By virtue of its power to legislate with respect to taxation · the Commonwealth Parliament has been able to pass. an Act intended to bring about the subdivision of large estates. (3) By virtue of its control over elections the Commonwealth Parliament has enacted that while elections are pending for the Com­ monwealth Parliament, newspaper articles and other matter comment­ ing on election issues shall be signed (see Smith v. Oldham, 15 C.L.R., 355). This enactment has now been modified with regard to leading articles and reports of meetings.

( 4) The Commonwealth has no express power to control conditions of manufacture, but by virtue of its power to legislate with respect to trade and commerce with other countries it claims the right to pro­ hibit the export of goods which are not manufactured under approved conditions. •

( 5) The Commonwealth may admit goods on condition that they are to be used in a manner prescribed by the Comptroller-General of Customs, and this condition may be enforced by a bond. (6) The Commonwealth has no power to legislate with respect to industrial conditions, but by virtue of its power to legislate with respect to conciliation and arbitration, it has set up a Court which may in part override State laws and fix standard wages and hours.

(7) The Commonwealth may impose conditions on loans made to States and so influence State administration. Loans have been made to the State of South Australia, for forestry purposes, subject to con­ ditions, and an officer of the Forestry School has been sent to Tasmania to inquire into proposals for a loan, also subject to conditions other than conditions for repayment, _

87

(8) The Commonwealth may influence the method of administration of the States by making grants, subject to conditions as to the manner in which the money granted shall be €xpended. The most conspicuous instauce is the roads' grant, which is made subject to the condition

that the · money granted will be spent on a prescribed typ€ of road, that the States will contribute a prescribed proportion of the total sum and that preference will be given to contract labour.

989 _

IX.--THE HIGH COURT AND THE J;UDICIAL POWER OF THE COMMONWEALTH. The functions of the High Court may be stated under three heads. It is an interpreter of the Constitution of the Commonw-ealth, it is a court of appeal from the courts of the States, and it is a court of

original jurisdiction. 8

In exercising its function of an interpreter of the Constitution the High Court of Australia has the duty of deciding the validity of any Federal Act or any State Act whenever the question of validity comes before it in properly constituted litigation. The High Court alone can finally determine in Australia the extent of the powers transferred to

the Commonwealth and the extent of those remaining with the State1 and the meaning of the terms used in the Federal Constitution. In this respect it exercises a power similar to that exercised by the Supreme Court of Canada, but in one respect it occupies a position different from.

that of any other court in the Dominions. No appeal from the High Court is permitted to the King in Council upon any decision

howsoever arising as to the limits inter se of the constitutional

powers of the Commonwealth and of any State or States, or as to the limits inter se of tha constitutional powers of any two or more States, unless the High Court shall certify that the question is one which ought to be determined by His Majesty in Council (s. 74). The royal prerogative has therdore been curtailed in order to establish the High Court as the sole interpreter of the Constitution.

The restriction imposed by section 7 4 does not apply to appeals from State Courts. The Constitution of itself does not pr-event a litigaut from appealing direct from a State Court to the Privy Council. The Commonwealth Parliament has therefore exercised its powers und-er sections 76 and 77, in order to ensure that, whenever a question may arise involving the rights inter se of the States and the Commonwealth, no appeal shall be made to the Privy Council until the matter has first come before the High Court. This result has been reached through the Judiciary Act 1903, as subsequently amended by the Judiciary Act 1907. By the Judiciary Act section 30, Parliament invested

the ·High Court with original in all matters arising under

the Constitution or involving its interpretation. Section 39 of the same Act provides that:-(1) The jurisdiction o£ the High Court, so far as it is not

exclusive of the jurisdiction of any Court of a State by virtue of either of the last two preceding sections, shall be exclusive of the jurisdiction of the several Courts of the States, except as provided in this section. (2) The several Courts of the States shall within the limits of

their sev-eral jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in . which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in the last preceding section, and subject to the following

conditions and restrictions:- -

(a) Every decision of the Supreme Court of a State, or any other court of a State from which at the

89

establishment of the Commonwealth an appeal lay to the Queen i.n Council, shall be final and conclusive except so . far as an appeal may be brought to the High Court.

(b) Wherever an appeal lies from a decision of any Court or Judge. of a State to the Supreme Court of the State, an appeal from the d-ecision may be brought to the High Court.

(c) The High Court may grant .special leave to appeal to the High Court from any decision of any

Court or Judge of a State, notwithstanding that the law of the Stat-a may prohibit any appeal from such Court or Judge.

(d) The federal jurisdiction of a Court of summary jurisdiction of a State shall not be judicially exercised, except by a Stipendiary or Polic-e or Special. Magistrate, or some Magistrate of the

State who is specially authorized by the

Governor-General to exercise such jurisdiction. . .

Section 40 (1) of the Jv-diciary Act 1903-1907 provides that any cause arising under the Constitution or involving its interpretation which is pending in any Court of a State may at any stage of the proceedings be r-emoved into the High Court under an order of the High Court.

The object which these sections were - intended to bring about was facilitated by sections 38A and 40A, which were added by the amending Act of 1907. Section 38A provides that in matters (other tl}.an trials of indictable offences) involving any question however arising as to the

limits inter se of the constitutional powers of the Commonwealth and those of any State or States, or as to th-e limits inter se of the constitu­ tional powers of any two or more States, the jurisdiction of the High Court shall be exclusive of the jurisdiction of the Supreme Courts of the States, so that the Supr-eme Courts of a State shall not have jurisdic­ tion tD determine any such matter. Section 40A provides that when in any cause pending .in the Supreme Court of a State there aris-es any question as to the limits inter se of the constitutional powers of the Commoi1wealth and those of any State or States, or a.s to the limits inter se of the constitutional powers of any two or more States, it shall be the duty of the Court to proceed no further in the cause; and the

caus-a is automatically and 'ivithout order of the High Court removed tn the High Court.

Subsequently to the enactment of sections 30 and 39 of the Judiciary Act 1903, an appeal was taken direct to the Privy Council in a question concerning the limits inter se of the powers of the Commonwealth and the State of Victoria (Webb v. Outtrim, 1907, A.C. 81), and the Privv

Council appears to have expressed the opinion that the enactment o'f s-ection 39 (2) was beyond the powers of the Commonwealth Parliament, but according to the judgment of a majority of the High Court in the Commonwealth v. Limerick S te amship Company (35 C.L.R., 69) the

Privy Council in expressing this opinion did not direct its attention to • a court of federal jurisdiction.

991

90

When application has been made to the High Court for a c-erti:ficat

Justice stated that one reason for so doing was that the decision of a Court which is equally divided would not have the weight which a decision of the High Court ought to have. In a number of other cases a c-ertificate has been refused, notwithstanding that the question at issue was of great importance (Municipal Council of Sydney v. The Com­ monwealth, 1 C.L.R. 208, at 237; Deakin v. Webb, 1 C.L.R. 585; Engineers' Case 29 C.L.R.. 406; Nelson v. Couch, [1929] 35 Argus L.R. 177), and when the Privy Council had laid down a rule of

interpretation with which the High Court did not agree, the High Court refused to follow the Privy Council, claiming that to treat a decision of the Privy Council as over-ruling its own decision on a question which it thought ought not to be determined by the Privy Council would be to substitute the opinion of that body for itself, and would be an unworthy abandonment of the great trust reposed in it by the Constitution.

In cases other than Webb v. Outtrim, the Privy Council itself has refused to adjudicate on questions which in its opinion came within the fanguage of section 74 (Attorney-General for New South TV ales v. Collector of Customs, 5 C.L.R. 818; Builders' Labourers' Cas e, 24 C.L.R. 296; Engineers' Case, 1923 A.C. 170). ·

The manner .in which the High Court has been constituted the :final interpreter of the Constitution through the Judiciary Act was stated by Mr. Justice Isaacs (Sir Isaac Isaacs) in Baxter v. Oomm1:ssione·rs of Taxat,ion ( 4 C.L.R. 1087, at pp. 1142-1143, 1148-1149) :-

77 (ii) of the Constitution confers power on the Parlia­

ment with respect to matters involving constitutional interpretation to make laws defining the extent to which the jurisdiction of any Federal Court shall be exclusive of that which belongs to or is invested in the Courts of the States. Sec. 39 of the Judiciary Act

begins with the exercise of that power. By the :first sub-section the jurisdiction of the I-Iigh Court is made exc.lusive of that of the State Courts, except such as is found later on in the section. This it will be observed is not a conditional exercise of power, it is absolute; the exclusion of the jurisdiction of other Courts is complete and unqualified -unless a valid exception is to be found "' later on. The subsequent portion of the section by virtue of sec. 77

(iii) invests the State Courts with, 'federal jurisdiction'. It appears necessary at this point to guard against an error which may easily arise. 'Jurisdiction' is a generic term and signifies in this connexion, authority to adjudicate. State juris­

diction is the authority which State Courts possess to adjudicate under the State Constitution and laws; federal jurisdiction is the authority to adjudicate derived from the Commonwealth Consti­ tution and laws.

The first is that which 'belongs to' the State Courts within the meaning of sec. 77; the latter must be 'vested in' them by

Parliament. Now sec. 77 ( ii) is a power to exclude jurisdiction, and this power has been exerted in this first sub-section of sec. 39, the result bei:Jfg that, so long as that provision stands unrepealed, no State jurisdiction can exist. Sec. 77 (iii), on the other hand,

91

is a power to invest with federal jurisdiction, not to I'estore State jurisdiction, and an exercise of that power in sub-sec. ( 2) of sec. 39 of the Judiciary Act is no contradiction -of the deprivation contained in the prior sub-section, and works no restoration of the

State jurisdiction. It is, therefore, clearly an error to say that the :Federal Parliament has in the same section purported to . take away to return the same jurisdiction, with or without the

power of appeal to the Privy Council, or that the conjoint effec t of sub-sees. (1) and (2) of sec. 39 of the Judiciary Act is to leave the ju_risdiction of the State . Courts as it previously stood. They still have_ jurisdiction in respect of the same subject-matters, . but

their authority to exercise judicial power -with regard to · those matters springs from another source quite as n1uch as if an Imperial Act had enacted by one section that their State jurisdiction should cease, and by the next section that henceforth they should have

similar jurisdiction but should exercise it under the authority of that statute. The authority which is given by sec. 39-naniely federal jurisdiction-had never been taken away, because it had never 'belonged to' a State Court; that which was taken away­ namely State jurisdiction-has never even nominally been returned. Sec. 39 ( 2) confers ' federal jurisdiction ' only; none

other is in the power of the Commonwealth Parliament to grant, and in the result either the State Courts possess federal jurisdiction only in these matters or they possess none at all. .

If the history of the section were to be called in aid, as \vas done by the Privy Council itself, in Webb v. Outtrim [(1907) A.C. 81], the conclusion is strengthened. ]'or the present purpose I think the themselves, by their inherent force, a.re clear enough and

strong enough to satisfy the mind as to the duty of the Court when such a question as the present is submitted to it. Sec. 74 finds no parallel in British legislation. It selects a certain class of controversies and places them apart fr<_:>m all others as proper ·for

separate and unprecedented judicial treatment._ They are selected, not because they are trifling or frivolous or of a limited effect or passing interest, but by reason of their inherent magnitude, and because they are of the highest concern, on the one side to the development of .Australian nationhood, and on the other to the preservation of the States. Their influence is per­ manent and far reaching, not confined to the immediate litigants i10r to a special class in the community, nor even to a State, but extends so far as to affect the political relations of the whole people, when considered in conflicting groups, as citizens of different States,

or as citizens of both States and Commonwealth. The determina· tion of these questions touches the ve1:y root of the federal prin­ ciple, namely, the distribution as betwee n State· and State, and Commonwealth and State, of that total mass of governmental power, which the Imperial Parliament has granted, and over which, outside the reservations to be found .in the Constitution itself, the Imperial authority does not assume or exercise control.

All these questions when pronounced upon by the Supreme federal tribunal constituted and sitting in Australia are declared bv sec: 7 4 to be free from the intervention of even the Roval

p;·erogative. Unless and until the High Court certifies that. a F.l25l.-7

993

92

question, determined by it and included within the terms of the section, ought to be decided by the Privy Council, which, however . eminent, is nevertheless a tribunal constituted and sitting outside Australia, the Constitution insists that it ought not to be and must

not be so decided, and until that event occurs-if it ever should occur-the supreme law of the Empire knows no judicial authority in relation to that question superior to this Court.". The High Court has a function of singular importance in seeing that neither the Commonwealth nor the States infringe the compact which is embodied in the Federal Constitution. This function of the High Court has given rise to criticism of the nature of the Federation and of the

check which the authority of the Court places on the will of a majority in Parliament. Further, the reversal of its own decisions by the High Court, and the number of differing opinions expressed by the Justices, have given rise

to difficulty and uncertainty in legislation, and pave aroused further criticism of the place occupied by the Cpurt in a federal system. In exercising the right of reversing its own decisions the High Court is in accord with the Supreme Court of the United States and with the Privy Council. The High Court will not decide a constitutional

question unless the Court consists of at least six Justices, and at least three Justices concur in the decision. In constitutional cases, if the Justices are equally divided, the case is determined by the opinion of the Chief Justice; in other cases the decision of the Court from

which the appeal is brought prevails. The High Court in deciding on the validity of Acts of the Commonwealth or State Parliaments in properly constituted litigation discharges the same function as is dis­ charged by any Court which inquires into the source of the authority

for any rule or by-law brought before it. · ·

The position of the High Court in a federal system may be illus­ trated by the following passage from the judgment of Chief Justice Marshall, of the Supreme Court of the United States, in the case of Marbury v. Madison (1 Cranch, 137, at pp. 176-178) :-

" The distinction betwe-en a government with limited and unlimited powers is abolished, if those limits do not confine the persons on whom they are imposed, and if acts prohibited and acts allowed are of equal obligation. It is a proposition too plain to be contested, that the Constitution controls any legislative act repugnant to it; or that the legislature may alter the Constitution

by an ordinary act. Betv1een these alternatives there is no middle ·ground. The Constitution is either a superior paramount law, unchangeable by ordinary means, or it is on a level with ordinary legislative acts, and, like other acts, is alterable when the legislature

shall please to alter it. If th-e former part of the alternative be true, then a legislative act contrary to the Constitution is not law; if the · btter part be true, then written constitutions are absurd attempts on the part of the people to limit a power in its own

nature illimitable. Certainly all those who have framed written constitutions contemplate them as forming the fundamental and paramount law of the nation; and consequently the theory of every ·such government must be that an act of the legislature, repugnant

to the Constitution, is void. This . ·theory is essentially attached to a written constitution, and is consequently to be consid-ered, by this

93

court, as one of the fundamental principles of our society. It is not, therefore, to be lost sight of in the further consideration of this subject. If an act' of the legislature, repugnant to the Con­ stitution, is void, does it, notwithstanding its invalidity, bind the

courts, and oblige them to give it effect? Or, in other words, though it be not law, does it constitute a rule as operative as if it was a This would be to · overthrow, in fact, what was

established in theory; and would seem, at first view, an absurdity too gross to be insisted on. It shall, however, receive a more consideration. It is emphatically the province and duty .

. of the judicial department to say ·what the law is. Those who apply the rule to part_ icular cases must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each. So, if a law be in opposition

to the Constitution; if both the law and the Constitution apply to a particular case, so that the court must either decide that case conformably to the law, disregarding the Constitution, or con­ formably to the . Constitution, disregarding the law, the court must

determine which of these conflicting rules governs the case; this is of the very essence of judicial duty. If then the courts are to regard the Constitution; and the Constitution is superior to any ordinary act of the legislature, the Constitution, and not such

ordinary act, must govern the case to which they both apply. Those, then, who controvert the principle that the Constitution is to be considered, in court, as a paramount law, are reduced to the necessity of maintaining that courts must close their eyes on the Constitution, and see only the law. This doctrine would subvert

the very foundation of all written constitutions. It would declare that an act which, according to the principles and theory of our government is entirely void, is yet, in practice, completely obligatory. It woyld declare that if the legislature shall do what

is expressly forbidden, such act, notwithstanding the expressed pro­ hibition, is in reality effectual. It would be giving to the legisla­ ture a pr·actical-and real omnipotence, with the same breath which professes to restrict their powers, within narrow limits. It is pre­ scribing limits, and declaring that those limits may be passed at

The position of the High Court may also be illustrated by the follow­ ing passage from the judgment of Sir Samuel Griffith, O.J., in the case of Baxter v. Commissioners of Taxation ( 4 C.L.R., 1087, at p. 1125) :-· "The observation that the American Union has erected a

tribunal which possesses jurisdiction to . annul a Statute on the ground that it is unconstitutional seems to be founded on the supposition that the Supreme Court of the United States was endowed with special povvers in this respect different from those

possessed by other Courts. We have already pointed out that that tribunal was created by a provision in the American Con­ stitution identical with that by ·which the High Court is created. The -power of the Supreme Court of the United States to decide

whether an Act of Congress or of a · State is in conformity with. the Constitution depends upon and follows from the Constitution itself, which is, by section 2 of Article VI., declared to be supreme law of the land, as the Australian Constitution is declared

995

94

to be by section 5 of the Constitution Act. Such questions must certainly arise under a federal Constitution, and must be

determined by the Courts before which they are raised. . Their Lordships [i.e., in the judgment of the Privy Council in Webb v. Outtrim, 1907 A.C. 81] seem to have thought that this Court had asserted a power to declare a law invalid on the ground that it is 'unconstitutional', using that word in some vague general sense, but meaning something different from a contravention of the written Constitution. This Court, of course, never asserted any such power, nor did it ever occur to it to treat the word 'unconsti­ tutional', as used in the ·American Courts, as meaning anything more than contrary to and forbidden by the Constitution, nor have those Courts ever claimed to do anything more than construe the written Constitution by the light of recognized canOJ.lS. English

jurisprudence has always recognized that the Acts of a legislature of limited jurisdiction (whether . the limits be as to territory or subject-matter) may be examined by any tribunal before whom the point is properly raised. The term 'unconstitutional', used

in this connexion, means no more than ultra vires."

o 'riginal Jurisdiction. The original jurisdiction of the High Court is based on sections 75, 76, and 77 of the Constitution as applied in the relevant sections of the Judiciary Act 1903-1927.

Section 75 of the Constitution enacts that in all the matters therein mentioned the High Court shall have original jurisdiction. That jurisdiction is not, merely by force of section 75, exclusive of the · jurisdiction of the State Courts. The Commonwealth has, therefore, in exercise of the powers con£ erred on it by section 7 6 ( ii) of the Consti tu­ tion enacted, by section 38 of the Judiciary Act 1903-1927, that the jurisdiction of the High Court shall be of the jurisdiction of

the St.ate Courts in thefollowing matters:-(a) matters arising directly under any treaty; (b) suits .between States, or between persons suing or being sued on behalf of different States, or between a State and a person suing or being sued on behalf of another State; (c) suits by the

Commonwealth or any person suing on behalf of the Commonwealth against a State or any person being sued on behalf of a State; (d) suits by a State or any person suing on behalf of a State against the Common­ wealth or any person being sued on behalf of the Commonwealth; (e) matters in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth or a Federal Court.

Section 76 of the Constitution provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter arising under the Constitution or involving its interpretation, and the Parliament as already mentioned _ has exercised this power by section 30 of the Judiciary Act. Section 7'6 further provides that the Parliament may make laws conferring original jurisdiction on· the High Court in any matter arising under any laws made by Parliament, and in any matter of Admiralty and maritime jurisdiction. By section 2 of the Ju(J,iciary Act 1914 the Parliament conferred original jurisdiction on the High Court in matters of Admiralty or maritime jurisdiction, nnd by section 3 of that Act has declared the High Court to be a Colonial Court of Admiralty within the meaning of the Colonial Courts of 1.tdmiralty Act) 1890.

96

The power in section 76 (ii) to confer original jurisdiction in any matter arising under any laws made by the Parliament has not been completely exercised. The High Cou1·t has not original jurisdiction in matters relating to trade-marks, patents, bills of exchange, · and certain other matters arising under laws made by Parliament, but by section

2 of the Judiciary Act 1915 Parliament has enacted that the High Court shall have original jurisdiction in trials of indictable offences against the laws of the Commonwealth. A Commonwealth Crimes Act was assented to on the 29th October, 1914, and by that Act certain offences against the Government and against laws of the Commonwealth

were mad-e indictable offences.

Suits by and against the Commonwealth and the States. The Commonwealth Parliament is empowered by section 78 of the Constitution to make laws conferring rights to proceed against the Commonwealth or a State in respect of matters within the limits of the judicial power (see Commonwealth v. New South Wales, 32 C.L.R. 200) . . In Part IX. of the Judic,iary Act 1903-1927 the Parliament has made

provision with respect to suits by and against the Commonwealth and the States, and has enacted in regard to claims in contract or in tort (a) that a suit by any person against the Commonwealth may be brought in the High Court or in the Supreme Court of the State in

which the claim arose; (b) that a suit by any State against the Com­ monwealth may be brought in the High Court; and (c) that a suit by any person against a State, in respect of a matter in which the High Court has original jurisdiction or can have original jurisdiction

conferred on it, may be brought in the Supreme Court of the State, or if the High Court has original jurisdiction in the . matter, in the High Court (ss. 56-58). Under section 59 of that Act any State making any claim against another State may bring a suit against that State in the

I-!igh Court.

Difficulties arising from the provisions of the Constitution and the Judiciary Act wif:h respect to the original jurisdiction of the High Court. The provisions of the Constitution and of the Judiciary Act

1903-1927 relating to the original jurisdiction of the High Court have produced a number of anomalies and difficulties in the administration . of justice. (1) If an action is brought against a State the relief obtainable

may depend on whether the plaintiff is or is not a resident of the

State sued. If he is a resident of the State sued, he will not be able to sue in tort, if the laws of the State, like the laws of the State of

Victoria, permit only of the State being sued in contract. - If he is a resident of another State, he may sue either in tort or in contract without the consent of the_ State stied (Commonwealth v. New South Wales, 32 C.J..J.R. 200).

An individual may sue individual in the High Court if

the individuals are residents of different States, but the High Court has no jurisdiction if one of the parties is a company (Australian Temperance and General Mutual Life Assurance Society v. Howe, 31 C.L.R. 290).

997 .

96

Doubts have arisen whether the High Court has original jurisdiction in a suit in which the parties, though residents of different States, are rival claimants in the distribution of a fund or of an estate. ( 2) The more serious difficulties have arisen, or may arise, through the provisions . of the Judiciary Act conferring original jurisdiction on the High Court, and federal jurisdiction on State courts which have

been deprived of State jurisdiction. These provisions, or some of them, were designed to render it necessary that all matters in · which the interpretation of the Constitution is involved shall come before the High Court. This object has been achieved, but at the same time the position of litigants has been made difficult and uncertain.

(i) A plaintiff when he begins litigation in the Supreme Court of a State may not know whether a constitutional question will be involved . . The jurisdiction will, therefore, depend, not on the subject-matter of the litigation, but on the nature of the defence raised. If the defence

involves an u inter se '' constitutional question (see s. 7 4 of the Constitu­ tion), then the matter is immediately taken from the Supreme Court to the High Court, with consequent delay and expense. · ( ii) A plaintiff may not know whether his opponent is a resident of a different State or not. If it turns out that the plaintiff and

defendant are residents of different States, then the proceedings may be found to be abortive if brought before an inferior tribunal owing to the tribunal not being constituted in the manner prescribed by section 39 (2) of the Judiciary Act.

Examples of these anomalies and difficulties as well as of anomalies and difficulties arising from provisions of the Constitution and of the Judiciary Act relating to other aspects of the judicial power of the Commonwealth are given in the passages of the evidence of Mr. Owen Dixon (now Mr. Justice Dixon) and of Mr. J. E. Clark (pp. 783-789, 1219) which are quoted later in this section of the report.

The High Cou.rt as a Court of Appeal from the State Courts. An appeal lies to the High Court, subject to such regulations as the Commonwealth Parliament prescribes, from all judgments, decrees, orders, and sentences of the Supreme Court of any State in any matter in which at the establishment of the Commonwealth an .appeal lay to the Queen in Council. From the High Court an appeal lies, in cases other than those mentioned in section 7 4, to the 'Privy Council by special leave of the Privy Council. The Parliament may make laws limiting the matters in which the leave may be asked, but the laws . must be reserved for the royal assent, imd so far no such laws have been passed. ·

An appeal lies in cases o'ther than constitutional cases from the Supreme Courts of the States to the Privy Council on conditions pre­ scribed by orders in Council. A defeated litigant has, therefore, the right to choose whether he will appeal to the High Court or to the Privy Council, and a successful litigant is bound by his choice. This right of choice is freely exercised by litigants. '

The manner in which the right of appeal from a State Court to the High Court may be exercised is prescribed by the Judiciary Act 1903-1927 (s. 35) :- ·

" (1) The appellate jurisdiction of the High Court v;rith respect to judgments of the Supreme Court of a State, or of any oth.er

97

Court of a State from which at the establishment of the Common­ wealth an appeal lay to the Queen in Council, shall extend to the following judgments whether given or pronounced in the exercise ·of federal jurisdiction or otherwise and to no others, namely:

(a) Every judgment, whether final or interlocutory, which­ (1) is given or pronounced for or in respect of any su_ m or matter at issue amounting to or of the value of Three hundred pounds; or

( 2) involves directly or indirectly any claim, demand, or question, to or respecting any property or any civil right amounting to or of the value of Three hundred pounds ; or ( 3) affects the status of any person under the laws

relating to aliens, marriage, divorce, bank­ ruptcy, or insolvency; but so that an appeal may not be brought from an

interlocutory judgment except by leave of the Supreme Court or the High Court; (b) Any judgment, whether final or interlocutory, and whether in a civil or criminal matter, with respect to

which the High Court thinks fit to give special leave to appeal; (c) Any judgment of the Supreme Court of a State given or pronounced in the exercise of federal jurisdiction in a

matter pending in the High Court." A litigant cannot be deprived of the right of appeal to the High Court in any matter in which at the establishment of the Common­ wealth an appeal lay to the Privy Council, either by the Common­

wealth Parliament, or by a State Parliament (Parkin v. James, 2 C.L.R. 315; Peterswald v. Bartley, 1 C.L.R. 497). An appeal will not lie to the High Court from the verdict of a jury (Musgrave .v. McDonald, 3 C.L.R. 132), but it will lie from the

decision of a single judge exercising the jurisdiction of the Supreme Court (Parkin v. James _. 2 C.I.J.R. p. 315; Blalce v. Bayne, 1908 A. C. 371, 374; v. Borthistle) 1 O.L.R. 379). ·

The right of the High Court to allow appeals to be brought to it from the Supreme Cour t of a State ha.s in practice received a · wide interpretation. The High Court will hear an appeal from a decision of a State Court granting a writ of h abeas corpus (ex parte Ah Sheung,

4 C.L.R. 949 ; L loyd v. W allach, 20 C.L.R. 299), but has decided that it will not hear an appeal from a verdict of acquittal (R. v. Snow) 20 C.L.R. 315).

The Judicial PoweT. The judicial power of the Commonwealth is vested in a Federal Supreme Court called the . High Court of Australia, and in such other federal courts as the Parliament creates, and in such other Courta as it invests ·with federal jurisdiction (s. 71).

The . . Justices of the High Court and o£ the other Courts created by the Commonwealth' Parliament are appointed by the Governor-General in Council, and are not to be removed except on an address from both Houses of Parliament praying for their removal on the ground of

proved mi sbehaviour or incapacity ( s. 72).

999

98

It follows from the provisions of section 71 that the judicial power of the Commonwealth may not be exercised by any tribunal other than those mentioned, and that, therefore, the Inter-State Commission could not exercise that judicial power (New South Wales v. Common­

wealth, 20 C.L.R. 54). It also follows that the High Court cannot give opinions or decisions except in litigation instituted between parties. The High Court will, therefore, refuse' to hear and determine a question referred to it by

the Governor-General, as to the validity of an enactment of the Com­ monwealth Parliament, and Part XII., which was inserted in the Judiciary Act by an amending Act of 1910, and which purported to give it this power is invalid (In re Judiciary Act and the Navigation

Act, 29 C.L.R. 257.) It was suggested that though the giving of advisory opinions by the High Court might prevent the establishment of expensive departments to administer Acts which are afterwards declared invalid, yet the inconvenience occasioned by the decision already quoted had been miti­ gated by the practice of suits being instituted by the Attorney-General of the Commonwealth or of a State, with the object of testing the validity of an Act of Parliament.

Owing to the requirements of section 72 as interpreted, the .Tudges of the High Court and of any Court created by the Commonwealth Parliament must be appointed for life. Ques tions have arisen as to the powers of tribunals appointed by the Commonwealth Parliament for

a limited term, and in particular, whether the powers of these tribunals are · administrative or judicial. It is clear that certain officials and tribunals have powers which affect rights but are not judicial, such for instance as the Attorney-General, under the Patents Act 1903-1921, and the Minister for Customs, or the Comptroller-General of Customs, under the Customs Act 1901-1925, and it has been decided that certain other tribunals were not entitled to exercise the powers which Parliament had conferred on them. Thus, while the President of the Court of Con­ ciliation and Arbitration was appointed for a limited term, he could not exercise the powers of a court and enforce penalties (Waterside

Workers' Fedemtion v. J. W. Ale:rander, 25 C.L.R., 434), though since . the Commonwealth Conciliation and Arbitration Act 1926, which provided for the appointment of a Chief Judge and other Judges of the Court on a tenure in accordance with section 72 of the Constitution, thE Court can exercise judicial power as a federal Court created by the Commonwealth Parliament under section 71 of the Constitution. The purported establishment of an income-tax board of appeal, the members of which were appointed for a limited term to exercise judicial functions

was a nullity (British Imperial Oil Co. v. Federal Commissioner, 35 C.L.R. 422). It also follows from the terms of section 72 that no retiring age for the Justices can be :fixed.

The terms of sectiot1s 71 and 72 do not apply to Territories so'that an appeal will lie to the High Court from the decision of a Judge of a Territory, including a mandated Territory, appointed for a limited term.

The requirements of these sections do not apply to judges or magis­ trates of State Courts invested with federal jurisdiction.

99

'J'h e operation of se ctions 71 to 77 of the _Constituti on, and of the J udiciary Act 1903-1927.

Examples of the anomalies and difficulties which have arisen, or may arise, from the operation of sections 71 to 77 of the Constitution, and of the Judiciary Act 1903-1927, will be found in _ the evidence of Mr. Owen Dixon (now Mi. Justice Dixon) given on behalf of the Com­ mittee of Counsel of Victoria, and of Mr. J. E. Clark, Assistant Crown

Solicitor of New South Wales.

The following extracts are taken from the evidence of Mr. Owen Dixon (pp. 783-789) :-" Ulifortunately, in selecting the matters to be allotted to the original jurisdiction of the High Court, not a few were made to

depend upon the character of the contronrsy arising in the litiga­ tion. In section 75, jurisdiction is given in all matters arising under any treaty, and, in section 76, it may be given in all

matters 'arising under this Constitution or involving its inter­ pretation,' or 'arising under any laws made by the Parliament.' It seems unfortunate that the jurisdiction to entertain a legal proceeding in which the party originating it desires to enforce rights

which he believes he possesses should depend upon the character of the questions which arise when the matter comes to be heard. Moreover, it is extremely difficult to say whether, when a par ty complains of wrongs, the elucidation of some of which involve the interpretation of the Constitution and some of which do not, how

much of the procee ding is a matter over which the High Court has jurisdiction. -If se ctions 75 and 76 were considered merely as provisions conferring jurisdiction, they would seem to us to be open to the most serious practical objection, because a jurisdiction given

to a -court for the enforcement of the law is made to depend upon the most controversial matters, which must be determined before ­ ever the merits of the case are reached. These provisions in truth sacrifice the interests of the litigant to the desire of the framers of

the Constitution to preserve to the High Court the power of giving constitutional rulings and making constitutional precedents. When these provisions ar e considered in relation to section 77 and the use which has been made of that sec tion, it will be seen that the greatest difficulty and confusion have arisen, and an incredible burden has

been placed upon the litigant who ha s the misfortune to be affected in his litigation by any Federal law or any other matter with which sec tions 75 and 76 of the Constitution are concerned.

We think that, generally speaking, it might have been wiser if, when it was decided to bestow upon the High Court the functions of a final court of appeal, it had been thought this was enough to enable that court to maintain full control of the interpretation of the Constitution and the administration of the Federal law in

common with that of all other law. We realize that, on occasions, a prompt solution of constitutional controversies has been possible because of the power to bring them immediately before the High Court in its original jurisdiction; but we think that this might

be preserved without adhering to the very complicated and difficult criteria of jurisdiction which at present prevail. Some of the diffi­ culties of administering the provision which has enabled Parliament

1001

100

to original jurisdiction upon the High Court in all matters

arising under this Constitution or involving its interpretation will appear from three instances which follow, (1) In the cases which arose over the liability of Federal public servants to State income tax calculated upon their salaries, the controversy reduced to its elements was this·: The State Commis­ sioner of Taxation, relying upon an ordinary general State statute, proceeded to assess the Commonwealth servants to State tax, and to endeavour to recover it. The taxpayers answered by saying: "Upon the true interpretation of the Constitution, it is not com­ petent for the State statute to extend to the taxation of our

salaries." The Commissioner's claim was, therefore, founded upon a State law, and the taxpayers' answer was founded upon the Com­ monwealth ConstitutKm. It was entirely within the taxpayers own election to raise or not to raise this answer. The question suggested

is whether a proceeding in which this answer was in fact raised was a matter of Federal jurisdiction because it was a matter arising under this Constitution or involving its interpretation. Upon that question most divergent opinions have been expressed by the most competent authorities. The Privy Council, in Webb v. Outt.rim, 1907 A.O., p. 81, seems to have thought that the character of the defence brought the matter into Federal jurisdiction. Starke, J.,

seems to have thought that the character of the claim, viz., upon a State statute to recover in a State tribunal a State tax, made it State jurisdiction, although an unfounded defence depending upon the Constitution was put forward (Commonwealth v. Limerick Steamship Company, 35 O.L.R., 117); and Irvine, C.J., and Mann, J., in K reglinger v. Commonwealth_. 1926, V.L.R.,- 326, consider that because the question whether the defence depending upon the Constitution was or was not unfounded was the question in the case, it necessarily was a matter involving the interpretation of the Constitution.

(2) Agai!l, take James' case (1927, Argus L.R., 334). A State legislature enacts that no dried fruits shall be sold in the State for consumption within the Commonwealth beyond a proportion to be declared by a State authority, and further enacts that a State authority may compulsorily acquire parcels of dried fruit if it chooses to do so. The producer of dried fruit desires to contest the exercise of these powers, on the ground that it involves a violation of section 92 of the Constitution. He brings his action. It then appears that the operation of the State Act of Parliament has expired, although the State authority mistakenly acted under it as if it continued. The result is that, upon all matters in relation to his supposed grievances since the date of the expiration of the Act of Parliament, no Federal question arises, although the expiration of the State Act made it clear that none of the powers; the de. fado exercise of which he complained, were ·at that time exercisable

de jure. · It follows that the High Court had no jurisdiction to entertain his suit, so far as it related to grievances occurring after that date. It further appeared that, upon the proper construction of the State Act of Parliament, some of his transactions might be outside it. If this were so, although it would be clear that these transactions were not affected by the State Act of Parliament, still

101

as no question in that respect arose under the Constitution or involved its interpretation, the High Court had no jurisdiction to entertain what, on this assumption, would be a perfectly valid complaint.

· (3) The Parliament has not conferred upon the High Court a jurisdiction to entertain all matters arising under any laws made by the Parliament. If it be supposed that a person believing himself to have rights under a Federal law desires to litigate in the High

Court, he may do so, if he is confident that his adversary will challenge its validity. If he does not know whether his adversary will do so or not, he must either t ake the risk, or he must sue in the court of the State. As matters stand, if he sues in the High

Court, and his adversary desires to delay him, he may do so by simply refusing to raise any constitutional question, although perhaps, one may be open in the proceedings. If, on the other hand, he sues in the State Supreme Court, his adversary may further delay him by insisting upon raising the constitutional

question, because, by reason of the sections 38A and 40A in the Judiciary Act, as soon as he raises it, the jurisdiction of the

Supreme Court ceases. However effectual such provisions rn ay be for ensuring that the High Court retains an almost exclusive authority to declare the meaning and effect of the Constitution, no one can fail to see that this is done at the expense of rendering

almost futile and impossible the practical administration of justice for the purpose of adjusting the real controversies between subject and subject, or redressing real grievances which a subject may have against the Crown.

Still further difficulties have arisen under heads of jurisdiction which less frequently arise. Parliament may confer, and has con­ ferred original jurisdiction on the High Court in any matter of Admiralty and maritime jurisdiction. See section 7 6 (iii).

Admiralty is a well-known expression, but no one

seems to what mari6me jurisdiction is. John Sharp and

Sons v. s.s. Kather1:ne Mad;all (34 O.L.R., 420).

An incidental result of the Commonwealth's attempt to confer full jurisdiction upon the High Court has been to create doubts in relation to the jurisdiction of the Supreme Courts of the States. The full content of the jurisdiction was supporte d by means of the Imperial Colonial Courts of Admiralty A ct, 1890. A consideration

of the Colonial Courts of Admiralty Act with the Imperial Acts Interp1·etatiori Act will show that it is not at all improbable that the High Court of Australia and the Supreme Courts of the State cannot both at the same time answer the description upon which,

in the absence of legislative declaration, the jurisdiction depends, viz., the courts of law in a British possession of original unlimited civil jurisdiction. Whether the State courts have admiralty juris­ diction or not has thus become uncertain, although they h ave exercised it up till that time, and without question, until the pr oblem

arose whether the High Court possessed the extension of admira1t.y jurisdiction which might or might not come wi thin the ·words maritime jurisdiction, but which certainly came under the Colonial Courts 'Of Admiralty Act.

1003

102

Section 75 gives the High Court jurisdiction in all matters arising under any treaty. More controversies in relation to the provision of treaties have arisen during the last seven years as a result of the various peace treaties than perhaps are likely to arise

again, but no one yet knows what is meant by the expression 'matter arising under t a treaty.' The word ':matter' refers to some claim the subject of litigation. It must, therefore, be a claim of legal right, · privilege, or immunity. Under a British system, .the executive cannot, by making a treaty, regulate the rights of its

subjects. A state of war may be ended or commenced and the rights and duties of persons may be affected by the change from one State or another; but this results from the general law re­ lating to peace and :war, and not from the terms of the treaty. If a treaty is adopted by the legislature and its terms are con­ verted into a statute, it is the statute and not the treaty which

affects the rights and duties of the persons. Section 75 (ii) speaks of all matters affecting consuls or other representatives of other countries. When does a matter affect a consul? He may be prosecuted in the police court for failing to

register his dog; he may be sued for money borrowed. He may, and often does, conduct an independent'business as well as exercise the office of consul. Do all proceedings arising out of the business affect him so that in all his legal relations he is the subject of Federal jurisdiction? If he is an employer, and is the party to

an industrial dispute, and is summoned to a compulsory conference in the Arbitration Court, does this raise a question under 75 (ii)? Why should a State court be any the less fit to entertain litigation affecting him than it was when it was a court of a colony?

Section 75 (iii) and 75 (iv) have raised difficulties of a strange character. At first sight, it would seem that they merely operated to give the Federal court jurisdiction, i.e., pqwer to decide upon legal rights otherwise existing and enforceable in all matters in which the -Commonwealth or a person suing or bejng sued on behalf of the Commonwealth was a party, and in all matters between States and perhaps between a State and a resident of another State. But a matter in order · to be litigated must exist before the litigation is commenced, and, inasmuch as the matter is a legal controversy, it must, as we have said, consist of some claim to ·a legal right, privilege or immunity. It I!J.ight have ·been thought

that the existence or non-existence of this right, privilege or im­ munity, depending as it would be on the general law, was under the full control of the legislature, Commonwealth or State, as the case might be. Indeed, if it were not for the decision of the majo­ rity of the High Court in Commonwealth v. New South Wales

(1923, 32 O.L.R., 200), we should unhesitatingly have said that the Federal Parliament had complete authority in respect of every cause of action against the Commonwealth, and every remedy by which it could be enforced. It seems clear to us that the rights of the subject to recover in tort against the Crown in right of the· Commonwealth and the proceedings by which recovery may be had are alike the creature of the law which the Federal Parliament controls. But in the case cited, the majority of the High Court decided that section 75 (iii) of the Constitution, in conferring

103

upon that court original jurisdiction 1n all matters in which the Commonwealth is a party, enabled the Commonwealth to sue a State in tort without the aid of legislation under section 78, which in their view applied not to section 75, but to section 76. They based their decision upon the ground that the Constitution, by this

section in the Constitution binding State and Commonwealth · alike, provided means for enforcing a delictual liability against the Crown in either right. This they thought followed from the fact that the word ' matters ' includes actions of tort, and, upon the reasoning of Farnell v. Bowman (12 A.C., 643), the creation of a jurisdiction to entertain such actions sufficed to impose upon the

Crown an effective liability for tort. The judgment must be read at length to appreciate justly the effect of the reasoning which we have attempted to reduce to com­ pendious statement. Logically, it appears to us to imply, if not to state, that it is a provision in the Constitution which imposes upon the Commonwealth liability for tort enforceable in the High

Court. If so, how can the Parliament alter, impair or indeed define, this liability? The decision is susceptible of distinguish­ ment upon the grounds-(1) that the case was before the High Court upon motion to set aside the writ for w.ant of jurisdiction,

and therefore no question of substantive liability was raised; (2) that the State of New South Wales had, by legislation, aban­ doned the Crown's delictual immunity, although subject to and under special procedure.

Apart from the question of legislation, the interpretation of section 75 (iv) produces a strange result in Victoria, where the Orown is not liable in tort. If two men cross Flinders-street and are run down by the police patrol car through the . of

its driver, and they are both residents of Victoria, they may· sue the driver, but not the Crown. If one happened to have his place of abode in New South Wales, he might sue and obtain a judgment in the High ·court for damages against the Victorian Government,

whilst his friend would be without remedy. It seems to follow from this interpretation of section 75 (iii) that the Commonwealth and the States are in a similar position. There seems to be no logical reason for saying if by reason of section 75 (iv). the liabilities of the States are :fixed, that the liabilities under section 75 (iii) of the Commonwealth are any less, and yet it seems irrational according to the notions of English lawyers to suppose that the legislature of a sovereign government

cannot determine the liability of that government both prospec­ tively and retrospectively. Section 7 5

( iv) gives original jurisdiction between the residents of different States. In America, citizens of different States were entitled to resort to the United States Supreme Court, and we can see no better reason for this provision in the Australian Constitu­

tion the desire to imitate an American model. The courts of no State were ever, so far as we are aware, accused of partiality towards their own citizens, nor does there seem any reason for suspecting them of it. Residence seems to be a strange criterion,

moreover, to adopt. Some persons have :po residence, and some

1005

104

have several. Corporations have been held for this purpose in­ capable of having a residence,.although they have found that when liability is made to depend under revenue laws upon the residence within the territory of a taxing government, residence has been

readily ascribed to them. A difficulty further arises as to the word 'between'; if a trust is created in favour of a number of persons, some of whom live in one State and · some of whom reside in another, and the controversy arises as to the proportion in which they share the trust property, it has been suggested in the High Court that there is no matter between residents of different States. It is said that there is no issue between residents of different States although there may be one among them. In other words, it is suggested that there must be a claim of right between one or more residents of one State against one or more residents of

another State. Again, when must residence attach? If a resident of Victoria is sued in the H igh Court by a resident of New South Wales, may he defeat the action by instantly changing his residence to Sydney?

Section 75 (iv) gives the High Court jurisdiction in all matters in which a writ of mandamus or prohibition or injunction is sought against an officer of the Commonwealth. State officials are fre­ quently invested with some authority under Federal legislation. Persons who may not be considered officers of the Government are frequently appointed to fulfil statutory functions of an unusual character, e.g. the Dried Fruits Board, the Development and Migration Commission and Royal Commissioners. Are they officers of the Commonwealth within the meaning of this provision? Whether a State judge exercising Federal jurisdiction pursuant to s·ection 3 9 ( 2) of the Judiciary Act was an officer of the Common­ wealth, or otherwise amenable to writ of prohibition, excited so much diff erence of opinion in the only proceeding in which it was

investigated that no judgment was ever given. R. v. ex

parte Carmie (22 C.L.R., 437.) Again, three remedies are mentioned-mandamus, prohibition or injunction. Each is discretionary, although the rules governing the discretion vary. Two are common law, and one is equitable. How much of the common law governing the character and nature of these remedies, the procedure by which they are administered, the occasions upon which they may be granted, is stereotyped and made

imwutable by this provision? It seems clear that, in a suit for an injunction against an officer of the Commonwealth, the court cannot do what a State court might well do-decline the injunction, but nevertheless make a declaration of right.

Under section 76, Parliament is given power to confer original jurisdiction on the High Court in any matter inter alia relating to the same subject-matter claimed under the laws of different States. So far the meaning of this and the application . of it has

been elucidated by no one. The observations we have made represent criticism instances of which might be multiplied almost indefinitely. Broadly, they arise from the fact that jurisdiction has been conferred upon a court on certain very limited matters by reference to considerations or

106

criteria which . have no relation to the practical administration of justice, but to circumstances which arise or features which are exhibited only accidentally or incidentally in the ordinary ad­ ministration of justice, and this has been done from motives which ·ignore the efficient, speedy and orderly administration of the law,

and concentrate upon the political expediency of a particular tri­ bunal retaining control over particular questions which may be expected to arise, or dealing with particular persons who it was thought (why, we do not know) might be the subjects of injustice

in State courts. The confusion which has resulted has been greatly increased by the complicated devices to which we have already referred, to which the legislature has resorted to prevent appeals being taken to the Privy Council.

Section 7 4 of the Constitution provided that no appeal should be permitted to the Privy Council from a decision of the High Court upon any question howsoever arising as to the limits inter se of the constitutional powers of the Commonwealth and those of

any State or States, or as to the limits inter se of the constitutional power of any two or more States, unless the High Court shall certify that the question :ls one which ought to be determined by His Majesty in Council.

In other matters the power of the Privy Council to give leave · to appeal from the decision of the High Court was preserved, subject to the power of Parliament to limit it by laws which were · not assented to. in the ordinary manner, but which were reserved

by the Governor-General for His Majesty's pleasure. The existing right of appeal from the Supreme Court direct to the Privy Council was not affected by the Constitution, and, indeed, when it was passed by the Imperial Parliament, the Attorney-General of Great

Britain assured the House of Commons that it could not be affected. This. resulted, however, in it being possible to canvass before Privy Council the correctness of a constitutional precedent estab­ lished by the High Court by a decision from which no appeal could directly be brought by reason of section 7 4, because a person · who desired to have it reviewed by the Privy Council might raise

litigation in the Supreme Court of the State, and then appeal direct to the Privy Council from the judgment of the Supreme Court following the precedent. With a view to avoiding this, Parliament in 1903 resorted to a device under section 77. Section 77 (ii) enabled the Federal Parliament upon any or all of these nine matters to define the extent to which the jurisdiction of any Federal court shall be exclusive, although it belongs to or is invested in the courts of the States. In order to prevent appeals upon

matters affecting Federal laws or the Constitution to the Privy Council, this provision has been employed. It was not considered possible for the Federal Parliament to prevent an appeal to the Privy Council from the Supreme Courts if a matter be en tertained

and decided by them in virtue of the jurisdiction which they possessed, but it was considered possible by the use of section 77 to deprive the Supreme Courts of jurisdiction in any such matters so that they could not be decided by the Supreme Court, and so

that no decision would ever be given from which there would be an appeal to the Privy Council.

1007

106

In cases falling ·within the de.scription of section 74, in which the Privy Council could not grant special leave from a decision of the High Court, it was considered desirable to deprive the Supreme Courts of all jurisdiction. In cases which did not fall within that description, but nevertheless. fell within the descriptions of sections 75 and 76, it was considered sufficient to deprive them of all State jurisdiction and.to confer upon them the same actual juris­ diction over the same subject-matters as Federal jurisdiction, i.e., power derived from the authority of the Federal Parliament, and to provide that there should be no appeal from the exercise of that jurisdiction save to the High Court. The validity of these provisions has been established by decisions of the High Court, although two of the more considerable objections to . the validity of the provision, which entirely excludes the jurisdiction of the

Supreme Court in cases falling within section 7 4, do not seem to have been adverted to by the Court, or brought to its notice. The Federal Parliament passed these provisions, which are contained in sections 38A and 40A of the Judiciary A.ct pursuant to the power given by section 76 (i), which provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter arising under this Constitution or involving its inter­ pretation. It may be said that many matters may come within the

description contained in section 7 4 which do not arise

under this Constitution or involve its interpretation. Indeed, all questions as to the limits inter se of the constitutional powers of any two or more States must depend on matters. outside the Con­ stitution, and many matters relating to the powers of the Federal Parliament need not arise under the Constitution or involve its interpretation. For instance, questions may arise relating to con­ stitutional powers under the Colonial Oottrts of Admiralty Act 1890, or under the Merchant Shipping A. ct. Again, section 77 ( ii) enables the Parliament to define the extent to which the jurisdiction of any Federal court shall be exclusive of . that which belongs to or is invested in the Supreme Court. It does not seem to be clear that the word 'exclusive' enables Parliament to deny jurisdiction to one court of the State. Indeed, it may be said that in correct English the jurisdiction of the High Court is not exclusive at all,

if it is shared by all the courts of the States save one. But it is not likely that, if these questions are raised, the decision support­ ing the provisions. will be overruled.

This sch-enie was carried into effect in two stages. When the Judiciary A.ct vvas originally passed (in 1903), it was decided that so much of the jurisdiction which State courts exercised by virtue of the mere fact that they were courts of justice .administer­ ing the law without regard to the source whence it came, as fell '''ithin the description of matters set out in sections 75 and 76, should be replaced by a Federal jurisdiction, i.e., a power to adjudicate precisely the same in all respects save one, viz., that it proceeded from the Federal Parliament. The object of making this change in· the authority whence the power was derived without

altering its nature or extent was to enable the Federal Parliament to regulate some· of the incidents of its exercise: to impose con­ ditions, the most important of which was that no appeal should

I

101

lie to the Privy Council. The plan which was put into effect bJ section of the Judiciary Act consisted in first depriving State courts of jurisdiction in respect of the nine possible subjects of Federal jurisdiction, and then granting them }""'ederal jurisdiction

over the same subject matters. The first step was taken under section 77 (ii) of the Constitution, which empowers the Parliament to define the extent to which the jurisdiction of any Federal court shall be exclusive of that which belongs to or is invested in the

courts of the States. The second step was taken under section 77 (iii), which empowers it to invest State courts with Federal jurisdiction. Th-e plan and the constitutional provisions upon which it rests are lucidly expounded in the judgment of

Mr. Justice Isaacs in Bax t e,r's case [s.ec pp. 90-92 of this report]. It will be seen from this that when this scheme comes to bt• applied practically in the ordinary work of the courts of the

State, from the lowest to the highest, two questions will arise which should be adverted to in every case. They are : ( 1) Does this

case relate to any one of the nine matters set out in sections 75 and 76; (2) If so, how do the conditions imposed by the second sub-section of section 39 of the Judiciary Act 1903-26 affect the matter?

We have already discussed the difficulty of interpreting and applying the definition of these nine criteria of jurisdiction because of their artificial character. · The operation of section 39 is to make it a necessity in every case b-efore every court in Australia,

whenever the 'conditions' set out in section 39 (2) affect the matter, to consider and apply these criteria. These conditions really touch the ordinary practical work of of th-e courts at two points, viz. :-(1) the constitution of the court

of summary jurisdiction; (2) the right of appeal direct to the High Court. But innumerable instances can be supplied of . .the anomalous manner in which even the two conditions operate. The simplest illustrations perhaps will best show the extraordinary effect

which may be produced. If a complaint is brought in the Sessions at Melbourne for money lent it will probably be heard by two or more justices, and speedy justice will be don-e. But if it is afterwards discovered that one of the parties resided ili

another State. their order will be void, because the justices heard a matter bet,v"een residents of different States, and section 39 (2) ( cl) r equired a police magistrate alone to haar it. Even if a

police magistrate had presided over the justices, their presence have vitiated th-e because h e should have

alone. (Sanderson v. Crawford , 1915, V.I •. R., 21, A rg1ts 368.) If a boy is prosecuted before justices of the peace under a municipa 1 by-law for riding a bicycle on t.he footpath, and objects that ha did so in the performance of his duties as a messenger of

the Post and Telegraph D epartment, and that the by-law cannot affect him however untenable his objection may be as a defence, yet instantly the justi:es .lose. jurisdiction, __ because the _inter ­ pretation of the Oonstltutwn 1s mvolved. (See Troy v. Wnggles­

worth, 26 O.L.R. 305.) So, if a tramp about to cross the bridge at Swan Hill is arrested for vagrancy and is intelligent enoug}t to object that he is engaged in interstate commer ce and cannot hP-F.l25l.-8

1009

108

obstructed, a matter arises under the Constitution. His objection may be constitutional nonsense, but his case is at -once one of Federal jurisdiction. In all three instances, even if it had

happened that a police magistrate alone had dealt with them, an appeal would lie from his order to the High Court. Moreover, if the justices sit alone or with him, although the tribunal have no jurisdiction, yet an appeal lies from their unlawful proceedings to the High Court because the jurisdiction which they purport to exercise is in fact Federal. It will be noticed, also, that at

1e11st in the case of a matter between residents of different States, neither the court nor the parties may know of the ·facts which render the jurisdiction Federal. But a still greater confusion arises in relation to the very large area covered by the description ' matters arising under a law of the Commonwealth.' This covers

every proceeding for debt upon a cheque, promissory note, or bill of exchange, every proceeding in which the Service and Execution of Process Act is availed of, every action for infringement of a a trade mark, a registered design or of copyright, all

1itigation relating to marine insurance,- every revenue matter, - (Land Tal:(, Income Tax, Estate Duty, Amusement Tax), eyery legal proceeding by or against bodies constituted by Federal statute, such as the Commonwealth Bank, the War Service Homes Com­

mission, all prosecutions for summary or indictable offences under any law of the Commonwealth }Vhether it be the Crimes Act,· the Customs Act, the Immigration Act, the Conciliation and Arbitration 1\..ct, the compulsory training provisions of the Defence Act, or , the compulsory voting provisions of the Electoral Act. There

is, therefore, a very considerable body of law to be which falls under this category. But because of its very volume and its varied character, it would be impracticable to confer upon : the High Court original jurisdiction to deal with it.

This involves the important consequence that the High Court had no jurisdiction upon matters arising under the laws of the Commonwealth which could be made exclusive. The plan of · section 39 (2), therefore, failed to effectively deal wi th this vast

field. Instead of divesting the courts of 'State ' jurisdiction and investing them witl1 Federal jurisdiction in lieu thereof, it left them with their State jurisdiction and invested them with Federal jurisdiction as a cumulative or an additional jurisdiction.

The jurisdiction possessed and retained is not subject to the Gonditions set ont as (a), (b), (c) and (d) in section 39 (2). Federal jurisdiction, although identical in extent, nature, and effect, is subject to these 'conditions. How then can this double jurisdiction be administered? It has been emphatically decided . that there is nothing· to prevent the addition of Federal jurisdiction

to State jurisdiction upon the same subject: Lorenzo v. Om·ey (29 _C.L.R., 243). In Booth v. Shelme1·dine (1924, V.L.R., 276), Mr. Justice McArthur had to deal with a case in which a matter arising under a law of the Commonwealth was decided by a court

of Petty Sessions which included justices of the peace. He held that they lawfully exercised State jurisdiction to the exclusion of the Federal jurisdiction invested in the same court, subject to the condition that it should be constituted of a police magistrate alone.

109

He said that counsel had contended that this conclusion 'leads to a ridiculous or impossible position; that with regard to the same subject-matter you cannot superimpose one jurisdiction on top of another; one with and the other without specified conditions or restrictions.' The answer to this contention is, I think, that the judgment of the High Court in Lorenzo v. Carey (1921, 29 C.L.R.,

243) says quite clearly, as it appears to me, that it is not an

impossible position; that one court can be invested with two separate and distinct jurisdictions-that is .to say, jurisdictions derived from two separate and distinct authorities. ,See page 252: 'An agent may have a valid authority from a number of indepen­

dent principals to do the same act. When Federal jurisdiction is given to a State court and the jurisdiction which belongs to it is not taken away, we see no difficulty in that court exercising either jurisdiction at the instance of a litigant.' He proceeded to say that

counsel 'then contended that, assuming that the court is invested with both a State jurisdiction and a Federal jurisdiction over the same subject-matter, the former being an unfettered jurisdiction­ that is to say, unfettered by any of the conditions and restrictions

specified in section 39 ( 2) of the Judiciary Act, and the latter. being fettered by such conditions and restrictions, the court imist exercise its Federal jurisdiction. But if this be correct, then it follows that it cannot exercise its State jurisdiction; in other words, that it is in effect deprived of its State jurisdiction. But the Federal Parlia­ ment cannot deprive the State court of its State jurisdiction, except

in the way provided by the Constitution, viz.,' by conferring original jurisdiction on a Federal court and making that jurisdiction exclusive of the jurisdiction of the State court under section 77 ( ii) of the Constitution. · That admittedly has not been done in the

present case, and I therefore cannot agree with the contention that in the circumstances of this case the State court must exercise its Federal jurisdiction, such contention necessai·ily involving, as I think it does, the conclusion that the State court is deprived of its

State jurisdiction'. He agreed with the observations of counsel that ' in a case such as this, where the court ex hypothesi may exercise either one of two jurisdictions over the same subject-matter, it is difficult to lay down any rule whereby to test which juris­ diction the court is exercising. In the judgment in Loren.w and Carey at page 252 it is said: 'We see no difficulty in that court exercising either jurisdiction at the instance of a litigant'. In the

present" case the court, in my opinion, exerdsed its State juris­ diction at the instance of the litigants, through their legal advisers'. This seems to represent the effect of the provisions of section 39 in relation to section 76 (ii) as worked out by the High Court.

The result may be summarized as follows :-(1) In a case arising under a law ·of . the ' Oqm,monwealth a State court has two jurisdictions derived from different so·urces.

(2)

(3)

It may exercise either at the instance of a party. It is not decided whether the election resides with the Court or with one of the parties, and if so · which of them.

lOll

110

( 4) The exercise of one or the other depends upon some mental act on the part of the court which may be inferred from its conduct, but is not necessarily disclosed or known. (5) The right of appeal depends upon the choice. (6) The constitution of the tribunal in cases of summary

jurisdiction may differ according to the choice. ('7) If the tribunal possesses both 'jurisdictions' it would seem to follow that it at least may and perhaps must exercise both at once. ( 8) The result vvould be that an appeal lies to the High Court

under section 39 (2) (b) from the decision in so far as it is given in the ·exercise of 'Federal jurisdiction' and only to the State court in so far as it is given in the

exercise of State jurisdiction. In order to vacate a single order given under both simultaneously, it might thus be necessary to have simultaneous appeals and concurring decisions. .

Of course, this is a reductio ad absurdum. But take the follow­ ing example: Suppose an action is brought in the County Court . by a plaintiff against a private individual for the follo1ving causes of action :-(1) passing off; which is exclusively State jurisdiction;

(2) · infringement of a trade mark; which is State and/or jurisdiction, and the registrar of trade marks is joined; and (3) an injunction is sought against him; which is exclusively Federal (by reason of section 75 (v) ). We think no one can give a con­ fident answer upon the question what jurisdictions the action is tried in and what appeals lie.

In 1907 it was found necessary or desirable to add further pro­ vision to prevent appeals to the Privy Council from the Supreme Court, and sections 38A and 40.A were inserted in the .J udiciarJ .L\..ct. Effectual as these provisions have .been for this purpose they

have necessarily added much complexity to an extremely intricate situation. Indeed, the intricacies of these sections and their peculiar opera· tion can only be appreciated adequately after prolonged study of the decisions given in relation to them . and to section 74 of the Constitution. See Jones v. Commonwealth Court of Conciliation and Arbitration (1917, A.C., 528); re Drew (1919, V.L.R., 600);

R ex v. Ma'ryborough Justice (27 C.L.R., 249); Ifudwn v. Aus­ tralian Timber 'Wo.rkers' Union (32 C.L.R., 413); Pirrie v. (36 C.L.R., 170); Cornmon'wealth v. Kre,ql-inger· (37

C.L.R., 393). ·

No . doubt it is by no meaus easy to arrive at a clear under­ standing of the . opera-tion of these provisions from a mere con­ sideration. o.f>tne but this merely serves to support the

conclusion we are desirous of suggesting to the Commission that· as a. result of the provisions of the Constitution and those of t hE: Judiciary Act 'Federal jurisdiction ' forms a grave impediment to the practical administration of justi·ce. _ We think this confusion a:nd all ·the difficulties which attend it ought to receive the serious attention of those interested in maintaining a Federal system of which is speedy, efficient and practical."

111

The following extractis taken from the evidence of Mr. J. E. Clark (p. 1219) :-" There is one other matter I would like to mention in con­

nexion with a case that came under my notice. Under the

Constitution, the High Court has original jurisdiction in ac,tions residents of different States. That jurisdiction was taken

away from the State courts and revested in them on certain con­ ditions, that is, when the inferior court is constituted by a police, stipendiary, or special magistrate. We had a case here in which we sought to enforce a maintenance order made by a court in South

Australia against a man who was resident in Broken Hill. He deserted his wife in South Australia and went to Broken Hill, and had not sent any money to her. She applied to the South

Australian court and got an order; then it was brought here under those interchanges of Maintenance Order Enforcement Acts, and the officers of the department sought to enforce it in Broken Hill, but the objection was taken there that the head order was not good

because it was not made by a court of proper jurisdiction under the Act. The South Australian court wa·s constituted of two justices of the peace and the stipendiary magistrate sitting together, therefore the South Australian court bad no jurisdiction to make

an order against this man, he being a resident of another Sta'te. It came down here and vvas before Mr. Justice Campbell on appeal, and .Vi'e managed to win the first round, but merely on the ground that the evidence did not say that he was a resident of this State

within the meaning of the Constitution. When it 'vent back,

evidence was adduced showing that he was a resident of New South Wales at the time, and so the woman has lost all her maintenance and has no chance of getting it. That comes under a section of the Judiciary · Act, and the question arose before in the case of

Coates v. Coates 1925, V.L.R., 231."

1013

/

112

X.-EXTERNAL AFFAIRS.

Under this heading it is proposed to indicate briefly (a) the part taken by the Commonvvealth in conferences with the Governments of Great Britain and the Dominions; .(b) the part played by the Com­ monwealth in international conferences; (c) the manner and . extent to which the Commonwealth has or may ·become bound by treaties and agreements; and (d) the manner in which the Commonwealth has been or may be brought into contact with other countries in the exercise of the powers of legislation conferred on the Commonwealth Parliament by the Constitution.

Conferences with the Governments of Great Britain and the Dominions. Prior to the establishment of the Commonwealth each of the six Colonies had b-een separately represented at' Colonial Conferences and each had had one vote. Subsequently to the establishment of the Com­ monwealth the Commonwealth Government alone represent-ed the people

of Australia. As is indicated elsewhere in this report, this position was ·not· conceded protest" from certain of the States, but was

maintained both by the Government of the Commonwealth and by the Government of Great Britain. Colonia] or Imperial Conferences wer-e held in the years 1902, 1907, 1911, 1917, 1921, 1923, and 1926. Each of these Conferences with one exception b;Js been attended by the Prime Minist-er of Australia. At some, but not at all, he has been accompanied by another Minister of State. In the year 1924 it was· proposed by the British Government that for the purpose of securing continuity of policy representatives of the Opposition for the tiine being, as well as of the Government, of the Dominions, should attend these CoJ?,ferences, but the practicability of the suggestion was. questioned by the Prime Minister of Australia and it was opposed by the Prime Minister of Canada and abandoned. In addition to the Colonial or Imperial Conferences, at which numbers

of subjects of common interest have been discussed, Conferences have been held from time to time on special subjects. Among the most notable of these Conferences have been the Navigation Conference of 1907, the Education Conference of 1907, the Defence Conference of 1909, and the Economic Conference of 1923. Representatives of the Dominions prior to the War were from time to time invited to take part in the sittings of the Committee of Imperial Defence, and the right of the Dominions to send representatives to explain their views b-efore this Committee was acknowledged by the represent.atives of Great Britain at the Conference of 1907.

In the years 1917 and J918, the Prime Ministers of the Dominions, including the Prime Minister of Australia, were members of the War Dabin-et, but they were not consulted on the terms of the Armistice. At t he Conferences held prior to 1911, the subjects which have

occupied the greater part of the discussions have been defence, pre­ ferential trade, and the means of consultation between the Govern­ ments of Great Britain and of the Dominions. The Conference of 1911 was remarkable ·for a discussion on foreign affairs initiated by a review of the relations of Great Britain with other countries, by the Secretary of State for Foreign Affairs, and in particular for a discussion of the proposed renewal of the Anglo-Japanese Alliance.

113

At all these Conferences other matters were discus:sed, some of which were the subject of resolutions.. These resolutions deal with, inter alia, --- penny postage, improved mail servic-es, uniformity of company law,

the· protection of patents and copyrights, and naturalization. At the Imperial Conference of 1917 it was arranged that, in future, communications should be between the Prime Minister of Great Britai'n the Prime Ministers of the Dominions, and a resolution was carried

that a special conference should be held after the war for the purpose of defining the relations of the Dominions to each other, and to the Govern­ ment of the United Kingdom. A resolution was also passed in favour of extending equal rights of citiz-enship to Indians resident- in. the

Dominions. IIi 1921 the subjects most prominent were the J apanese A_lliance. and the forthcoming International Conference to be held at Washington. In 1923 a detailed resolution was passed on the subject of the rights of the Dominions to make treaties and the extent

to which Dominions were bound by treaties. to which they were not parti-es. In 1926 a Committee was appointed to draw up a· report on all the questions of the agenda in relation to Inter-Imperial Relations. No Conference of Ministers, however, has been held in accordance with

the resolution of 1917. At the Conference of 1921, Mr. Hughes, Prime Minister of Australia, declared himself at a loss to understand what was contemplated by the resolution of 1917, and at the Conference of 1926, Mr. Bruce, Prime Minister, declared that "it would b-e disastrous

to attempt to lay down something in the nature of a written Con­ stitution that is going to govern us in the future. It is quite impossible for an Empire progressing continually to have such a document. If we had had it in the past, either it would have had to be torn up, or

it would have destroyed the Empire". This attitude has also beer.i I_Ilaintain-(3d by Mr. Bruce in his answer to a proposal made by Mr: Ramsay MacDonald in 1924 that each · Dominion should send repre­ sentatives to London for the purpose of a preliminary discussion on the

subject ot Inter-Imperial Relations (infra), an answer in which the Prime Minist-er of South Africa concurred. In the Report of. the Inter­ Imperial Relations Committee of 1926, however, some .attempt was made to define the relations of the ·Dominions. The definition, which

refers to the autonomy, equal status, common allegiance to the Crown1 and free association marking the position and mutual relations of Great Britain and the Dominions from a constitutional point of view, must be read ii1 ·conjunction with the explanation which follows in the Report,

under the heading "Status of Great Britain and the Dominions" (see Appendix 0).

Pa1•ticipation in International Conferences. The participation of the Commonwealth as of right in International· Conf-erences of a political character began with the Peace Conference of 1919. Prior to the War the Commonwealth was independentl;y represented at the International Radio Telegraphic Conference of 1912, and. the credentials of the Commonwealth representative were then issue.d

by His Majesty "on behalf of the Commonwealth of Australia". A1 the Peace Conference of Versailles, Australia independently repre­ sented and in plenary sessions her representatives took part on the same footing as representatives of the Allied and Associated Powers. Upon the Council of Ten the Prime Minister of Australia, as of others

of' the Dominions, was from time to time associated with a member of

101_5

114

the British Cabinet as one of the two British representatives. Upon the Council of Four a member of the British Cabinet spoke on behalf of the whole British Delegation, which consisted of three British delegates, the Dominion Ministers, and a representative of British India.. During the whole of the Conference the Dominion delegates, as members of the British Empire Delegation, were in touch with thE

proceedings and had access to all papers, and from time to time

Dominion Ministers represented the British Empire on Commissions appointed to consider special aspects of the conditions of Peace. The procedure established at Versailles was partially followed at. the Washington Conference of 1921-1922. The invitation of the President of the United States was issued to the Government of the United Kingdom alone, .but at the Conference the Dominions were . represented by plmiipotentiaries of their own, and regular meetings of the British Empire Delegation were held at which all important questions . were discussed. At the Inter-Allied Conference on Reparations held in London in 1924, the procedure of the Peace Conference was followed after considerable preliminary discussion, and at the Naval Conference held at Geneva in 1927 the right of the Dominions to be s.eparately represented on the same footing as the United States and Japan was conceded. The Kellogg Peace Pact 1928,· which was concluded after correspondence, was signed by representatives of each Dominion separately as well as by · a representative of Great Britain.

The right of the Dominions to separate representation at Inter­ national Conferences has not, however, been invariably acknowledged by other countries. The Dominions were not separately represented at the held at Lausanne to arrange peace 'vith Turkey, mainly,

it is said because of the opposition of the French Government, and the resulting treaty was ratified by the Governments of Australia, New Zealand and South Africa, but not by the Government of Canada. At t_he Conference of Locarno the Dominions were not represented, and the pact resulting from the Conference was expressed so as not to impose active obligations on a Dominion without its concurrence.

Tre.aties. The question how far a Dominion is bound by a treaty purporting to be executed on behalf of the British Empire or is itself entitled to conclude a treaty is to some extent bound up with the question of the right of a Dominion to participate in International Conferences. Both

these questions were discussed at the Imperial Conference of 1923 and "a-re the subject of recommendation by the Committee on Inter-Imperial Relations appointed in 1926 (see Appendix C). In a great number of treaties of a commercial or technical character concluded by the

Imperial Government provision is made that the treaty shall not be binding on any of the self-governing parts of the Empire unless it has expressly adhered to the· treaty, and in others there is provision that a Dominion may exclude itself from the operation of the treaty. The Commonwealth has exercised the right of exclusion in relation to a great number of treaties which were thought to be inconsistent with national policy, and has not acceded to a number of commercial treaties concluded by the Imperial Government since the War. The right of a Dominion to make political treaties with a foreign country is, subject to the observations contained in the Report of the Inter-Imperial Relations Committee of 1926, the same as that of the government of

115

the United Kingdom. The government of . the Commonwealth has not as yet exercised this right. It has however from time to time entered into agreements with other countries which are n'ot formulated as treaties, and which relate to some specific aspect of Commonwealth

policy. One series of these related to merchants, tourists, ministers of religion, and students visiting Australia from Japan, China, India, and other Eastern countries for a limited time only. Another series entered into during the years 1924 and 1925, after the commencement of the

recent immigration legislation in the United States, related to the issue of passports to wobld-be immigrants into Australia by the governments of Italy, Greece, Albania, Czecho-Slovakia, Yugo-Slavia and Malta. At the Imperial Conferences of 1907 and 1911 suggestions w-ere

made for the improvement of the means of consultation between the different Governments within the· British Empire. At the Conference of 1907 a resolution was carried on the motion of Mr. Deakin in

favour of the establishment of a permanent Imperial Secretariat, and at the Conference of 1911 Mr. Fisher suggested that Conferences be held annually. In 1924 a circular telegram signed by the Prime Minister of Great Britain, Mr. Ramsay MacDonald, and by the Secretary of State for the

Dominions, Mr. Thomas, was addressed to· the Governments of the Dominions, in which, after referring to the resolutions of the Imperial Conference of 1917, suggestions were made for the improvem-el}t of methods of consultation. The reply of the Prime Minister of Aus­

tralia sets · out the existing difficulties and the methods proposed for meeting them :-"It is, of course, obvious that in practice there are two main difficulties in establishment of an effective system of joint· con­

sultation and action, namely (a) the impossibility of full exchange of views when 'the Imperial Conference is not sitting, particularly in the sphere of foreign policy where immediate action is impera­ tive, and (b) the possibility of conclusions of Imperial or Economic

Conferences being reversed through change of government. The problems which have to be considered appear to divide them­ selves into: (1) 'the manner in which an Imperial policy should be laid down in regard to matters of common Empire interest, such · as foreign policy, defence, and inter-Empire trade. (2) How

should consultations take place with regard to giving effect to such policy when determined upon and for its alteration where necessity arises? (3) What steps can be taken to ensure that any common policy arrived at will be given effect to irrespective of change of government in different parts of the Empire?

With regard to (1) it is now an established principle of Empire Government that Prime Minister Conferences shall take place at frequent intervals. At these Conferences a common Empire policy on questions of Imperial interest can be arrived at and submitted . by' the respective :Prime Ministers to their. individual Parliaments·

for their ratification and assent. The machinery for ensuring a common policy therefore already exists by holding of the Imperial Conferences, and no alteration of existing practice appears either necessary or desirable. ·

· (2) It is unavoidable that questions of urgent foreign policy must be dealt with according to the circumstances in which they arise,

1_017

116

and they are therefore in an entirely different category from other matters upon which a common policy may have been determined at an Imperial Conference. It appears to my Government there­ fore that no alteration in the underlying principle of consultation

which at present exists is practicable, but considerable improve­ ments could be effected in the operation of such machinery. These improvements should be on lines of-(a) a closer liaison between the Foreign Office and Dominion Governments, which could be effected by the establishment by the Dominions of a Foreign Office Branch in their High Commissioners' Offices under the control of an officer of such standing and character as to enjoy the confidence of the Foreign Office; such a representative would be in a position to keep his Prime J\1:inister informed in regard to current events and atmosphere in connexion with foreign policy, in addition to information which is conveyed by cable to the Prime Minister and by information at present sent from time to time by the Foreign Office. (b) Fuller and more regular advice in regard to all ques­ tions of foreign affairs, both by cable and mail, than is at present forwarded to the . Prime Ministers of the self-governing Dominions.

(c) Greater efforts to anticipate questions which are likely to arise and require urgent decision, with a view to ascertaining the views of the Dominions in advance, in place of informing them of _ decisions after they have been arrived at and acted upon or when

it is too late for any alternative action to be submitted. With regard to questions other than foreign policy, my Govern­ ment is of the opinion that the establishment of a permanent Imperial Secretariat responsible to the Prime Ministers of all the self-governing parts of the Empire, whose task would be to prepare for the Imperial Conferences, carry out all Secretariat work during the sittings of such Conferences, follow up all resolu­ tions and decisions arrived at, and keep the Dominions constantly informed of developments between the Conferences, would go a long way towards solving the problem of effective and continuous con­ sultation. This Secretariat would also embrace existing Imperial

Committees such as the War Graves and Shipping, and the Economic Committee when established. It would not merely be a connecting link between the individual Dominion Governments and the British Government, but also between the Governments of the different Dominions. At the present time the Secretariat for Imperial Conferences is provided by the British Government, together with representatives of the Dominions concerned, but immediately the Conference is ov;er the Secretariat is broken up, and no effective machinery exists for keeping the Dominions con­ tinuously informed as to developments or alterations necessitated by changed circumstances. In the opinion of my Government a great improvement would be · effected by the establishment of a permanent Imperial Secretariat." .

As an illustration of the defects in the then existing methods of consultation reference may be made to the absence of the Australian Prime lYiinister from the Conference-of 1917 owing to a p_ arliamentary crisis, and to the Chanaq Inci_ dent of 1922. On the 15th September, 1922, a telegram was addressed by the Prime Minister of Great Britain Mr. IJoyd George, to the Prime Minister of each Dominion, regarding

117

the relations of Great Britain and Turkey in which he invited

the Dominions to be represented by contingents "in defence of interests for which they had already made enormous sacrifices." The Australian Government replied, on or before the 17th Sep­ tember, "that it desired to associate itself with His Majesty's

Government in whatever action might be deemed necessary to ensure the freedom of the Straits and the sanctity of-the Gallipoli Peninsula:," but stating that the opinion of Parliament would be taken on the matter on the 19th September. It appears that the telegram of the

British Government was the first official intimation that had been received by the Dominion Governments of a situation in the near East which had reached a critical stage and with respect to which there was reason to anticipate the necessity of making any kind of appeal fo r

military assistance. Subsequently to the date of the telegram of the Australian Prime Minister set out above, the Australian Government has maintained in London a liaison officer for foreign affairs, who is in touch with the

Foreign Office and is in communication with the Prime Minister's Department and with the Prime Minister himself. Following the report of the Inter-Imperial Relations Committee the Governor­ General of Australia ceased to communicate with the Imperial Govern­

ment on Australian affairs. Despatches are now addressed by the Prime Minister of the Commonwealth to the Secretary of State for Dominion Affairs. The Government of Australia has not, as the Government of Canada has, appointed a diplomatic representative to Great Britain,

nor has it received a diplomatic representative from Great Britain. Australia is represented in the United States by a Commiss ion er, who has not diplomatic status, and it has not appointed a diplomatic repre­ sentative to any foreign country.

League of Nations. From the establishment of the League of Nations in pursuance of the treaty of V ersailles the Commonwealth became a member of the. League with rights equal to those of the other Powers who were not permanent members of the Council. Upon the issue of Mandates in 1919 the Commonwealth as a mandatory became responsible for the

territory of New Guinea and jointly with Britain and New Zea:land for the government of Nauru. The manner in which the duties of a mandatory are discharged by the Commonwealth is set out in the section of this report dealing with Territories. The Commonwealth

is in touch with the Secretariat of the League at Geneva and sends delegates to the annual meeting of the Assembly of the League. The Commonwealth has not been elected to a seat on the Council of the League, as Canada has, nor has it been a candidate, as the Irish Free

State has. The Commonwealth is also an original member of the International Labour Organization of the League, and is represented at its annual meetings or conferences. Such conferences may adopt a draft convention by a two-thirds majority, but these conventions in

relation to a F ederal Government take the form of recommendations and none of them has been ratified or given legislative sanction

by the Commonwealth. New Hebrides . The Commonwealth has inter ests in land in the New Hebrides and is represented by an official stationed in the grQ,np, whose duty it is to safe­ guar'd C6mmonwealth interest's !n litigation on land matters. The

1019

118

Commonwealth was not consulted on the Condominium Convention of 1906 until after the terms of the Convention had been settled between the British and },rench Governments. The Commonwealth was con­ sulted during the negotiations for a new Convention, which took place

prior to 1914, and on the Convention which was ·agreed upon in 1920.

The Commonwealth has for some time subsidized. a mail service to the New Hebrides (see p. 1,428). ·.

Contact w·ith other countries through legislation. The Commonwealth Parliament may make laws for the peace, order and good government of the Commonwealth with respect to a number of subjects which bring the government of Australia into contact with

the governments of other countries. Among these subjects are: · (1) trade and commerce with other countries; (2) postal, telegraphic, telephonic and other like services; ( 3) the naval and military defence _of the Commonwealth; ( 4) quarantine; ( 5) in

waters beyond territorial limits; ( 6) copyrights, patents of invention and design, and trade marks; (7) and aliens; (8)

foreign corporations; (9)' the people of any ·race, other than the aboriginal race in any State, for whomit is deemed necessary to make special laws; (10) immigration and emigration; (11) the influx of criminals; (12) external affairs; and (13) the relations of the Com­ monwealth with the islands of the Paci:fic.

In the exercise of one or more of these powers the Commonwealth Parliament has passed the Pacific Island Labourers Act 1901-1906; the Immigration Act 1903-1925; the Extradition Act 1903; the Naval Agreement Act 1903-1912; the Contract Immigrants Act 1905; the

Wireless T elegraphy Act 1905-1919; the Pacific Cable Act 1911; the Treaty of Peace Act 1919; the Treaty of Peace ( ()ermany) Act 1920; the Treaty of Peace (Austria and Bulgaria) Act 1920; the Treaty of Peace (Hungary) Act 1921; the Treaties of Washington Act 1922;

the Passports Act 1920; the Naturalization Act 1903-1917; the Nationality Act 1920-1925; the Customs Tar#J (New Zealand Pre­ ference) Act 1922-1926; and a number of Acts relating to the export of primary products.

The Commonwealth Parliament has also by the Commonwealth Electoral Act 1925 admitted Indians resident in Australia to the Com­ monwealth franchise in pursuance of resolutions passed at the Imperial Conferences of 1917 and 1921, and after the visit to Australia of a representative of India. Indian residents have also been quali:fied for the old-age pension. By the Air Navigation Act 1920 the Common­ wealth has empowered the Governor-General to make regulations for the purpose of carrying out and giving effect to the for the

regulation of aerial navigation signed in Paris on the 30th October, 1919.

The opinion was expressed by Mr. E ·. L. Piesse (evidence p. 1429) that the means adopted to keep Parliament and the electors informed on foreign affairs are inadequate, and that the establishment of a Parliamentary Committee on Foreign Relations as in France and tho United States was highly

119

. XL-THE DEFENCE OF THE CO:NIMONWEALTH.

The provisions of the 0 onstitution. The Commonwealth Parliament may make laws, under para­ graph (vi) of section 51 of the Constitution, with respect to "the naval and military defence of the Commonwealth the several States, and

the control of the forces to execute and maintain the la-vvs of the

Commonwealth". This power is supplemented by the power conferred by paragraph (xxxii) of the same seetion to make laws for the control of railways with respect to transport for the naval and military purposes of the Commonwealth. It is to be read too, as other powers

are, with the grant of incidental powers in paragraph (xxxix). The auestion has been suggested "'\vhether the power to make laws for the naval and military defence of the Commonwealth includes defence by air, but any such doubt has been .ignored in practice, and in Farey v.

Bu'rvett (21 C.L.R. at p. 440) it is said that the words "naval" and "military" are not words of limitation, but rather of extension, showing that the subject matter includes all kinds of warlike operations.

The departments of naval and military defence were included among the departments of the public service in each State which were to become transferred to the Commonwealth on a date or dates to be proclaimed, under section 69 of the Constitution, ·by the Governor­

General after the establishment of the Commonwealth. The defence departments of the States were transferred to the Commom;.,realth on the 1st March, 1901.

Section 114 of the Constitution forbids a State to raise or maintain any naval or military force without the consent of the Commonwealth Parliament. This section, together ·with the provision in paragraph ( ii) of section 52 w1th respect to matters relating to transferred departments,

makes the defence ·power of the Commonwealth an exclusive power ( cf. Joseph v. Colonial Treasurer (N.S. vV.), 25 C.L.R. 46).

The Commonwealth has the duty, under section 119 of the Consti­ tution, to protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence. The obligation to intervene for the prptection of a State against domestic

violence arises, it seems, where there is in fact domestic violence against which protection is needed, and not merely because a State Government has stated that there is domestic violence and has applied for protection. The machinery for giving effect to the obligation js

provided in the Defence Act 1903-1927 (see infra).

The CJonstitution itself; by section 68, vests the command in chief of the naval and military forces of the Commonwealth in the Governor­ General as the Sovereign's representative. The command in chief cannot, therefore, be vested by the . Common·wealth Parliament in any other person or body, though the Parliament may make provision for

the administration of the Defence system and the military and naval command of the Defence forces. In effect section 68 ensures that the civil administration and control of those forces shall be in the hands of Ministers responsible to Parliament, as the Governor-General will act

on Ministerial advice.

1021

120

The Defence Power. ·The defence power of the Commonwealth rests primarily on the Constitution, and in particular on the provisions which confer power on the Commonwealth Parliament, but besides the legislative power, there is the executive power of the Commonwealth under section 61 of the Constitution, which Cl!rries with it the war prerogative of the Crown so far as it is applicable to Australia (see Farey v. Burvett, 21 C.L.R. at p. 452). Moreover in regard to the making of laws for the enforce­ ment of discipline beyond the limits of the Commonwealth the power is reinforced or supplemented by the provisions of British Acts other than the Commonwealth of Australia Constitution Act-the Army Act, s. 177, and the Naval Discipline (Dominion Naval Forces) Act, 1911, s. 1.

The power of the Parliament under section 51 ' (vi) is not confined to warlike operations, but extends to every measure of defence which circumstances may require, including preparation for war in time of peace, any such action in time of war as may conduce to the successful prosecution of the war and the defeat of the enemy, and the termination of hostilities by the imposition of terms of peace and the enforcement of those terms ( Farey v. Burvett, 21 O.L.R. at p. 441; Roche v. K ron-heimer, 29 C.L.R. at p. 337). ·

The scope of the defence power is wider in time of war than in time of peace. Normally the power of the Commonwealth. Parliament in regard to defence "extends to the legislative authorization of all such acts and measures as are proper to the subject of 'defence' in· its technical or more limited sense, including the raising and training of naval and military forces, and the making of rules for their discipline and government; the providing of arms, ammunition, vessels, fortifi­

cations and other works -of a like nature; together with all matters · incidental thereto, including the control of all railways for naval or military transport. These powers avail both in time of peace and war. On the intervention of a state of war 'the defence

power', operating now as a 'war power', becomes enlarged into what is probably the most far reaching of all the Federal powers" (Pitt Cobbett, Government of A ustralia---.:unpublished; see Farey v. Burvett, 21 C.L.R. pp. 452-455). In time of war the Commonwealth Parliament may pass

any law, or may give the Executive authority to make any regulation, which it considers necessary for the safety of the country. The Com­ monwealth in time of wa.r was, for practical purposes, a unified government. This interpretation of the defence power was first pronounced by a majority of the High Court in 1916, when regulations :fixing the price of bread under the authority of the War Precautions Act 1914-1915 we re held to be within the powers of the Commonwealth, a minority of the Justices dissenting on the ground, amongst others, that if this power were necessary to the safety of the country, the States could transfer it to the Commonwealth ( Farey v. Burvett, 21 O.L.R. 433). Thereafter it was held that the Commonwealth could make it an offence, during the war, to encourage the destruction of property

(Pankhurst v. Kie1 ·nan, 24 C.L.R. 120), or make a law prescribing conditions on which a person should be deemed to be trading with the enemy (Welsbach Light Co. of A1tstralasia Ltd. v. The Commonwealth, 22 C.L.R. 268), or a law providing for the deportation of aliens arrested or detained on th e order of a Minister of State (Ferrando v. Pearce, 25 C.L.R. 241), or a law providing that then present state of war should

121

be deemed to have ceased on the issue of a proclamation by the

Governor-General (Jerger v. Pearce, 28 C.L.R. 588), or a regulation authorizing the Attorney-General to sell 'Shares owned by enemy subjects (Burkard v. Oakley, 25 C.L.R. 422). Under this interpretation of the defence power regulations were issued during the . war making arrange­ ments for the disposal of all wool and sheepskins in the Commonwealth

to the Imperial Government an-d: for the acquisition and disposal of a number of other commodities. These regulations were subsequently continued as schedules to the Commercial Activities · Act 1919. The defence power also authorized the Commonwealth Parliament to pass the Treaty of P eace Act 1919, together with the regulations thereunder, the

Australian Soldiers' fiepatriation Act 1917-1918, and the Australian R epatriation Act 1920-1922, under moneys advanced by

the trustees of the Australian Soldiers' Repatriation Fund were to have the same priority with respect to the payment of debts as if the moneys had been advanced by the Crown, and goods vested in the Repatriation Commission were not liable to be distrained (Attorney-General for the

Commonwealth v. Balding, 27 C.L.R. 395). The defence power, however, is subject to certain limitations, most of which apply in time of peace only. (1) The authorities may control State railways with

respect to transport for naval and military purposes, but they may not acquire the railways of a State or build or extend a railway in a State without the consent of the State concerned. The Commonwealth has joined with the States of Queensland and New South Wales in building

a railway from Grafton to South Brisbane which may have a distinct military value. A view has been expressed (see the evidence at p. 341) that even in time of war the Commonwealth could not take over a railway and staff without the consent of a State, and Colpnel Wynter

suggested that in order that the defence needs in regard to trans­ portation should be met with the greatest expedition and certainty, and due weig?t given to the needs of the civil community, the Consti­ tution should . explicitly give the Commonwealth the power to possession of and administer the State railways in time of war.

(2) The Commonwealth may maintain dockyards fo.r the building or repair of ships, and factories for the manufacture of munitions, uniforms and equipment. To maintain throughout a period of peace the nucleus of a staff for emergency and war purposes it has been found convenient, if not necessary, to carry on work for civilian purposes and

to enter into contracts with other than the Commonwealth authorities (see evidence of Captain E. D. Sydenham, pp. 315-317.) The Shipping Board, for instance, entered into what was popularly known as the Bunnerong Contract to do certain work at the Cockatoo I sland Dock­ yard. The High Court decided that authority to enter into this contract

had not been conferred on the Shipping Board by the Commonwealth Parliament, and that a law conferring this authority would have been ultra vires the Commonwealth Parliament (Commonwealth v. Aus­ tralian Commonwealth Shipping Board, 39 C.L.R. 1). This judgment

must add to the difficulties of the Defence authorities in putting Australia in a state of preparation for war or for war em ergencies. (3) The Commonwealth forces are sometimes requested to assist the police of the States in connexion with offences afloat against State

1023

122

statutes. They have, for instance, been requested to search vessels suspected of illicit fishing. Doubts exist as to the rights and liabilities of members of the Defence Force in these circumstances. The Commonwealth may, on the application of the Executive Government of a State, intervene for the protection of the State against domestic violence, and it may of its 0"\Vll motion intervene for the protection of the property and services of the Commonwealth, but except unde.r section 119 of the Constitution it has no express obligation

to intervene in the event of rioting or violence within a State. ·

The Defence System. Provision is made for the defence of the Commonwealth by the Defence Act 1903-1927, the Naval Defence Act 1910-1918, and the Air Force Act 1923, together with the regulations made under those Acts, and the arrangements entered into with the British Government in regard to naval defence. The Defence Act 1903 was framed for both naval and military defence. After the Naval and Military Conference held in London in 1909, the Commonwealth Parliament passed the Naval Defence Act 1910, which was amended in 1911, 1912, and 1918. A number of the provisions of the Defence Act still apply to the naval as well as to the military forces. ·

Under these Acts the Governor-General may appoint an Inspector­ General of the Military Forces, divide the Commonwealth into Military Districts, appoint a Council of Defence, a Military Board for the administration of the Military Forces, and a Naval Board for the administration of the Naval Forces. The Council of Defence is to have such powers and functions as may be prescribed. Under the Council of Defence Regulations, made under the Defence Act 1903-1918, the powers

and functions of the Council are (a) to ensure that the whole policy of the defence of Australia by the Naval, Military, and Air Forces is consistent generally with Imperial plans, and especially with such of those plans as directly concern Australia, and to issue such instructions in connexion therewith as are necessary; (b) to act as the medium of communication with the Committee of Imperial Defence or any other

body of a similar nature formed by the Government of the United Kingdom; (c) to effect such supervision of the approved defence policy in the Naval, :Military, Air, and Munition branches as will ensure its efficient and economical application; (d) to co-ordinate the activities of the Naval, Military, Air and Munition branches with each other as well as with those of other Commonwealth Departments and the commercial and manufacturing activities of Australia in so far as is necessary to ensure, in case of need, the mobilization of all resources for

the defence of Australia; and (e) to advise upon and supervise the total expenditure upon defence and the distribution of that expenditure. Regulations have also been made under the Defence Act 1903-1918 and the Naval Defence Act 1910-1918, under which the functions of the Air Council are (a) to advise the Minister upon the Air Force provision necessary from time to time for the defence of Australia; (b) to

co-ordinate the Air Force requirements of theN a val and Military Forces respectively, and to advise upon questions of principle affecting command and administration resulting from tbe distribution of the Air Force; (c) to advise the Minister upon all matters of policy or principle

affecting the organization, distribution, ai1d preparation for war of such

123

Air Forces as may be established; (d) to allocate the funds made avail­ able for air defence; (e) to advise upon the general control of Common­ wealth air policy in its naval and military aspects and to co-ordinate civil aviation therewith; and (f) to advise and make recommendations

upon such matters as the Council may direct shall be referred to it from the Air Board. .

The Naval and Military Forces of the Commonwealth are divided into two branches, called the Permanent Forces and the Citizen Forces. The Permanent Military Forces are to be raised, maintained and organized only for Administrative and Instructional Staffs, · including

Staff Corps, Aviation, Survey, Army Service, Medical, Veterinary and Ordinance Corps, Artillery, Fortress Engineers, and Submarine Mining Engineers. The Citizen Military Forces are to consist of active forces and

reserve forces. The Active Citizen Military Forces are to consist of Militia Forces, the Volunteer Forces, those undergoing military training, and officers on the unattached list. The Military Reserve Forces are to consist of Citizen :Forces, and are to include the officers shown on the Reserve of Officers List, the members of Rifle Clubs who are allotted to

the Military Reserve Forces, and all those liable to serve in time of war, under section 59 of the Defence Act 1903-1927, who are not included in the Active Forces. The Permanent Naval Forces are to consist of officers who are

appointed officers of those Forces, and seamen who have enlisted or engaged as members of those Forces, and who are bound to continuous naval service for the term of their enlistment or engagement. The Citizen Naval Forces are to consist of Naval Reserve Forces and

Naval Volunteer Reserve Forces. The Naval Reserve Forces are to consist of officers and seamen who are not bound in time of peace to continuous naval service and who are paid for their services, and of persons who are liable under the Defence Act to be trained in the Citizen

Forces and who are allotted to the Naval Forces. The Naval Volunteer Reserve Forces are to consist of officers and seamen who are not bound in time of ,peace to continuous naval service and who are not ordinarily paid for their services.

The Permanent Military and Naval Forces are at all times liable to be employed on war service and in the defence and protection of the Commonwealth. In time of war the Governor-General may, by procla­ mation, call out the Citizen Forces or any part thereof for war service. If the Parliament is sitting at the time, the reason for calling out the 'Forces is to be communicated forthwith by the Governor-General to both

Houses. If the Parliament is not sitting, it is to be summoned within ten days after the calling out of the Forces. Members of the Military Forces are not to be required to serve beyond the limits of the Commonwealth and those of any Territory of ·the Commonwealth, unless they voluntarily agree to do so. Members of

the Naval Forces may be required to serve for training or any naval service either within or beyond the limits of the Commonwealth. When the Governor of a State has proclaimed that domestic violence exists therein, the Governor-General, upon the application of the

Executive Government of that State, may call out the Permanent Forces, and in the event of their number being insufficient may call out F.l25l.-9

1025

124

such of the Militia and Volunteer Forces as may be necessary for the protection of the State. The Citizen Forces are not to be called out or utilized in connexion with an industrial dispute. This provision was enacted by the Defence Act 1914. In 1912 the Governor of the State of Queensland made an application by telegram to the Governor-General of the Commonwealth, stating that, in consequepce of a general strike, riot and bloodshed were imminent in Brisbane, that the State police were not able to preserve order, and that :firearms had been used to' prevent the arrest of a man guilty of riotous conduct, and requested that the should direct steps to be taken immediately to protect

the State against domestic violence in terms of section 119 of the Constitution. The Commonwealth Government recommended the Governor-General to send the following reply to the Governor of Queens­ land:-" That whilst the Commonwealth Government is quite

prepared-to fulfil its obligations to the States if ever the occasion should arise, they do not ad:rriit the right of any State to call for their

assistance under circumstances which are proper to be dealt with by the Police Forces of the States. The condition of affairs existing in

Queensland does not in the opinion of my Ministers warrant the request of the Executive Government of Queensland contained in Your .Excel­ lency's message being complied with '' (Parliamentary · Papers, 1912, No; 16).

In time of war the Governor-General may place the Defence Force or any part thereof under the orders of the Commander of the King's Regular Forces or the King's Regular Naval Forces, and under certain conditions the Military Forces are to be subject to the provisions of

the Army Act. When any member of the Military Forces is killed on war service or on duty, or dies, or becomes incapacitated from earning his living, from wounds or disease contracted on war service or on duty, provision is to

be made for his widow and family or for himself out of the Consolidated Revenue Fund .. In time of war all male inhabitants of Australia who have resided therein for six months and are British subjects and are between the ages

of eighteen and sixty years, a:re, with certain exceptions, to be liable to serve in the Citizen Forces, and the Governor-General. may call upon them to enlist and serve according to classes speci:fied in section 60 of the Defence Act 1903-1927. "\ Provision is made for a system of universal naval or · military

training under Part XII. of the Defence Act 1903-1927. The system was established by the Act No. 15 of 1909. Except in the case of persons who are exempt from the obligation, all male inhabitants of Australia who have resided therein for six months and are British subjects, are liable to be trained (a) from twelve to fourteen years, in the Junior Cadets; (b) from. fourteen to eighteen years, in the Senior Cadets; (c) from eighteen to twenty-five years, in the Citizen Forces; and (d) from· twenty-:five to twenty-six years, in the Citizen Forces though in the last case, except in time of imminent danger of war' service is limited to one registration or one muster-parade. · Any who without lawful excuse evades or fails to render the personal service

required under the Act, is to be ineligible for employment of any kind in the Public Service of the Commonwealth.

125

The Governor-General may constitute courts martial. In view of the decisions of the High Court relating to the judicial power of the Commonwealth, which is discussed elsewhere in this report, some doubt has been expressed whether the provisions of the Defence Act 1903-1927 relating to courts martial are within the powers of the Commonwealth,

though by virtue of section 177 of the Army Act, which relates to forces of a colony employed beyond the limits of that colony, courts martial may rest on a different authority in time of war and in time of peace.

Arrangements with the British Gov ernment. The agreement relating to naval defence between the governments of the Colonies and the government of the United Kingdom r emained in force until 1903; when it was superseded by an agreement similar in

effect, which was made between the government of the Commonwealth and the government of the United Kingdom, and which was ratified by the ) V.aval Ag1·eement Ay't 1903. - At the conference of 1909 an arrangement was made

under which the Commonwealth, in place of the subsidy pay­ able under· the agreement of 1903, undertook to build and

maintain an Australian fleet unit. In the following year the

.C ommonwealth Parliament passed the Naval Defence Act 1910, and at the Imperial Conference of 1911 the Commonwealth

Government submitted an official paper ( cd. 57 46-2) as to the building of the Australian navy. Arrangements were made with respect to the naval forces of the United Kingdom and of Canada and Australia, both of which had adopted the principle o£ separate navies, and the relations

of their navies with the British Admiralty and with foreign powers were defined; though no formal agreement was actually drawn up. In 1912 the Naval Agreement Act 19Q-3 was amended by the Naval Agreement A ct 1912, under which the Governor-General was empowered to arrange

with the Imperial Government for reducing the Naval Force to be provided on the Australian station under the agreement of 1903, and also for reducing the amount to be paid by the Commonwealth under that agreement, and in 1913 the Australian contribution ceased.

Military Service Referendums. In the year 1916 a referendum was held on the 28th October, when the following question was submitted to the electors, as prescribed by section 5 of the Military Service Referendum Act 1916: "Are you in favour of the Government having, in this grave emergency, the same compulsory powers over citizens in r egard to requiring their military service, for the term of this War, outside the Commonwealth, as it no w has in regard to military service within the Commonwealth ?" The voting was, in favour of the prescribed question, 1,087,5 57, and not in favour of the prescribed question, 1,160,033; and according to States,

New South Wales, in favour, 356,805, -against, 47 4,544; Victoria, ·in favour, 353,930, against 328,216; Queensland, in favour, 144,200; against, ·158,051; South Australia, in favour, 87,924, against, 119,236; Western Australia, in favour, 94,069, against, 40,884; Tasmania, in

favour, 48,493, against, 37,833; Federal Territories, in favour, 2,136, against, 1,269. The reference in the question to the compulsory powers of the government is to the powers conferred by the Defenc e Act, already quoted.

1027

126

In the year 1917 a second referendum was taken under the provisions of the War Precautions (Military Service .Ueferendum) Regulations of 1917, on the 20th December, when the following question was submitted to the electors:" Are you in favour of the proposal of the Commonwealth Government for re-inforcing the Australian Imperial Force oversea?" The voting was1 for the whole of Australia, in favour of the prescribed question, 1,015,159, not in favour, 1,181,747; and in New South Wales, in favour, 341,256, ·against, 487,77 4; in Victoria, in favour, 329,772, against, 332,490; in Queensland, in favour, 132,771, against, 168,875; in South Australia, in favour, 86,663, against, 106,364; in Western Australia, in favour, 84,116, against, 46,522; in Tasmania, in favour, 38,881, against, 38,502; F.-ederal Territories, in favour, 1,700, against, 1,220.

Suggestions were made before the Commission by Mr. H. C. Gibson·, on behalf of the Australasian Council of Trade Unions, and by Mr. J. J. Kenneally, the Federal President of the Australi,an Labour Party, that the powers of the ·Commonwealth Parliament should be very considerably extended, but that it should be precluded by the Constitu­ tion from imposing conscription for military, naval or industrial purposes.

127

XII.-TAXATION.

The provisions of Consti tution. The power of the Commonwealth Parliament to impose taxation is subject to certain restrictions, the obj ects of which are (a) to prevent discrimination between States or parts of States, or preference to one

State or part of a State (s. 51 (ii); 99); (b) to guard the position of

the Senate, in which the States have equal repr.esentation, by prescribing the manner in which taxation may be imposed by legislation (ss .. 53, 55); and (c) to exempt property belonging to a State (s. 114). With regard to Customs duties. there must not, apparently, be any discrimina­

tion based on locality, whether by reference to the boundaries of States or parts of States or otherwise ( s. 90). Subject to these limitations, the Commonwealth Parliament has a general and unfettered power of taxa­ tion ( s. 51 ( ii) ) . As regards duties of customs and excise it has exclu­

sive power (s. 90). As regar_ ds other taxation, the Commonwealth and State Patliaments have . separate rather than concurrent powers; the Commonwealth may raise money by taxation for itself, and aState may raise money by taxation for itself, but Commonwealth could not

exclude a State from a field of taxation, though it might occupy the field by taking so much that there would be nothing left for a State (s ee the evidence of Sir Robert Ga-rran, p. 66). ·

Taxes imposed by the Commonwealth. Until 1910 the Commonwealth restricted its taxation to duties of customs and ·excise. In 1910 the Commonwealth imposed a land tax, in 1914 estate duties, in 1915 an income tax, in 1916 an entertainments

tax, and in 1917 a war-time profits tax.

The judgments of Uie High Co urt. An account of the cases in which the High Court has considered questions i1i regard to the taxing power of the Commonwealth is given in the evidence of Mr. R. Ewing, Commonwealth Commissioner of Land

Tax and Commissioner of Taxation (pp. 150-157), where it is pointed out that, with the exception of Cameron's case (32 C.L.R. 68), the questions raised were in regard to section 55 of the Constitution.

Under the first paragraph of section 55 lav.'s are to deal only with the imposition of taxation, and any provision therein dealing with any other matter is to b8 of no effect. Under the second paragraph of the section laws imposing taxation, except laws imposing d_uties of cust?ms or

excise are to deal with one subject of taxation only. The sectiOn has not yet been successfully invoked to invalidate any taxation

enactment, although in one case (Waterhouse's case, 17 C.L.R. 665), in which section 3fl (2) of the Land Tax Assessment Act 1910-1911 was held to be invalid on other grounds, Sir Samuel Griffith, C.J. , was . prepared to hold that that provision was also invalid under section 55

of the Constitution.

The only cases 111 which provisions of taxation Acts or

regulations have been h eld to be invalid are the followiu.g .­

(1) Bendall v. Federal Commissioner of Land Tax (12 C.L.R. 664); (2) Waterho·nse v. Deputy F ederal . Commissioner of Taxation (17

1029

128

C.L.R. 6_65); (3) Cameron v. Deputy Pederal Commissioner of Taxation (32 C.L.R. 68); and (4) British Imperial Oil Go. Ltd. v. Pederal Commissioner of Taxation (35 C.L.R. 422). A list of the cases in which Acts imposing taxation have been challenged before the High Court, whether the attack succeeded or failed,

is given in Appendix D, distinguishing between (1) cases where the attack was by reference to the first paragraph of section 55; (2) cases where it was by reference to the second paragraph of section 55; (3) cases where it was on the ·ground that section 51 (ii) prohibits discrim­ ination between States or parts of States; and (4) cases where it was on

the ground that the Commonwealth is forbidden by section 114 to impose any tax on State property.

Customs and Excise. The extent of the power to impose duties of customs and of excise has not been clearly defined, but it may give the Commonwealth control over all indirect taxation imposed immediately or directly in respect of goods-see the judgment of Mr. Justice Rich in the Petrol case (38 C.L.R. at p. 437) : "In my opinion, the Constitution gives exclusive power to the Commonwealth over all indirect taxation imposed immediately upon or in respect of goods, and does so by compressing every variety thereof under the term 'customs and excise'". The term excise has not received the same wide interpretation as in England, and has been held not to apply to brewers' licences of a fixed amount irrespective of the sales made by the brewer (Peterswald v. Bartley, 1 C.L.R. 497). It has been held to apply to a tax on the first sales of petrol, though the tax was imposed in _ the form of an additional tax on income, and to a tax on newspapers produced and sold within the State imposing the tax ( 0 ommonwealth v. S o1dh Australia, 0 ammon­ wealth Oil R efineries Ltd. v. South Austmlia--the Petrol case, 38 C.L.R. 408; John Pairfax and Sons Ltd. v. New South Wales, Smiths' News­ papers Ltd. v. New South Wales, 39 C.L.R. 139).

The decision in the Petrol case as to the tax on motor spirit has caused States which desired to raise special taxes for the improvement of roads to resort to other methods of taxation. The State of South Australia has levied a motor tax calculated on weight plus power of vehicle, and it is claimed that this tax is neither so fair, nor so easy to collect, as the tax which was declared invalid. The State of Tasmania has levied a tax on retail instead of on wholesale dealers in motor spirit. The State of Western Australia, although its Act imposing a tax on motor spirit differed in some respects from that of South Australia, ceased to collect its tax after the delivery of the High Court judgment. The. judgments of the High Court have thrown doubt on other taxes which have not been challenged, e.g., a tax on coal, for the benefit of persons whose property has been injured through mining operations; a tax on swine sold, to compensate persons whose swine have been destroyed during an epidemic; duty or compensation fee levied on publicans and assessed on the quantity of liquor sold. It has been · suggested that the only field of indirect taxation left solely to the States is stamp duties, and some doubt has been expressed as to the validity of some of the provisions in State Stamp Duties Acts (see the evidence of Mr. J. E. Clark, Assistant Crown Solicitor for the State of New South Wales, p. 1213).

129

Customs duties on goods imported by State Governments. Customs duties imposed by the Commonwealth do not come within the prohibition in section 114 of the Constitution under which the Commonwealth is not to impose " any tax on any property of any kind belonging to a State" (Attorney-Geneml of New South Wales v.

Collector of Customs, · 5 C.L.R. 818). Goods imported by a State for its own purposes are therefore subject to customs duties, and the proceeds of a State loan may go to increase the revenue of the Common­ wealth. This liability has considerably increased the cost of develop­ ment of the States, particularly in view of the increased prices of

materials since the war, and it has been claimed that although duties may be remitted, remission has been refused, where Australian factories were too busy to· carry out urgent orders of a State. Extracts from correspondence in 1924 between the Premier of Western Australia and

the Prime Minister of the Commonwealth on this subject are set out in Appendix E .

It has not been possible to obtain exact details of the amounts paid in customs duties 'by the Stat-es, but it is said that large amounts were paid in connexion with the hydro-electric scheme in · Tasmania, and with railway development in Western Australia, and that during the

four years of the railway r ehabilitation scheme in South Australia, aft-er allowing for rebates, £600,000 was paid in customs duties.

Unijo1·m Customs Rai: e in f01 ·ce when goods a1·e entered for consumption.

Customs duties are to be uniform throughout the Com­

monwealth, as " uniform " duties of customs were to be imposed withiu two y-ears after the establishment of the Commonwealth, and the power of the Commonwealth Parliament to impose duties of customs and excise was to become exclusive on the imposition of "uniform " duties

of customs (ss. 88 and 90 of the Constitution). I t was urged before the Commission that where the tariff is increased between the

date on which a vessel arrives at its first Australian port, and the date on which it subsequently arrives another Australian port, the manner in which effect has been given in the Customs Act 190171925 to the principle of uniform i ty has in:fiicted a hardship on merchants landing goods in those ports, such as Hobart or Brisbane, which are, or

may be, the. last port of call of oversea vessels. Under s-ection 132 of that Act all import duties are to be paid at the rate in force when the goods are entered for home consumption. If, for instance, the tariff is increased between the arrival of a vessel at Fremantle and its arrival · at Brisbane, lower duties are paid on goods landed at Fremantle and

entered there for home consumption than on goods landed at Brisbane and entered there for home consumption.

Resolutions on this subject have on sever al occasions been presented by the Associated Chambers of Commerce, including the following resolution, which is set out in Exhibit 62 (evidenc-e p. 1483) :-" That it be a recommendation to the Commonwealth Govern­

ment that the Customs Act be amended to provide that, as soon as an overseas vess-el has r evorted to the Customs at first port of

1031

130

call in the Commonwealth, the rate of duty leviable on that elate shall be the legal rate for the whole of that vesse l's cargo if

ent-ered for home consumption, and that the Customs Act be amended accordingly." The ciaim is, in effect, that once a vessel is entered at au Austr:tliau port the rate of duty. on goods imported in that vessel should be the sam-e wherever those goods are landed. Under the present system an importer of goods at one port of call may pay a less rate than an

importer at a later port, and may possibly be able to undetsell the later importer by transferring his goods from one State to another. Section 132 of the Customs Act makes administration simple, and while it may be practicable to amend it without creating any serious difficulties, care will be needed not to infringe the requirements as to uniformity, and

after such an amendment it might happen that there would be similar goods in different ships in port cleared on the same day, paying different rates of duty.

Indirect use of the Excise Power . . The Excise Tariff 1906 (No. 16 of 1906) provided that duties of excise should on and from the 1st January, 1907, be impos-ed on the dutiable goods specified in a schedule to the Act at th-e rates specified in the schedule, but contained a proviso "that this Act shall not apply to goods manufactured by any person in any part of the Commonwealtl1 under conditions as to remuneration of labour which (a) are declared by a resolution of both Houses of Parliament to be fair and reasonable; or (b) are in accordance with an industrial award under the Com­ monwealth Conciliation and A r·bitration Act 1904; or (c) are iu accordance with the terms of an industrial agreement fil ed und-er the Commonwealth Conciliation and Arbitration Act 1904; or (d) are, on an application made for the purpose to the President of the Com­ monwealth Court of Conciliation and Arbitration, declared to b-e fair

and reasonable by him or by a Judge of the Supreme Court of a State or any person or persons who compose a State industrial authority to whom he may refer the matter" (s. 2). An account of this att-empt to regulate conditions of manufacture of the agricultural implements specified in the Act by an indirect use of the power to impose duties of is given in the evidence of Mr. E. T. I-Iall, Comptroller-

General of Customs (pp. 382-383) :- ·

"With the obj-ect of furthering its declared policy the second Deakin administration passed in 1906 an Excise Tariff Act which imposed certain duties on certain types of agricultural machinery. This Act was assented to on 12th October, 1906, and on the day assent was given to a Customs Tariff Act which revised the duties on similar types of agricultural machinery imported. Under the Customs Tw·iff Act 1906, power was given to the Governor­ General to reduce the rat-e of import duty set out in the schedule to the Act in respect of stripper . harvesters, if he was satisfied that the cash prices at which stripper harvesters and drills manu-:­ factured in Australia were sold exceeded prices specified in the Act

but so that the reduction should not reduce the rate of duty one-half the rate of duty imposed by the Act. The whole of the Customs Tariff Act 1906 (No. 14 of 1906) was repealed by the Customs Tariff Act 1908, assented to on 3rd June, 1908.

131

The rates o:f excise duty imposed under the E x cise Tar'iff Act 1906 on .locally manufactured agricultural machinery of certain types were 37i per cent .. of those imposed by the Cttstorns Tariff Act 1906 on agricultural machinery of identical types imported prior to

7th September, 1906, and 50 per cent. of the rat-e imposed on those imported after that date. The legality of the was questioned •

by certain Australian manufacturers, and the leading case of The King ancl the Minister of State fo1· the Commonwe-alth administer·ing the CtLstonu (plaintiffs) v. Barger (defendant), and the Commonwealth and A. W. Smart, Collector of CtLstorns (plain­ tiffs) v . . iVI cK ay (defendants) was contes ted in the High Court of Australia.

The circumstances giving rise to the action were as follow:­ An action was brought by His Majesty the King, and the Minister of State for the Commonwealth administering the Customs against William Gabriel Barger, wherein the staternent of claim alleged

that the d-efendant, a manufacturer of agricultural implements, on the 8th, 9th and lOth January, 1908, manufactured in Melbourne certain specified implements, being "stump-jump ploughs" and " cultivators-:-'-other than disc cultivators ", that such implements were dutiable goods specified in the schedule to the E xcise Tariff

Act 1906 (No. 16), and were not manufactured under any of tht' conditions as to remuneration of labour specified in the proviso to section 2 of the AGt; that the implements were not. manu­ factured pursuant to the provisions of the E xcise A ct 1901; and that defendants manufactured the implements specified without

having obtained a licence to manufacture from the Collector of Customs pursuant to the Excise Act 1901 and without having a licence to manufacture in force in any State on the days mentioned or at all. The plaintiffs jointly and severally claimed a penalty

in respect of each of the implements specified. The defendant demurred to the whole of the statement of claim, and the demurrer was set down for hearing before the Full Court, the question being whether the Excise Tariff Act 1906 (No. 16) w as valid.

Another action was brought by the Commonwealth and Archibald W ,illiam Sma1·t, Collector of Customs for the 8tate of Victo1'ia, f or· and on behalf of the Commonwealth, against H. V .. NicKay, and in the statement of claim it was alleged that the defendant, a manufacturer of agricultural implements, had on and between 1st

January, 1907, and 8th November, 1907, manufactured certain stripper harvesters of which defendant was the owner, and that all the implements were dutiable goods specified in the . schedule to the Excise Tariff Act 1906 (No. 16), and were not manu­

factured under any of the conditions to the remuneration o-f labour specified in the proviso to section 2 of that Act; and that the defendant had not paid the duties of excise imposed in respect of such implements by the Excise Tariff Act 1906 (No. 16), and still refused to do so. The plaintiffs jointly and severally claimed

£-20,000, the amount of the excise duties payable in respect of such implements. The defendant demurred to the whole of the statement of claim, and the demurrer was set down for hearing before the Full Court, the question being the same as in the

first-mentioned action. Both the demurrers were heard together. The State of Victoria obtained leave to intervene in both cases.

1033

132

The High Court of Australia in announcing its decision that the E xcise Tariff Act 1906 (No. 16) was ultra vires the Coi;tstitution stated that the Act (i) was not an Act imposing duties of excise, but was an Act to regulate the conditions of manufacture of

agricultural implements, and was therefore not an exercise of the power of taxation conferred by the Constitution; (ii) was invalid as dealing with matters other than duties of excise contrary to section 55 of the Constitution; (iii) was invalid on the ground that it authorized discrimination; and therefore discriminated between States ·or parts of States within the meaning of section

51 (ii) of the Constitution, and authorized the giving, and there­ fore gave preference to one . State or a part thereof within the meaning of section 99 of the Constitution."

The position of the States. The effect of the exclusion of the States from the field of excise has already been mentioned. Commonwealth legislation has had . some indirect effect on State taxation besides reducing the taxable capacity of the people. The Commonwealth Parliament has legislated so as to make the interest on State loans liable for Federal income tax. By section ·1 of the Taxation of Loans Act.1923 the interest on Commonwealth loans is to be liable to State income tax, but this section is not to commence until a date to be fixed by proclamation, and no proclamation has yet been issued. Prior to the passing of that Act it was beyond the power of the States to tax Commonwealth loans, and where the Commonwealth Parliament, in the exercise of its power to make laws with respect to borrowing money on the public credit of the Commonwealth, had issued loans free of State tax, a State could not legislate so as to include the interest on a Commonwealth loan in the income of a tax-payer for the purpose of fixing the rate of tax payable by him to the State (The Commonwealth v. Co_mmissioner of Income Tax, Queensland, 29 C.L.R. 1). The States were unable to tax servants of the Commonwealth until the Commonwealth Salaries Act 1907, under which a State may tax the salaries of officers of the Commonwealth residing in the State, earned in

the State, provided that the taxation is not at a higher rate or to a

greater extent than is imposed on other salaries of the same amount earned in the State (Chaplin v. Commissioner of Taxes for South Australi a, 12 C.L.R. ·375; the Engineers' case, 28 O.L.R. at p. 157). Commonwealth property is not liable to State taxation or to municipal rates (s. 114 of the Constitution; Municipal Council of Sydney v.

Commonwealth, 1 C.L.R. 208), but in practice it is usual for the Commonwealth to make allowances, regarding its payments as a return for services rendered (evidence, p. 109). It was said that in some circumstances land held by the Commonwealth for soldiers' homes was unrateable, and that rates are not paid (evidence, p. 651) .

R esidents of another State. Dottble Taxation. A State is prevented from taxing a resident of another State at a higher rate than it taxes its own residents, but the provision of the Constitution which deals with the matter has only a limited operation as apparently "it is discrimination on the sole ground of outside the legislating State the Constitution aims at in section 117 "

(Davies and .Jones v. West ern Australia, 2 C.L.R. at p. 47).

138

The Constitution does not prevent an Australian taxpayer from being liable to taxation by two or more States in respect of the same asset. Instances of this double taxation are given at pages 1518-1519 of the evidence :- ·

"The anomalies which result from the StatE?s levying taxes ·both on the basis of the situation of the · asset and on the basis of

domicile can be seen from the following remarks of the Chairman of Directors of Bagot's Executor and Trustee Company Limited, Adelaide (Honorable W. G. Duncan), published in the Adelaide .Advertiser and Register on 21st May, 1924, extracts from which

are as follows:-'Under the existing law, if the estate of a testator having died domiciled in this State, possesses shares on, say, the Melbourne register of a company, which also has a share

register in Sydney, the executor is liable to pay South

Australian succession duty and Victorian and New South Wales probate duties, and if the company possesses assets in Queensland, then the executor is required to also pay

Queensland probate duty, calculated on the value of the deceased's share · (as a shareholder) in such assets. Added to these duties is Federal estate duty, if the net value of the estate exceeds £1,000, making altogether five different duties. Added

to this is the expense and unavoidable delay in re-sealing in some of the States-a process that often takes weeks, and iu some cases months to finalize, thus preventing the executor from promptly dealing the particular asset or assets

involved. To quote an actual case :-My company is an executor of the .estate of a deceased·person who died in 1923. Amongst the deceased's assets were shares on the Melbourne register of a

well-known limited company, whose head office is in Sydney. Among the assets of this limited company are some situate in Queensland. In the first instance, the deceased being domiciled · in South Australia, my company had to. pay (1) South Aus­

tralian succession duty; then (2) Victorian duty, because the shares were on the Melbourne register of the limited company; then (3) New South Wales probate duty because of section 103 of the N evv South Wales Stamp Duty Act, which reads, inter alia) as follows:-' The estate of a deceased person, whether domiciled at the time of his death in or out of New

South Wales, shall also be deemed to include (c) every share held by such person in any corporation, company or society having a share register in New South Wales for any purpose whatsoever; then ( 4) Queensland probate duty calculated on

the deceased's share (as a shareholder) in the assets situate in • Queensland of the limited company-this particular duty is payable by the executor to the limited company acting on behalf of the Queensland Government-that is, that Govern­

ment makes the limited company its collecting agent; then ( 5) Common wealth estate duty .(the net value of the estate being over £1,000) '. In another instance brought before the Taxpayers' Association of Queensland-an estate administered by the Public Trustee of New South Wales, where the estate included 1,160 shares in a large

1035

134

public company, valued at £2,291-the shares were assessed as assets for New South Wales probate duty at full value under the Stamp (Death Duties) Act, being shares in a company incorporated outside of New South vVales, and carrying on pastoral pursuits in

that State. They were also assessed as assets in Victoria at full value, being on the share register in that State, and in Queensland under the Succession and Probate Duties .LL\..ct at £426,, being a proportion based on the relation Queensland assets of the company

bore to total assets. Thus shares worth £2,291 were, in fact, taxed as if they were assets valued at £5,008. In addition, Commonwealth estate duty ·would, of course, be payable also." Other instances might be cited, arising from the duties payable on partnership assets. ·

The question: of double taxation was discussed by a Premiers' Conference held in 1924 and referred to a committee of State taxation officials, who unanimously passed the following resolutions (evidence, p. 1561) :-

" That in the opinion of this conference a solution

for the cessation of double death duties upon shares in companies held by deceased persons at the date of death would be for each State, irrespective of domicile of deceased, to refrain from directly levying duty on shareholdings where the registers of such companies are situated in their State, and to levy on shareholdings only in the State where the companies' works or business is actually carried on.

In the event of . the works or business of the . company being actually carried on in more than one State, duty should be levied in such States upon the proportion which the assets in such State bear to the total assets of the company wheresoever situated". The views expressed in resolutions, however, have not been universally accepted. The following alternative was proposed by Mr. Fitzpatrick, Commissioner of Stamp Duties for the State of Queens­ . land (evidence, p. 1562) :-

"Shares in Companies.-Basis of settlement of this double taxation question} 'which} if adopted) wou.zd· fairly meet the position. (a) Where a person died, domiciled in Queensland possessed of shares in a company incorporated in and carrying on business solely in the United Kingdom, or incorporated in and carrying on business solely in any of the States of the Commonwealth other than .

Queensland, or such company is carrying on business ih the United Kingdom and one or other of the States of the Commonwealth other than Queensland, the whole of the succession duty paid els6-where in respect of such shares to be allowed as a deduction against

the duty assessed in Queensland in respect of such shares. (b) Where a person died domiciled in the United Kingdom, or died domiciled in any one of the States of the Commonwealth possessed of shares in a company incorporated in Queensland and

carrying on business in that · State and having all its assets in Queensland, then irrespective of the domicile of the person so dying, or the locality of the share register upon which such shares are recorded, the total value of such ,shares to be chargeable with duty in Queensland, and such duty to be allowed as a deduction against the duty payable, if any, where such person died domiciled.

135

(c) Where a company incorporated in Queensland, and having assets in Queensland, _is carrying on business outside Queensland and has assets outside Queensland, duty shall be paid in Queensland on the death of a shareholder in such company upon the value of the shares so· held, irrespective of the domicile of the deceased share­ holder, or of the share register upon which such shares are recorded

in the proportion that the value of the assets of the company in Queensland bears to the total value of the assets of the company. Provided, however, if such company has assets in any place where this basis of reciprocity is not applicable in the place of domicile,

and if there are no assets of the company in the place of domicile, then such assets shall be included with the assets in the place where the head office of the company is situate or such company i,s incorporated.

In regard to the assets of such Queensland company situate outside Queensland, duty shall also be payable where such assets . are situate upon the value of the shares in the proportion that the value of such assets bears to the total value of the assets of the

company.

(d) Where a company incorporated outside Queensland is carrying on business in Queensland and elsewhere, duty shall be paid on the d·eath of a shareholder in such company upon the value of the shares so · held, irrespective of the domicile of the deceased

shareholder or where the head office or share register of the

company is situate, in the proportion that the value of the of

the company in Queensland bears to the total value of the assets of the company wheresoever situate. Similarly duty shall be collected in the United Kingdom or other State of the Commonwealth on the value of the shares held by the deceased member in the proportion

that the value of the assets of the company in any such place bears to the total value of the assets of the company.

Provided:,- however, where such company is carrying on business and has assets in any country or place other than the · U nitecl Kingdom or States of the Commonwealth where this basis of reciprocity has been agreed upon, and the deceased member in such company died domiciled either in the United Kingdom or in one or other of the States of the Commonwealth (where reciprocity has been agreed upon), there shall be added to the value of the assets situate in such country or place where the deceased member was domiciled, the value of the assets of the company situate elsewher e

than in the United Kingdom or States of the Commonwealth where reciprocity as aforesaid has been agreed upon, and duty b1:J paid in such country or place of domicile as aforesaid on the value of the shares or other interests in the proportion that the value of the assets as so ascertained bears to the total value of the assets of the company.

(e) In the case of a company incorporated within or without Queensland and such company's principal business is pastoral, agricultural production, mining, or timber getting (primary industry) all moneys in bank or other liquid or movable assets shall proportionately the destination of the 'primary assets'

of the company.

1037

136

(f) Provided that if this basis of assessment of shares in com· panies is adopted, the maxim mobilia sequuntur personam in so far as shares in companies are affected by this basis of reciprocity, shall be modified accordingly.

(g) The matter of the collection of the_ duty on this basis should be quite a simple matter and easily adjustable between the parties to any arrangement on the above basis."

Probate and Letters of Administration. The Commonwealth has no power to regulate the grant of probate or letters of administration, and Federal estate duty is not properly described as a testamentary expense (Shelley v. New South Wales

Institution for Deaf, Dumb and Blind, 1919 A.C. 650). Where an executor or administrator obtains a grant of probate or letters of administration in one State, he cannot deal with assets jn another State, unless he obtains the necessary authority under the law of that State by re-sealing or by another grant. Resolutions in favour of a provision for a single probate for the whole Commonwealth have been passed by the Associated Chambers of Commerce from time to time (evidence, p. 1496). It was thought by witnesses (evidence, pp. 899, 1045-1046, 1562) that there would be no practical

or administrative difficulties involved in the grant of a single probate, though tuere would be a slight loss revenue to the States. ·

137

XIII.-APPROPRIATION.

The only constitutional limitations on the power . of the Common-. wealth Parliament to appropriate the Commonwealth Revenue Fund are those which are mentioned or referred to in s. 81. The Common-· wealth Parliament cannot disr-egard the charges and liabilities imposed

by the Constitution, or the obligations of the Commonwealth under the Financial Agreement of the 12th December, 1927, but subject to these charges liabilities and obligations it may appropriate any part of the Fund "for the purposes of the Com·monwealth." The important ques­

tion is whether, and if so how far, these words limit the power of

appropriation. "Unquestionably the Commonwealth may appropriate money for the maintenance of its government and for the execution of any of the objects which have been committed to any branch of it. Does the power of appropriation extend beyond this, so that the Parliament having a general power of taxation, has an equally general power to

expend the proceeds of that taxation as it thinks fit without regard to whether the object of expenditure is for the purpos-e of and incident tO' some matter which belongs to the Federal Government?" (Harrison 2nd edn., p. 523). The answer to the qu-estion may make a

number of appropriations liable to be examined by the High Court, or it may allow the Commonwealth Government to trench up'on the functions of the States, arid at the same time affect the possibility of there being any surplus revenue for distribution among the

The difficulties of the problem were present to the minds of the framers of the Constitution. In the Convention of 1891 a fear was expressed on the one hand that the Treasurer of the Commonwealth might have to consult the law officers of the Crown on every item of the

-estimates, and on the other th.at 'the Commonwealth Parliament might, by the expenditure of money for purposes outside its sphere, encroach upon the sphere of the States. Sir Samuel Griffith, who had pre­ viously thought that some was n!3cessary to guard against

the latter possibility, told the Convention that he had been thinking ·about the matter for several months and had come to the conclusion the clause, in the form in which it then stood, contained "all the

limitations that we can really insert, however many words we may use to express them " (Convention Debates, Sydney, 1891, pp. 788-789). At that tim-e the Consolidated Revenue Fund was to be appropriated for " the public service " of the Commonwealth. In the Convention of 1898 Mr. Isaacs, now Sir Isaac Isaacs, pointed out that some of the

proposals in the Finance Committee's report were to the effect that a portion of the Consolidated Revenue Fund was not to go to the public services of the Commonwealth, but to b€ returned to the States, and suggested that the words "public service of the Commonwealth" were

not sufficiently large to cover the proposed return to · the States. Apparently as the result of his suggestion the word "purposes" was substituted as a drafting amendment for "public service" (Convention Debat-es, Melbourne, 1898, pp. 899-900).

In its present form the section is capable of more than one inter­ pretation. The section is discussed in the evidence given before the Commission by Sir Robert Garran, Sir Edward Mitchell, and Mr. Owen Dixon, now Mr. Justice Dixon, the last named submitting a

1039

138

memorandum which had been prepared by a sub-committee on behalf of the Committee of Counsel of Victoria. These witnesses differed as ro the true interpretation of the section, the most important divergence of view being that Sir Robert GaiTan treated the section as containing a power of appropriation which is not confined to subject-matters withi'n the specific legislative powers of the Federal Parliament (evidence, p. 1721), and that Sir Edward Mitchell and Mr. Owen Dixon treated the section as limiting the objects of appropriation (evidence, pp. 760-761, 780).

Sir ·Robert Garran's view is that the Com.;monwealth, in the sense in which the term is used in the phrase "for the purposes of the Com­ monwealth," includes the States and not merely the central govern­ ment, and that the Commonwealth Parliament may appropriate for any

purpose which it considers to be a purpose of the Commonwealth. Even if the power of appropriation is not unlimited, the purpose of an appropriation is, in his view, a political question on which the Court would not interfere, unless it could be satisfied that the purpose was one which could, by no conceivable means, have any interest for the Commonwealth qJta Commonwealth, or have any relation to any of the powers given to th-e Commonwealth by the Constitution (evidence, pp. 69-73). .

In Sir Edward view the power of appropriation is

limited, "the purposes of the Commonwealth " including not merely everything about which the Commonwealth Parliament may legislate, but also everything which the Executive Government may do without express legislative authority. At the same time there would, in his view, be a practical difficulty in the way of any attempt to test the validity of an ordinary Appropriation Act in a court of law.

"There is a good deal of difficulty in saying what is the meaning of the words 'purposes of the Commonwealth'. No doubt these are_ words of limitation, and some meaning must be given to them. You cannot deal with the disposal of the revenues . or moneys raised or received by the Executiv-e just as though no such words existed, simply because the Federal legislature deter­

mined that they should be disposed of in a certain way. I think there would be great practical difficulty the Federal Par,-­ simply passes an ordinary Appropriation Act, in which

moneys are specifically voted for a certain purpose, to find a com­ petent plaintiff having a valid locus standi to sustain a complaint in a court of law. I have no doubt that "the purposes of the

Commonwealth" include everything as to which the Parliament can legislate, and I think they also include everything in regard to which the Executive Government of th-e Commonwealth can lawfully do" (evidence, pp. 760-761). In Mr. Owen Dixon's view the power of the Commonwealth Par­ liament to · appropriate money is restricted to the subjects assigned

to the Federal legislative power (evidence, p. 780). In America, although appropriations in aid of purposes outside the enumerated subjects of legislative power have . been common since the first Congress, no ·appropriation by Congress has ever been held bad. Congress appears to have acted consistently on the view that Federal expenditure is not restricted to those subjects, and several eminent publicists regard the doctrine, that Congress may appropriate

. 139

money in aid of matters which the Federal Government of the United States is not constitutionally able to administer and r egulate, as being now establish-ed ( cf. l!filloughby, Constitutional Law of the United States, vol.l, p. 588; and Hare, American Constitutional Law,

vol. 1,.p. 245). ·

Sir Robert Garran regards this doctrine as being in effect applicable to appropriations by the Commonwealth Parliam-ent, notwith&tanding some · differences between the Australian and American Constitutions, including the ·words under which Congress may provide "for the welfare of the United States," and the words under ·which the Con­

solidated Revenue Fund of the Commonwealth is to be appropriated by th-e Commonwealth Parliament "for the purposes of the Common­ wealth", and he cited a number of American cases in which the validity of appropriations by Congress had been unsuccessfully called in ques­

tion, among them being the case of Massachusetts v. lYieUon (262 U.S. 447), which was concerned with money appropriated by Congress to the States for the purpose of reducing maternal and infant mortality and of protecting the health of mothers and infants, and in which it was held, in 1923, that questions raised by a State as to the right of the Treasury to disburse the money was not justiciable (evidence, pp.

70-71). Mr. Owen Dixon's view is indicated at p. 780 of the

evidence-" The High Court would no doubt give great weight to this doctrine, if it were support-ed by decisions of the United States Supreme Court, or had obtained universal acceptance. But the

fact appears to be that American theory was opposed to it, but was first disregarded and then o-v-erthrown by Congressional prac­ tice. Moreover, the structure of the Australian Constitution and the terms in which the rele-vant pro-visions are· expressed diff-er

materially from those of the United In connexion with the question whether the Commonwealth Parliament could, if it so desired, legislate for the establishment of a system of child endowment, opinions which dealt, among other matters, with the scope and operation of section 81, were obtained by the Royal

Commission on Child Endowment from Sir Robert Garran, Sir Edward :Mitchell, Mr. Owen Dixon, and :Mr. Maurice Blackburn. From the summary at pp. 10-15 of the r eport of that Commission (15th December, 1928), it would seem that Mr. Blackburn did not regard the Common­ wealth Parliament as ha-ving an absolute power of appropriation fo r such purposes as it deems proper, but that if the Parliament voted money for some purpose not within its legislative competence nor

authorized by the Constitution, the appropriation could only be assailed by a State, and on the ground that the money was "surplus r evenue" within the meaning of section 94 of the Constitution. Several methods by which the question might possibly be raised

before an appropriate Court are briefly discussed or indicated in the evidence gi-ven before this Commission (pp. 790-791) and in the report of the Royal Commission on Child Endowment (pp. 10-15). Mr. Owen Dixon was of opinion that the Attorney-General for the Commo.nwealth

could raise the question by a suit in the High Court, or could gi-ve hi!'l · fiat to enable a litigant to do in the name of the

(e-vidence p. 790). Other poss1ble methods referred to by Su Edward F.l251.-IO

1041

140

Mr. Owen Dixon or Mr. Blackburn were (a) · by proceed­

lUgs against an officer who paid out money, if the Act

under which he did so were invalid; and (l:J) where an Act sought to safeguard the administration-of money by imposing a penalty in cases of improper receipt, and some person was prosecuted for a contravention of the Act, by a defence thaf the provisions of the Act, or at least those of its provisions which imposed the . penalty, were 1.-t.ltra vires. At the same time Mr. Owen Dixon pointed out that the problem of procedure has not yet been fully investigated and has not been solved (evidence, p. 790).

The question was raised in Parliament in 1903, in the debate on the Naval Agreement Bill, by Mr. Higgins, afterwards Mr. Justice Higgins, wh,o expressed grave doubts as to the correctness of the view that section 81 gives the Parliament an unqualified power of appro­

(Parliarnenta11y 1903, pp.

In memorandum presented to Parliament in 1908, the Honorable L. E. Groom, now Sir Littleton Groom, who was then Attorney-General, discussed the appropriation power in connexion with a proposal for the establishment of an Australian Bureau of Agriculture, and after referring to the American precedents the opinion that " as

regards the Commonwealth power of appropriation the words are in terms as general as those contained in the United States Constitution, and are accompanied by no specific words of limitation, the only condition being that the appropriation must be 'for the purposes of

the Commonwealth'." At the same time he expressed the opinion that the power to organize such a department mig·ht be incidental to speci:tic powers under the Constitution-for instance, interstate com­ merce, statistics, foreign trade and quarantine (Parliamentary Papers , 1907-8, p. 1151).

· In practice the Commo:p.wealth Parliament has, it is said, always acted on the assumption that section 81 gives it an absolute power of appropriation for general purposes (evidence of Sir Robert' Garran, p. 69). '

141

XIV.-TRADE AND COMMERCE. FREEDOM OF TRADE, COMMERCE AND INTERCOURSE AMONG THE STATES.

TRADE AND CoMMERcE.

The provisions of the Constitution. The power of the Commonwealth Parliament to make laws with respect to trade and commerce is defined by sections 51 ( i) and 99 in general terms, and in particular terms by the provisions of section 51

relating to bills of exchange, weights and measures, patents, trade.:. marks, and corporations, which in effect enlarge the trade and commerce power and authorize legislation with respect to trade and commerce within a State, so far as those matters are concerned. The power of

the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State (s. 98). ·

Under section 51 (i) the Parliament of the Commonwealth may make laws with respect to trade and commerce with other countries and among the States, but this power is subject to the requirements, in section 99, 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. The Commonwealth has no power to make laws with respect to trade and commerce within a State, except in so far as it is specifically authorized. It cannot, ·

therefore, pass a uniform Sale of Goods Act or Partnership Act, nor can it inquire into the working of a corporation carrying on business within a State. It may r egulate routes that may be used for interstate commerce, and thus control airways; but it cannot control aviation

within a State. The Commonwealth cannot carry out a marketing scheme under which it could fix both the quotas of a commodity which may be consumed within a State, and the quotas which may be used in interstate trade or in export overseas. To carry out any marketing

scheme of this character the Commonwealth must depend on the co-operation of the States, but is entitled itself to pass laws dealing with export overseas, or interstate traffic. The Commonwealth has acted on this power with regard to export trade in r elation to a number of commodities, and by the Inter-State Dried Fruits A ct 1928 it ha;; legislated in order to regulate trade between States, after portions of

State Acts passed with this object had been declared invalid. The manner in which the limitation of the Commonwealth's powers has hindered a majority in the Commonwealth Parliament for the time being may be gathered from the proposals made to alter the Constitution with relation to trade ·and commerce and monopolies, put before the

people and rejected in 1911 and referendums of

included a proposed law for an alteratwn to trusts and combmes. Similar proposals were put forward in 1919. Speeches made in Parlia­ ment in relation to these proposals are quoted in the evidence of Mr. J. J. Kenneally 1101-1113). ·

The powers of the Commonwealth Parliament with respect to trar.le and commerce are similar to those of the Congress of the United States, but as the States of the Commonwealth are, on the average, larger than those o£ the United · States and have their own coastlines, and as

1043

142

much of the trade and commerce of Australia in manufactured goods is in the capital cities of the States, which are large centres of population, and between the capital city and the rest of

a State, the powers of the Commonwealth Parliament are in fact more restricted in this respect than those of Congress. In the United States it has proved in some instances so difficult to draw a distinction between interstate ai::td intra-state commerce that Federal legislation has superseded that of the States. This condition is not so likely fo prevail in Australia, and has become less likely as the concentration 0f the population in the great cities of New South Wales, Victoria, and South Australia has increased.

The restriction in section 99, on. the power conferred in

section 51 (i), that a law r elating to trade and commerce

must not give preference to one State or any part thereof,

is similar to that contained in section 51 (ii) relating

to taxation, and in section 51 (iii) relating to bounties. These

restrictions do not prevent the Commonwealth conferring a benefit on one State or part of a State which is not enjoyed by another State or part of a State. A bounty on cotton would not be unconstitutional because the greater part of the cotton produced in Australia is grown in Queensland, and similarly the amendment of the Navigation Act by

the Act No. 8 of 1926, which in general terms permits unlicensed vessels to engage in inter-state traffic, where it is shown to the satisfaction of the Governor-General that tourist traffic is injured or retarded, is not an infringement of section 99, merely because the State of

Tasmania depends more than any other State on tourist traffic by sea. The restrictions are aimed at distinctions which are based on

locality so that the Commonwealth Parliament may not give preference to a State as a State, or to a part of a State because it is part of the

State named. It is said in Barge1·'s case that the provision in section 51 (ii) under which the Parliament i.s not to "discriminate between States" and the provision in section 99 tinder which the Commonwealth is not to "give preference to one State over another State " seem to be identical in purport and effect, that "discriminate between parts of

States" may or may not be identical with "give preference to any part " of one State " over any other part " of another State, but that "the treatment that is forbidden, discrimination or preference, is in relation to the localities considered as parts of States, and not as mere Australian localities, or parts of the Commomvealth considered

as a single country" (6 C.L.R., at p. 107; cf., Oamerons case, 32 C.L.R., at pp. 72, 76, 78, 79). Matters within the trade and commerce power. In section 51 (i) the terms are "trade and commerce with other countries and among the States", and in section 92 "trade commerce and

intercourse among the States ", intercourse including non-commercial intercourse (Smithers' case, 16 C.L.R. at p. 113). The meaning of the terms is discussed in McArthur's case (28 C.L.R. at pp. 546-549) :-" The terms ' trade, commerce, and intercourse' are not terms of

art. They are expressions of fact, they are terms of commqn knowledge as well known to laymen as to lawyers, and better under­ stood in detail by traders and commercial men than by Judges. The particular instances that may fall within the ambit of the expressions depend upon the varying phases and developmen t of

143

trade, commerce and intercourse itself. Aviation and wireless telephony have lately added to the list of instances, but the essential character of the class r emains the same. ' Trade and commerce' between different countries-we leave out for the present the word

'intercourse '-has never been confined to the mere act of trans­ portation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. All the coi:nmercial arrangements of

which transportation is the direct and necessary result form part of 'trade and commerce·'. The mutual communings, the negotiations verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations ·which the world calls 'trade aud commerce'. . . . In Welton

v. lrlissmtri [91 U.S. 275, at p. 280] Field, J., speaking for the Court said: ' Commerce is a term of the largest import. It com­ prehe11ds intercourse for the purposes of trade in any and all its forms, including the transportation, purchase, sale and exchange ·of

commodities between the citizens of one country and the citizens or subjects of other countries, and between the citizens of different States .' In the very recent case of Public Utilities Oommi.ssion v. London [249 U.S. 236, at p. 245] the Court said : 'Inter-state com­

merce is a practical conception and what falls within it must be determined upon consideration of established facts and known commercial methods.' It is therefore impossible to limit the 'trade and commerce' either 'among the States' or 'with other countries' to the mere

act of transportation over the territorial frontier. The notion of a person or a thing, tangible or intangible, moving in some way from one State to another is no doubt a necessary part of the

concept of 'trade, commerce, and intercourse among the States'. But all the commercial dealings and all the accessory methods in fact adopted by Australians to initiate, continue and effectuate the movement of persons and things from State to State are also parts

of the concept, because they are essential for accomplishing the acknowledged end. Commercial transactions are multiform, and each transaction that is said to be inter-state must be judged of by its substantial nature in order to ascertain whether and how far

it is or is not of the character predicated. A given transaction which taken by itself would be domestic, as, for instance, transport between two points within a State, may in a particular instance be of an inter-state nature by reason of its association as part of a larger integer, having as a whole the distinctive character of com­ merce between States. On the other hand, a transaction which is

inherently of an inter-state char'acter, as passage of goods between two States, is none the less inter-state because a contract out of which it arises is itself a domestic contract. The mode of fulfilment of the contract may be optional, one mode being intra-state and the other (the one assumedly adopted) being by move­

ment and in that case the inter-state movement remams mter-state the impelling motive may be. The meaning of the

expression 'trade and commerce am_ong the States' must be the same, in sec. 51 (i ) and sec. 92, and m both must embrace all that is ordinarily comprised within the term' trade and commerce' when taking place 'among the States'."

1045

144

Some of the matters which come within the trade and commerce power are indicated in the above extract from the judgment of the Chief Justice, Sir Adrian Knox, and two other Justices, Sir Isaac Isaacs and Mr. Justice Starke, in McArthur's case, and it has been said or decided in other cases that various matters come within the power, though

the High Court has not attempted to make an exhaustive list. The power extends to the transport of goods or persons by land, sea or air as _ well as to . the purchase or sale of commodities, and under this power, with the aid of section 98, the Commonwealth Parliament may legislate with respect to ships, vehicles, or other agencies or means used in the trade or commerce, contractual rights and obligations, and the relations of employers and employees (cf. Australian Steamships Limited v. Malcolm, 19 O.L.R. 298). In the Railway Servants case (4 C.L.R. at p. 540) it is said that " the power to regulate inter-state trade and

commerce, which is involved in the language of sec. 51 (i), is plenary as to its objects, and includes a power to prescribe in every respect the rules by which such commerce is to be governed "-a view which derives support from the principles laid down in the Engineers' case (28 O.L.R. 129).

In exercise of the trade and commerce power the Commonwealth Parliament has legislated on a variety of subjects, including monopolies and agr-eements in restraint of trade, carriage of goods by sea, corq­ pensation to seamen for injuries suffered in the course of their employ­ ment, and licensing of waterside workers (Australian Industries Preservation Act 1906-1910, SearOarriage of Goods Act 1924, Seamen's

Compensation Act 1911, and Transport Workers Act 1928-1929).

Where inter-state trade and commerc e begin and encl. It is not possible to lay down any hard and fast rule which can be applied in a merely mechanical way in order to determine whether a particular transaction is to be regarded as taking place before inter-state commerce begins or after inter-state commerce ends. The question is not whether from a technical point of view the transaction, considered alone and ·without reference to its association with other circumstances, is an intra-state matter, but whether from a business point of view it is so connected with other circumstances that it is a part of inter-state commerce (cf. Petrol case, 38 O.L.R. at pp. 427-430).

In general, goods do not cease to be the subjects of inter-state com­ merce until they have been taken from their original packages and mingled with the other goods in the State, though the "original

package" doctrine is rather a convenient working rule than a definite legal test (Petrol case, 38 C.L.R. at p. 428).

T rade and commerce with other co1mtries. The power to make laws with respect to trade and commerce wit:!:! other countries was exercised in the :first period of the Commonwealth's history through the Customs Act and a number of other Acts with various objects, including the S ea-Carriage of Goods Act 1904, the Commerce (Trade Descriptions) Act 1905, and the Australian In­ dustries Preservation Act 1906-1910. More recently it has been exer­ cised through a number of Acts intended to promote the marketing of primary products overseas, such as the Dairy Produce Export Control Act 1924, the Dried Fruits Export Control Ayt 1924, and the Export Guarantee A ct 1924-1925, as well as by Customs legislation.

145

Administration of Acts to promote the marketing of primary products overseas.

Under the Customs Act 1901-1925 (s. 270) regulations may be made prescribing amongst other things (a) the nature, size, and material of the packages in which goods for export are to be packed; (b) the

maximum or minimum weight or quantity of goods for export which may be contained in any one package ; (c) the conditions of prepara-· tion or manufacture for export of any articles used for food or drink by man; and (d) the c<;mditions as to purity, soundness and freedom

from disease of goods for export. The manner in which the regula­ tions made under this power, and the Acts with respect to marketing primary products overseas, are administer-ed is described in the evidence of Mr. Carroll, Commonwealth Supervisor of Dairy Produce, with

relation to grading ·(p. 425), and Mr. Allen, Chief Veterinary

Officer of the Commonwealth, with relation to inspection of certain goods for export (p. 670). The manner in which the Acts dealing wit1J the export of fruit are administer-ed is described in the evidence of Mr. Scouler, growers' representative, of the Commonwealth Dried Fruits

Control Board (p. 795), and Mr. Balfour, Chairman of the Victorian Dllied Fruits Board (p. 719).

The following extract is from the evidence of Mr. Carroll (p. 426) :-"The supervision of dairy produce intended for the overseas markets was for twelve years carried out by State officials acting. on

behalf of, and under the authority from the Commonwealth, but in 1917 the Federal Government took direct control of the super­ vision of dairy exports, and established the Commonwealth Dairy Branch as a section of the Customs Department. From 1st

January, 19·27, this branch has been transferred to the Department of Markets and Migration."

The following extract is from the evid-ence of Mr. Allen (p. 670) :-"Dealing with fresh or frozen meat export the

establishments or abattoirs at which the cattle are slaughtered or frozen are under the Commerce (Meat Export)

Regulations. These regulations are made under the Customs Act 1901-1922 and the Commerce (Trade Descriptions) Act 1905. In the preparation of meat for export, the one is controlled

by the Department of Markets and Migration."

The following extract is from the evidence of Mr. Scouler (pp. 795:..796) :-"The Commonwealth Dried Fruits Control Board was consti­ tuted under the Dried Fruits Export Control .Act 1924. . . . The

board consists of seven members (a) a Government representative appointed by the Governor-General; (b) four growers' represen­ tatives elected by growers; (c) two members with commercial experience appointed by the Governor-General. . . . The Board

may accept control of any dried fruits placed under its coptro1 for the purposes of the Act; and for the purpose of s-ecuring advances made at the request of the board to the owners of the fruit, the board has power to give security over such fruit.

1047

146

The D1·ied Fruits Export Charges Act 1924 provided for a levy on all dried fruits -exported from the Commonwealth. The levy is collected by the Collector of Customs, and paid from Consolidated Revenue into the Dried Fruits Export Fund. The moneys paiJ into the latter fund are applied by the board in payment of

expenses incurred in carrying out its various functions under the Act.

The Export Act 1924 provides means for

advanees on fruit placed under the control of the board. The Export Control Board commenced to function in time to 'handle the dried fruits export pack of 1925. The Act was passed as a result of representations made to the Commonwealth Government by the growers through the Australian Dried Fruits Association. In the earlier history of the industry, even before it became sary to export, disaster had loomed owing to unorganized marketing. Finally, the growers formed the Australian Dried Fruits Associa­ tion to overcome this trouble, and it functioned with considerable success until, in the post bellum years the export surplus gradually mounted, and other producing countries placed larger tonnages· on the markets. of the world. Prices on the export markets fell to e1 very low level. In 1924, the grower received considerably less than

the cost of production-that is the grower who loyally observed the voluntary export quota which was :fixed by the Australian Dried Fruits Association. Matters became so bad that some growers could not carry on, and, as a result of growers' representations th(] Commonwealth Government passed the Dried Frttits Advances Act 1924, under which moneys were loaned to growers to produce the

crop for 1925. The gro·wers had hoped that an Act could be passed by the Commonwealth Government which would create one body to deal effectively with marketing, both in Australia and · abroad. Finally, State Acts ·were passed by Victoria and South Australia, which provided for a compulsory export quota. Later, Western Australia, and then New South Wales, passed similar Acts. The Export Control Board was created to deal with the problem of marketing the export quota."

The following extract is from the of Mr. Balfour (p. 719) :-

"In view 'of the fact that prod-uction far exceeds the Australian consumption, and that the prices overseas are very considerably below those obtainable on the Australian market, it was found necessary in 19.24 for the Gove7nment of the producing

States to appoint boards to red·ulate the quantities whwh could b\3 sold within the Commonwealth! Legislation is now in force in all the dried-fruit producing with the object of ensuring that

th·e surplus above Australian requirements shall be and that all growers and packing sheds shall share equally in the better prices obtainable on the local market. These boards have, therefore, declared a uniform export percentage of the crop in each State, and supervision of arrangements for overseas sales of these fruits is exercis.ed by a board appointed by the Federal Govern­ ment."

147

}/[ arketing.

It was urged before the Comrnission that the Commonwealth shouliJ ha\re a general legislative power to make laws with respect to marketing. At present, its power extends only to marketing overseas and inter­ state, and it acts in co-operation -vvith those States which haye also

made laws fixing the quotas of dried fruit to be consumed within the State and to be sold interstate. As portions of the Acts of these States have been held invalid as an infringement of section 92, it has been urged that those growers are ])laced at a disadvantage who are willing

to regulate their sales in the interes t of the whole'trade. This difficulty, however, has been to some extent overcome by recent Commonwealth legislation relating to interstate trade. A description of the manner in which fruit-canners and jam

manufacturers have endeavoured to obtain markets for their products overseas by organization among themselves, will be found in the evidence of Mr. J. L. Moore, Secretary of the Commonwealth Jam Preserving and Condiment Manufacturers Association (pp. 368-369).

Export of birds and animals, and the slcins of birds and animals. The power of legislating with respect to trade and commerce with other countries has also been exercised through the Customs Act, for the purpose of regulating the export of birds and animals, and the skins of

birds and animals. For this purpose, committees have been appointed in some of the States to advise the Customs authorities as to how this power should be exercised. It was strongly urged by some witnesses that this power of regulation, or prohibition, had not been used .as ·it

should have been to prevent the wholesale destruction of certain species. If a State does not itself protect the species, the Customs authorities not regulate or prohibit the export of birds or animals, or the

skins of birds or animals belonging to that species, which it is claimed · - have originally come from that State. If the Customs authorities had used their power adequately, they could, it was said, have prevented the vvholesale destruction of native bears in Queensland, and the

excessive export of birds from the north of Australia.

FREEDOM o.F TRADE, Ool\LMERCE, AND INTERcouRsE AMONG THE STATEs.

The interpretation of Section 92. ,

The expression in section 92 of the Constitution "on the imposition of uniform duties of customs, trade, commerce, and intercourse, among the States, whether by internal carriage or ocean navigation, shall be absolutely free", was until the year 1916 interpreted as a command

addressed to the Commonwealth as vvell as to the States, but no Act of the Commonwealth Parliament has been declared invalid as an infringe·­ ment of section 92. In 1916, in the case of Dtmcan v. State of Qu eens ­ land (22 O.L.R. 556) it was suggested, but not decided, that the

command was addressed only to the States, and in 1920, in the case of .ilf.cArthwr Ltd. v. State of Q-ueensland (28 O.L.R. 530), this interpre­ tation was adopted by the High Court. It follows that the power of the Commonwealth Parliament to legislate with respect to trade and

commerce among the States is unfettered, save by the r equirement of sect·iDn 99. It has been said that the right of the citizens is probably not carried much further by the word "intercourse" than the fact of

148

union necessan1y carried it, though the expr.ess prohibition against restriction makes the Australian charter much stronger than the American with respect to trade and commerce (per Barton, J., in R .. v. Smithers, 16 C.L.R. 110) . .

Effect of Section 92 upon the States. By virtue of this section the State of Western Australia has been prevented from imposing a higher licence fee for the sale

of wine produced in another State than for the sale of vvine

produced in Western Australia. The State of Queensland has

been prevented from enforcing legislation to :fix tlie pric.e of

goods in so far as those goods vvere sold in pursuance of

an interstate contract, and so it has been claimed that a State may be prevented from effectively enforcing a price-fixing law. The State of South A.ustralia has been prevented from taxing goods imported from another State and not yet become mixed with the goods of South

Australia, as by a tax on imported motor spirit (the Petrol .case, 313 O.L.R. 425) ; and similar legislation passed in other States has been treated as invalid by reason of that decision. The State of New South Wales has been prevented from enforcing a law for prohibiting per­ sons ·who have been convicted of crime from crossing its borders from other States, but whether a State may not prevent newly released or dangerous criminals from doing so seems doubtful (R. v. Smithers, 16

O.L.R. 110). Again the section do.es prevent a State legislature from fixing quotas of dried fruits produced in a State which may be marketed outside the State, and so has rendered ineffective portions of a number of Acts passed by the Parliaments of South Australia, Victoria, and New South Wales, with the object of promoting the dried-fruits industries, and of apportioning between producers profits of the home market and losses of the overseas market (James v. South A1tstralia, 40 C.L.R. 1). Legislation with the same object, the Dried Fruits Act 1928, has been passed by the Commonwealth Parliament after con­ sultation with the States, but this legislation is subject to the require­ ments of section 99.

Section 92, however, does not affect the title to goods, but only the disposition thereof. It did not, therefore, prevent the State of New South Wales during the War, from acquiring the whole of the wheat in New South Wales, although some of .it was the subject of interstate contracts, or the State of South Australia from recently acquiring those dried fruits only which were the subject of interstate contracts. s'ection 92 may therefore render ineffective any marketing scheme which rests on State legislation, except in so far as it involves the acquisition of goods by the State.

Diseased or infectious animals or plants. It was thought at one time that section 92 would prevent the

enforcement of various State .L\.cts designed to prevent. the importation of diseased or infectious animals or plants from other States.

Apparently conflicting dicta on this point may he found in decided cases. In Duncan v. State of Queensland (22 C.L.R. at p._ 579) it is suggested that a State could prevent traffic in any class of goods by declaring them not to be proper subjects of commerce. In W. & A.

McArthur Ltd. v. State of Queensland (28 C.L.R. at pp. 561-562) certain State Acts prohibiting or regulating the introduction of plants

"

149

or animals from other States are mentioned, and it is stated that these and other such restrictions were terminated by section 92, and future restrictions of a similar character on trade, commerce, or intercourse were forbidden; In the State of South Australia the question was

regarded as so doubtful that on 1st August, 1911, the Commonwealth Government was called upon to issue and did issue a proclamation under the Qua1·ant'ine Act 1908 forbidding the introduction of vines from New South Wales, Queensland or Victoria, for the purpose of

protecting the vineyards of South Australia against phylloxera, and this proclamation was supplemented by others issued on the 25th October,' 1912, and the 4th January, 1913. Similarly proclamations were issued on the 18th July, 1912, and the 18th September, 1912, for­

bidding the introduction of pear, apple, and quince trees into Western Australia (evidence, p. 1043). Apart from these instances, however, the States appear to have relied on State Acts to protect stock and plants within their boundaries from infection from other States, the States o:f Victoria and South Australia relying on the elaborate organization

established for the northern border of New South Wales to protect them from infection from the tick-infested districts of Queensland. The value of the New South Wales system was maintained by expert witnesses not only in Victoria and New South Wales but in Queens­ land. Each State appears to take precautions by legislation against

the introduction of unhealthy stock and plants from other States, and at the same time by intra-state quarantine to isolate infected districts for the purpose of preventing the spread of disease within the Stat-8. In the case of Nelson v. Couch ([1929] 35 Argus L.R. 21) the validity

of the provisions of the New South Wales Stock Act authorizing the pro­ clamation of certain areas in Queensland as infected with tick, and the imposition of restrictions on cattle crossing the border from these districts, was attacked on several grounds, but principally on the

ground that they were forbidden by section 92. By the judgment of the Court, which was equally divided, the validity of the Act · and proclamations was upheld on the ground that the State Act was not an Act restricting trade and commerce but facilitating it, that the

State was not deprived of its rig·ht to legislate for the health of its stock, and would not be so deprived until the Commonwealth superseded the State Acts by a proclamation under the Quarantine Act. State Acts for the protection of stock and plants are therefore valid until the Commonwealth supersedes them.

Agents and dealers. Under section 92 it is thought that a State cannot impose a special tax on commercial travellers from other States, and cannot subject them to income tax in respect of negotiations which do not ripen into con­

tracts within the State. A State may pass a law regulating the affairs of agents within its borders even though those agents may be engaged in inter-state commerce (Roughley , v. New South Wal es; E x parte Beav·is, In re Edwards, [1929] 35 Argus L.R. 1).

Section 92 has · also been thought to prevent a State from

effectively protecting fish, birds, and other animals within its borders. It is thought that a dealer may rely on the section as a defence to

a prosecution for having protected fish, birds, or animals in his posses­ sion, if he can allege that they were imported from another State. ' By

1051

150

this means it is said that the protection of certain birds and :fish in · Victoria and of native bears in New South Wales has been iueffective, there being no protection jn the neighbouring States, and the protected States being powerless to prevent importations from theso States. . Several instances were given in evidence before Com­ mission in which section 92 was blamed for the destruction of native

fauna (but see the remarks of Sir Isaac Isaacs in Nelson v. Couch) [1929] 35 Argus L.R. pp. 32-33.) Section 92 has also been invoked to prevent a State reqmrmg merchants to furnish returns of traffic to and from the State, in order that jt may collect statistics of inter-state trade. Regulations with this object were issued on the 1st F ebruary, 1911, under the authority of the

Tasrnania,n JJ{cirine Boa1·ds Act Arnendrnent Act 1910, and the Secretary to the Attorney-General's Department of the Common­ wealth advised that they were ultra vires section 92 (evidence p. 379). Since the opinion was given the collection of statistics has been discon­

tinued, but it is clear that it could be resumed if authorized by an Act of the Commonwealth Parliament. ·

In the absence of inconsistent Commonwealth legislation; persons engaged in inter-state trade and commerce are amenable to the ordinary la\vs of a State. If for in stance the goods ai·e dangerous, as gun-powder, or wild cattle, or a mad dog, or are stolen or offensive, a dealer cannot deny his obligation to submit in respect of them to whatever laws are

in force in the State on the subject (JJ!fcArthttr's case, 28 O.L.R. at p. 550; JVelson v. Couch) [19291 35 Argus L.R. at p. 23).

I ntox,icating liquors. There is a special provision in section 113 of the Constitution with respect to intoxicating liquors, under which all fermented, distilled, or other intoxicating liquids passing into any State or remaining therein for use, consumption, sale, or storage, are to be subject to the laws of the

State as if such liquids had been produced in the State. A State is, therefore, not debarred by section 92 and cannot be debarred by legisla­ tion passed under section 51 ( i) of the Constitution, from enforcing local or state-wide prohibition. •

T erritories. Section 92 does not apply to Territories, and does not prohibit a State from passing an Act regulating trade commerce and intercourse with a Territory.

151

XV.-NA VIGATION AND SHIPPING. The provisions of the 0 on.stitution. The Commonwealth Parliament has power to make laws with respect to trade and commerce with other' countries and, among the

States (s. 51 (i) ). Section 98 provides that this power ·extends to navigation and shipping. Under covering clause 5 the laws of the Commonwealth are to be in force on all British ships, the Sovereign's ship& of war excepted, _ whose first port of clearance and whose port of destination are in the Commonwealth. Further, by section 76 (iii), the Parliament of the Commonwealth is empowered to conf-er on the High

Court original jurisdiction in any matter of Admiralty and maritime jurisdiction. · These powers must be read in conjunction with the 111 ercha.nt Shipping Act 1894, which applies to all the British

Dominions, but confers a power on each Dominion of legislating in certain respects for its own coastal shipping.

The power conferred by sections 51 (i) and 98 is not limited to transport, but enables the Commonwealth Parliament to r-egulate the reciprocal rights and obligations of those engaged in carrying on that traffic by means of ships. An Act relating to the compensation to be paid to seamen injured in th-e course of their duty is within the

power (Australian Steamships v. J VfalcolmJ 19 C.L.R., 298).

The Navigation Act. The Navigation Act of the Commonwealth was passed in 1912, when it was reserved for the signification of His Majesty's pleasure. Before the Act was introduced a royal commission had inquired

into the subject of navigation in 1906, and there had been corre­ spondence between the legal advisers of the Commonwealth and the legal adviser of the British Board of Trade in -vvhich the latter had challenged the validity of certain sections of the Navigation Act ati

repugnant to the Merchant Shipping Act.

The N Act is divided into a number of parts to .come

into force on a dat-e or dates to be fixed by proclamation. Certain sections of the Act have not yet been proclaimed, others came into force on the 1st July, 1921, the 1st October, 1921, the 1st March, 1922, the 1st February, 1923, the 1st March, 1923, the 1st October, 1923, and the 31st August, 1925.

The Commonwealth Act deals, and can deal only, with interstate · and foreign shipping. Intra-state shipping is subject to State laws .

Different rules may prevail, therefore, and differ ei1t conditions may apply to ships engaged in the interstate coastal trade and ships tr ading solely between the ports of one State. Different conditjons may apply to the same ship, according to the voyage which it undertakes, or the

waters which it traverses. Different standards may be applied in granti11g certificates, according as the certificates are to be used in int-erstate or intra-state trade. The same distinction does not apply to what has been called the rule of the road at sea, and the master

of a vessel, though on an intra-state voyage, m ay be punished by the Federal law for an offence committed in waters traver se d by inter­ state vessels.

1053

102

The coastal clauses of the Navigation Act. Attention was drawn to the coastal clauses of the Navigation Act (Part VI.) by a number of witnesses, including Sir Edward Mitchell who expressed a doubt whether those clauses were valid (evidence, p. 758). .This Commission did not have before it sufficient

evidence on which to come to a conclusion as to the effect of Part VI. of the Navigation Act on the several States, but it was evident that in Western Australia, Tasmania and South Australia the opinion was widely held that by reason of the operation of 'this part these States had suffered a serious grievance through their membership of the Federation.

The effect of the coastal clauses of the Navigation Act

has been the subject of an inquiry by a royal commission

and also m relation to Tasmania by the Public Accounts

Committee of the Commonwealth Parliament. A number of

witness-es before this Commission, particuiarly witnesses in Western Australia, Tasmania, and South Australia, said that these provisions had injuriously affected their respective States, both by reducing the number of ships by which freight might be despatched and by facilitat­ ing an increase of freights and fares. In Tasmania it was claimed that the tourist traffic had been curtailed by removing from the traffic · those ships which were most attractive to ·wealthy passengers. To meet this claim an amendment of the Navigation Act was passed in 1926 exempting from the necessity of obtaining licences under the Act those States whose tourist traffic is shown to have been injuriously affected. It was further stated by Tasmanian witnesses that by reason of the lack of direct communication by interstate steamers with South Aus-· tralia, Western Australia, and Queensland, and the inability of pro­ ducers to ship goods by overseas vessels the cost of commodities had been greatly increased by freights and handling charges, and that business had been· or might be lost through the possibility of delay in fulfilling contracts. It was said that restriction of shipping fell with most severity on Tasmania because of the large extent to which the producers of Tasmania depended on their export trade. Ships may be granted special exemption from the necessity of complying with the provisions of the Navigation Act, but it was complained that exemptions were with­ held in cases. where they might haYe been granted without detriment to Australian shipping, and that Deputy Directors of Navigation did not exercise a sufficiently wide discretion.

By a proclamation issued under the Navigation Act and published in the Commonwealth Gazette the 19th May, 1921, it was declared that the carrying of passengers and cargo between ports in the Northern Territory, and between ports in the Northern Territory and any other · Australian port or ports shall not while the order is in force be

deemed engaging in the coast trade. This proclamation, however, has been interpreted so as not to exempt a .vessel which engages in trade between different ports of the same State and also with a port in the Northern Territory.

Under section 286 of the Navigation Act permits are granted by the Minister for Trade and Customs to specified British

vessels to carry passengers and goods between Fremantle and north­ ·west ports of Western Australia.

153

N·avigation. Owing to the existence of both State and Federal laws relating to shipping and navigation, questions have come before the Courts as to whether in the event of an accident an inquiry should be held by a

State or by a Federal tribunal. It was held in R. v. Turner (39 C.L.R. 411) after consideration of the Merchant Shipping Act, and the Com­ monwealth Navigation Act, that a collision between two ferry boats which took place in waters beyond the range of interstate traffic should be investigated by a State tribunal, and later when a collision occurred within the waters of Port Jackson between an ocean-going vessel and a ferry steamer, it was arranged by the State and Federal authorities that

a joint inquiry should be held. In Hume v. Palmer (38 C.LR. 441) it was held that a master. who had been convicted of a breach of the regulations relating to collisions within the waters of Port Jackson should have been tried under Federal and not under State laws. Evidence was given by the Port of Queensland that cases had

occurred in which there had been considerable doubt as to the proper tribunal, that these doubts had caused considerable difficulty, which, however, had been to some extent overcome by the good feeling existing between State and Federal officials (evidence, p. 1564).

With regard to other· matters relating to administration, the follow­ ing evidence was given by Mr. L. F. East, Secretary, Marine Branch, Department of Trade and Customs (p. 453) :-"This division of control over coasting shipping applies not only

to the particular matters covered by the judgments referred to, namely, manning, accommodation, licensing and rule of the road, but aLso to such other important matters as wireless installations, survey of hull, engines and equipment, _load-lines and depth of

loading, life-saving appliances and boat drills. As regards all these, there is at present one set of rules-the Federal-for inter· state traders and, if the matter is covered ·at all, another-the State-for ves.sels employed within' the State boundaries. The

result is highly unsatisfactory in many ways. It involves, in the first place, unnecessary expenditure of public moneys in that it necessitates the maintenance in each State of two sets, Federal and State, of clerical and highly qualified technical

officers, when one set would suffice. It means diversity of laws, ·with the result that a vessel that engages at one time in interstate, and at another time in intra-state, trading comes in turn under Federal and State jurisdiction, and must comply at such times with the laws of the particular jurisdiction applicable at the moment,

which means, in practice, compliance with both sets. And last, but not least, it means that in certain important respects, as the installation of wireless, vessels under State jurisdiction fail to measure up to the standard which in the view of the Federal law is

essential to the safety of life at sea.

The following are the State · Acts at present in operation in regard to intra-state shipping, and the authorities administering them :-New South Wales, Navigation Act 1901, Department of N avl.gation; Victoria, Marine Act 1915, Marine Board of Vic-\ toria; Queensland, Navigation Act 1876, Marine D epartment;

1055

54

South Australia, Marine Board; and Navigation Act 1881, Marine Board; West Australia, Navigation Act 1904, I-Iarbours and Lights Department, and Tasmania, '.L'he jl.![ arine Boards Act 1889. Seven separate Marine Boards." With this evidence should be compared the evidence of Captain J. E. Morris, late Superintendent of Navigation, New South Wales, and of Dr. Brissenden, K.C., speaking on behalf of the· joint committee of the Bar Council and of the Law Institute of New South Wales. The following extract is from the evidence of Captain Morris (p. 1266).-

" Since 1st October, 1923, the provisions of the .Navigation Act, No. 60, 1901, New South Wales, and amendments, have been limited to . intra-state shipping, but the work of the department at Newcastle and such outports as Richmond -River, Clarence River, Port Stephens, Bulli Jetty, Bellambi Jetty, Port Kembla, and Twofold Bay, has extended to interstate and oversea shipping. I would like to qualify that by adding that the officers of the

,. department are not strictly limited to intra-state shipping,

inasmuch as the pilots who pilot interstate or overseas shipping are und-er my control, and are State servant.s. The department's officers carry out inspections at N.ewcastle for the Commonwealth Navigation Service, and act as agents for the Commonwealth at the other places mentioned. The officers at Newcastle also do Port Stephens. Passenger steamers, cargo carriers, colliers, tugs, and other vessels trading solely within the limits · of the State of New South Wales far exceed the total of interstate and foreign-going ships trading to New South Wales. Practically all intra-state vessels come under inspection and survey by this department, but the survey of interstate vesstJls is distributed among all thr States, and the great majority of the foreign-going ships are not surveyed in Australia, and need comparatively little oversight by the Federal authorities. Inspections of intra-state vessels require much more attention and supervision by reason of theil' limited size and constant voyages than the larger interstate and oversea ships. The work specified is two-thirds State and one­ third Federal in character, the intra-state trade of New South Wales greatly exceeding that of the rest of Australia combined, the coast trade division representin_g in the constant voyages of . coasting vessels more than 70 per cent. of shipping using New

South Wales ports. This percentage holds good with ship surveys and inspections. How far is there overlapping of the functions of the State and Commonwealth Navigation Departments ?-There is no over­ lapping of activities in the sense that work already executed by one department is again carried out by the other, but identical services as under are performed by the two departments in their r-e.spective statutory jurisdictions. These are briefly:-( a) examination of masters, mates, and engineers, for . certificates of competency; (b) survey and inspection of steamships as to condition of hull and machinery, equipment, loading, accommodation, &c., in effect, sea-·

worthiness; (c) marine inquiries, and (d) sailing rules. ·Tho assumption by the Commonwealth in this State of the functions specified did not seriously affect the. volume or importance of the State department's activities. Whatever portion of the alleged

155

overlapping functions might be transferred to Federal control, the fact remains that the State department would still be required to act as a conservancy authority, and State officers at all ports would be necessary for the carrying out of State obligations undet

the Constitution. What do you mean by, 'conservancy authority' ?-At the out­ ports the pilots of the ports serve in more than a single capacity; the pilot acts as Harbour. Master, officer in charge of harbour ·and

tonnage dues, and so on; the pilot is in charge of a port, in

addition to doing the pilotage work, and that work, particularly on the north coast, includes almost daily sounding of the bars, otherwise navigators could not use them." The joint committee for which Dr. Brissenderr spoke strongly urged that there should be a single authority to deal with shipping and navigation (p. 1120) :-

"For the purpose of this memorandum navigation and shipping, regarded as a subject of legislation, may be briefly defined as· con­ sisting of those matters which are dealt with by the Navigation Act 1912 and the Merchant Shipping Acts. ·

'The Constitution does not endow Parliament with a substan­ tive power to deal with navigation and shipping at .large. It only empowers it to deal with that subject in so far as it is relevant to interstate and foreign trade and commerce ' .-Newcastle & Hunter River Steamship Company v. Attorney-General for Commonwealth

(29 C.L.R., 368). The result is that the Federal Parliament has no legislative power, nor have its officers any executive power, over vessels are solely engaged in intra-state trade, although these run side

by side on the common highway of the sea with the vessels engaged in foreign or interstate trade, · and are practically subject to the same law; since in all essentials both Federal and State law are· drawn from the Merchant Shipping Acts.

This divided authority over a single subject-matter leads to quiL: unnecessary difficulties. Examples of the questions to which it gives rise may be se en in I·Iume v. Palmer ( 38 O.L.R., 441) anJ R. Y. Turner ( 39 C.L.R., 411). In this case, a collision between

a foreign trade vessel and an intra-state vessel, there is no legal reason to pre-vent simultaneous Marine Court inquiries by State and Commonwealth, in which it is possible the conclusions may be directly contradictory.

We submit that the Constitution should be so amended that the Federal power should cover navigation and shipping as n single substantive subject-matter independent of the trade and commerce -power, thus restoring it to the position of a placitum of section 51 as in the draft bills of 1891 and 1897 ." Where State legislation on' the subject of wireless installations in ships engaged in intra-state trade does not exist, the Royal Commission on Wireless (14th July, 1927) expressed the opinion that representations

should be made to the State Governments concerned to bring ships within provisions similar to those of section 231 of the Navigation Act . . The provisions of the Commonwealth Navigation Act r elating to pilots have not yet been proclaimed.

F.l251.-ll

1057

166

Admiralty. From the decision in the case of John Sharp & Sons v. s.s. Katherine J.Vlackall (34 C.L.R. 420) it follows that the Commonwealth of Aus­

tralia is a British possession within the meaning of the Colonial Cour·ls of Admi'ralty Act 1890. It is, therefore, doubtful whether the ·state Courts have any jurisdiction in admiralty, though jurisdiction may be conferred on them by Commonwealth legislation.

The following extract is from the evidence of Mr. Owen Dixon, on behalf of the Committee of Counsel of Victoria (pp. 784-785) :__;_ "An incidental result of the Commonwealth's attempt to confer full jurisdiction upon the High Court has been to cr-eate doubts irl

relation to the jurisdiction of the Supreme Courts of the States. The full content of the jurisdiction was supported by means of the Imperial Colonial Courts of Admiralty Act 1890. A considera­ tion of the Colonial Courts of Admiralty Act with the Imperial Acts· Interpretation Act will show 'that it is not at all improbable

that the High Court of Australia and the Supreme Courts of the State cannot both at the same time answer the description upon which, in the absence of l-egislative declaration, the jurisdiction depends, viz., the courts of law in a British possession of original unlimited civil jurisdiction. Whether the State courts have admiralty jurisdiction or not has thus become uncertain, although they have exercised it up till that time and without question until the problem arose whether the High Court possessed the extension of admiralty jurisdiction which might or might not come within the words maritime jurisdiction, but which certainly came under the Colonial Courts of Admiralty Act."

Lighthouses, lightships, beacons and buoys. The Commonwealth Parliament may legislate with respect to light­ houses, lightships, beacons and buoys. In the draft Constitution of 1.891 the power was limited to ocean. lighthouses and lightships, and

ocean beacons and buoys, the object being to give the Commonwealth control over external and coastal services of this kind, whilst matters capable of internal regulation, such · as lights, beacons and buoys situated in harbours and rivers, were to remain und-er the control of the States.

The following extracts are taken from the evidence of Mr. E. T. Hall, Comptroller-General of Customs (pp. 384--385) :-"The power of the Commonwealth Parliament to make laws in regard to lighthouses, &c., is not subject to · qualifying conditions,

as is the case with the power relating to navigation and shipping, and· app.ears to be wide enough to _ enable the Commonwealth to deal effectively with the covered, in its widest

interpretation. . _

In 'exercise of the powers conferred by section· 51 (vii) of the Con­ stitution, the Commonwealth Parliament has enacted the following _ .t\cts relating to lighthouses-No. 14 of 1911, No. 17 pf 1915, a1;1d No• 6 of 1919. - .

The Lighthouses Act 1911-1919 empowers the Commonwealth Government to make an agreement with any State or person for the· acquisition by the Commonwealth of any lighthouse or marine mark, or, failing an agreement in the matter, to acquire such by

157

-compulsory process. The Commonwealth administration is authorized to erect, alter, or remove lighthouses and · marine marks within the jurisdiction of the Commonwealth. The Act also con­ tains the necessary provisions for the protection of Commo:invealth lights and marks, and for imposing light dues upon vessels. Upon

the imposition of such dues, it is declared, the light dues prescribed by or under any State Act (other than dues solely in respect of lights maintained by the State) shall cease to have effect. Up to 30th June, 1915, all lighthouses, lightships, beacons and buoys in Australian waters continued to be administered by State departments and locally constituted authorities, such as harbour

trusts and marine boards. On 1st July, 1915, the Commonwealth took over control of all coastal lighthouses, lightships, beacons and buoys. All inner lighthouse and other marine marks, e.g., those prark1ng the port channels, harbours, and rivers, remained, and . continue to remain, under the control of the various States and local port

authorities. The administration of the Lighthouses Act is placed· by that Act in the hands of the Minister for Trade and Customs. The immediate supervision of the Commonwealth lighthouse service is entrusted to the Director of Lighthouses, who, until 30th June, 1927, was directly responsible to the Comptroller-General of Customs. From 1st July, 1927, the Commonwealth lighthouse service was amalgamated with the Commonwealth navigatioi.l ser­ vice, to constitute the Marine Branch of the Department of Trade

and Customs. The principal function of the Commonwealth lighthouse service is the construction and maintenance of marine lights and marks on -the coast of Australia and Tasmania. Certain other duties,

of relatively minor importance, are also performed, such as receiv­ ing and sen'ding shipping messages, attending where required to tide and weather signals, obtaining meteorological information, and in some cases lightkeepers or their wives act as postal officials.

Possibility of duplication of Fede1·al and State possibil'i ty of this occurs in relation to (a) the construction and maintenance of marine lights and marks; (b) the duties performed by the staffs; (c) the control of existing coastal and harbour lights, involving possible duplication of plant and staff.

Concerning (a), construction, since the Commonwealth assumed control of coastal lights in 1915, no new light has been established which is within range of any State light. Neither has any State established a light which overlaps a coastal light under the control · · of ·the Commonwealth.

None of the coastal lights be discontinued by

reason of the fact that a light under State controt meets necessary navigational requirements. It may here he added that; wherever possible the lights under the control of-the Commonwealth are also adapted' to meet as far as possible the of

From the above it will be seen that under th1s headmg there has been no duplication or overlapping in. the lights established on the coast.

1059

158

As to (b), overlappip.g or duplication of staffs, there are no lighthouse stations, under the control of the Commonwealth and of a State respectively, at which the duties of the staffs could be interchanged. It may be mentioned, however, that in Queensland

State officials attend to certain lights on behalf of the Common­ wealth lighthouse service. With reference to (c), control of coastal and harbour lights-­ port lights and marks are at the present under the control

of State or port authorities. It has been suggested in certain quarters that all such lights should, with the coastal lights, bo placed under the control of the Commonwealth. This matter has received careful consideration at various times, and the opinion formed is that the maintenance of port lights could not be carried out as economically by the Commonwealth • lighthouse service as by the State and local authorities at present

in charge. The reason is, chiefly, that the State and port authorities utilize the plant and staff for other port duties, as well as attending to the lights and marks.

From 1st July, 1915, the Commonwealth levied light dues at the following rates:-( a) for any ship of less than 4,500 tons-Sd. per ton; and (b) for any ship of 4,500 . tons or upwards-£150. For ships calling at one port only in Australia en route to a port or destjnation outside Australia, the rate was-for vessels of less than 4,500 tons-41d. per ton; and for vessels of 4,500 tons or upwards-£75.

Rates are required to be paid quarterly and ·are levied on the net registered tonnage of the ship. Variations of the above rates were made and brought into opera-, tion on 1st January, 1918, when the rate was increased for vessels

classed (a) and (b) above to 9d. per ton, and the maximum charge of £150 omitted. For vessels calling at one port only, the rate was raised to 5d. per ton, without fixed maximum. These latter rates are those now in force.

Prior to the assumption of Commonwealth control of coastal lights, the States and State authorities levied dues under local Acts and regulations. On the control of coastal lights being transferred to the Commonwealth, on 1st July, 1915, the State of Tasmania

abolished local light dues; Queensland and Western Australia reduced their light dues by one-half, but New South Wales, Victoria and South Australia made no alteration. A memorandum on the subject of dues charged by State authori­ ties w;as presented to the Conference of Commonwealth and State Ministers held at Melbourne in May-June, 1923 (vide pp. 133, et seq. of printed report, Parliamentary Paper, 1923, No. 38).

In this memorandum reference is made to the fact although the States of Victoria, New South Wales and South Australia had been relieved of a large expenditure on coastal lights when the Commonwealth took control of the latter, they made no alteration

in their dues. It may be added that all the States, with the

. exception of New South Wales, by agreement, decided that the combined dues levied by State local authorities should be designated

159

'port dues.' In the case of the State of New South Wales, under an Act which has not yet been repealed, such dues are termed 'harbour and light dues.' As mentioned above, the power of the Commonwealth Parlia­ ment to make laws in regard to lighthouses, &c., appears to be fully adequate to enable the Commonwealth to deal effectively with

the subject. No amendment of the Constitution, it is suggested, is necessary or desirable in this connexion.'' Evidence was given on behalf of the Chal!lber of Qommerce, Hobart, that the transfer of lighthouses to Federal control had materially raised the amount .of dues payable by shipping, and had deterred vessels, from calling at Hobart, and in particular those vessels for which Hobart

was the one port of call in the voyage from the Cape to New Zealand.

i061

·-

160

XVI.-INDUSTRIAL POWERS.

Industrial arbitration. The Commonwealth Parliament has power under section 51 (xxxv) to make laws with respect to conciliation and arbitration for the pre­ vention and settlement of industrial disputes extending beyond the

limits of any one State. It also has unlimited power to appoint a tribunal to determine the ·conditions of labour of employees of the Commonwealth, and this power has been exercised. No State has power to control, by legislation or adjudication, disputes beyond its own borders, but each State has power to make provision for the prevention or · settlement of disputes within its own borders and each State has done so. There is, therefore, in the Com­ monwealth as a whole one tribunal for the prevention and settlement of disputes extending beyond the limits of any one State, and there are six tribunals dealing with intra-state disputes. In the State of New South Wales there is a court known as the Industrial Commission, and there are conciliation committees from which an appeal lies to that court. In the State of South Australia there are wages boards

appointed for three years, and there is a court presided over by u president. In Western Australia there is an industrial court consisting of a judge and two lay members, one nominated by the unions of workers, and the other by the unions of employers. In Victoria and Tasmania there are wages boards, in Victoria there being an appeal to u court. In Queensland there :is a Board of Trade and Arbitration, of which a Supreme Court judge is president, and of which there are two other members appointed by the Governor-in-Council.

From recent interpretations of section 51 (xxxv) it follows that whether a dispute exists, or whether it extends beyond any one State, usually depends on the choice of the party which first decides to appeal tc the court. It also follows that there is from time to time confusion between the Federal and State jurisdiction, and between Federal and

State awards, and that the question whether disputants will seek a Federal or a State tribunal will depend on the opinion formed by the applicants of the tribunal for the time being.

Reg1'stered organizations. On the 31st December, 1928, there were registered under the pro­ visions of the Commonwealth Conciliation and Arbitration Act 1904-1928 one hundred and forty-eight organizations of employees and twenty-six organizations of employers. The whole number of unionists covered by Federal awards is estimated at 406,000, or approximately half the unionists of the Commonwealth.

Industrial awards and agre em ents. A table at p. 540 of the Commo nwealth Year-Book for 1928 sets out, as at the 31st D ecember in the ye ars 1913, 1926 and 1927-(a) the • number of boards authorized and the number of boards constituted by

each State, together with the number of such boards which had made awards or determinations; (b) the number of awards and determinations in force made by the Commonwealth Court, the Commonwealth Public Service Arbitrator, and the tribunals in each State; (c) the number of awards m ade by the Commonwealth Court in force in each S_ tate;

161

·(d) the number of a1vards made by the Commonwealth Court, and th•e number of determinations made by the Commonwealth Public Ser­ vice Arbitrator, in force in each State; (e) the number of Common­ wealth and State industrial agreements in force; and (f) the number of

Commonwealth industrial agreements in force in each State. table is set out below:-BoARDS Au'l'HORIZED, AwARDS, ETc.-SuMMARY, 1913, 1926, AND 1927.

Commonwealth.

I At 31st New Vic- Queens- South Western Tas- Particulars. Decem- Public South toria. land. A us- A us- mania. Total. ber. Court. Service Wales. tralia. tralia. Arbi· trator. ---------------------------Boards Authorized, r· .. .. (b) 216 135 75 56 .. 23 505 &c. (a) 1926 .. .. 291 182 2 75 .. 49 599 Boards authorized .. 1927 .. .. 300 183 2 76 3 49 613 1913 .. .. (b) ·223 132 74 51 .. 21 501 Boards constituted •• 1926 .. ' .. 291 180 2 49 .. 43 565 1927 .. .. 298 176 2 25 3 43 547 Boards which have made 1913 .. .. 123 123 74 47 .. 19 386 A wards or Determina- 1926 .. .. 265 168 .. 66 . . 39 538 tions 1927 .. .. 273 169 . . 53 .. 39 534 Awards and Determina- }"" 17 (c) 265 127 73 54 18 21 575 tions-A wards and '34 Determinations in 1926 199 346 179 237 109 107 51 1,262 force 1927 223 36 398 180 248 112 110 51 1,358 State A wards and Deter-f'" .. .. 32 8 3 'i6 .. 15 58 minations-Applying 1926 .. .. 54 67 66 5 41 249 to whole State 1927 .. .. 89 66 70 16 5 41 287 Applying to Metropolitan 1913 .. .. 58 .. 28 53 13 1 153 Area 1926 .. . .. 94 2 60 64 59 1 280 1927 .. .. 103 2 62 65 61 1 294 Applying to Metropolitan r· .. .. 49 105 1 . . 1 5 161 and Country Areas 1926 .. .. 133 97 47 2 10 7 296 1927 .. .. 134 99 52 2 10 7 304 Appiying to country 1913 .. .. 126 14 41 1 4 . . 186 1926 .. 65 13 64 27 33 2 204 areas 1927 :: . 72 13 64 29 34 2 214 .. Commonwealth Court {1913 .. .. 13 17 15 16 9 13 .. awards--Awards in 1926 .. .. 123 144 39 111 41 78 .. force in each State 1927 .. .. 131 156 41 126 46 85 .. Commonwealth Public Service Arl;>itrator- .. .. 32 29 27 27 27 26 .. Determinations in 1927 .. .. 34 29 27 27 27 26 .. force in each State Industrial Agreements {1913 228 .. 75 .. 5 11 82 . . 401 in force 1926 252 .. 167 .. 95 48 115 4 681 1927 260 .. 177 108 51 144 4 744 Commonwealth Agree- {1913 .. .. 132 129 68 62 57 61 .. ments in force in each 11!26 .. .. 90 105 28 25 19 25 .. State 11!27 .. .. 97 103 31 27 19 23 .. (a) The figures for New South Wales are exclusive of Demarcation Boards. (b) Including boards which were subsequently dissolved, owing to alteration in the sectional arrangement of industries and callings. (c) Omitting a number of awards which expired on the 31st December, 1913. Interpretat,ion of S e:ction 51 ( xxxv). For some years after the establishment of the Commonwealth Court in 1904, section 51 (xxxv) was given a far more restricted interpreta­tion than it has to-day, and the disputes with which the Court was helci entitled to deal were less numerous. Litigation concerning the juris­diction and powers of the Court has been directed mainly to the interpretation of the words u industrial", "disputes", and ·" extending beyond any one State", and to the questions whether the Court has power to make a common rule and whether an award of a court is valid if it is inconsistent with the legislation of a State or the decisio11 of a State tribunal.

1063

162

Since the power to legislate with respect to industrial disputes· is by means of conciliation and arbitration, the Commonwealth Parli"n­ ment itself cannot legislate for fixing hours and rates of pay, or

minimum rates of pay and maximum hours of work, for the whole or an ,v part of Australia, or for any industry, and it cannot empower a Court to do any of these things by means of a common rule. The :Federal Court, therefore, differs from a State tribunal which, being the creature of a Parliament of which the powers are limited only by the Common­ wealth Constitution, may be empowered to make awards binding a11 persons engaged in an industry within the area of its jurisdiction.

The term "industrial" does· not limit the arbitral power to produc­ tion by means of manufacture. The power extends to mining

( J umbunna case, 6 C.L.R. 309), and employees of banking and insur­ ance companies (Au.stralian Insurance Staffs' Federation v. Acddent Underwriter·s' Association; Bank Offic ,ials' Assodation v. Bank of Au-s­ tralasia and others, 33 C.L.R. 517)). Nor is it limited to industries carried on for profit (Munic'ipalities case, 26 C.L.R. 508), but the power does not extend to teachers (Federated State School 'Teachers' Associa­

tion v. State of Victoria, [1929] 35 Argus L.R. 129). The term "disputes" means disputes ·which may be created by the service of a log containing a demand for changes in industrial con­ ditions, and the refusal of that demand. There need not necessarily have been any disputes existing between employers employees apart from the service of a log, nor any dispute threatening the industrial peace of more than one State. The dispute becomes interstate if persons

engaged in the same industry employed in different States join in the service of the same log (Federated Felt Hatters v. Denton, 18 C.L.R. 881; Labourer·s case, 24 C.L.R. 396; 1917 A.C. 528). The award of the :Federal Court will • not bind employers or employees who are not parties to the dispute or who have not been served with the log either individually or as members of a registered organization, but an employer may be made a party to a dispute whether he has any dispute with his own employees or not. All employers connected together, by the mere fact of their being engaged in the same industry, in such a way as to make them proper parties to a dispute so soon as the dispute is initiated, and all employees are connected

together in the same way ( Burwood Cinema case, 35 C.L.R. 528). The :Federal Court is empowered to deal in its awards with industrial and the term "industrial matters"- includes a great number

of the details of industrial conditions besides wages and hours. It has been held by the ·High · Court that the Federal

Court is not empowered by the Commonwealth Conciliation and Arbitration Act 1904-1928 to make an award dealing with non-unionists, not named as parties, who are in the employ of a party to the award (Amalgamated Engineering Union v. Alderdice Proprietary Ltd., 41 C.L.R. 402). In the Musicians' case

(24 C.A.R. 517) it had been held by Chief Judge Dethridge that a union may have an interest in the employment of persons other than its own members, and that having that interest it may create an indus­ trial dispu.te concerning their conditions within the meaning of the Act.

Since no one is bound by an award who is not a party to a ei.ther personally or through a registered organization, it has sometimes lH!en necessary to serve large numbers of individuals, and it has happened

•

163

that persons engaged in an industry subject to a Federal award are not parties to that award and may therefore make application to a State tribunal and become bound bv its decision to observe different condition;:; from those imposed by the" Federal Court. In this -vvay there have

been two awards in the same craft and in the same industry, operating in the same States, at the same time, and imposing different wages and conditions of labour. From this cause has arisen great uncertainty and difficulty in the management of · industries owing to diversity in the details prescribed by Federal and State awards. ·

To meet the difficulty involved in serving numerous persons it has been enacted by an amendment to the Common,vealth Conciliation and Arbitration Act passed in 1928 that the Court may make an order appointing representative respondents, that the order shall be published forthwith in the Commonwealth Gazette, that aU documents served on

the representative respondents shall be deemed to have been served upon all the interested persons specified in the order, and that any award ur order of the court made in the matter shall be binding on those interested persons.

Relations of State and Federal Co1trts. By section 20 of the Commonwealth Conciliation and Arbitration Act provision is made to enable · the Federal Court to prevent a State tribunal from dealing with any matter with which it is dealing or is about tb deal. This section gives the Federal Court power to restrain either State Courts or Wages Boards, and is followed by provisions, in Division 4 of Part III., which enable State and Federal Courts to confer in order to prevent the existence of conflicting or overlapping

awards. The Federal Court is a controlling authority, but by the amending Act of 1928 is directed, in the case of every industrial dispute, to consider in the course of the hearing and as promptly as possible if there is anything in the nature or circumstances of the industry which

makes it more desirable that the dispute or any part of it should be dealt with by the Court than by a State industrial authority tlr by State industrial authorities in the several States, and unless the Court so declares it shall dismiss or refrain from further hearing or determining the dispute or part of the dispute (s. 38 c.)

In F ederated Hotel, Club, Resta.urant, and Caterers Employees Union of Australia Abbott and Others (No. 33 of 1928), Chief Judge Dethridge refrained, in the absence of special circumstances, from hearing or determining a dispute in regard to the conditions of employ­ ment of employees engaged in or in connexion with restaurants, cafes, coffee palace::; and eating houses . The following tests wer.e laid down

for the purpose of deciding whether a dispute would be better dealt with by the Federal Court:-"Where the conduct of an industry does not involve (1) any competition or any more than an inconsiderable amount of com- -

petition between establishments in one State and those in another; or (2) the employment to a great extent of labour migrating from one State to another; or (3) the management of branches or depart­ ments in two or more States; or ( 4) the employment of labour

substantially and directly in connexion with exports or imports from or into Australia or a State thereof; or ( 5) the existence of other circumstances making the intervention of a Federal tribunal

1065

•

1M

more desirable than ·that of a State tribunal; and there are State tribunals in existence with power to deal with the disputes that are likely to arise in the industry-in my. opinion this Court should leave the regulation of the subject-matter of those disputes to the State tribunals." The Commonwealth Parliament by virtue of the powers conferred on it by section 51 (xxxv) and (xxxix) has made laws prohibiting a strike or lock-out as those terms are defined by section 4 of the Common­ wealth Conciliation and Arbitration Act, and imposing penalties for a breach of this prohibition and for aiding and abetting or encouraging others in a strike or lock-out. These laws have been passed in the Commonwealth Concilia.tion and Arbitration Act 1904-1928, and in the Crimes Act 1914-1928 (see Stemp v. Australian Glass Manufac­ turers Company, 23 C.L.R. 226, and lValsh v. Sainsbury, 36 C.L.R. 464), and the Court may issue an order in the nature of a mandamus

or an injunction against an organization for the purpose of enforcing an award (Waddell v. Australian ·workers' Union, 30 C.L.R. 570; Waterside Workers Ji' ederation. v. Gilchrist Watt 34 C.L.R. 482 ; Australian Commonwealth Shipping Board v. Federated Seamens'

Union, 35 C.L.R. 462), but this power may not be applied as against members of an organization of employees bound by an award to prevent them from striking while in the employment of an employer who js not bound by an award (Metropolitan Gas Go. v. . Federated Ga.'i

Employees, 35 C.L.R. 449).

State Employees. In the Conciliation and Arbit,ration Act 1904, section 4, the term "industrial dispute" was defined as inter alia including disputes in relation to employment upon State railways, or to employment ill industries carried on by or under the control of the Commonwealth or a State, or any public authority constituted under the Commonwealth or a. State.

On the ·17th December, 1906, it was held in the Railway Servants case ( 4! C.L.R. 488) that, State r·ailways being a State instrumentality, the portion of the definition which referred to State railways was ultra vires. In 1911 and 1913 it was . proposed that the Constitution should be altered so that the Commonwealth Court might be given power to fix wages and hours of labour on State railways, but these pr,oposals were rejected. In 1918 in the Federal Mttnicipal and Shire Council Employees v. Councillors and Citizens of Melbourne (26 C.L.R. 508) the principle of the Railway Servants' case was affirmed. In 1920, in Engineers' case (28 C.L.R. 129), the decision was over­ ruled, and the principle affirmed that all employees in State industries were within the jurisdiction of the Court, although not mentioned in the Act. It was said, however, in the Engineers' case that the Court . would not exercise jurisdiction over persons engaged in strictly govern­

mental functions, such as legislative, executive, and judicial functions, without which a constitutional State cannot be conceived. Evidence was given before the Commission that in 1923 a resolution was passed at a Premiers' Conference, that State employees should be denied access to the Commonwealth Court, first by an amen..dment of the Conciliation and Arbitration Act and afterwards by an of the Constitution. Objection was taken, at the Premiers' Conference,

166

and by witnesses before the Commission, to the inclusion of servants, on the ground that their inclusion was detrimental to State· finances, that it made it impossible for a Treasurer to estimate. his expenditure, and that it deprived the States of the power of controlling

their own revenue. It was also argued that the inclusion of State servants, and in particular of railway servants, placed the organization of State industries in the hands of a court which could not be so well acquainted with the details of these services as tribunals appointed by

the States themselves. Evidence was given, on the other hand, of the determination of great numbers of unionists, principally members of the Australian Railways Union, and of the Australian Federated Union of Locomotive Engineers to resist this proposed exclusion, and of the

members of these and other unions to obtain, if necessary, an amend­ ment of the Constitution which would ensure to all State employees access to the Federal Court. It appears, however, that State employees in Western Australia and Queensland, and a considerable section of State employees in South Australia, have not sought access to the Federal Court. The association which made the claim in the Teachers,

case included teachers in each State.

State laws. It was held by the High Court in WhybrowJs case (1910, 10 C.L.R. 266) that a Federal award, if inconsistent with a State law, is invalid, and that the test of inconsistency is whether both can be obeyed. In

Clyde Engineering Company v. Cowburn (1926, 37 C.L.R. 466) this decision was overruled, and it was held that an award of the

Federal Court, once validly made, prevails over any inconsistent State law, and that the test of inconsistency is whether

the result of enforcing a State law would be to destroy or vary

the adjustments of industrial relations established by the award with respect to the matters formerly in dispute. An award of the Federal Court is, therefore, a law of the Commonwealth within the meaning of section 109 of the Constitution, and must prevail over an inconsistent

State law to the extent of the inconsistency. It follows that a law of a State affecting industrial relations may cease to be binding on those who are bound by a Federal award, so soon as that award is issued, and in this way Acts dealing with employers and employees, or with apprentices, may be binding on some of the residents of a State, but not on others.

Witnesses before the Commission expressed the opinion that the effect of this decision was open to objection on either of two grounds, or on both. It gave to a Court an authority which should be exercised by Parliament, but which could not be contrC?lled by Parliament except by the repeal or amendment of the Conciliation and Arbitration Act. It added to the difficulty of the State legislatures

by rendering the validity of all State industrial laws uncertain in so far as thev might affect persons bound by Federal awards, and pre­ vented Stat; Governments from giving Parliamentary time to the consideration of useful reforms. It was said by Mr. Holman, K.C., that

so long as State legislation on such subjects as apprenticeship or housing might be found inconsistent with s?me award, or. to be

made, Ministers would not set as1de t1me for the cons1derat10n of measures dealing with these . subjects.

1067'

166

Congestion. The opinion was expressed that the work of the Court should h e further decentralised, whether its scope is increased by a constitutional ?. mendment or not. :.Mr. H. C. Gibson, an industrial advocate of long

experience, who gave evidence on behalf of the Australasian Council of Trade Unions in favour of the Commonwealth having full power in regard to all industrial matters, expressed himself on this point as follows (evidence, P: 13.79) :-

" My experience shows me that, if we are going to rely for

arbit.ration on one court having jurisdiction over the whole Com­ monwealth, it will fall of its own weight. The cases listed before it could not be reached in five years, and I would point out in this connexion that delay at the present time is one of the most pregnant causes of dissatisfaction. In the case of our first applica­ tion to the Federal Arbitration Court, the period of time from when we lodged the application until the time when we got our award was three years and nine months. On the second occasion

matters were expedited a little, but it took us two years, and on the third occasion we got it do·wn to fifteen months. In the case of our present application, it was filed in the court on the 12th

J anuary this year, and I think it is somewhere about No. 172 ou the list at the present time [19th March, 1928]. Applications have been lodged by our organization eighteen months ago, and they have still not had a date fixed for hearing.

Would you say that your experience has been the experience of most of the other organizations? I think ·that experience w

general in labour circles."

Mr. Walsh, Industrial Registrar for the State of Western Australia, expressed the opinion that this inconvenience had been mitigated to some extent by the establishment of boards of reference, and by occasional visits from the Court to outlying States (evidence, p. 606).

Writ of Prohibition. The Commonwealth Parliament cannot deprive the High Court of an authority which the Constitution has conferred on it. Although section 31 of the Conciliation and Arbitration Act provides

that no award or order of the Court shall be challenged, appealed reviewed, quashed, or called in question, or be sub­

Ject to prohibition mandamus ·or injunction, in any other Court on any account whatever, yet since the President or Judge is

an officer of the Commonwealth, he is liable to prohibition if he adjudi­ cates on some question not within the language of section 51 (xxxv). The issue of a prohibition, after a prolonged hearing in some cases, led to much expense and much waste of time. Section 21.AA was there­ fore enacted, which gave either party a right to apply before the· he"aring

to the High Court for a decision whether an alleged dispute was or was not within the jurisdiction of the Court. As prohibition is a

discretionary remedy, the Court announced that it would require parties to make use of the liberty given by section 21AA, and in exercising its discretion would consider whether the parties had done so (Ex parte Motions andProhibitions, 21 C.L.R. 669).

167

Industrial Peace Acts. In further exercise of the power conferred by section 51 (xxxv) of the Constitution the Parliament passed the Industrial Peace Act 1920, assented to the 13th September, 1920, together with an amending Act of

the same year (No. 55 of 1920). The Act is divided into six parts . . The :first part consists of defini­ tions. The second part authorizes the Governor-General to establish a Commonwealth Council of industrial representatives. This Council is to consist of a chairman and of an .even number, not less than six nor more than eight other members, of whom one half shall be repre­ sentatives of employees, and one half representative of employers, to be recommended respectively by organizations of employees and

employers. The powers and functions of this Council are, inter alia, to consider any matters conditions and tendencies in any part of the Commonwealth leading or likely to · lead to industrial disputes or affecting or likely to affect industrial peace, to confer with any persons or associations as to any matters affecting the prevention or settlement of industrial disputes, and to report to the Governor-General on any

industrial matter. This Council has never been established. The formation of a Commonwealth Board of Trade and Industry, with similar but wider powers, under a unified Constitution, was advocated by Mr. Kneebone, a member of the Federal Executive of the Australian Labour Party, and vice-president of the Australasian Council of Trade

Unions (evidence, 1035). The third part of the Act provides for the a;ppointment of District Councils of industrial representatives subsidiary to the Commonwealth Council, and similarly composed. The fourth part of the Act gives the Governor-General power to appoint

any special tribunal or tribunals for the settlement of any industrial dispute or disputes. A special tribunal is to consist of an equal number of employees' and of employers' representatives, and of a chairman either chosen by agreement or appointed by the Governor-General.

These tribunals hav·e powers similar to those of the Commonwealth Court of Conciliation and Arbitration, and may enquire into all matters relativ-e to a dispute from the point or-production to the final disposal of the commodity. Part five provides for local boards, to exercise jurisdiction within such limits as are defined or prescribed by the local tribunal. Part six gives any party to a proceeding before a special tribunal power to apply to the High Court to decide a question of jurisdiction and gives the chairman the power of applying to the . High Court for a decision on any question of law. Tribunals under this Act have been appointed in connexion with the coal industry only.

106.9

188

XVII.-HEALTH.

Quarantine and other powers affecting Health. The Commonwealth Parliament has no power to legislate with respect to health except in so far as it may do so in exercise of its powers to legislate with respect to imports and exports, to trade and com­ merce between the States, or to quarantine. The Commonwealth is also directly interested in the improvement of the health of the people, through its control of Territories within the tropics, through its responsi­ bility for defence and the defence force, through its responsibility for old· age and invalidity pensions, and through its provision of the maternity bonus. The Commonwealth Parliament has no power to legislate with respect to industrial hygiene or local sanitation, except in connexion with Commonwealth property, or through an award of the Arbitration Court.

The Commonwealth Parliament has legislated with respect to imported goods by the Commerce (Trade Descriptions) Act 1905, and by the Customs Act 1901-1925, and for quarantine by the Quaran­ tine Act 1908-1924. The Qu,arantine Act 1908 was amended by Acts

of 1912, 1915, 1920, and 1924. The quarantine power has been inter­ preted so as to include legislation with respect to plants and animals, as well as human beings, and with respect to isolation, segregation, and disinfection, not only on the outside borders of Australia, but between the States and in any part of Australia.

-The quarantine power has not become exclusive either by the transfer of State departments as authorized by the Constitution, or by legislation covering the whole field. T he States may still exercise certain quarantine functions, particularly in relation to inter-state traffic in animals, but since the passing of the amending Act of 1920 State laws may be suspended on a proclamation issued by the Governor-General in an emergency.

Health Conferences. For some time after the establishment of the Commonwealth, con­ ferences for the consideration of problems of public health were held among the State officials, at many of which the Commonwealth was

represented. A conference of State officials was held in 1904 at the invitation of the then Prime Minister, when it was recommended that the Commonwealth should take over the control of inter-state quaran­ tine. Another conference was also convened by the Prime Minister and held in 1909, after the Quarantine Act 1908 had been passed, but before it had come into operation. This conference considered the staff

that would be required under the new Act, and the limits of Common­ wealth and State jurisdiction. A conference that has been described as the turning point in the his­ tory of health administration was held in 1913, after an outbreak of small-pox in New South Wales, when the Commonwealth had inter­

vened and declared part of New South Wales to be a quarantine area. This conference passed resolutions to the effect that Commonwealth intervention would be necessary in any of the following circumstances: -(a) at the request of the State concerned; (b) on account of the danger to other arising from the neglect of the State in which

169

the epidemic was, or the inability of the State complaining to take measures on its borders or otherwise for its own defence; and (c) on account of the neglect or refusal of the infected State to take the advice of the Director of Quarantine (evidence, p. 112).

In November, 1918, another conference was called at which were present not only departmental officers but also representatives of the British Medical Association. The occasion was the outbreak of an epidemic of influenza, and the following resolutions passed,

amongst others :-" 3. That the chief health officer should immediately notify to the Director of Quarantine the presence of any cases of pneumonic influenza in his State, and that the Commonwealth should take steps to proclaim the State to. be infected with pneumonic influenza.

4. That, upon the proclamation of any State as infected, all traffic with that State be suspended until a case breaks out in a neighbouring State, when traffic may be resumed between the infected States.

5. That, upon the proclamation of any State as infected, the Commonwealth should take complete control of all inter-state traffic both by land and sea, and that the States should render to the Commonwealth every possible aid 'and co-operate in the effective

carrying out of the regulations" (evidence, pp. 1048-104·9).

That the agreement embodied in these resolutions broke down, for whatever reason, appears from the following telegrams sent by the Acting Prime Minister to the State Premiers ou the 3rd and the 6th February, 1919 :-

" Circular.-In consequence of violation of control of influenza epidemic agreement of twenty-seventh November nineteen eighteen by States of New South Wales, Queensland, Western Australia and Tasmania, Government of Common­

wealth is unable to carry out arrangements voluntarily entered into by Commonwealth and States and gives formal and urgent notice that unless States which have broken the agreement indicate by noon on Wednesday fifth instant their intention to abide by it and assist quarantine authorities of Commonwealth to operate it, Commonwealth Government will renounce agreement ·and revert to constitutional position it occupied before agreement was drawn."

" Further my circular telegram of third regarding adhesiou terms Influenza Conference. Have now to advise you Com­ monwealth have repealed existing regulations and gazetted new regulations. Position on and after noo_n of 6th

' February will be that Commonwealth w1ll not exerCise any control over inter-state traffic by land and will completely conti·ol inter-state traffic by sea between · all States. Full statement in writing following. - Existing land control regula­

tions repealed as from noon to-day and Commonwealth will no longer be concerned with land traffic until one or more States invite Commonwealth action" (evidence, p. 1050).

1071

170

Department of II Health Council.

In 1919 in view of the conduct of the influenza epidemic, and of problems arising out of the return of large numbers of troops from the war, the question of health was referred by the Prime Minister to the Premiers' Conference. The Prime Minister then advanced tentative

proposals for the establishment of a Commonwealth Department of Health. To these proposals each of the State governments ultimately consented, and the Department was created by order in council on the 7th March) 1921. ·

The Royal Commission on Health appointed in 1925 made a number of recommendations with regard to the administration of the Depart­ . ment, the more important of which were the following:-" (a) A Federal Health Council should be created.

(b) The Common-vvealth Department of Health should be extended and should formulate a model outline of general prin­ ciples of health administration, should establish further divisions to investigate Australian problems and advise as to methods to be adopted.

(c) Health administration should be developed by the creation of health districts each in charge of a whole time district health _ officer. ·

(d) The constitutional power to legislate for the control of foods and drugs should be transferred by the States ·to the Common­ wealth" (evidence, p. 114). The conference of Ministers of Health held j.n 1926 adopted the general principle that a Federal Health Council should be established.

That Council was established on the 23rd November, 1926, and met for the first time on the 25th January, 1927.

Co-operation of State a.nd Feder·al authorities.

The manner in which State and Federal authorities have co-operated before and since the establishment of the Department of Health and the Health Council is described in the evidence of Dr. Ramsay Smith (pp. 1046-1051) and in the report of the Royal Commission on Health

(p. 16). The following extract is .from that report:-" Co-operat?:on in rre,qard to Quarantine. 4. The Constitutional powers of the Commonwealth ·with regard to quarantine were exercised by the passing of the Quarantine Acf

1908. In the years immediately following, co-operation took the form of the State Departments of Health carrying out the pro..: visions of the Quarantine Act under the direction of the Director of Quarantine, the Chief Medical Officer of the State Department of Health acting as Chief Quarantine Officer in the State con­ cerned. The State Governments were paid a certain sum for the services of the officers carrying out the work. Similar arrange­

ments were made with respect to animal and plant quarantine, and these, with certain modifications, are still in existence. Evidence before the Commission showed that with regard to animal

quarantine the Commonwealth could now be of greater assistance by providing an expert in veterinary science at the head of a

171

V et.erinary Quarantine Division of the Commonwealth Depart­ ment of Health, who, among other duties, could advise its officers in the States. As these officers at present are also State officials, such an arrangement would be an extension of co-operation betwemi

the Commonwealth and States.

The system under which officers of the State Health Depart­ ments carried out quara;ntine work has (except in the case of Tasmania) been discontinued for some years. The Act is now administered, so far as human or general quarantine is concerned,

by a permanent Commonwealth officer and staff stationed in each State (except Tasmania) as a branch of the Commonwealth Department of Health. Consequently; co-operation has since had to proceed on different lines, and, on the whole, it has been success­

fully maintained. It has, however, failed under the stress of

epidemics as in that of small-pox in 1913, influenza in 1919, and plague in 1921. Although the Commonwealth Quarantine Act has now been amended ( s. 2A (1.) ) 'by the introduction of a provision which will diminish the danger of a recurrence of some of such

difficulties, the necessity still continues for the most complete co­ operation possible between the Commonwealth and the State Health aut,horities in times of threatened epidemics. We think that the position of the Commonwealth Department of Health in regard to

the performance of its functions would be more clearly defined if the Quarantine Act were further amended by the addition to section 11 at the end thereof of the words 'and in promoting

public health '.

Co-opera.t,ion in .regard to other matters. 5. In those matters affecting health of 'Yhich the States have sole control, evidence has been submitted that a considerable degree of co-operation has existed between the Health authorities of the

Commonwealth and States. They have combined in an investiga­ tion into hookworm over the ·whole of Australia and in promoting measures for its eradication where found to be present. They have similarly acted in co-operation in the campaign against venereal diseases, by the Commonwealth providing subsidies to theStates for expenditure on venereal disease. Conferences of Commonwealth and o State Health and · other officials have been held to devise uniform legislation and regulations with regard to purity of food

and drugs, and to devise measures for uniformity in the action to be taken against tuberculosis. vVhile these and other conferences have been of considerable value, great delay has frequently occurred in giving effect to their recommendations. In some instances the

recommendations have not been fully carried /out.

The Commonwealth Department of Health has also eo-operated with State Departments in the fields of industrial hygiene and sanitary engineering, by expert.s. in .these .subjects,

have advised health and mume1pal authorities In vanous States m regard to partic1;1lar problems .. It has also instituted _laboratories which hav<:; beel\ of great assistance, not only to State Health authorities but to members of the medical profession in their

_Preventive medicine."

F.l25l.-12

1073

172

The Commonwealth has assisted or co-operated with the States in establishing serum laboratories and other laboratories at different centres for the assistance of local practitioners, a School of Public Health and Tropical Medicine, and various clinics. The Commonwealth

authorities have also conducted or co-operated in conducting investiga­ tions into various diseases, including diseases associated with mining and with tropical areas, and has spent the sum of £100,000 in the purchase of radium and the establishment of a radium bank.

.At the conference of Commonwealth and State :Ministers held at Canberra in May, 1929, the Prime Minister drew the attention of those present to the important effect on public health of the extension of effective water and sewerage systems, particularly in country dis­

tricts, and suggested that if the States would come forward with a proposal, after investigation, to assist local bodies in paying the interest on approved schemes, the Commonwealth would be prepared to consider favourably the idea of associating itself with the States in this financial arrimgement in order to encourage the installation of such systems.

E xte.rnal Relations. The Commonwealth is a contributor to the International Office of Public Health at Paris, and is a party to the Venereal Diseases Con­ vention, and to the International Sanitary Convention. The Common­ wealth is also a member of ihe League of Nations, "\vhich has established a Health Organization, and the Director-General of Health for the Commonwealth is an assessor to the Advisory Committee of the Health Organization of the League.

The Commonwealth is a party to conventions of the League of Nations relating to social hygiene, and it has been suggested that the Parliament could make these conventions binding throughout Australia by the exercise of its powers to make laws with respect to external affairs, but no legislation of this nature has been introduced, and the

Commonwealth as a federation is not bound to introduoe such legislation.

Control of Health. The States retain exclusive control of local government adminis­ tration, and of purely preventive measures. It was urged by w}tnesses that the States are financially-unable to discharge adequately th'il respon­ sibility which is left to them of safeguarding the health of the people. This statement was made with regard to a!l the States, with the excep­ tion of Victoria, as to which State no evidence on this point was placed before the Commission. It appears that the States have been unable

to appoint full time medical officers outside the large cities, and this disability has been brought under the notice of successive governments in New S.outh Wales. ' It was said of Western Australia that the build­ ings and equipment were deficient. In Tasmania the Chief Health Officer was a layman.

It was suggested by a departmental committee appointed by the Commonwealth Government in 1916 that an enormous impetus would be given to progress if the Commonwealth Government would offer to contribute to the cost of appoiuting district medical inspectors through­

out Australia, and the suggestion was made by several State officials

1'73

before this Commission that the Commonwealth should pay a portion of the salaries of State district health officers either instead of or in addition to establishing laboratories for research. The Commonwealth in some instances does make grants to the States

for a named work, e.g., for the treatment of venereal disease, and then as a condition of the grant has the right of inspection. It was suggested by Dr. Cumpston that the Commonwealth Par­ liament might be invested with a concurrent health power, and that this power might either be unqualified or be restricted to acting in

aid of the States, as the successful exercise of the power would of necessity depend upon agreement between the Commonwealth and the States as to their relative spheres of legislation and of administration. The following extract is from pp. 116-117 of his evidence:-

" It has already become apparent, even at the first session of the Federal Health Council, that there is hardly a single aspect of public health which does not for its proper consideration require to be studied in its national phases. Reference to the res olutions of the Federal Health Counc_ il will show that most of the principal matters were referred to the Commonwealth Department of Health

for general inquiry and the formulation of basic principles. This decision was reached owing to the conviction present in the minds of each of the State representatives that hardly a single aspect of public health administration could be considered as a matter which concerned one State only. It was obvious that, for a proper study of the conditions surroun(J..ing each of the public health

problems, a national inquiry was necessary. It was also obvious that some form of central co-ordination in practice was essential to success. There would appear to be some grounds for the pro­ posal that the Commonwealth might be invested with constitutional

powers in respect of health. This would not of course remove the difficulty that is always to be found in the domain of concurrent powers. It might be difficult to define the limits of activity or of authority either - of the Commonwealth or of the State in any

constitutional or legal form. This would need to be a matter for adjustment and arrangement, but if the Commonwealth had powers to legislate in respect of those matters which it was agreed with the States were proper fields in which the Commonwealth should legislate, there would be the opportunity of removing many

anomalies and many difficulties which now exist, and there would certainly be presented the possibility of progress to a degree which is not now possible. The Federal H ealth Council, if given

statutory status, would provide· an instrument adequate to secure agreement a.s to the fields in which the Commonwealth should legislate. The 'position might be met thus :-Section 51 of the Constitution might be amended by the addition of the single wo rd 'health'

without qualification, the exercise of this power by the Common­ wealth to be dependent (as of necessity it must be for success) upon agreement between the Commonwealth and States a.s to relative spheres of legislation and of administration; or by the

addition of the word 'health, with some qualifications indicating that the activity by the Commonwealth should be in aid of the States and not exclusive'."

1075

174

Federal control was affio urged by Dr. Harvey Sutton, who \\'as theD Principal Medical Officer, Department of Education, New South Wales, and is now Director of the School of Public H ealth and Tropical Medicine, and who contemplated a system under which such matters as the control of water and sewerage would be in the hands of a local authority, while things which concerned the State as a whole would be dealt with by the State, and things of national importance would be with by the Commonwealth but chiefly through the States

(evidence, p. 1224). Mr. Tudor, Secretary for Public H ea lth, Tas­ mania, expressed himself as being strongly in favour of the Com­ monwealth having general legislative powers in regard to health on the ground that its financial and other resources wo uld materially assist the States to deal with various health problems common to the whole of Australia and of national concern and importance (evidence,

p. 895). On the other hand a number of witnesses, including Dr. Dick, Director-General of Public Health, New South Wales, Dr. Mitchell, Acting Deputy Commissioner of Public Health, Western Australia, Dr. Ramsay Smith, Permanent Head of the Public Health Depart­ ment, South Australia, and Dr. Dale, City H ealth Officer, Melbourne, expressed opinions against a transfer to the Commonwealth of a general health power, the more important reasons . which were urged being ·

that better results would be obtained by a continuance of the system of co-operation, and by grants from the Commonwealth to the States subject to the minimum of conditions, and that the control of health is bound up with local government (evidence, pp. 1277, 482, 1051, 707).

Foods and D1·ugs. At the conference of 1904 · a resolution was passed. in favour of a uniform standard of foods and drugs for the Commonwealth. In 1906 an Act was passed by the State of Victoria making it possible that stan­ dards for each food should be legally promulgated, and appointing a Foods Standards Committee . Prior to 1911 similar Acts had been passed in all the States, although Tasmania did not appoint a Foods Standards Committee until recently, but it was found that the stand ards established

were not identical in all the States. Certain of the differences were removed in 1910, and cer tain others in later years; but in 1927 there were still some differences (evidence, p. 121). The Royal Commission on Health appointed in 1925 r ecommended

uniformity in foods and drugs. recommendation was referred, through the Federal H ealth CounCil, to the fourth conference of the Commonwealth and States on that subject, which met in May, 1926. The conference recommended that the Parliaments of the States should empower the Parliament of the Commonwealth to legislate so as to provide that the standards and regulations framed by the conference in relation to the control of imported food s and drugs, and of such foods and drugs of Australian origin as are or may be the subject of interstate

trade, be made uniform throughout the Commonwealth. It was proposed by the Acting Prime Minister of the Commonwealth that if the proposed legislation were passed, there should be a Common­ wealth Foods and Drugs Standards Committee with sub-committees, but the proposal has not yet been accepted by all the States .

175

Registration. At present there is no Commonwealth r egister of doctors, dentists, pharmacists, or nurses, nor has the Commonwealth power to establish such register s. It is said that inconvenience may arise and has arisen

through a doctor registered in one State being unable to sign a death certificate in another, and through a nurse from a State in which there is no State register being unable to obtain registration in England, whereas a nurse from a State in which there is registration may do so.

The period of training . for the medical profession throughout the States is uot uniform, but at present the qualification accepted in one State is accepted in all, though separate r egistration is necessary. At the conference of Commonwealth and State Ministers held n t.

Canberra in May, 1929, the F ederal Minister for Health raised the question of the desirability of a grant of power by the States to the Commonwealth to enable the Commonwealth to have control of the registration of medical practitioners for A.ustralia. It was agreed

that the subject be again referred to the Federal Health Council with a request that that body make a definite recommendation on the question. The Premiers undertook to give early consideration to any r ecommendt! · tion of the Council on this subject and to communicate at once to tl1 · Commonwealth their views thereon. ·

----·----

1077

176

XVIII.- CO-OPE R1\.TION BETWEEN THE COMMONWEALTH AND THE STATES. 0 o-o pera.t?:on. Since the Commonwealth Government exercises a limited authority over the whole of Australia. and since the States within their own areas exercise those po·wers which h ave not been transferred to or have not been exercised by the Commonwealth, it has been found necessary to

devise means of co-operation between one or more States and the Com­ monwealth, or between the States them selves. This co-operation has taken a number of different forms. ·

The Commonvvealth in the exercise of its powers has made laws which are passed on the understanding that they will remain

in force for an agreed period. . Examples of such laws are (a)

the Surplus Revenue A ct 1910, which provided for p er capita payments to the States for a period of at least ten years; and (b) the Financial Agreement Validation Act 1929, which gave legislative effect to an agreement of which one of the terms is that it may be varied only by the unanimous consent of all the sig·na tories.

The Rive,r J.l1rurray Waters A ct 1915-1923 was passed for the purpose of carrying out an agreement between the States of Victoria, New South Wales, South Australia, and the Commonwealth, by which a settlement was arrived at of a problem which at the establishment of the Common­ wealth seemed likely to lead t o prolonged litigation between the States named.

The Grafton to South B risbane Railway Act 1924-1926 provided for an instalment of a uniform gauge railway, and for the construction of a railway with the consent of the States through whose territories it is laid.

The Sugar Agreement. Tasmanian hops. The Commonwealth has entered into agreements from time to time with the State of Queensland whereby in consideration of the importa­ tion of foreign sugar being prohibited the Queensland Government

agreed (a) to acquire under the Queensland Sugar Acquisition Act all raw sugar manufactured from sugar cane grown in Queensland; (b) to purchase all ra"\v sugar manufactured from sugar cane grown in New South Wales; (c) to sell refined sugar, and other products manufac­ tured from the raw sugar, for consumption in Australia at prices not exceeding the various prices fixed by the Commonwealth Government, a Jower price being fixed for sugar used in the manufacture of fruit products; (d) to supply sugar for use in the manufacture of goods intended for export at the Australian in-bond equivalent of the world's sugar parity; and ( e) to accept responsibility for any loss arising from

the exportation of surplus sugar from Australia. The manner in which such an agreement is carried out is explained at page 321 of the evidence. There is no provision for such an agreement in the Constitution, but the sanction of the agreement is to be found in the power of the Com­ monwea)th to r emove the prohibition on the importation of cane sugar, beet sugar, golden syrup, and treacle, imposed by proclamation under section 52 (g) of the Customs Act 1901-1925.

By similar use of the cust oms power, provision has been made for the use of a speci:fied proportion of Tasmanian hops by brewers.

177

Officials engaged on similar work. Co-operation takes place between officials engaged on the same or similar work, e.g., as between Commonwealth officials engaged in classing goods for export and State officials engaged in examining goods for domestic consumption. This co-operation has at times proved unsatisfactory, especially in relation to the grading of butter, and it has b-een suggested that the time of Commonwealth officials might be employed in giving instruction at periods of the year when the export

trade is not active.

Confe?·ences and agreements. Conferences of departmental offic-ers have been held, occasionally but not always under the presidency of the Ministerial head. Of these conferences, among the most important have been, those between Health officers, which are referred to elsewhere in this report.

Conferences between Railways Commissioners and railway officials have been held from time to time. In 1905 a conference between the Railway Commissioners of the States arrived at an agreement for the abolition of freight rates designed to attract trade from its natural

outlet. These rates were much discussed at the Federal Conventions, and provision with respect to them is made in sections 102 and 104 of the Constitution (see section xx of this report). Uonferences have been held between officers of the Defence Depart­ ment and th-e Chief Railway Commissioners of the States, and in 1911

brought about the War Railway Council, on the recommendation of Lord Kitchener. There have also been (a) conferences between the departmental heads of the Departments of Fisheries, intended to secure uniformity in the

regulations; (b) conferences between heads of the D-epartments of Navigation in the Commonwealth and in the States, designed to prevent overlapping while preserving the separate existence of Federal and State departments; and (c) conferences between Forestry Officers for the

purpose of considering matters of mutual interest. .

Conferences of taxation and mining officials have b-een held recently on the recommendation of the Development and Migration Commission to consider the position of the gold-mining industry. At the conference of Commonwealth and State Ministers h-eld in May, 1929, the repre­ sentatives of the States undertook to give favourable consideration to

the proposals made by this conference on· the questions of uniformity of mining laws and relief in the dir-ection of taxation. At the same conference it was agreed that there should be a meeting of the State authorities dealing ·with unemployment and a representative

of the Development and Migration Commission to to draft

a uniform plan for labour bureau s and to propose umform methods of administration. It was further resolved that there should be a conference of the Surveyors-General of the States with a representa- .. tive of the Defence Department jn order to f acilitate the preparation of survey rna ps.

At the same conference the representatives of the Stat-es approved of the principle of the establishment of a Federal Transport Council as a consultative advisory body carrying out functions similar to those perform-ed by the Federal Loan Council, the Federal Aid Roads Board,

and the Federal Health CounciL

1079

178

Commonwealth and State departments no1v work together in the eollection of income tax, though the Commonwealth and the State of w· estern Australia alone act together for the purpose of collecting land tax. In assessing estate duty the Commonwealth Commissioner of Taxa­ tion usually adopts the State valuation of personal property, and the State valuation of real property where no valuation fot the purposes of F _ ederal land tax is available.

A common electoral roll is in use in Victoria, South Australin and Tasmania, and is being instituted in New South Wales. Commonwealth and State Statisticians co-operate in the collection _ of statistics, though it is only in the State of Tasmania that the State

department of statistics has been superseded by the Federal department. Conferences between the 1!'0deral and State Statisticians are held at intervals. The work of collecting the census is carried out wholly by the Commonwealth. The collection of vital statistics is carried out bv the States. •

Cinematograph Films. There are State ,and Federal authorities for the licensing of films. The Commonwealth can exercise no authority over :films made in Australia, but a suggestion was made to this Commission that the Commonwealth has power to exercise complete control over the manner in which any imported :films may_ be· exhibited.

The proposal for the transfer to the Commonwealth of power to legislate with respect to the production distribution and exhibition of films is noted at pages 182-183 of this report.

Loan Council. The Loan Council was formed in 1924, without statutory authority, for the purpose of controlling borrowing by the States and the Common­ wealth, and reducing competition. For some time the State of New South Wales was not a member of the Council. The Loan Council has now statutory authority under the Financial Agreement Validation Act

1929. .

J11 ail Services.

By means of subsidies or mail contracts, the Commonwealth has enabled frequent communication to be maintained with outlying settle­ ments and therRby improved -the conditions of settlement.

Repa.tria.#on. The Commonwealth and the· States have co-operated in the settle­ ment of returned soldiers, on the land, and of munition and war­ workers ·who left Australia under engagement vvith the British Govern­ ment to undertake war work.

At the Premiers' Conference of 19.17 the Commonwealth offered both to finance and to superintend repatriation, but this offer was rejected by the States. The arrangement then made was that the

-Commonwealth should take the responsibility of finding up to £500 per settler) as w_ orking capital for improvements, implements, seed &c. I • h • ' '

an amount wm.c was subsequently mcreased to £625 per settler, together with £375 per settler for resumptions and works incidental to land settlement approved by the Commonwealth.

179

By the 30th June, 1927, the total amount advanced -by the -Common­ wealth to the States was £35,001,941. The amounts advanced to each State were :-New South Wales, £9,826,203; Victoria, £11,968,176; Que.ensland, £2,717,697; S?uth Australia, £2,857,780; W-estern A.us­

traha, £5,463,782; Tasmania, £2,168,303. ·

At a conference of representatives of the Commonwealth and the States', held in S-ydney on the 23rd July, 1927, it was shown that some of the States had incurred heavy losses, and the Commonwealth was asked to share in these losses, the States claiming that the repatriation

of soldiers was an obligation of the Commonwealth. The Prime Minister thereupon reminded the conference that at the conference of 1917 the States had claimed that as they were in control of all machinery for land settlement the scheme should be controlled solely by the States. l-Ie stated that the Commonwealth had already provided about

£10,000,000, and was willing to bear a further share of ascertained losses after inquiry. An inquiry has since been held and a report

presented by Mr. Justice Pike (Soldier Land S ettlement, 12th July, 1929). Immigration. Prior to the year 1920 the activities of the Commonwealth in relation to immigration consisted mainly in advertising the resources and

attractions of Australia by means of exhibitions and in handbooks and newspapers. In 1920 an agreement was entered into between the States and the Commonwealth by which the Commonwealth undertook the task of recruiting and selecting immigrants, whilst the States undertook to

advise the Commonwealth as to the number and classes of immigrants they were prepar-ed to receive, and accepted the responsibility for their absorption. Prior to the year 1926 the task of the Common­ wealth was carried out by the Migration Branch of the Department of

Markets and Migration, but in that year it was taken over _by the Development and Migration ' Commission. On the 8th April, 1925, the governments of the United Kingdom and the Commonwealth entered into an agreement under which the

Commonwealth Government was to raise loans for the States and issue the proceeds at low rates of interest during a limited period, and the British Government undertook to make certain contributions to the Commonwealth to assist it in making these concessions to the States. The total of the sums of money which 1p-ay be raised under the agree­ ment is to be £34,000,000, arid the money is to be used for the purpose of enabling areas of land to be made available for settlement, or to

enable such public works to be carried on as will tend to develop and expand settlement areas, or will enable areas already settled to carry a greater population. This agreement is now_ administered under the direction of the Development and Migration Commission, appointed in A.ugust 1926 which considers and reports on any scheme proposed by a

State be out under the agreement. This agreement has now

been signed by all the States, and a number of schemes have been pro­ posed by States and approved by the Commission. At the conference of Federal and State Ministers held at Canb-erra in May, 1929, it w_as agreed that the Commonwealth should negotiate

with the British Government in order to obtain an amendment of the migration agreement while. the of Aus­

tralia, would not add to Its responsibilities m respect to migrants.

1081

180

The Development and Mig1·ation Commission. Besides its duties in connexion with "the migration agreement " the Development and Migration Commission is . to carry out in­ vestigations on economic questions. It has examined the position of

Tasmania by agreement between the State and Commonwealth Govern­ ments and has made sugg-estions for the improvement of primary pro­ duction and internal transport in the island. In investigating the prospects of forestry in Tasmania, it has acted in conjunction with the State Conservator of Forests and has had the assistance of the Chie f

Forester of the Federal..Territory. The Commission has also conducted investigations into the gold mining industry in Western Australia, and into the position of the dried fruit industry in Australia generally, and .connected therewith an inquiry into the prospects of development in the

Murray R.iver Valley. The Development and Migration Commission collaborates with the Council for Scientific and Industrial Research, the Council inquiring into the scientific, and the Commission into the economic aspects of the pr.oblem under investigation.

The Council for and Industrial Research.

The work carried out by the Council for Scientific and Industrial R esearch is in many respects similar to that carried out in the

United States by the Bureau of Agriculture. A proposal

wa:s m ade to the Premiers' Conference in 1909 that a

Bureau of Agriculture for the Commonwealth should be estab­ lished, and a bill for that purpose was introduced into the Senate, but was subsequently abandoned owing to the opposition of the States. In view of the existence of Agricultural Bureaus in the several States

this proposal was not renewed, but in 1916 a temporary body was formed, and in 1920 the Institute of Science and Industry was estab­ lished, which in 19 26 was re-organized under the name of the Council for Scientific and Industrial Research. The Council received a grant of £250,000 out of the surplus revenue of the year 1925-1926, and a further grant of £250,000 in 1927-1928. Th-e money is to be expended in accordance with estimates of expenditure passed by both Houses of the Parliament from tim-e to time (see the Science and Industry R esearch Act 1920-1926). The Council consists of a central

body and Stat-e committees. The central body consists of three Commonwealth representatives, the six chairmen of State committees, t hree members co-opted on account of their scientific knowledge.

The State committees consist partly of r epresentatives of the State governments, and partly of representatives of the Australian National Research Council and of industries . The functions of the State committees are to advise the Council, to bring up m atters for investiga­ tion, and to make inquiries as r equested.

At the conference of Federal and State Ministers held in May, 1929, attention was drawn by the Chairman of the Development and Migra­ tion Commission to the scope for joint action between th-e Common­ wealth and the States "in connexion with scientific research and direction, by provision of expert scientific personnel to be made available to the producers of the country to assist them both in dealing with animal and plant diseases and pests and also in sr·:enti:fic advice and direction in rural organization and production".

181

The aim of the Council is to place at the service of producers

throughout Australia the highest ability and the most advanced know­ ledge obtainable, and so to reduce the cost and increase the volume of production. The Council is at present concentrating its attention on problems of primary production, including animal pests and diseases,

plant .pests and diseases, fuel problems, especially liquid fuel, the pre­ servation of food stuffs, and forest products. The Council is also co-operating with the DevBlopment and Migration Commission and with representatives of the Departments of Agriculture in Victoria and New

South Wales in inquiring into methods of improving the cultivation of tobacco in Australia, and is to collaborate with the Commission and representatives of thB States in carrying out a geophysical survey of The members for the time being of the executive committee

of the Council also act as trustees of a fund of £100,000 established for the purpose of assisting research workers and training research students (see the Science and Industry Endowment Act 1926).

The Premiers' Conference. Conferences between the Premiers of the different States have been held in almost every year since the establishment of the Commonwealth. A list will be found at page 42 of the evidence. At most of . the con­

ferences a Commonwealth Minister has been present, and in recent years the Prime Minister has opened the conference. In 1908 the government of New South Wales undertook to provide a secretariat which would act as a link between successive conferences.

It was suggested in evidence before the Commission that the Premiers' Conference would be much better qualified to bring about uniformity in the laws of the different States if experts were appointed to advise the Conference, and to carry on a work similar to . that which is carried

on in the United States. What is described as a typical agenda for a Premiers' Conference, and was the agenda paper for the conference of May, 1923, will be found on page 43 of the evidence. Witnesses who had attended one or more conferences on behalf of

their respective States said that the value of these conferences could not be judged from the presence of the same item on successive agenda papers. The conferences may not be successful as instruments for having proposals passed into law, but they considered or formulated agreements between one or more States which have been or are being

carried into effect. In a great number of ·instances recommendations or resolutions of a conference have not ooen carried out, but in many instances suggestions have been made which have brought about legis­ lation on the part of the Commonwealth or of one or more States.

The conferences have paid most attention to two topics-the financial relations of the States and the Commonwealth, and the problem of industrial relations. The problem of financial relations has been par­ ticularly prominent in the conferences immediately preceding the year

in which a re-adjustment was to be made, that is, in the conferences immediately preceding the termination of the first ten years of the Com­ monwealth, and in those immediately before and after the termination of the ten year period prescribed by the Surplus R evenue Act 1910.

The problem of industrial relations was most prominent in the year 1909, when it was thought necessary to bring about uniformity in industrial legislation, and shortly after the decision of the High Court

1083

182

in 1920 in the Engineers' case, in which it was held that the Federal Arbitration Court could regulate the wages and hours of labour of employees in State industrial undertakings. Other important subjects considered at conferences were those of a uniform railway gauge, health and aviation.

·Other conferences have been held between State and Federal Ministers, of which one of the most noteworthy was the Treasurers' Conference of May, 1914, for the purpose of considering resolutions designed to prevent competition for loans among the States. ·

At the conference of Commonwealth and State Ministers held at Canberra in May, 1929, it was resolved that the meeting of the Prime Minister and the State Premiers be held annually at some date in May, and that the agenda p aper and any accompanying memoranda should be furnished to the States at least one month before the holding of the conference.

References to the Commonwealth Parliament under section 51 (xxxvii). On several occasions agreements have been made, principally at Premiers' Conferences, to submit to the State Parliaments •

proposals to refer subjects of legislation to the Commonwealth Parliament, with the object of bringing about uniformity. Doubts have been expressed as to the e:ffect of paragraph (xxxvii) of

section 51 of the Constitution-:-( a) whether reference may be made in general terms, or only in the terms of a special Act; and (b) whether a reference once made may be withdrawn. These doubts have never been tested, as no reference to the Commonwealth Parliament by all the States simultaneously has ever been made.

In 1906 a proposal was ma<;le at the Premiers' Conference that legis­ lation on the subject of hall-marking should be referred to the Com­ monwealth by the States. A.t the Premiers' Conference in 1909 it was agreed between the Prime Minister of the Commonwealth and the Premiers of the States

that the Premiers would bring forward in their respective

Parliaments legislation for referring to the Commonwealth Par­ liament the power of legislating on industrial conditions, so as to bring about uniformity through the Inter-State Commission. In 1912 a bill was prepared for the purpose of vesting in the Commonwealth Par­ liament wider industrial powers, but nothing further was done. In 1915, after the writs had been issued for a referendum the Premiers agreed to submit to the State ParliaJments proposals to confer on the Commonwealth Parliament certain industrial powers for the period of the war and one year thereafter. On the withdrawal of the writs only the State of N ew South Wales passed th e necessary Act, though bills were introduced in the other States.

A proposal was at one time made to the State governments that they should introduce legislation giving the Commonwealth Parliament power to legislate with respect to intra-state shipping and navigation, but this proposal was not acted on by any of the States.

At the conference of Commonwealth and State Ministers held in May, 1929, the Prime Minister referred to the proposal for the transfer b.Y the States to the Commonwealth of power to legislate with respect to the production distribution and exhibition of cinematograph £lms

183

in. . on the lines recommended by the Federal Royal Com­

miSSIOn on Films. It was thereupon suggested by the Premier of Vic­ toria that the Victorian Act seemed to meet what was and that the Commonwealth might consider this Act and, if thought fit, circulate it to the other States with a view to uniform action.

Aviation. In 1920 on the motion of the Prime Minister a was carried

at a Premiers' conference in the following form:-" (1) That it is desirable that each of the Parliaments of the

States should refer to the Parliameut of the Commonwealth pur­ suant to section 51 (xxxvii) of the Commonwealth of Australia Constitution Act the matter of the control of air navigation, but so as to retain to each State (a) the right to own and/or use for

the purposes of the government of the State air-craft operating within the State, and (b) the police powers of the State. . (2) That it is desirable that pending the passing of legislation by the Parliament of the Commonwealth pursuant to such reference

the States shall each enact regulations similar to the Imperial Act, 9 George V., ch. 3, to secure uniform legislation and regulations. That the Premier of N ew South Wales as executive officer be requested to draft and submit to the State governments (a) a bill to provide for the regulations for the control by the Commonwealth of the necessary powers in accordance with the terms of paragraph 1 of the foregoing r esolution, and (b) a bill to provide for uniform

action by the States pending the passage of Commonwealth legislation." The Commonwealth thereupon passed the Air Navigation Act 1920. Four States dealt with the ma.tter. Tasmania and Queensland passed

Acts substantially in accordance with the terms of the resolution. Victoria and South Australia passed Acts on different lines. In New South Wales and Western Australia bills in accordance with the terms of the resolution were introduced but not passed (evidence, pp. 49,

270-271). At the conference of Commonwealth and State Ministers held in May, 1929, it was agreed that the Commonwealth should draft a bill to be submitted to the governments of the States transferring to the Commonwealth Parliament full power to legislate with respect to aviation and matters incidental to aviation, and the State Governments undertook to consider whether they would submit the bill to their

respective Parliaments at an early date.

Education. The Commonwealth has no power under the Constitution to make laws with respect to education, but it may make laws for education in a Territory, and it is interested in the education of students for· service in the Territories and for other purposes. The Commonwealth has,

therefore, considered proposals for establishing a University in the Federal Territory, and evidence was given on this subject before the Commission by Sir Mungo MacCallum, then Vice-Chancellor of the University of Sydney, and by Professor Laby, Professor of Physics

and Natural Philosophy in the University of Melbourne.

1085

!'

184

The Commonwealth has already made prov1s10n for a School of :Forestry in the Federal Capital Territory, to which students are received from the States, and which will _take the place of a School of Forestry formerly contemplated by certain of the States. The Commonwealth has made arrangements -with the University of Sydney for the establishment of a Sclibol of Public Health and Tropical Medicine, and the building required for the School is in course of erection. The Commonwealth gives assistance to the University of Sydney by contributing a certain share of the salary of the Professor of Oriental Studies, and of the expenses of the Department of .Anthropology, and has given temporary assistance for the study of aero-dynamics to the University of Melbourne.

The Commonwealth has also provided a fund, to be administered through the Council of Scientific and Industrial Research, for the purpose of providing assistance to research workers and in the training of research students. Evidence was given before this Commission by

witnesses who urged that the Commonwealth should have power to make laws with respect to secondary education or to education generally, and also that it should give further assistance to the States in providing for educational research, for experimental education and for other purposes, and also that a Federal Bureau of Education should be established (evidence of Dr. Cole, Vice-Principal, Sydney Teachers' College, at p. 1369, and of the Ron. E . .A. McTiernan, at p. 1284).

Federal aid in the United States of America. Under the Constitution of the Umted States there is no express power under which Congress may grant subsidies to States, but there are numerous instances of appropriations being made for the purpose of granting subsidies to States for specified purposes, and of conditions being prescribed as tq the manner in which these subsidies may be

applied. By the Morrill Act of 1862 portions of the national land were set aside for the benefit of each State in proportion to its representation in Congress, and provision was made that the proceeds of sale of this land were to be devoted to the maintenance of one or more colleges

engaged principally, but not exclusively, in teaching branches of learning relating to agriculture and the mechanical arts. Later amendments of this Act went into some detail as to the management of the Land Grant Colleges, committed the administration of the law to the Bureau of Education, and empowered the Secretary of the Interior to withhold the allotment of any State which did not comply with the terms of the

grant, subject to an appeal to Congress. In 1887 Congress made a lump sum appropriation to each State for the purpose of maintaining an .Agricultural Experiment Station in connexion with its Argicultural College. In 1907 it increased the appropriation and laid down addi­ tional rules for the use of the money. Eight years later it established in the Department of .Agriculture a State Relations Service, charged with the duty of supervising the .Agricultural Colleges and Experiment Stations. .

The Weeks Act of 1911 made appropriations for the purpose of enabling the Forest Service and the Department of .Agriculture to co-operate with any State or group of States, when requested, in pro­ tecting the forested watersheds of navigable streams against fire. The

Smith-Lever .Act of 1914 made appropriations for extension work in agriculture undertaken by the Department of Agriculture and the

186

Agricultural Colleges of the States. A small lump sum was voted to each State, and the remainder was apportioned among the States, each receiving a share fixed on the basis of its rural population as compared with the rural population of the rest of the Union. This Act also

contained the provision that Federal funds should not be given to any State, until it accepted the terms of the Act and appropriated or wise secured a sl).m equal to that allotted to it by the law. The Hughes Voc ational Education Act of 1917 appropriated Federal funds

to aid the States in teaching trades, industrial subjects, and home economics. The Act is carried out under the direction of a Federal Board for Vocational Education. It is now supplemented by the Purnell Act of 1925, making provision for research in home

economics.

By the Federal Highway Act of 1916 large sums of money were granted to the States for public roads, and provision was made . for the closest scrutiny over the construction and maintenance of such roads, the grants being apportioned among the States on the basis of popu­ lation, area, and postal route mileage . . This Act has been amended in

the direction of giving the Federal authorities greater control over the State highways, and for the years the sum of

million dollars was voted for road building.

By the Industrial ·Rehabilitation Act of 1920 Federal aid was provided for the purpose 'of restoring to civil employment persons jured in industry or any legitimate occupation, and States

have the provisions of the law and begun work under Federal

supervision.

By the Towner Act of 1921 Federal money was appro­

priated to the States for the purpose of promoting the welfare of mothers and infants at the time of and this law was sustained

by the Supreme Court in the case of lVIassachusetts v. Mellon in 1923. The general administration of the law fs placed in charge of the Children's Bureau, in the Department of Labor, subject to the super·· vision of a Board of Maternity and Infant Hygiene (s ee' Bear d,

American Government and Politics, 1928, 5th edn., pp. 443-447).

International Labour Conventions.

The conventions agreed upon by the International Labour Con­ ferences at Geneva have from time to time been referred to the States by the Commonwealth Government on the assumption that to give effect to them by legislation was not within the p_owers of the Commonwealth

Parliament and also because under article 405 of the Treaty of Versailles the Commonwealth Parliament ·is entitled to treat conventions on labour matters as recommendations only.

Of the conventions so referred, some were already covered by legis­ lation of the Commonwealth or the States, none has been dealt with specifically by any State. subject of the conventions was d.iscussed at the Premiers' Conference m July, 1927, and reasons were given for

the inaction of the States, but no plans for the future were adopted. The subject was again discussed at the confer ence of Commonwealth an

1087

186

The carrying out of co-operation between the Commonwealth and the States. Generally witnesses befQre the Commission expressed satisfaction with the manner in which co-operation had been carried out between

Commonwealth and State officials and Commonwealth and State Depart­ ments. Particularly was this the case with regard to the co-operation between the State and Commonwealth Departments of Health and of Statistics. An to this rule; however, was found in the relations

between the officials engaged in the inspection and grading 9f certain commodities in the State of N ew South Wales. The opinion was expressed by some witnesses that in taking over functions previously carried out by the States and in assuming functions which the States were carrying out simultaneously, the Commonwealth had imposed unnecessary expense on the people of Australia. It was urged · that the Commonwealth should have made more frequent use of State officials, and that i_nstead of establishing new departments of its own it should have subsidised existing State Departments or have acted ill close co-operation with them (see evidence of Mr. Bland, p. 1166, and for examples, the evidence of Mr. Holman, p. 1317, Mr. Eggleston, p. 731, Sir Edward Mitchell, p. 761, 1\ifr. Drummond, p. 1228). Further it was said that in assuming functions not expressly transferred to it t.he Commonwealth had . caused expenditure ·which was unnecessary and unjustified (see in addition to witnesses previously cited, Sir Henry Barwell, representing the South Australian State Government, p. 963, and Sir .James Mitchell, p. 564), and that if Commonwealth intervention was necessary it could have taken the form of subsidies to existing State departments. It may be noted that co-operation between the Common­ wealth and States in the collection of income tax has been established in comparatively recent years, and that there is stiil an apparently unnecessary duplication of · expense in the maintenance of separate State and Commonwealth departments in some States for land tax and for electoral purposes. It should also be noted that at the conference of State and Commonwealth Ministers held in May 1929 reference was made to the prospect of more ·effective co-operation between the States and the Commonwealth in the. application of science to primary production.

187

XIX.-THE FINANCIAL RELATIONS OF THE .. AND THE STATES.

The financial provisions of the Constitution. A brief account of the :financial provisions of the Constitution including the provisions which were contained in the pact of union and the provisions (s. 105A) which were inserted by the constitutional altera­ tion of 1928, has been given in section iii of this report. Some of these provisions (se e ss. 87, 89, the second paragraph of s. 92, ss. 93 and 95)

related to specified periods, and their operation has now been exhausted, but their effect on the :financial r elations between the Commonwealth and the States is to be noted in an account of the working of the Con­ stitution since Federation. The obj ec ts on which the Commonwealth may expend its r evenue are to be gather ed from v arious sections of the · Co'llstitution, and in particular from sections 51, 52, 69, 81, 82, 85, 96

and 122. Provisions relating to the payment of surplus revenue to the States, the grant of :financial assistance to the States, and the making of agreements with respect to 'the taking OYer by the Commonwealth of the debts of the States and the borrowing of money by the Common­ wealth and the States, are to be found in sections 94, 96, and 105A. The :financial between the Commonwealth and the States depend

on these sections and on the interpretation which_ has been placed on sections 94 and 96 by the GoYernment of the Commonwealth and by the High Court.

The initial stages of Federation. The book:keeping period. The effect of the operation of sections 89 · and 92 on the :financial relations of the Commonwealth and the States was only temporary and has already been indicated. These sections prescribed · the means of

adjustment for the period prior to the imposition of uniform duties of customs. Section· 93 provided for what was called the

" book-keeping" period. Under the Constitution this period wa;s to continue for five years after the imposition of uniform duties of customs and thereafter until the Parli,ament should otherwise provide, and the operation of the section was continued for a further

period by the Surplus R evenue Act 1908. During the book-keeping period the States were credited with the revenues received in the States, and debited with the expenditure of the departments transferred under section 69 of the Constitution, and also with a proportion of the

expenditure of the · Commonwealth on other objects. The Surplus Revenue Act 1908 continued the book-keeping system, but provided tha.t revenue formerly collected by the States should be distributed among the States in proportion to their respective populations, and more particularly defined what items of expenditure should come under the heads of transferred and new expenditure respectively. The book­ keeping period as. extended coincided the pe;iod of. ten. years

mentioned in sectiOn 87 of the Const1tutwn, durmg whiCh 1t was provided that of the revenue derived by the Commonwealth from customs and excise not more than one-fourth shoul be applied by the Commonwealth towards its ·own expenditure, and that the balance should . in accordance with the Constitution, be paid to the several

States' or applied towards the payment of interest on debts of the several .States taken over by the Commonwealth. During this period F.l251.-13

1089

188

of ten years the States received not only the three-fourths of customs and excise revenue, which the Commonwealth was bound to pay them, but £5,000,000 in addition; and no debts were taken over from the States.

The Surplus R evenue Act 1908. After the end of the five-year book-keeping period the Parliament, section 94' of the Constitution, was to "provide, on such basis

as it deems fair, for the monthly payment to the several States of all the surplus revenue of the Commonwealth." Diff erent opinions were entertained whether this section was mandatory or permissive. The Commonwealth Government adopted the practice of forming trust

accounts, in accordance with the provisions of the Audit Act, and of appropriating mop.ey for th e purposes of these trust accounts, so that although all the revenue of one year might be appropriated for authorized purposes, part of it might. not be expended until later years, In J ur1e, the Parliament of the Commonwealth passed

the Coast Def ence Appropriation Act 1908 apd the Old-age Pensions Appropriation Act 1908, whereby unexpended moneys were appro­ priated for expenditure in future years. The S urplus R evenue A c't 1908 provided in effect that moneys so appropriated should be deemed expenditure of the Com­

monwealth, so that there could be no surplus revenue

until afte r the moneys appropriated had been added to . the

moneys actually expended within the year, and deducted from the revenue for that year. Doubts as to the constitutional validity of this practice were expressed iu Parliament, and the Acts of the Com­ monwealth by which it was sanctioned -were attacked before the High Court by the State of New . South Wales, but unsuccessfully. The State claimed the sum of £160,000 as its share of moneys appropriated to trust accounts, but the High Court held that the Commonwealth was entitled to charge against the States the amounts paid out of the Commonwealth revenue as special appropriation (New South Wales v. Commonwealth, 7 C.L.R. 179).

Conferenc es. The Referend'l,lrns of 1910. Shortly after the e5tablishment of the Comm onwealth and until the end of the te n-year period prescribed by section 87, n ego tiations had been going on between represe:otatives of the States and of the Common­

wealth in the hope of arriving at a new adjustment by which the financial relations of the States and the Commonwealth would be r egulated for the immediate future. Eleven conferences between repre­ sentatives of the States were held during this period. At several, representatives of the Commonwealth were present., and at one--that held in 1906-leaders of the Opposition in the State Parliaments attended, in order to give the resolu tion of the States a non-party character.

In. 1909 agreement was drawn up and signed by Mr. Deakin, as Pl'lme 1bmste:tftof the Commonwealth, and by the Premiers of the States, which was in the following terms:-"In the public interests of the people of Australia, to secure

economy and efficiency in the raising and spending of their I'even ues, and to permit their Governments to exercise unfettered

189

control of their receipts and expenditure, it is imperative that the :financial r elations of the F ederal and State Governments­ which under the Constitution were determined only in part, and for a term of years-sh ould be placed upon a sound and permanent

basis. It is therefore agreed by the Ministers of S tate of the wealth and the Ministers of the component States in conference assembled to advise:-

1. That to fulfil the intention of the Constitution by pro­ viding for the consolidation and transfer of State debts, and in order to insure the most profitable ·management of future loans by the establishment of one Australian

stock, a complete investigation of this most important subject shall be undertaken forthwith by the Govern­ ments of the Commonwealth and the States. This investigation shall include the question of the actual

cost to the States of transferred properties as defrayed out of loan or revenue moneys. 2. That in order to give freedom to the Commonwealth in levying duties of customs and excise, and to assure to

the States a certain annual income, the Commonwealth shall, after the :first day of July, one thousand nine hundred and ten, pay monthly to the States a sum

calculated at the rate of one pound :five shillings per annum per head of population according to the latest statistics of the Commonwealth. 3. That in recognition of the heavy obligations incurred in

the payment of old-age pensions, the Commonwealth may, during the current :financial year, withhold from the moneys returnable to the States such sum (not exceeding six hundred thousand pounds) as will provide

for the actual shortage in the revenue at the end of the said year. If such shortage amounts to six hundred thousand pounds, the basis of contribution by the States shall be three shillings per head of population in the Pension States (viz., New South Wales, Victoria, and Queensland), and two shillings per head of popu­ lation in the N on-pension Sta tes (viz., South

Australia, Western Australia, and Tasmania). If such shortage be less than six hundred thousand pounds, the contributions shall be reduced proportionately per head of population as between the P ension and the Non­

pension States. 4. That in view of the large contribution to the customs revenue per capita made by the State of Wes tern Australia, the Commonwealth shall (in addition to the

payment provided for in par agraph No. 2) make to such State speci al annual payments, commencing a t two hundred and :fifty thousand pounds in the fi nancial year one thousand nine hundred and ten an d on e

thousand nine hundred and eleven and diminishing at the rate of ten thousand pounds per annum. The

Commonwealth shall in each year deduct on a per

1091

190

capita· basis from the moneys payable to the States of the Commonwealth an amount equal to one half of the sum so payable to the State of Western

Australia.

5. That the Government of the Commonwealth bring before · the Parliament during this session the necessary measure to enable an alteration of the Constitution (giving effect to the preceding paragraphs os. 2, 3,

and 4) to be submitted to the electors." In with paragraph No. 5 of this agreement two pro­

posed laws for the alteration of the Constitution were submitted to the electors at referendums held in 1910. By one of the proposed laws­ Constitution Alteration (Finance) 1909-the alterations were to be as follows:-

" 2. ·The Constitution is altered by inserting, after section eighty-seven thereof, the following section:-" 87 .A.-(1.) Notwithstanding anything in section eighty­ seven of this Constitution, the Commonwealth may in the year

beginning on the first day of July, One thousand nine hundred and nine, out of the net revenue of the Commonwealth from duties of customs and of excise, apply toward its expenditure for the service of that year any sum not exceeding Six hun red thousand pounds over and above one-fourth of the said net ·revenue.

" ( 2.) From and after the thirtieth day of June, One

thousand nine hundred and ten, section eighty-seven of this Constitution shall cease to have effect.". 3. The Constitution is altered by inserting, after section ninety­ four thereof, the following sections:--

" 94.A. From and after the thirtieth day of June, One

thousand · nine hundred and ten, sections ninety-three and ninety-four of this Constitution shall cease to have effect. " 94B. From and after the first day of July, One thousand nine hundred and ten, the Commonwealth· shall pay to each State, by monthly instalments, or apply to the payment of interest on debts of the State taken over by the Common­ wealth, an annual sum amounting to Twenty-five shillings per head of the number of the people. of the State as ascer­ tained according to the laws of the Commonwealth.

"94c.-(1.) The Commonwealth shall, during the period of twenty-five years beginning on the first day of July, One thousand nine hundred and ten, pay to the State of Western Australia, by monthly instalments, an annual su:,.:n which in the first year shall be Two hundred and fifty thousand pounds, and in each subsequent year shall be pr()gressively diminished by the sum of Ten thousand p(:mnds.

"(2.) One-half of the a;mount of the payments so made shall be d-ebited to all the States (including the State of

Western Australia) in proportion to the number of their . people as ascertained according to the laws of the Common­ wealth, and any sum so debited to a State may be deducted by the Commonwealth from any amounts payable to the State

under the last preceding section or this section.

191

4. Section one · hundred and :five of · the Oonstitutio'n is

altered-( a) by omitting the words-" and thereafter the interest payable in respect of the debts shall be deducted and retained from the portion.s

of the surplus · revenue of the Commonwealth payable to the several States, or if such surplus is insufficient, or if there is no surplus, then the deficiency or the

whole amount shall be paid by the several States;" · and (b) by adding at the end thereof the following paragraph:-"The interest and charges payable by the Common­ wealth, in r-espect of the debts of a State taken over,

may be deducted and retained from any moneys

payable to the State under this Constitution, and shall, to the extent to which they are not so deducted and retained, be paid by the State to the Commonwealth."

. By -the other proposed law-Constitution Alteration (State Debts) 190.9-section 105 of the Constitution was to be altered by omitting the words "as existing at the establishment of the Commonwealth". Of these two proposed laws, Constitution Alteration (Finance) 1909 was rejected, and Constitution Alteration (State Debts) was approved.

The arrangement proposed in Constitution Alteration (Finance) 1909 would have had the effect of giving the States a permanent charge, on the whole revenues of the Commonwealth, of a :fixed sum instead of the varying amount of the proportion of customs and excise revenue to which they· had previously been entitled for a period of ten

years. Western Australia vvould also have become entitled to an annually diminishing grant for · a p-eriod of twenty-five years in addition to any other grant that might have been made to that State under section 96. The representatives · of the States, both before and after the Conference

o£ 1909, sought to obtain a larger share of the Commonwealth revenue than 25s. per head, and also an additional payment varying with customs receipts. When the sum of 25s. was paid under the Surpl'Jls Revenue Act -1910, the States were worse off than they would have been had th-ey retained their original share of the ·customs receipts. An estimate of the difference between the payments actually made

and the payments . which would have been made, had the provisions of 'section 87 been continued, is extracted from the report on Western Australian disabilities (pp. cxlviii and c1) :-

Financial year.

1910-11 1915-16 1920-21

Estimated amount which would have been payable to States under section 87.

£

8,041,850 8,551,906 9,264,713

Per capita payments.

£

5,603,193 6,346,995 6,840,163

It should be noted, however, that in 1908-1909 the customs and revenue 'Vvas £10,844,067, and that there was no anticipation of the

great that afterwards took place. On the contrary some doubt

1093

192

was felt whether the Commonwealth would be able to meet its obliga­ tions to the States, and although New South Wales, Victoria and Queensland were the only States paying old-age pensions at this timr, it is reasonable to suppose that other States would have followed their -

example at no remote date. It should also be noted that the repre­ sentatives of the Commonwealth and the States, in their desire to secure certainty and freedom in the management of their revenue, made no allowance for the possibilities of great changes taking place in the value of money . .

Although by the referendum the Commonwealth obtained power to take over all State d-ebts, and not only those existing at the establish­ ment of the Commonwealth, no attempt was made to use this power, until after a further alteration of the Constitution had been carried in

1928.

Per capita payments under the Surplus Revenue Act 1910. Special grants to ·western A'ustralia and Tasmania. Although the proposed law providing for per capita payments to the States had been rejected at the referendum, by the Surplus Revenue Act 1910 the Parliament itself imposed on the Commonwealth the obliga­ tion of making these payments for a period of ten years. That Act governed the distribution of Commonwealth revenue between the States and the Commonwealth until the year 1927.

The principal provisions of the Surplus Revenue Act 1910 were that for a period of ten years from the 1st July, 1910, and thereafter until the Parliament oth-erwise provided, the Commonwealth should pay to each State an annual sum amounting to 25s. per head of the people of that State (s. 4), and that during a similar period additional sums should be paid to Western Australia so that in the :first year £250,000 should be paid and thereaft-er the payments should diminish by £10,000 per annum, half of these payments to be deducted from the payments to be made to the States (s. 5). The Act also directed, by s-ection 6, that in addition to the per capita payments referred to in section 4, the Treasurer should pay to the several States in proportion

to the number of their people all surplus revenue, if any, in his hands at the close of each :financial y-ear. This direction was given under the provisions of section 94 of the Constitution, as the proposed law by which that section would have been deleted had been reject-ed at the referendum, but section 6 conferred no practical benefit on the States, since the Commonwealth was at liberty to act on the decision of . the High Court already mentioned and to appropriate the unexpended revenue of every year to one or more trust funds. The section, it may be noted, has been replaced by section 5 of the States G1·ants Act 1927, which is substantially identical and is subject to the same comment.

In 1912 Tasmania received a grant of £95,000 under an arrange­ ment similar to that made with Western Australia, th-e payments to diminish by £10,000 per annum over a period of ten years. That grant terminated in 1921-1922. For 1922-1923 and 1923-1924 further annual payments of £85,000 were authorized. In 1924 an Act was passed granting Tasmania assistance of £85,000 for 1924-1925, and sums less

than £85,000 by £17,000 in each of the succeeding four years. By the same Act the Commonwealth gave Tasmania Federal income tax on prizes in lotteries in that State. In 1927 special payments to

193

Tasmania of £378,000 per annum were authorized for two years from the 1st July, 1926, and from th-e same date special payments to

Western Australia of £300,000 per annum were authorized for five years. ·

During the period covered by the Surplus Revenue Act 1910 the participation of Australia in the war brought about a d-ecisive change in the financial position of the Commonwealth. The Commonwealth became a borrower, on a large scale, principally from the people of Australia. It bec3ime liable to large annual payments for interest and

pensions, and it became a creditor of the - States for money lent for temporary purposes and for the settlement of r-eturned soldiers on the land. At the same time the purchasing power of the sums of money paid by the Commonwealth to the States seriously diminished, and

som-e of the States, except during a few years of the war period,

borTowed on a far larger scale than previously.

The ten-year period provided for by the Surplus Revenue Act 1910 came to an end in 1920. Thereafter the control of the Commonwealth Parliament over the expenditure of the Commonwealth revenue unfettered by any legal or constitutional obligation to the States­

except so far as section 81 might be regarded as limiting the power of appropriation, and section 94 as directing the distribution of surplus revenue-and the Parliament's power of taxation remained unlimited. With a view to bringing th-e arrangement embodied in the Surpl'us

Revenue Act ·1910 to an end and to making a new adjustment, various proposals were made both by the States and by the Commonwealth. In 1919 the then Acting Prime Minister submitted a proposal to the Premiers' Conference that the per capita payments be reduced by 2s. 6d.

in each year so that within a period of six y-ears they would have fallen from 25s. to lOs. In doing so he l aid stress on the great increase in the obligations of the Commonwealth since 1910-1911, not only through the war, but also through the increased amounts payable for old-age and

invalid pensions, which in 1910-1911 were £1,868,000, and in 1918-1919 were _ £3,925,000. In 1923 proposals and counter-proposals were made behalf of the Commonwealth and the States, which were elaborately ussed, but of which none was accepted. The Commonwealth pro­ P' . .::Js were to make an adjustment for a period of five years by ceasing to ·mak-e the per capita payments, by abandoning income tax on all ·

incomes over £2,000, and by making certain special payments. The State proposals were for an arrangement extending over ten years during which th-e Commonwealth would abandon all taxation of income, and the States all claims to a share in customs revenue, the Common­

wealth to be recouped for loss of revenue in each year by the States. Later in the same year further proposals were made by the Common­ wealth, including a proposal to abandon all taxation of incomes except incomes of companies, the States to cease to receive payments under

the Surplus Revenue Act 1910, and this alternative arrangement to continue for five years. Four States accepted these proposals, New South Wales dissenting and Tasmania not being represented at the conference. These proposals and counter-proposals did not contemplate

a permanent arrangement, one reason being as put forward by the Prime Minister that the customs revenue might be expected to decrease. Customs revenue, however, continu-ed to increase until the next proposals for a financial adjustment were made and accepted.

1095

194

Abolition of per capita payments by the States Grants Act 1927. Special grants to Western Australia and Tasmania. By the States Grants Act 1927 the provisions of the S,tl.rplus Revenue Act 1910 relating to per capita payments were repealed, and in their place a direction was given to the Treasurer to make payments to the States during the financial year 1927-1928 of the amounts specified in a schedule to the Act, the amounts being those which the respective States would have .received, had the per capita payments been continued. The Act also provided for the special payments to Western A.ustralia and Tasmania already mentioned-£300,000 per annum to W esterr1 Australia for five years commencing f rom the 1st July, ·1926, and .£378,000 per annum to Tasmania for two years commencing from the

same date.

Th e Financial Agreement 1927. Prior to the passing of the States Grants Act 1927 protests had been made against the announced intention of Ministers to

abandon the per capita payments, and suggestions had been made that the Loan Council, which was then in existence as a

voluntary council in which the Commonwealth and all the

States other than New South Wales participated, should be placed on a statutory basis, that the Commonwealth should take over the whole or a portion of the State debts, and that in order to improve the credit of the States and to meet criticisms of their indebtedness, sinking funds should be established for the liquidation of State debts. T n response to the protests a scheme was prepared by the vernment,

which was submitted to two successive conferences of · resentatives of the States and the Commonwealth in the months of •. 1 1·il and July, 1927. After a number of modifications in substance and in form scheme was accepted subject to ratification by the respective Par­

liaments of the States and the Commonwealth, and was set out in "the financial agreement" dated the 12th December, 1927. This agreement was subsequently approved by the Parliaments of all the States, and in part became binding on the States and the Common­ wealth until the 1st July, 1929.

Before r eferring to the scheme in detail, it should be stated that by the Loans Sinking-Funds Act 1918 provision was made for the establish­ ment of a loans sinking fund for the Commonwealth by the payment into a trust - fund of lOs. per annum for each £100 of the

public debt of the Commonwealth to be used in re-purchasing

securities issued by the Commonwealth and in repaying loans. This Act was superseded by the National Debt Sinking Fund Act 1923, subsequently amended in 1924, 1925, 1928 and 1929, which established the National Debt Commission consisting of the Treasurer of the Com­ monwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary to the Treasury, and the Solicitor­ General. By this .Act the National Debt Sinking Fund was established, and the Treasurer· was directed to pay into the Fund in each financial year for a period of fifty years, inter alia, a sum of £1,250,000, and a

sum of lOs. for each £100 of the net debt created in that year and · in financial year prior thereto and after the 30th June, 1923, together

w1th certain capital sums r epaid to the Commomvealth by way of

195

redemption of loans made by the Commonwealth, and also the 'repara­ tions received under the Peace Treaty. Under the amending Act No. 19 of 192.8 moneys received by the National Debt Commission in pursuance of the financial agreement are·to be paid into the Trust Fund under the head of the National Debt Sinking Fund and applied in

accordance with that agreement.

Constitution Alteration (State Debts) 1928. After the financial agreement had been approved by the States and the Commonwealth, a proposed law for the alteration of the Constitu­ tion was submitted to the electors at a referendum and was approved by the requisite majorities. The n-ew power which is introduced into

the Constitution is in the following terms :-105A.-(1.) The Commonwealth m ay make agreelJlents with States with respect to the public debts of the States, includ­

mg-( a) the taking over of such debts by the Commonwealth ; (b) the management of such debts; . (c) the payment of interest and the provision and manage­

ment of sinking funds in r espect of such debts; (d) the consolidation, r enewal, conversion, and redemption of such debts; ·

(e) the indemnification of the Commonwealth by the States in respect of debts t aken over by the Commonwealth; and (f) the borrowing of money by the States or by the Common­

wealth or by the Commonwealth for the States. (2.) The Parliament may make laws for validating any such agreement made before the commencement of this section. (3.) The Parliament may make laws for the carrying out by the parties thereto of any such agreement.

(4. ) Any such agreement may be varied or rescinded by the parties thereto. · (5.) Every such agreement and any such variation thereof shall be binding upon the Commonwealth and the States pm•ties thereto, • notwithstanding anything contained in this Constitution or the

Constitution of the· several States or in any law of the Parliament of the Commonwealth or of any State. (6.) The powers conferred by this section shall not be con­ strued as being limited in any way by the provisions of section

105 of this Constitution.

The Financial Agreement Validation Act 1929. The agreement, which was validated under section 105A by the Financial Agreement Validation Act 1929, is divided into four parts. The first part defines the meaning of net public debt and gross public debt of a State existing on the 30th June, 1927, and the amount of

each is set opposite the name of each State in the agreement. The net public debt does not include (a) the amount of the State debt for which the Commonwealth makes itself responsible as the equivalent of the value of "transferred properties" taken over from a State, i. e., pro­

perties which became vested in the Commonwealth pursuant to section

1097

'I

196

85 (i) of the Constitution; or (b) the amount of the sinking fund of a State. Both of these amounts are included in the gross public debt. The public debt, whether net or gross, does not include the amount of loans raised by municipal or· other public bodies authorized to borrow moneys for local government or other public purposes.

· The first part of the agreement also defines the powers and of the Australian Loan Council. The Loan Council is to consist of a representative of the Commonwealth and a representative of each State. To this Council the Commonwealth and each State is to submit from time to time a programme setting forth the amount it desires to raise by loan for each financial year for purposes other than the conversion, renewal or redemption of existing loans or temporary pur­ poses. Any amount which it is proposed to raise for the purpose of funding a t:,evenue deficit shall be included in the programme, but stated separately. Loans to be raised by the Commonwealth for defence purposes are not to be included in the programme, nor are they to be

otherwise subject to the agreement. The Commonwealth and each State are· also to forward to the Loan Council during each year a state­ ment of the amount which each requires for the conversion, renewal or redemption of existing loans. The· Loan Council is to decide whether the amount required under either of these submissions can be borrowed at reasonable rates and under reasonable conditions. If it cannot arrive at a unanimous decision, the . Commonwealth is to be entitled to borrow at least one-fifth of the amount to be borrowed under the first submission, and each State is to be entitled to an amount which

bears the same proportion to the balance of that amount as the total of the net loan expenditure of the State during the preceding five years bears to the total net loan expenditure of all the States during the same period. In arriving at any decision · the member representing the Commonwealth has two votes, and a casting vote, and the members representing the States one vote each. The amounts to be borrowed may be raised either by one loan or by more than one loan. The

Commonwealth is to arrange for all borrowings, including borrowings for conversion, renewal, redemption, or consolidation of existing loans, except where the Loan ·council by unanimous decision ha.s decided that a State may borrow money outside Australia in the name of the State, in which case the Commonwealth is to guarantee the performance y the State of all its obligations . to bond-holders in respect of the money so borrowed.

"' Subject to the maximum fixed by the Loan Council, each State may ?orrow within the State, the securities, except when the borrowing · Is for temporary purposes only, being Commonwealth securities, and the Commonwealth may borrow within the Commonwealth, subject to the same restrictions. The agreement does not apply to municipal or other public bodies authorized to borrow moneys for local govern- ment or other public purposes. ·

The agreement provides for a payment of interest during the period between the 1st July, 1927, and the 1st July, 1929, and during

the period covered by the agreement subsequent to the 1st July, 1929. During the temporary period the Commonwealth pays to each of the. States two amounts which are fixed, the first being an amount eqUivalent to the amount of the per capita payment to that State for

I

.r

197

the 1926-1927 period, the second being interest at the rate of 5 per cent. (in lieu of the 3i per cent. previously paid) in respect of the value of the properties transfer:red to the Commonwealth by that State. During the same period contributions are to be made to the National

Debt Sinking Fund by the Commonwealth and the States in respect of loans contracted before the 1st July, 1927-the contributions being 7s. 6d. per annum for each £100 of the net public debts of the States, of which the Commonwealth contributes 2s. 6d. and the States 5s.­

and in respect of loans contracted after that date, the contribution being lOs. per annum for each £100 of the loan, of which the States contribute 5s. and the Commonwealth 5s. These contributions are not to be made in respect of a loan raised for the purpose of funding a deficit. Where

a loan is raised for that purpose, the State raising the loan has to

contribute 4 per cent. per annum to a sinking . fund and the Common­ wealth contributes nothing. In some cases States had contributed larger sums than 7s. 6d. for the redemption of old loans. In such cases the amount in excess of the 7s. 6d. was to be paid for the future out

of the National Debt Sinking Fund. Part III. of the agreement is headed " permanent provisions ". It was to come into force on the 1st July, 1929, provided the constitu­ tional amendment had been made and a law had been passed by the

Commonwealth Parliament validating the agreement. Under it the provisions relating to the temporary period are to apply to the whole period of 58 years, with certain necessary exceptions and additions. It includes provisions for the States paying to the Commonwealth any

amounts payable as interest on loans which are in excess of the fixed payments, and giving a general indemnity to the Commonwealth in . respect of interest on money borrowed on behalf of the States. ·It also · contains provisions for increased contributions by the States in respect

of loans which are to be redeemed within a shorter period than 53 years and are to be expended on wasting assets. Part IV. provides for the payment by the States to the Common­ wealth of the expenses of loan flotations, for the alteration of the Con­

stitution, and for the indemnity above-mentioned. The constitutional alteration, the terms of which are set out in the agreement, was approved at a referendum held on 17th November, 1928. By the Financial Agreement Validation Act 1929, assented to on

the 18th March, 1929, the agreement was brought into force for the full period of 58 years, and special provision was made for those States which had created sinking funds on such terms that they could not be transferred to the National Debt Commission. By the National Debt Sinking Fund Act 1929 it was further provided, in deference to a resolu­

tion passed by the Loan Council, that the States should be represented on the National Debt Sinking Fund Commission by a representative chosen by themselves.

The effect of the Financial Agreement on the finances of the States. The effect of the operation of the agreement on the finances of the States has been variously estimated. Assuming that the population of the whole of Australia increases at the rate of 2 per cent. per annum,

then it is clear that the States will for portion of the time covered by the agreement receive more than they would have received if the per capita payments had been continued, and thereafter less. The

1099

198

length of this period must depend iri some measure . on the extent of the future borrowings on· behalf of the States, since under the agreement a sinking ·fund is to be maintained for the. redemption of all loans and the Commonwealth contributes ·to this sinking fund the sum of 5s. per annum for each £100 of all loans raised.

It was estimated by the Commonwealth Statistician, Mr. Wickens, that at the end of the :first :fifteen years covered by the agreement the States will have received a total sum of £1,800,000 _more than they would have received had the per capita payments been continued, but · that the period at which the annual payments would be less than -the sum which would have been received had the per capita payment been continued, would begin before the expiration of ten years from the date of the agreement and would continue until the end of the 58-year period. Professor Copland, Professor of Commerce in the University of Melbourne, came to substantially the same conclusion, and Mr. Chapman, Under-Secretary the Treasury of New South Wales, expressed the opinion that the payments under the agreement would be -less than the per capita payments in .1935.

Assuming an annual increase of 2 per cent. in the population of Australia, it was said that some States would benefit at the expense of others, since it was probable that in some States the annual increase would be more than 2 per cent., and in some States less. It was claimed that in Western Australia the annual increase was likely to be ·more than 2 per cent. because of the prospect of pastoral and agricultural expansion in that State, and that in any State the rapid increase of

population following a minip.g discovery might render the uniform basis unfair. The force of this criticism was admitted by some wit­ nesses, but the comment was made that an increase of the

population engaged in agriC1,1ltural or grazing pursuits must be followed by some increases in the manufacturing centres, and that rapid rural development must cause heavy borrowing. The agreement has also affected· the States unequally because some States have made a practice of paying annual to sinking

funds, and some have not. The State of New South Wales wiii in the future make an annual payment to · sinking fund £700,000 a year which it hils not made in the past; the States of Western

Australia and Victoria will probably make . smaiier payments than they have made in the past. . . .

The agreement makes no for new States, but

be amended by the unanimous consent of all parties, if a new State were formed out of an existing State. · The agreement has been criticized on the ground that by reason of the pecuniary obligations assumed by the Commonwealth little scope is left for the ·assumption of further liabilities such as would be involved

in the payment of widows' pensions or child endowment. The answer made to · this criticism by one witness was that the Commonwealth Parl_ iament could increase the income tax . . The agreement l;tas also been criticized· on the ground that, as it does not apply to municipal or other public bodies, the Loan Council will be unable to put any check on borrowing by such bodies.

The agreement curtails the power over the distribution of its which was left to the Pa·rliament by the Constitution, and it

199

puts a. check on the power .·of the Commonwealth to borrow · money. It also puts a check on the power of each State to borrow for its own development, and places it _ under a constitutional obligation to maintain a sinking fund . . The agreement also marks a constitutional innovati-on

since it gives some control over the loan p'olicy of the individual States to representatives of all the States and of the Commonwealth, whose decisions are not subject to ratification by their respective Parliaments. A copy of the agreement is printed in Appendix B.

Expenditure under section 81 of the Constitution . . Reference has already been made to the interpr-etation placed by successive Commonwealth Governments on section 81 of the Constitu­ tion. A list of .Acts by .which money has b€en appropriated and of items in annual Appropriation Acts, which Acts and items may depend

for their validity on this interpretation, was supplied by Sir Robert Garran, and is given at pp. 1721-1722 of the evidence (see also pp. 69-71). The of Acts is as follows:-

Precious Metals Prospecting Act 1926. Petroleum Prospecting Act 1926. Oil Agreement Act 1920, 1924, 1926. Science and Industry Research Act 1920-1926.

Science and Industry Endowment Act 1926. Development and Migration Act 1926 _(D-evelopment). Maternity Allowance Act 1912-1926. Australian War Memorial Act 1925.

Commonwealth Shipping Act 1923. Queen Victoria Memorial Act 1905. Sugar Purchase Act 1915, 1917, 1920. Sugar Purchase Act (No. 2) 1920. ·Westralian Farmers Agreement Act 1920, 1921.

Wheat Pool Advances Act 1923. Zoological Museum Agreement Act 1924. Coronation Celebration Act 1902 (No. 3). Belgian Grant Act 1914. The list may require some additions, e.g. ) the Victor'ian Parl,iament House Memorial Act 1927, by which the sum of £50,000 was appro­ priated for the provision of a permanent memorial to commemorate the

occupation by the Parlia·ment of the Commonwealth of the Parliament House of Victoria prior to the removal of the Parliament to the seat of government, and the GeophySic al Surve y A ct 1928, by virhich the sum of £20,000 was appropriated for the purpose of conducting in Australia

a cpmprehensive test of various geophysical methods of prospecting for minerals, metals, oil and water. It may also be the fact that some of these Acts could be defended by reference to one or more of the express powers conferred by the Constitution.

It has be-en suggested that the Commonwealth Parliament by the appropriation of money under section 81 could introduce a scheme o.f child endowment for the whole of the Commonwealth. This question is discussed in the report of the Royal Commission on Child Endowment

at pp: 10-12 and the opinions of counsel are there given (s ee section xiii supra). None of the appropriations m·ade on the authority of section 81 has as yet been attacked in the Courts. It may be an explanation of this

1101

'";

200

immunity that in many cases it may be impracticable . for a

State to act as a plaintiff in an action to restrain the Commqnwealth from expending money under an appropriation not connected with one or more of its enumerated powers, and that the .Attorney-General of the Commonwealth would be justified in refusing his fiat to commence an action on the relation of a citizen or a State .

.Apart from any question connected with section 94 of the Constitu­ tion, the use made or to be made by the Commonwealth of this power, actual or assumed, has affected or may affect the States (a) by relieving them of necessary expenditure, and increasing production through the application of scientific methods and the development of new industries

as the result of investigation and research conducted by the Common­ wealth; and (b) by depriving the States of experts attracted away from their service by the offer of higher salaries. While it is too soon to assess the value to the States of the scientific work which has already been undertaken by the Com;monwealth, it was not disputed that the advice of experts employed by the Commonwealth had been and was likely to be of great benefit to the States, though the suggestion was made that better results would be obtained if the Commonwealth sub· sidised State officers or co-operated in work undertaken by the States.

The effect of Federation on State Finance. The effect of Federation on State finance has been investigated in relation to the States of Western Australia, Tasmania and South A us- · tralia on behalf of the Commonwealth, and in each instance a

statement of the position of the State was made by State representatives. Full and detailed evidence was given on the subject in each of these States before this Commission. The Royal Commission on the finances of Western .Australia was not unanimous in its recommendations, but was unanimous in its opinion that the finances of Western Australia had been adversely affected by Federation. Its report was presented on the 23rd September, 1925.

Sir Nicholas Lockyer, whose report on · Tasmania was presented on the 19th May, 1926, said: "It appears to be also certain that Tasmania has suffered more than any other State by the direct and indirect in:fiuence of Federal

policy. 'l'he State not only has been'" unable to share in the

remarkable prosperity which has been so marked a feature in regard to Australia generally during the period covered by the Federation, but to an increasing extent each year she lags behind her more fortunate sister States. The most convincing evidence of this is the very regrettable serious annual loss of population. The accumu­ lating effe ct of these conditions on the finances makes it less possible

for the State each year to meet the common requirements of govern­ ment and still less to meet what is indispensable for the development of its natural resources. Whilst the present unsatisfactory con· dition of the State finances is partially due to causes apart from any question of Federal policy, it is quite possible that under more favorable circumstances the excessive loan expenditure and other obj ectionable features in the State administration would not have

been in evidence had the State been in a better po.sition to cope ·with its own local difficulties."

201

In the report (15th March, 1929) on the finances of South Aus­ tralia as affected by Federation, there is a statement of the disadvantages of Federation as claimed by certain witnesses, and of the advantages of Federation· as claimed by others.

Before this Commission evidence was given in all the States that the finances of the States had been seriously hampered by the adjustment made by the Surplus Revenue Act 1910 upon the expiration of the -ten years' term during which the Sta_ te.s were entitled, under section 87

of the Constitution, to three-fourths of the customs revenue. Mr. Holman, who had been Premier of New South Wales for many years, stated that a series of deficits had begun with the passing of the Surplus Revenue Act 1910 and had continued ever since, and Mr. Eggleston

complained, as did Mr. Holman, of the inability of the States to pay adequate salaries to highly qualified civil servants. Mr. Holman by an analysis of revenue and expenditure of the Commonwealth suggested an arrang-ement under which larger amounts might be paid to the

States (see evidence, pp. 1316-1317, and for the comments of ::Mr. Wickens, Commonwealth .Statistician, p. 1446).

The effect on the States of the Tariff, the Navigation Act, and

Federal Arbitration Awards . . In the States of Western Australia, Tasmania, and South Aus­ tralia, evidence of witnesses who complained that the working of Federation had been disadvantageous to those States was directed more particularly to the effect of the tariff, of the Navigation Act, and to a lesser degree, of Federal arbitration awards.

It was alleged that the tariff bore hardly on those States· which depended mainly on primary production and did not include any -large cities such as Sydney or ::Melbourne, that it increased the cost of pro­ duction in unsheltered ·industries which have to compete in the markets

of the world, and that the tariff did not confer the same compensating benefits in those States as it did in Victoria and New South Wales. It was alleged that the Navigation Act bore hardly on States which depend on inter-state transport over long distances, that it had deprived producers of many necessary facilities, and that it had borne parti­ cularly hardly on Tasmania, a State of which the exports are greater

than the total volume of its production, and which looks to the tourist traffic for a substantial revenue. Of the Arbitration Court awards it was said that they set the same for all States, and a standard

which a State accustomed to a low standard of expenditure would not have set up for itself. Evidence on these points accompanied by a very careful analysis of the relevant figures was put before the Commission by Professor

Brigden, then Professor of Economics in the University of Tasmania, and Professor Giblin, now Ritchie Professor of Economics in the University of Melbourne and then a Deputy Federal Statistician. The conclusion reached by these witnesses is substantially identical with

of the British Economic Mission (7th January, 1929, p. 13) :-

" We may say that we have been strongly disposed to the view that the combined operation of the tariff and of the Arbitration Acts has raised costs to a level which has laid an excessive and possibly even a dangerous load upon the unsheltered primary

1103

202

industries, which, having to sell in the world's markets, cannot pass on the burden to other sections of the Australian community, and consequently as between the · various States upon those, notably Western Australia, Stmth Australia and Tasmania, which are poor in manufactures, and are principally concerned with primary pro­ ductions. These States, and Tasmania probably most of all, are further handicapped by the high cost of freight in inter-state trade, which results from the operation of the Navigation Acts, along with the other causes which we have mentioned.

"We are aware that the disabilities under which these States suffer are recognized by the Commonwealth Government, and that substantial subsidies are paid by the Commonwealth to Tasmania and Western Australia, while the question of granting a similar subsidy to South Austra.lia is under consideration; these sub­ sidies, however, can only be regarded, as palliatives of a system in which there is something amiss."

Gr:ants to States. It is to be observed, however, that in none of the reports above­ mentioned are the recommendations in favour of grants being made to States by the Commonwealth based solely on the disadvantages that those States have suffered through the unequal working of Federal laws.

- The recommendations in each instance, and more particularly in the reports dealing respectively with Tasmania and South Australia, are based on the finding that the States in question are unable ade­ quately to carry out the functions remaining . to them under the Con­ stitution, such as health administration, education and development, and the maintenance of public credit. It appears · to be the fact that no test can be applied to applications for relief other than the test whether the State is in a financial position to carry out its functions, and whether it is taxing its own people at a sufficiently high rate, having in view the danger of driving producers, and particularly manufacturers and employers of to other States. ,

One of the conditions recommended by Sir Nicholas Lockyer, in his report on Tasmania, was that taxation should be reduced with a view to arresting the :flow of population from the Island, and this was done after a grant had been made by the Commonwealth Parliament.

It was suggested in evidence before this Commission that the posi­ tion of three States dependent on, grants from the Commonwealth Government, and the position of the State of Queensland, of which a large section of the population is dependent on the price of · sugar fixed from time to time by agreement between the Commonwealth and State governments, and of other States claiming bounties and con­ cessions, point to the advisability of appointing some independent body which will advise on such applications, and will-to repeat the phrase used by Mr. Deakin of the I:nter-State Commission-be "the eyes of Parliament." In the absence of such a body there must be a danger lest, in addition to the competition between rival parties for the votes of the electors by offers of economic benefits, there should be added the possibility of competition· for the votes of the States by offers ol grants or of special legislation.

203

JI!Ja,in Roads and Federal Aid Roads. l 1Vire and Wire Netting.

In addition to the grants made to the States of Western Australia and Tasmania as already noted, the Commonwealth has made grants to the States for special purposes.

The JJ!I ain Roads Development Act 1923 authorized the payment of certain maximum amounts to each State, the conditions being inter alia that each State receiving a grant should spend from its own

revenues an amount equal to the amount of the grant, and that before any payment was made to a State, that State should submit for the approval of the Minister a detailed plan of the expenditure of the money granted. The amounts specified in this Act were doubled by

an amending Act passed in the following year. Doubts have been suggested as to the constitutional validity of this legislation, though it has been supported as an exercise of the power to legislate with respect to trade ·and commerce between the States, or with respect

to defence.

By the Federal Aid Roads Act 1926 a new scheme, under which the Commonwealth should take a share in the construction and main­ tenance of roads, was brought into operation. By this Act the Common­ wealth was authorized to enter into an agreement with the States according to a form prescribed in the schedule. The agreement recites that the Commonwealth is willing to distribute a sum of £2,000,000 per annum among the States upon a basis of three-fifths population

and two-fifths area, and it also recites the amount which on that

basis the Commonwealth proposes to pay to each State. The agree­ ment then sets out the amount which each State will have to . pay after becoming a party to the agreement, the basis of payment being that each State is to pay 15s. for every £1 paid by the Common­

wealth. The agreement prescribes the amount of the contribution of each State _which must be paid from revenue, and the amount which 1nay he paid out of loan moneys, and that the amounts paid

from loan moneys are to be covered by payments into theN ational Debt Sinking Fund. The agreement further provides (a) that the State is to maintain, to the satisfaction of the Commonwealth Minister, every road constructed or reconstructed under the agreement; (b) that each

State party to the agreement is to submit to the Minister a programme of road construction or reconstruction; and (c) that a road is to be structed by contract, unless approval is given by the Commonwealth Minister for its construction by da;y labour. The agreement also provides for the establishment of a Federal Aid Roads Board, consisting

of the Commonwealth Minister and a Minister rep resenting each of the States parties to the agreement, ·which is to meet at leas t once a year.

By the WiT e and Wire Netting Act 1927 the Commonwealth Minister is authorized to enter into an agreement with the 'States for the purpose of enabling the States to obtain loan money from the Commonwealth to be spent in supplying wire and wire netting

to settlers. The agreement is to provide for the liquidation of the amounts borrowed by means of contributions to a sinking fund, and provides that the settler obtaining the wire netting may pay for the same by instalments extending over 25 years.

F.l25l.-14

1105

I

204

All the States have become parties to the agreement under the Federal Aid Roads Act, but not all the States have become parties to the agreement under the Wire and Wire Netting Act. Objection was taken to both these agreements by witnesses before the Commission. It was said of both agreements that they were attempts by the Common­

wealth to control the States in the exercise of functions which it was for them to carry out, and which they were carrying · out with

reasonable satisfaction. It was said of the roads agreement that it was an attempt to produce uniformity where uniformity was impossible, that one government should ·have the supervision and control of all roads within a State, and that that government should be the State government, if only by reason of its control over local government bodies. Further it was said that the roads agreement forced an

expenditure on the States which they could not afford, and which they would not have attempted if left to themselves. In explanation of this criticism and in defence of the States it was said that no State Ministry, particularly in periods of unemployment, could resist the pressure of its political supporters to obtain money to be spent in the State when offered from a source other than the revenue or the loan moneys of the State itself, or the temptation presented by the opportunity of a new 1·xercise of patronage.

205

XX.-SUB

namely :-Health (section xvii); Industrial Powers (section xvi); Inter-State Commission (section v) ; Judicial Power (section ix) ; Navigation (secti.on xv); Taxation (section xii); and Trade and Commerce (section xi v).

The rest of those subjects-Aviation, Company Law and New States --- v.rill be dealt with in this section, together with the following subjects on which a report appears to be desirable, namely :-Aborigines, Fauna and Flora, Forestry, and · Raihvays.

Aviation.

The ex'isting_ powers. The Commonwealth Parliament· h as no express po,ver under the Constitution to make laws with respect to aviation. It has power to deal with some aspects of aviation under its power to make la-vvs with respect

to trade and .commerce \vith other countries and among the· States ( s. 51 ( i) ) , postal, telegraphic, telephonic and other like services

(s. 51 (v) ), and quarantine (s. 51 (ix) ). A doubt has been

expressed whether. the terms of paragraph (vi) of section

51-" the naval and military defence of the Commonwealth

and of the several States "-are wide enough to include aviation, but it has . been assumed by the Commonwealth authorities that they are (see section xi-The Defence of the Commonwealth) . It is

arguable that the Parliament may bring into force international con­ ventions or treaties relating to aviation by virtue of its power to make laws with respect to external affairs.

The I nternah:onal C On?Jen{'ion. The Commomvealth became a party to the. international convention for the regulation of aerial navigation, signed in Paris in October, 1919, and in December, 1920, the Parliament passed the Air Navigation Act

1920, which came into force by proclamation on the 28th :1fareh, 1921. By that Act the Governor-General was empo·wered to make regulations for the purpose (1) of giving effect to the convention and to any

amendment of the same; and (2) of control of air navigation iri the Commonwealth and the Territories. The convention lays down a number of general principles relating to (a) the sovereignty of every Power over the air space above its territory; (b) the freedom of innocent

passage for the aircraft of the contracting parties; (c) the right of . each party to prohibit passage over certain prohibited areas; and (d) the necessity for any aircraft engaged in international flying to be

provided with a _ certificate of airworthiness, and for each member of its crew to hold a certificate of competency. The standards of air­ worthiness and competency are laid down in the annexures to the convention, and are amended periodically by the International

Commission for Aerial Navigation.

The Ptl?miers) Co ·nfm·ence, 1920. Prior to the passing of the Air Navigation Act 1920 resolutions were passed at a Premiers' Conference held in :11.ay of that year that it was J.esirable for the States to r efer to the Commonwealth the matter of the

1107

I

206

control of air navigation, but so as to retain for each State (a) the

right to own and use State aircraft operating -vvithin the State for government purposes, and (b) the police powers of the States. New South vVales, Western Australia, Queensland, and Tasmania introduced bills in accordance with this resolution. Bills introduced into the Parliaments of Victoria and South Australia limited the powers of the Commonwealth within those States to (a) any matter necessary for performing the obligations of the Commonwealth under the conven­

tion, and (b) intercourse by aerial navigation between the State and any other country or State of the Commonwealth (evidence, pp. 49, 271).

I nter-stcde traffic.

The Commonwealth has power under section 51 (i) to safeguard the routes used by inter-state traffic. It may, therefore, make provision for aerodromes, for emergency landing grounds, and for lights. It may by a law or regulation override a State law or regulation forbidding

aircraft to approach within a speci£.ed distance of a State electricity phmt (evidence, p. 283). But the Commonwealth may ·not have power to make uniform regulations relating to aircraft or airmen within a State, including standards of airworthiness and fitness or periodical examinations.

Defence and Civil Aviation.

The Commonwealth Parliament has legislated for defence purposes by the Air Force Act 1923. Civil aviation is kept entirely distinct in departmental administration from naval or military administration, but the connexion of civil aviation with defence policy is provided for by the establishment of the Air Council by r egulatio ns under the

Defence Act 1903-1918 and the N a'val D ef ence Act 1910-1918 (see sectio n xi of this report).

Civil aviation is promoted by subsidies to companies which carry mails, principally in Western Australia and Queensland, and in some instances, as in the service between Perth and Adelaide, for the

convenience of Australia generally; by subsidies for the training of aviators by aero clubs ; and by lectures at the Universities of :Melbourne and Sydney. It was generally agreed that subsidized aircraft in the sparsely settled districts of Western Australia and Queensland

render ed valuable service to settlers in various ways, including carrying medicines and medical assistance. ·

Control of All the expert witnesses on this subject who appeared before the Commission were agreed that the Commonwealth should have control of aviation, and their views may be summed· up in the following extract from the evidence of Captain G. F. Hughes, President of the Aero Club of N ew South Wales, which was expressly approved by other wit­ nesses:-

" The very nature of aircraft and their uses, and the nature of the r egulations required, make utterly impracticable, in my opinion, a control by th e Commonwealth the effectiveness of which \vould only arise contingently on a particular class of journey being

207

undertaken. Where could one draw the line and decide where Commonwealth regulations began to op erate? Such an arrange­ ment would, in my view, be hazardous in the extreme, and a menace to all classes of aerial navigation.

There is absolutely no other industry or means of

locomotion in which control necessitates supervision of the product from the drawing board through all the processes of manufacture to the finished article, and then throughout the life of the machine. There is no means of travel which is so unrestricted by physical

boundaries" (evidence, p. 163) .

The existing power. Compa_ny Law.

It is uncertain wh at is the exact seope of the power conferred on the Commonwealth P arliament by paragraph (xx) of section 51, but it seems certain that this paragraph was thought by the members of the Convention to confer pmver to pass a company law for the whole of

Australia as the term company law is generally understood. The uncertainty as to the present position arises from the diversity of opinions expressed by different J ustices of the High Court who took part in the decision of H1.tddart Parker & Co. Pty. L td. v. oo·rehead

(8 C.L.R. 330), but all :five J ustices agreed that the Commonwealth Parliament under this paragraph has no power to make laws with respect to the creation of corporations. This decisio n is described by Sir Robert Garran as one of the surprises of t he Constitution, and the

Commission was informed that a bill for a Commonwealth Act de aling , with companies had been prepar ed before the decision was pronounced but was subsequently abandoned (evidence, pp. 50, 692). The Com­ mission was also informed by Sir Edward Mitchell that during the

hearing of an appeal before the Privy Council some members of the Board, including Lord Haldane, expressed a strong opinion that the decision was not one which the Privy Council would acc ept (evidence, p. 762). So long as the decision stands, however, and so long as it is

impossible to obtain advisory opinions from the H igh Court, it is im­ probable that the Commonwealth Parliament will pass a Companies Act.

State legislation. The States have power to legislate with r espect to companies and may pass Acts in identical terms, but in fact although more than twenty years have elapsed since the Commonwealth bill was abandoned, wide divergencies still exist between the Acts of the several States. The

dates of the principal Companies Acts of the States are :-Queensland, 1863; South Australia, 1892 ; Western Australi a, 1893; N ew South Wales, 1899; Victoria, 1915; Tasmania, 1920. I t is to be noted, how­ ever, that in some of the States the date given is that of a consolidating

Act. The State Acts have been amended from time to time, but they still present many · divergencies, and they are still b8hincl English legislation in the protection which they afford to the public (s ee the evidence of Mr. T. Brentnall, President of the Australasian

Corporation of Public Accountants (p . 1596), though Tasmania has recently adopted some of the suggestions which we r e

made by the committee appointed by the Board of Trade in England in 1925, An analysis of the Acts of the different States will be found

1109

...

208

in the evidence of lVIr. Fadden at page 1567. At the present time it seems probable that a uniform company law may be obtained through co-operation among the States, but divergencies may subsequently arise through rtmending legislation in States.

Control of Company Law. Among the witnesses who expressed themselves in favour of the Commonwealth Parliamer1t having pow-er to make laws with respect to companies, were the late Mr. Justice Higgins, Dr. Brissenden, K.C., representing the Bar Council and Incorporated Law Institute of New South Wales, Mr. "Walsh, representing the Constitutional Club of Queensland, and Mr. H. B. Jackson. Apart from these legal 'vitnesses the majority of those who spoke in favour of a Commonwealth company law were accountants, and included accredited representatives of the

Australasian Institute of Secretaries, the Brisbane Chamber of Com­ merce, the Australasian Corporation of Public Accountants and the Institute of Incorporated Accountants of New South Wales. These witnesses urged that it was a disadvantage to investors and those engaged in the management of companies that there should be different company laws in the different Australian States, and it was urged that because of the absence of this power in the Commonwealth the laws at present in force in Australia do not sufficiently safeguard the interests of the public (evidenc e, pp. 1596, 1535). These arguments are summarized in the evidence of Mr. W. T. Tidex (p. 1372) :-

" (a) Legislation differs in ev-ery State. (b) Companies carrying on business in more than one State suffer from confusion thereby. (c) Registration is necessary in each State in which trading is

conducted, thus restricting freedom of trade throughout the Commonwealth, and involving unnecessary (d) Legal decisions in one State are not necessarily binding in another . . (e) Reform of the New South Wales Act, which is long out of

date, has been long deferred owing to the probability of company legislation being made a Federal matter. (f) There is a big disparity in the cost of registration of com­ panies in the different States. (g) The anomaly frequently exists of a company being registered

in one particular State on account of the low registration fees payable there, although the whole of its operations may be confined to a diff-erent State. _ Moreover this virtually creates competition between the State authorities

for r-egistration fees."

The witnesses in favour of a grant of power to the Commonwealth referred to what is generally known as company law and is the subject of well-known legal text books cited as Pal?ner or-Buckley. Witnesses who opposed or question-ed the proposed grant of for the most part called attention to difficulties of definition or adminis­

tration, and claimed that there are certain classes of corporat"e bodies which not b-e subject to Commonwealth legislation. The views of these witnesses are expressed in the extracts from the evidence of Mr. Owen Dixon, K.C., and of Mr. Layton1 Registrar-General, New Sout'h Wales, which are given below, · ·

209

Representatives of the Hobart Chamber of Commerce who opposed the grant did so partly on the ground that they had been unfavourably impressed by the administration of the Federal Bankruptcy Act (evidence, pp. 950, 857).

In a statement presented on behalf of the Melbourne Chamber of Commerce the following r eference was made to company law (evidence, pp. 1448-1449) :-"Our recommendation is that the Commonwealth should have

and use power under the Constitution to control the incorporation, administration, and winding up of companies, but that in other respects companies should be on the same footing as individual traders and firms in relation to their trading activities. Our

reasons for this recommendation are:-In principle the power of con trol over the incorporation,

administrating and winding up of companies is in the general interests of the community. It is not a power which interferes with the exercise of individual rights, but is one which affords a common measure of protection to all parties. Exercise of such

power should not interfere with the domestic fiscal legislation of any State, but should give the whole community adequate and common safeguard. A safeguard determinable on general lines, and administered from one source, can be more easily adjusted than · where the control is divided.

On the grounds of convenience, we submit not only as between State and State, but as between any State and the outside world, trade and commerce would be materially assisted were it unneces­ sary for possible creditors to reconcile varying laws before engaging

on business with a company. On the same ground we consider that one registration should be sufficient to enable a duly incor­ porated company to commence business in any part of the Com­ monwealth."

Objections to Commonwealth Control. The objections raised by witnesses against conferring this power on the Commonwealth Parliamen t were of two kinds: (1) that it would be difficult to define the subject-matter of the power; and (2) that there would be difficulties in administration. These difficulties are summarized in the e-vidence of Mr. Owen Dixon and of Mr. Layton.

The following extract is from the evidence of :Mr. Owen Dixon, on behalf of the Committee of Counsel of Victoria (pp. 778-779) :-"The advantages of a uniform company law are probably undeniable, but at the same time they are not very considerab1e.

We think there is a great deal of difficulty in giving the Common­ wealth power sufficient to enable it to make a uniform company law, unless it is expressed in terms which will enabl e the Parl.iament to control completely the internal management and operat10ns 0f companies, the determination of what associations of persons and

partnerships shall or shall not be incorporated, and indeed the who 1e subject of incorporation and the use of the idea of the juristic person. It may be doubted whether a power which would extend to regn­ lating all activities and aff ecting all transactions so long as they

were carried on, entered into or performed by companies, is a desirable one, and yet short of this it is difficult to confer power which will be sufficient for all purposes of company legislation.

1111

210

It must be remembered that the starting point of existing

company law is to compel the incorporation of an association of persons greater than the prescribed number formed for the purpose of carrying on a business. Any power which enables the Common­ wealth Parliament to fix the number or define the purpose must necessarily extend to requiring the incorporation of any association of persons, few or many, and ·whatever may be the object or character of their joining together. It would be difficult to

distinguish between industrial and provident societies formed under an enactment such as the British Industries Provident Societies Act 1893 (56 & 57 Viet. c. 39), which has been copied in Victoria (Act No. 3362), and companies. Such a society may be formed for carrying on any industries, businesses or trades, and is incor­ porated. Another instance is that of building societies. The

incorporation of societies and associations of persons is resorted to for many purposes which cannot be divided by any · line from ., company law'. The formation of a trustee company, an electric . lighting company, and most companies requiring 'franchises' must

be accompanied by legislation authorizing the incorporation to do what would otherwise be unlawful under the law of property or the law of civil wrongs, and this authority is usually given upon conditions involving special regulation of its affairs.

:Nioreover, legislation such as the Victorian Fruit Act 1915, section 12, shows · how ) quasi-trading bodies with a corporate character may be authorized under various special schemes for encouraging production or industry. Once the Federal Parliament laid down conditions necessary for incorporation for trading

purposes generally, most of this legislation by the States might well be considered inconsistent. W e think so many difficulties would result from an attempt to confer power upon the Federal Parliament which would be wide enough to enable it to exercise any real discretion in framing a uniform company law, that the very minor advantages derived from such a law would be far outweighed.

The fact is that 'company law' is merely a convenient

description of an existing head of law, and is an entirely artificial and unnatural division of subject-matter for a legislative power. In relation to many matters of the general law, of which this may be considered an example, it seems to us that the various parts

of the Empire are in the same situation. There is no real reason · why the law relating to the formation of companies, the mutual rights of members, and the general regulation inter se should not be uniform throughout the Empire, and this is true of the general

law relating to civil rights. There has been an increasing tendency towards this uniformity. The codification of the law relating to bills of exchange, partnership, marine insurance, and sale of goods has been adopted by most of the legislatures, and in the case of copyright the Imperial P arliament as the result of an arrangement passed an Act for the express purpose of adoption by legislatures of the Dominions. This form of legislation might well be adopted in r elation to many other matters, including the general rules of company law, and we suggest that the Commonwealth Parliament mi(Sht be S'iven power to adopt for the whole o£ Australia if it

211

f4inks :fit any legislation upon any subject which the Imperial Parliament has passed pursuant to any similar arrangement for the purpose of adoption by the legislatures of the Dominions."

The extract is from the evidence of Mr. E. E.· S. Layton,

Registrar-General of New South Wales (p. 1261) :-"Now as to the advantages of administ ration of the company law by the States. Firstly there is-( a) Prompt incorporation. Quite frequently incorporation

takes place as from the day on which the memorandum and articles are signed by the subscribers, or on the following day, notwith­ standing that the actual signing of the certi:ficate of incorporation is preceded by a close examination of the memorandum and articles

and statement of capital, and careful search as to the availability of the name. The Registrar or Assistant Registrar of Joint Stock Companies, before signing the certificate, satisfies himself that the essential requisites for incorporation have been complied with.

(b) Convenience. Companies incorporated in this State with the exception of a very small proportion are promoted in Sydney, and the essential documents are signed here. Registration in Sydney must therefore necessarily be less troublesome than registra­ tion elsewhere. When companies are promoted and documents signed in some part of New South Wales other than Sydney, their

transmission to this city and the conduct of the incorporation is rendered easy by existing arrangements under which solicitors in country towns already have agents in Sydney. Not infrequently the documents are not in order and their recti:fication can now be

readily secured in the majority of cases, as the subscribers and the company's solicitor are· at hand. If incorporation wer e to be effected elsewhere, much inconvenience would ensue. It is important that the period between the search as to the availability

of name (usually made by solicitors before preparing the

documents) an d the presentation of the documents to secure incorporation should be as brief as possible, otherwise the name may be appropriated by another undertaking and the expense of printing, &c., lost. Incorporation elsewhere than in Sydney wou ld

increase this period. Sydney being probably the most important commercial centre of the Commonwealth, it is desirable that the documents of companies carrying on business in this State should be available for inspection here by those whose business relations with the companies necessitate inspection of the documents.

(c) Efficiency in existing organiza..tion. The existing organiza­ tion is efficient, the staff well trained, and the correspondence is typed by officers having som e acquaintance with the law and practice, and familiar with terms in ordinary use and their

abbreviations. It is not thought that a newly ·created organization could gain similar efficiency for a number of years. The staff includes an inspector, part of whose duty it is to secure that annual returns of companies shall be promptly fil ed. It is now rarely necessary to prosecute companies for default in filing returns, and

such information as to a comp any's affairs a is required by law to be fi.led is mad e availabl (.1 to th public as early as practicable ,

212

If administration of the 'company law were handed over to the Commonwealth, it would be difficult to create an efficient org·aniza­ tion, and to transfer the present staff would deprive the State of 0fficers whose duties include other spheres also.

(d) Economy. The administration of company law is carried out by officers of wide.general experience, who perform in addition many other duties. The branch, presided over by the D eputy Registrar-General in charge of the Deeds Branch, who is also an Assistant R egistrar of Joint Stock Companies, embraces registra­ tion of the following-deeds, liens on crops and wool, stock­ mortgages, firms and firm-names, money-lenders, bills of sale and renewals and discharges thereof, newspapers, printing presses; together with numerous administrative duties arising under the relevant statutes. ·

It is thought that, in a separate office for registration of

companies only, the restricted class of work would not justify the payment of salaries adequate to secure officers of the · requisite capacity or tend to the development of such officers.

(e) Continuity of practice, &c. Practice under the various State Companies Acts is broadly understood by solicitors and accountants throughout the Commonwealth. While if the Commonwealth took over the administration of company law, a knowledge ·

attainable in the present state of the law. It could not be said with any certainty that a new organization having the whole Commonwealth for its field would fulfil its much more difficult task. I am not aware of any country as extensive as the wealth in which company law is administered by a central

authority. Each State in the United States of America, and, I understand, each Province in the Dominion of Canada has its own company law. Commonwealth control would be an experiment surrounded with obvious difficulties.

(f) Practicability of special legislation desired by a State. While company law is administered by the respective States it is competent for any State desiring to do so to make special provision in r egard to the incorporation of companies of peculiar character. · An example of such legislation is the Co-op eration, Community

S ettlement and Cr edit Act 1923. It is quite conceivable that in a sparsely populated State with tropical or semi-tropical conditions, company legislation designed to advance some industry peculiar to that State might be desired. In a closely settled State with

temperate climate, special legislation to encourage some other industry peculiarly suited to that State might be thought necessary. If the administration of company law were transferred to the Commonwealth, special legislation of the character indicated above could not be readily secured ".

213

New States.

The establishment of New States.

A number of witnesses before. this Commission contended that there is need for a revision of the boundaries of certain States, particularly of the States of N ew South Wales and Queenslan d, that it is desirable that new States be established, and that Cllapter VI. of the Constitu­

tion be altered with the object of giving greater facilities for the

formation of a new State to the electors of a particular area. The Commission heard evidence on the history of the new State movement in New South Wales from Mr. W. W. Killen, :M.P., and from Mr. V. C. Thompson, M.P., Honorary General Secretary of the All Australia

New States Movement, and Honorary General Secretary of the Northern New State :Movement, who quoted resolutions of the Par­ liaments of New South Wales and Queensland in favour of the

establishment of new States within the areas of those States respectively. The Commission also heard evidence in favour of the establishment of new States from Mr. D. H . . Drummond, M.L.A., and Mr. W. C. Cambridge, President and Secretary respectively of the Farmers' and Settlers' Association of New South Wales, and from representative and individual witnesses at Armidale, Rockhampton, and Townsville. Evidence was not heard on the merits of any particular proposal or on

the desirability of forming a new State in any particular area.

Suggested alterations of Chapter VI. of the Constitution.

Mr. R. Windeyer, K.C., and Mr. V. C. Thompson each submitted proposals fo1· the alteration of Chapter VI. Those submitted by :Mr. Thompson include9. resolutions passed by the Riverin_ a New States :Movement in 1922, proposals of the Northern New States Movement,

proposals drafted by Mr. Latham, K.C., for giving effect to those

VleWS.

The following provisions, in substitution for Chapter VI., were sub­ mitted by Mr. R. Windeyer (evidence, pp. 216-217) :-" 121. Whenever the Parliament of any State has declared that any defined area within its boundaries should be established as a

new State, and has enacted laws whereby the terms of separation of such area from the parent State have been determined, and laws making provision whereunder the form of constitution of such a new State has been formulated and subsequently approved of by the majority of the electors of the Commonwealth resident within .such area voting on referendum, on notification by the Governor

of the parent State to the Governor-General. of the fulfilment of these conditions, he shall proclaim such area as a State of the Commonwealth, and such new State shall have all the status, rights, privileges and liabilities of the original States of the Commonwealth.

122. The Parliament may establish new. States within the area of territory surrender ed by any State to and ac cepted by the Com­ monwealth or of territory placed by the King under the authority of and accepted by the Commonwealth or otherwise acquired by

the Commonwealth.

214

122A. The Parliament may make laws for the government of such territories as are referred to in the next preceding section until they become States or portions of States.

123. The Parliament of the Commonwealth may independently of the action of the Parliament of any State establish and admit to the Colil!monwealth new States from within the area of an existing State or States whenever-

(a) twenty per cent. of the electors resident within a defined area qf a proposed new State have petitioned the

Governor-General for such establishment and admis­ sion; and (b) the Governor-General has made provision for the summon­ ing of a convention elected by the electors resident

within such area and the .appointment of a president thereof; and ( c) such president has transmitted to the Governor-General a draft constitution for such new State together with

proposed terms of separation from the parent State or States, certified by him as having been approved by such convention; and (d) the Governor-General has submitted such draft constitu­

tion for acc eptance to a r eferendum of the electors of such area ; and (e) the Chief Electoral Officer of the Commonwealth has certified that such draft Constitution has been accepted

by the electors of such area; and (f) the Chief · Justice of the High Court has certified that the proposed terms of separation of. the proposed new State from the present State or States are just as

regards present indebtedness. 124. The ·proposed areas referred to in se.ctions 121, 122, 122A and 123 shall not in either case be less than 38,000 square miles, nor contain less than 75,000 inhabitants"·. The following proposed alterations were submitted by Mr. V. C. · Thompson (evidence, pp. 1135, 1136, 1137-1138) :-

P roposals of the Riverina New States JJti 1922.

" (1) That section 123 of the Commonwealth Constitution Act be amended to read as follows:-That the Parliament of the Commonwealth may increase, diminish, or otherwise alter the limits of a State upon such

terms and conditions as may be agreed upon and iffiay make provision respecting the effect and operation of diminution or alteration in relation to any State with the consent of a three­ fifths majority of the electors entitled to vote at a Common­ wealth election in the area affected. (2) That section 124 be amended to read as follows:-

".A new State may be formed by separation of territory from a State, and a new State may be formed by the union of two or more States or parts of · States, but only with the

consent of a thr ee-fifths majority of the electors entitled to vote the Co1Ull101lwealth elections in the area so affected".

215

That a new section be added to .Chapter VI. of the Co;m­

monwealth Constitution as follows:-That the Commonwealth Parliament shall, on a petition being presented signed by 10,000 electors in a:h area containing not less than the equivalent in population of one Common­ wealth electorate praying such a vote be taken in such area

on a matter affecting such area, cause a vote to be taken

without further delay. ( 4) That a State should have the following powers:-(a) direct taxation within its area in order to raise revenue for State purposes;

(b) the borrowing of money on the sole credit of the State for developmental purposes, provided that a referendum must be taken when a large sum, say, over £250,000, is required, sinking funds to be established in all cases for

the redemption of loans; . (c) lands, irrigation, agriculture and forestry; (d) education; (e) hospitals and charitable institutions;

(f) municipal, shire, and local government generally; (g) local works and undertakings 1vithin the State, excepting any work declared to be a national work; (h) markets and pounds; ( i) fish and game preservation; (j) enforcement of State laws;

(k) generally all matters of a local nature, and all other

subjects which may be delegated to the State Par­ liaments by the . Commonwealth Government; ( Z) adult suffrage for the Commonwealth and States. Additional resolutions carried were-

(1) that the initiative and referendum be incorporated 1n Federal and State Constitutions; (2) that in dividing Australia into small States the chief objective should be economy of government with one

House;

(3) that the States be equally represented in the Senate, and senators be elected on the proportional representation system".

Proposals of the N orr·thern New States Mov ement. "1. The Parliament of the Commonwealth shall have power to establish new States upon receipt of a petition which shall be signed by a number of Commonwealth electors as shall be from

time to time determined by Act of Parliament, and such petition shall at once be inquired into to determine its bona fides by a royal commission to be appointed by the Federal Parliament, and upon which the Federal Parliament, the State Parliament, and the

petitioners concerned shall have representation. 2. If the Federal shall decide to act upon the

petition, a referendum of the whole of the electors in the area covered by the petition shall be taken within twelve months from the date of receipt of the petition by Parliament, a bare majority of electors voting to determine the question.

I

216

3. Upon acceptance by the Commonwealth Parliament of authority to e.stablish a new State, a tribunal, which shall have due representation of the Commonwealth the existing State and the new State, shall examine the terms and conditions,

and recommend the constitution upon which the new State shall be established, . and furnish a report to Parliament, which shall forthwith proceed to establish the new State by formulating a con­ stitution, which shall be submitted to a refer-endmn of the Com­ monwealth electors within the boundaries of the proposed

subdivision. '

4. In the event of the rejection of this constitution by a majority of the electors voting, the Commonwealth Parliament shall consider any proposals which are unacceptable to the people within the separating area, and having come to a final determination shall submit the revised constitution which, if approved by the people concerned, shall become operative forthwith.

5. If such revised con.Stitution is rejected by a· majority of the electors voting, the Commonwealth Parliament shall take no further steps to establish a new State in that particular area unless, in the event of a fresh refer-endum in the area covered by the petition, the question is· again referred to Parliament for further determination. If there is still no agreement by the Common­ wealth and the people of the separating area concerned, no further referendum of the ar-ea covered by the petition shall be taken for a period of at least six years".

Proposals drafted by Mr. Latham:

Under the proposed alterations drafted by Mr. J. G. Latham, K.C., now the Attorney-General for the Commonwealth, and placed before the Prime Minister by a deputation in July, 1923, as tentative suggestions for giving e:ffect to the views of the Northern New States Movement, section 122 would remain unchanged, and the following sections would be substituted for sections 121, 123· and 124:-

"Section . 121.-The Parliament may admit to the

Commonwealth or. establish new States and may upon such admission or establishment make or impose such terms and conditions as it thinks fit.

The terms and conditions shall be expressed in an Act of the Commonwealth Parliament and shall be alterable only as provided in such Act, provided that the extent of representation of a new State in the Senate shall be equal to that of the original States.

Section 123.-With respect to the establishment as a new State of an area part of an existing State, the following procedure may be adopted :-(a) Twenty per cent. of the electors upon the Common wealth

electoral roll in any area not less in extent than the smallest existing State may petition the Parliament for the admission of such area to the Commonwealth as a new State.

(b)

(c)

(d)

(e)

(f)

217

Upon receipt of such petition the Parliament shall

appoint a commission of not less than three persons to determine precisely the boundaries of a referendum area ·which in the opinion of the commission, regard being had to community of interest and geographical

position and to such other matters as the commission may deem relevant and to the desires of the petitioner8, is most suited to institute a. ·new State in or about the area mentioned in the said pet.ition. Upon receipt of the report of the commission the Parlia ..

ment may determine the terms and conditions upon which the Government is prepared to establish the referendum area as a new State. The Parliament may submit to the electors qualified to

vote for the election of members of the House of Repre­ sentatives either-(i) in the referendum· area, or (ii) in the State containing the referendum area, the question whether the Parliament should on a speci­ fied date establish the referendum area as a new State

upon the terms and conditions determined as aforesaid, and with the constitution recommended by the conven­ tion hereinafter mentioned. The vote of the electors shall be t'aken in such manner as the Parliament pre­ scribes. Before the said question is submitted to electors as afore­

said, a convention shall be elected by the electors in the referendum area qualified as aforesaid. The Parliament shall determine the number of members and method of election of the said convention, and so far as .it

thinks fit the rules of procedure for the said convention, and all matters incidental to the qualifications and rights and privileges of members of the convention. The convention shall recommend to the Parliament a

constitution for the referendum area to become

operative if and when the referendum area becomes a State. The constitution shall contain a distinct part con­ sisting of provisions adjusting or for the adjustment of questions arising out of the severance of the referendum

area from the State of which it forms part. If in the referendum area or in the State containing the referendum area, as the case may be, a majority of the electors voting answer the said question ·in the

affirmative, the referendum area shall on the specified date become and be established as a State of the Com­ monwealth upon the said terms and conditions and with the said constitution. The said terms and conditions

shall be alterable only in the manner provided by this Constitution for altering the provisions of this Con­ stitution. The said constitution as recommended as shall as from the specified date be the constitu­

tion of the new State.

111_9

218

(g) The new State and the State which contained the

referendum area shall as from the specified date be bound by the distinct part of the constitution of the new State hereinbefore mentioned. The High Court shall have jurisdiction to determine any disputes or differences arising between the new State and the said State in relation to the said part oi the said. constitution of the new State, and the decision of the I-Iigh Court thereon shall be final and conclusive, unless the King may be pleased by virtue of His Royal Prerogative to grant special leave to appeal from the I-Iigh Court to His Majesty in Council. Sec tion 124.-N otwithstanding anything contained in this Constitution, a new State may be formed by separation of territory from a State with the consent of the Parliament thereof, and a new

State may be formed by the union of two or more States or parts of States with the consent ·of the Parliament of the State affected."

The New States Royal Commission in New South Wales. No attempt has been made to make use of the existing prov1s10ns relating to new States, but in 1922, after the passing of a resolution in favour of the creation of a new State in New South Wales, application was made to the Prime Minister of the Commonwealth for his

assistance. The resolution and an extract from the correspondence are here set out ( cf. Exhibit No. 1 tendered to the New States Royal Com­ mission in New South Wales) :-In September, 1922, the following r esolution was carried by the

Parliament of New South Wales:-That the large area of the State of New South Wales makes it desirable that the creation of a separate State in Northern New South Wales should be taken into early consideration by a Federal Convention summoned for the purpose, and to consider the boundaries of the States and distril:iution of legislative powers between the States and the Commonwealth.

That this r es olution be conveyed to the Federal Government and Government of the States with a view to securing their concurrence. In answer to the letter which was transmitted to the Federal Government, the present Prime Minister sent the following letter:--

Melbouru.e, 12th June, 1923.

Dear Sir, '

Your letter of 28th September, ·1922, conveying the texts of resolutions passed by the Legislative Assembly of New South Wale.:;, to the effec t that it is desirable that the creation of a separate State in New South ·wales should be taken into early consideration by a Federal Convention, has been considered by my Government.

As, however, the Constitution already provides that a new State may be formed by diminishing or otherwise altering the limits of an existing State subject to the consent of the Parliament of that State, and further empowers the Commonwealth Parliament t.o admit new States .so formed, there does not, in .. the opinion of my

Government, appear to be any necessity at this stage for submitting the matter to a Federal Convention.

219

The :first step which would appear to be necessary is that the Parliament of your State should affirm not only the principle that a partition of the State is desirable, but the terms thereof, such as the boundaries of the new State, and the allocation between the parent State and the new State of public debts and public assets, such as railways and rolling stock.

When such a proposal has been formulated, the Commonwealth Government, subjec t to the concurrence of the Commonwealth Parliament, as provided in the Constitution, will be prepared to take whatever steps are necessary to give effect to the wishes of the Parliament and people of New South Wales.

Yours faithfully, (Sgd.) S. M. BRUCE, Prime Minister.

The Government of New South Wales appointed a Royal Com-J.ission to inquire into proposals then formulated, and the Commission after inquiry found that it was neither practicable nor desirable that these proposals should be carried into effect. This decision was based very largely on evidence to the eff ect that the creation of new States as

proposed would increase the cost of government and the taxation to be paid by residents in the proposed areas, and also on the :finding that many of the benefits claimed ):y the advocates of new States could be obtained by an extension local government and by further

decentralization in administration.

Aborigines.

The Commonwealth Parliament has no power to make laws with respect to the aboriginal inhabitants of Australia, "the aboriginal race in any State" being specially excluded from the words of section 51 (xxvi), by which power is conferred to make laws with respect to the

people of any race for whom it is deemed neces.sary to make special laws. A great number of witnesses before this Commission urged the need of giving increased attention to aborigines. Some of the witnesses took

the view that complete control should be handed over to the Common­ wealth, and others urged that the control could be more satisfactorily carried out by the States. The Commonwealth at present exercises · control over aborigines of the N ortbern Territory, of whom there are

20,000 full bloods and 782 half castes. It was suggested that a portion of the Northern T erritory, in Arnheimland, should be set aside fOT aborigines as a native State or native settlement, or as a reserve ot· territory from which white settlers -vver e excluded. It was also suggested that if the control of aborigines we re to remain with the States, there should still be a Commonwea lth advisory council, which would keep in touch with the proper authorities and with citizens and

employers. One of the main reasons advanced for transferring the control of aborigines to the Commonwealth was the existence of a great diversity in the methods of employment in the several States and the rules relating to payment of wages . It was claimed that as an aboriginal knew nothing of political boundaries, the laws by which he is governed should be uniform and imposed by one authority only. It was urged that

as the reputation of Austra1ia may be greatly affected by the treatment F.l25L-15

1121

' 220

of aborigines, the responsibility should rest with the national government. ( It was also urged that, .if the care of the aborigines were entrusted to the Commonwealth, , which already has the guardianship of natives in Papua and the Mandated Territory, a Commonwealth public servire which was responsible for the welfare of native races both in Australia and in Territories outside Australia, and vvhich provided a carerr for a specia!Jy trained staff, would be in a better position than the public service of a State to attract and train suitable officers for dealing with pn>blems affecting the aborigines.

On the other hand attention was drawn to the fact that, in order to make proper provision for the treatment of aborigines in· several States-Queensland, South A ustralia and Western Australia-it was necessary to set aside reserves, and that it was desirable that the treat­ ment of aborigines should be in the hands of the governments which have control of lands. It was also urged that the State authorities and the State police were better qualified to control aborigines than those of) the Commonwealth, and that it would be inconvenient to appoin

Commonwe alth officials to act within the areas of the several Stat(_ , though some witnesses expressed the view that in any case the care and management of the aborigines should not be in the hands of police. Further, it -vvas urged that in the past the treatment of aborigines had

been more satisfacto'ry in the State of Queensland than in the Northern Territory. An account of the system of protection in force · in

Queensland, which is said to be the most satisfactory in the

Commonwealth, will be found in the evidence of l\1:r. J. W.

Bleakley, Chief Protector of .Aboriginals in that State (p. 1475). In \Vestern Australia one of the ways in which provision is made for aborigines · is through Government cattle stations. An account of the methods adopted in connexion with these stations is given in the evidence of Mr. A. 0. Neville, Chief Ptotector of Aborigines in Western A.us­ tralia, who describes more particularly Moola Bulla Station in the East Kimberleys, where there is ·an area of about 1,250,000 acres, and a system is adopted under which cattle are killed daily to feed visiting

aborigines. Station-holders within a radius of 150 miles of Moola Bulla have informed Mr. Neville that the aborigines are leaving cattle alone as the result of the establishment of this Government station (evidence, pp. 487, 490-491).

Examples of the divergencies in the laws of the States of Wes.tern Australi a, South Australia, and Queensland, and of the Northern Territory relating to aborigines, are set out in the evidence of the Rev. William Morley, Honorary Secretary, Association for the

Protection of the Native Races of Australasia and Polynesia, at page 1600. During the sittings of this Commission, an inquiry on the subject of the aboriginals and half castes of Central Australia and North Australia was conducted by Mr. J. W. Bleakley, and his report to the Prime Minister was made on the 16th January, 1929 (Par·liamentary Papers, No. 21, 19 29).

Fa una and Flora.

The Commonwealth Parliament has no express power to make law& with respect to fauna and flora. It has power to make laws respecting the export of fauna or flora, and it has exercised this power under the

221

Ctlstorns Act 1901-1925. Under section 112 of that Act the Governor­ General may by proclamation prohibit the exportation of any goods the prohibition of the exportation of ·which is in his opinion necessary for the preservation of the flora or fauna of Australia. This power has

been exercised from time to time, the Customs authorities usually acting after consultation with a committee of citizens appointed in each State, or through the Chief Secretary's Department of the State. The manner in which this control has been exercised is referred to in section xiv of

this report under the heading " Export of birds and animals, and the skins of birds and animals ".

A number of witnesses before the Commission claimed· that the efforts of the States to safeguard their fauna were hindered by the operation of section 92, and that a pre>secution initiated by a State for the purpose cf enforcing the ·enactments protecting birds or animals might be defeated -owing. to the absence of the same protection .in an adjacent State. This

question referred to in section xiv of -this report under the heading "Agents and dealers". Some urged that the Commonwealth

should have power to make laws with respect to fauna·; others suggested tha,t legislation might be passed on the model of the Lacey Act in force in the United States, by which Congress· has ·attempted to safeguard bird life. Other 'vitnesses urgedthat the power to legislate with respect to fauna should remain with the States, but that there should be closer co-operation betv.reen the authorities of the different States, and that

there should be periodical consultations for the purpose of advising the cemmittees already referred to. It was said that close local knowledge is required in order to fix the proper periods of protection, that

conditio:ps vary greatly not only between States but also within the States themselves, and that the State authorities have an advantage in securing information through their control of the police (evidence of :Mr. E. Ashby, p. 1099).

The evidence showed that efforts were made to protect bird and animal life by the State authorities through the schools and by means of reservations in connexion with public parks and elsewhere, and a resolution wr:s quoted, passed by the Royal Australasian Ornithologists

Union in 1922, asking that the Government of each of the States would see that in connexion with the surveying of new townships suitablA reserves ·should be set apart for fauna and :flora.

It was suggested by Dr. Brooke Nicholls that the Commonwealth should immediately undertake, by a biological survey, the study from an economical and a scientific stand-point of the native game resources of the mammals, birds and :fishes of Australia. Samples of biological survey maps prepared by the department at Washington, showing the

distribution and -origin of the various mammals in the United States, ·were shown to the Commission.

It was urged rby some witnesses before the Commission that unless a closer check over the export of birds and animals, and the skins of birds and animals, from Australia were kept by the Commonwealth, certain valuable species would be in danger of extinction. Reference was made in particular to the export of skins of the koala or native bear and of the opossum, and to the export of finehes captured in the nol'th of

Australia.

'1123

222

Forestry.

The Commonwealth. The Commonwealth Parliament has no power to make laws with respect to for-estry for the whole of the Commonwealth, but it has power to make laws for forestry within any of the Territories, and it can influence the forestry policy of any of the States by making loans for forestry purposes subject to conditions, by providing assistance and

advice to the Stat-es, and by establishing a school of forestry which students from the States may attend. The Commonwealth has provided a loan for forestry purposes, subject to conditions, to the State of South Australia, and has supplied assistance and advice to the State of Tasmania. The Commonwealth has also established a School of Forestry. This School was opened with eighteen students in March, 1926, and was housed for the first year at Adelaide University, but was transferr-ed to Canberra early in 1927. Applicants for entrance must be graduates of an Australian University or matriculated students who have compl€ted a :minimum University course of two years in science. Prior to the establishment of the School, certain of the Stat-es had decided to establish a forestry school at Laurel Hill in the Coota·­ mundra district of New South Wales, but they have not proceeded with

th-e proposal. A programme of afforestation has been laid down for the Federal Capital Territory, and a nursery has been established.

Interstate and other conferences. Since 1911 interstate conferences have been held from time to time in the State capitals, including conferences at Adelaide in 1916, at Perth in 1917, at Hobart in 1920, at Brisbane in 1922, and at Sydney in 1924. Australia was represented at a World's Forestry Congr-ess held in Rome in 1926. In 1928 an Empire Forestry Conference was held in Australia, which met in Canberra and in every State of the Commonwealth as well as in New Zealand, and which re-affirmed the resolution of an Imperial Forestry Conference held in London in 1920, urging all governments of the Empire to lay down a definite forestry policy.

At the Forestry Conferenc-e held in Hobart in 1920 it was recom­ mended that each State should reserve a specified area, so that the total reservation should b-e an area of 24,500,000 acres of indigenous forest lands to meet the future requirements of Australia. This area

was adopted by the Premiers' Conferenc-e held later in the same year as the area at which the authorities should aim for permanent reserva­ tion. At present the r-eservations made by the States are considerably less than this total, and no State has so far reserved its specified area, but it appeared to the Commission that the total and specified ar-eas may have been 'based to some extent on mistaken estimates.

The Sta:tes. Each of the States has a · forestry system under the control of a ;Department or Commission, and in each State legislation has been or 1s about to be p assed, providing for the manner in which lands may

be dedicated to forestry purposes, for the control of forests, and for the . manner in which lands may be thrown open to settlement aft-er havmg been under the control of the Forestry Commission or Depart­ ment. Evidence was given in all the States as to the manner in which

223

the forests were controlled, though in Victoria no official evidence was given. It appeared to the Commission that although forestry had been negl€cted in certain of the States for a time, great progress had been made in almost all the in recent years. .

Control of Forestry. It was said during this inquiry that if a Council to control forestry in the Commonwealth were appointed on which the Commonwealth Government was represented, it would be likely that the in

framing th€ir forestry schemes would give greater attention to the needs of Australia as a whole than they do at present, and that there would be less danger of forest lands being sacrificed to the demand for S€ttlement.

Evidence in favour of a greater, or an exclusive, control of

forests being transferred to the Commonwealth, was .given by Mr. Lane­ Poole, Commonwealth Inspector-General of Forests, by Mr. Dalrymple Hay, formerly Commissioner for Forests of New South Wales, and by Mr. McKay, for!merly Conservator and Commissioner of Forests in Victoria. Evidence to the contrary was given by Mr. S. L. Kessell,

Conservator of Forests. of Western Australia, by :11:r. E. H. F.

Swain, Chairman of the Provisional Forestry Board of Queensland, and by other witnesses in W€stern Australia and Queensland.

Railways.

The 0 ommonwealth. The powers of the Commonwealth Parliament with respect to Stat€ railways are to be found in section 51 ( i) as. extended by section 98, section 51 (xxxii-xxxiv), and sections 102 and 104 of the Constitution.

The operation of thes€ provisions has been discussed in other sections of this report, particularly in the sections. relating to trade and commerce, defence, industrial powers, and the Inter-State Commission. R eference has also been made to railways owned or controlled by the Common­

wealth in the section relating. to T€rritories. The principal railways owned and controlled by the Commonwealth are the Trans-Australian Railway from Port Augusta to Kalgoorlie, the first through train on which left Port Augusta on the 22nd October, 1917, the Port Augusta to Stuart Railway, control of which was assumed by the Common­ wealth on the 1st January, 1926, and the Darwin to Birdum Railway. A number of other lines have been or are being surveyed by the Com­ monwealth.

Classification of freights, and tapering or developmental rates, on railways. Evidence was given before the Commission by Railway Com­ missioners or their repr€sentatives in all the States with the exception

of New South Wales, and by the Commonwealth Railway Com­ ·missioner, in relation to the manner in which freights are classified and adjusted with the object of promoting land settlement and of r€ndering assistance to settlers. In particular, reference was made to the building

of lines preceding settlem€nt for purposes of development, to the assistance given out of general revenue in certain States for the purpose of making u:p o:p. non-paying lines, and to the manner i:p. which

1125

•

224

rat-es are adjusted for the purpose of furthering "the development of the territory of a State" by reducing the freight per ton mile in accordance with the distance travelled, this being the rate referred to in section 104 of the Constitution. The Commission was informed by some witnesses that the discriminatory freights referred to in section 102 of the Constitution had been for the most part abolished by

agreement among the Railway Commissioners, but it was said that some attempt is still made by classification of freights and otherwise to attract trade away from its natural economic or geographical outlet.

Many of the grievances arising from this form of competition which were discussed at the Federal Conventions have been removed by the agreement already mentioned and by the agreement

between the States of Victoria and New South Wales under

which the State of Victoria has built lines into the South Western Riverina and now operat-es them as part of the Victorian system, but it appears that there are still instances of the refusal or contemplated refusal by a State to allow its railway system to be connected with the railway system of another Stat-e lest the trade of its border districts be lost to its capital city.

On this matter reference may• be made to the evidence of Mr. Clapp, Chairman of the Victorian Railway Commissioners (p. 749) :-"Prior to 1905 the State Railways of Victoria, New South Wales, and South Australia, by means of sp-ecial rates competed

intensively with each other for traffic to and from districts adjacent to their borders. In 1905 an agreement was reached between the States to practically eliminate this competition ·by reducing the existing special rates to a comparatively few items and to prevent their extension. Provision was also made that alterations to classi­ fication of goods should not be confined to the competitive areas but should apply g-enerally throughout the State concerned. Since that date no effort has been made by any of the States concerned to divert traffic from its natural outlet by classification or other­ wise. Each State, however, frames its own classification of goods, which specifies the particular rat-e at which each description of

traffic . shall be charged. The many differences in the respective classifications have an effect in the routing of traffic to the capital cities in neighbouring Stat-es. From time to time, however, " reductions have been made in classification in one State below that

provided in other States, and although these reductions in fication were made applicable generally throughout the State con­ cerned, they have the effect of making the rates for similar traffic lower than in neighbouring States and so enable goods to be carri-ed for much longer distances in the State where the variation is made than· in adjacent States. In addition to differences in classifications which have the effect of the same goo.ds being charged at different class rates in the various States, considerable variations occur in the application of the tapering principle."

Mr. Bell, Commonwealth Railways Commissioner, expressed the opinion that the tapering or developmental rate above referred to was necessary in the interests of settlement and as a part of railway policy, but stated that he would prefer to see a rate which would be applied

225

indep-endently of State boundaries so that a consignor at a distance from the destination of his goods would have the benefit of the same con­ cessions, whether the journey traversed was wholly in one State or not ( evidenc€, p. 345).

At the instance of Mr. Bell a con£ erence was held in order to

ascertain the cost to the States of applying uniform freights and fares throughout the Commonwealth. It was found after investigation .. that th€ gross railway revenue of New South Wales wo.uld be considerably reduced by the change, and that Victoria and Queensland wo'uld benefit.

Uniform gauge. Evidence was given before the Commission of the benefits that would accrue by the introduction of a uniform gauge (see evidence, particu­ larly p. 347); but the opinion was expressed by Mr. Webb, Railway

Commissioner of South Australia, that the economies effected would not compensate for the cost of the necessary works. At pr€sent by agree­ ment between the Commonwealth and the States of New South Wales and Queensland the uniform gauge work now being out (the

Sydney-Grafton Brisbane connexion) is· controlled by the

Railway Council consisting of the Commonwealth Railways Commis­ sioner, the Chief Commissioner of Railways of New South Wales, and the Commissioner for Railways of Qu€ensland. The agreement pro­ vides that the Council shall among other things have entire control of

all the works contemplated by the agreement and take all necessary steps to secure standardized methods and types of construction. In respect of the main conversion works, if undertaken, it was recommended by the Royal Commission on Uniform Gauge in 1921 that a Director should

be appointed who would have power and responsibilities similar to those now vest€d in the Railway Council, and in addition it was recommended that each of the various Railways Commissioners should act as agent for the Director to carry out the works required in the

terms and conditions specified by the Director and giv€ all necessary consents and do all things within its powers, acquiring lands, &c., as may be required by the Director. In 1925 an · agreement was entered into betwoon the Commonwealth and the State of South Australia which provides for a standard gauge railway from Port Augusta to Red Hill, and for a third rail on the railway between Red Hill and Adelaide, so that the Trans-Australian trains may run into Adelaide

(evidence, p. 346).

Commonwealth control. The opinion was €xpressed before the Commission that both economy and efficiency . would be promoted if the ··whole of the rail-way systems of the Commonwealth were placed under central control. The example

of South Africa was quoted as a proof of the valu€ of a centralized system with decentralized administration, particularly in the use of rolling stock and of other material, and the examples of South Australia and New South Wales were quoted tD show the increas-e d cost of isolated

systems. Other witnesses claimed that the control of railways is so closely connected with land s€ttlement and development that it could not conveniently be exercised by the Commonwealth so long as these

1127

226

funetions continue to be discharged by the States. It was also suggested that the Commonwealth should take over the direction of all communica­ tions as a means of relieving the States of some portion of their

liabilities and expenditure (see evidence of Professor Mills, p. 1160). The Commission wa.s informed that conferences were held from time to time between the Commissioners of the different States, or between railway officials, and that considerable benefit had been derived from these conferences. On this point, however, Mr. Clapp said

(evidence, p. 7 44) :- ·

"Endeavours have also been 1made by a series of annual con­ ferences of officials of the various railway systems to achieve uniformity of practice and policy in a multitude of matters of varying importance. In some r espects standardization has been

achieved, but in many of the most important matters of administra­ tion this is not so, nor does success . in this respect appear to be likely under present conditions. This is due to the divergent views of the various administrations on many matters of broad policy

and of railway practice. I do not claim tpat Victoria is any

less to blame than th-e other States. The plain fact is that wide and honest differences of opinion are only natural under existing conditions, they would be reconciled or determined under a system of central control ".

Mr. Bell, Commonw-ealth Railways Commissioner, said (evidence, p. 347) :-"With regard to any constitutional changes considered desirable, I would point out the. financial position of the Australian railways

for a number of years has. been very uusatisfactory. Their capital cost as at June, 1926, was £288,392,000, and for a considerable period they hav-e failed to meet the whole of the interest on capital invested. The latest returns available, viz.} for the year ended

30th June, 1926, show only 2.23 per cent. was earned. It would appear that their only salvation would be control by one central body. This would immediately solve the difficulties referred to in the foregoing as regards uniform freights and fares, standard structure gauge, control in time of war, uniform gauge, and construction of new railways without the consent of the State. It would enable large economies to be effected in a number of

directions and would be following the practice in other parts of the world not only with regard to railways but also with regard to other large business undertakings. It would in my opinion be advisable for the Constitution to b-e a,mended so as the Com­ monwealth could assume control of the various railway systems of the States."

The opinions expressed by Mr. Bell and Mr. Clapp on the subject of central control were .supported by Mr. St. Hill, Commissioner of the · Tasmanian Government Railways. Mr. Fraser, Chief Commissioner of Railways in N ew South Wales, did not give evidence before this

Commission, but in giving evidence before the Royal Commission on N ew States in N ew South W ales in. the year 1925 he expressed an opinion that economy in railway administration and organization is promoted by ce:n tl·al control with decentralized administration.

227

On the other hand Mr. Webb, Commissioner of Railways in South Australia, expressed himself on this subject as follows (evidence, p. 989) :-"Certainly the creation of any Federal control would simply

super-impose an additional overhead charge, because I do not believe you could dispense with any of the local organizations. Some of the arguments presented have been that such control would bring about economies in organization, in standardization of equipm.ent,

and further the project of unification of gauges. I have had some experience of such a 'scrambling' of railways in Unit-ed States during the War period when the government to take

over the operations of all the railways in the States, and we saw th-e evil effect of the attempt to standardize along those lines. Standardization of locomotives and cars invariably means stopping the hands of progress, and that is exactly what took place there.

The interests of the States are so diverse and the mileage of the railways is g-etting so large that I think any central organiza­ tion of that kind would be unworkable and really stop instead of advance the progress of the Commonwealth."

Opposition to Commonwealth control was also expressed by Mr. Evans, who was then Deputy Commissioner and is now Commissioner of Railways in Western Australia, and with som-e reservation by Mr. Davidson, Commissioner of Railways in Queensland. The opinion was

expressed by a number of witnesses that railway policy and the control of railways could not he dissociated from the control and management of the lands of the State and of trada and commerce generally, and Mr. Holman, K.C., expressed his opinion that railway development

was a function which could not be efficiently discharged by a centra] governm-ent.

1129

228

XXI.-THE ALTERATION Ol!' THE CONSTITUTION. Sevlion 128 of the Constitution. lt has already been mentioned that the provisions of the Constitu­ tion, though not "covering clauses " 1-8 of the Act by which the British Parliament gave legal effect to the Constitution, may be altered by the method prescribed in sectiori 128. Under this section a proposed law

to alter the Constitution may be ini tiated in either H ouse of the

Commonwealth Parliament. Before it is submitted to the electors, it has, normally, to be passed by an absolute majority of each House. If it is so passed, it must be submitted in each State to the electors qualified to vote for the election of m embers of the House of Representatives, and within the time fixed by the section, that is to say, not less than two nor more than six months after its passage through both Houses. The Vt)te is to be taken in such manner as the Parliament prescribes. If the proposed law is approved in a majority of the States by a majority of the electors voting, and is also approved by a majority of all the ele_ctors voting, it is to be presented to the Governor-General for the royal assent.

The section provides an alternative procedure under which the proposed law may be submitted to the electors after being passed by one House, though this procedure '':'ill not necessarily ensure its submission. Either House may pass the proposed law by an absolute majority, and if the other House does not concur, whether by rejecting

or failing to pass it or passing it with an unacceptable amendment, the H ouse in which the proposed law was initiated may, after an interval of three months, in the same or next session, again pass it, with or without any amendment which has been agreed to by the other House. If the other House again does not concur, the Governor-General may submit the proposed law to the electors, but will, it seems, be guided by the advice of his Ministers (see P. D. 1914, vol. lxxiv, p. 2420; and section v of this r eport). If he submits the proposed law, it is to be submitted in the form last proposed by the House in which it was initiated, and either with or without any amendments subsequently agreed to by both Houses.

Section 128 prohibits certain alterations of the Constitution unless, in addition to approval by the m ajorities required in other cases, they also receive approval in the State or States affected. The prohibition is set out in the last par agr aph of the section and is as follows :-" No alteration diminishing the proportionate representation of any State in either House of the Parliament, or the minimum number of

representatives of a S tate in the House of Representatives, or increasing, diminishing, or otherwise altering the limits of the State; or in any manner affecting the provisions of the Constitu tion in r elation thereto, shall become law unless the majority of the electors voting in that State

approve the proposed law". The powers· of altering the Constitution extend to section 128 itself as well as to the other sections of the Constitution. Both the method of alteration and the restrictions against alteration may be changed under those power s. The only question is as to the appr oval required. E xcept as to the concluding p aragraph, it is clear th at any provision 'of section 128 may be altered ·with the approval of a majority in four of the States and of a majority in the Commonwealth. It is also clear

229

that the paragraph itself may be altered with the approval of a majority in each of the S.tates. What does not seem to be clear is whether the paragraph may be altered without that approval, and on that point opinions have been expressed. The view expressed by Sir Robert

Garran was that the paragraph may be altered wit4 the approval of a majority in four of the States and of a majority in the Commonwealth, so that in a subsequent refer endum the alterations which are at present prohibited, except with the assent of a State, might be made without that

assent. This view was not accepted by Sir Edward Mitchell, K.C., and it may be suggested that it scarcely appears to give sufficient weight to the final prohibition. After specifying three matters in which the Constitution is not to be altered except with the assent of a Sta.te- that is to say: (a) diminishing the proportionate representation of any State in either House, (b) diminishing the minimum number of representatives

of a State in the House of Representatives, and (c) diminishing or otherwise altering the limits of the State-the Constitution prohibits any alteration "in any m anner affecting the provisions of the tion in relation thereto". Those words are themselves a provision of the Constitution in relation at least to "increasing, diminishing or otherwise altering the limits" of a State, and seem, therefore, to afford a strong argument against a power to alter that part of the paragraph ·without the assent of the State. The question is of particular

importance to the advocates of an alteration of those sections of the Constitutior1 which relate to the creation of new States.

:Methods of altering the Constitution.

Section 128 of the Constitution begins with the words "This Constitution shall not be altered except in the following manner ". The Constitution may, however, be altered by an Act of the British Parliament, though it would not be in accordance with constitutional

practice for the British Parliament to pass such an Act without the consent of the· Commonwealth (see section viii. of this report). On one interpretation of section 51 (x..'l:xvii) it maiY also

be altered by a r ef erence to the Commonwealth Parliament of some matter by all the States. This interpretation of section 51 (xxxvii) is, however, open to some doubt. It was suggested bcfOTe this Com­ mission that the States were not entitled to confer on the Commonwealth

Parliament a new legislative power, but only to empower it to pass an Act on a specified subject in a specified form, and it was suggested that thq p ower might be revoked after it had been conferred. The power of rr.Jfe r ence has never been acted upon by all th e States simultaneously,

wu d has never been acted upon by the Commonwealth Parliament.

It seems, too, that section 105A, which was inserted by Constitution Alteration (State Debts) 1928, has introduced what is in effect a l'ew method of altering both the Constitution of the Commonwealth and tbe Constitution of the States, so far as r elates to the public debts of the

Rtates and th e borrowing of money by the Commonwealth and the Siates, namely, by agreement between the Commonwealth and the States, which is to be binding on the parties notwithstanding anything

contained in the Constitution of the Commonwealth or the Constitution of the several States (see section viii. of this r eport under the heading "Financial Agreements between the Commonweal th and the States").

1131

230

The description of the Commonwealth as a Federal Commonwealth. Quite apart from any significance that may be attributed to the preamble of the Commonwealth of Australia Constitution Act, which recites the agreement to unite in a Federal Commonwealth under the Constitution, the covering clauses, and especially the description, in covering clause 3, of the Commonwealth as a Federal Commonwealth, raise a question whether the powers of alteration contained in section 128 may be used to substitute a frame of government which is not federal.

On this point conflicting views, including those of Sir Robert Garran and Sir Edward Mitchell, were expressed before the Cbmmission (s ee evidence, pp. 101, 754, 763, 764-765). An opinion given by Mr. Owen Dixon, now Mr. Justice Dixon, is set out in Appendix F (see evidence,

pp: 794-795, 1112-1113). Various definitions of a federal system have been given from time to time, and the term Federal has been applied to a number of constitutions widely differing in the relations of the States and the central

government, and in the manner in which the constitution may

-be altered or interpreted. The definitions of a Federal system include the following :- ·

"A form of government in which or political power

is divided between the central and the local governments, so that "' each of them within its own sphere is independent of the other. The distribution of powers between the local and central govern­ ments may vary to any extent; but the fundamental idea is always that of the two-fold sovereignty and the independence of each government within its own sphere" (Sir Robert Garran-see the report of the royal on the :finances of Western

Australia). "A 'federal government' exists where, in a political community, the powers of government are distributed between two classes of organization-a central government affecting the whole territory and population of the sovereignty, and a number -of local govern­ ments affecting particular areas and the persons or things therein -which are so far independent of each other that the one cannot

destroy the other, or encroach upon the sphere of the other as determined by the Sovereign in the Constitution. Both are pletely subject to the State. Either may be changed or abolished at will by the State. It appears to involve also the existence of some authority recognized by the and local parts as com­

petent to determine the conflicts which arise as to their respective powers" (Sir William Harrison Moore, Oonstittdion of the Com­ monwealth of Australia_. 2nd edn., p. 68). "In a loose sense the word 'federal' may be used to

describe any arrangement under which self-contained States agree to delegate their powers to a common government with a view to entirely new constitutions even of the States themselves. But the natural and literal interpretation of the word confines its applica­ tion to cases in which these States, while agreeing on a measure of delegation, yet in the main continue to preserve their original

constitutions" (see the judgment of the Privy Council delivered by Viscount Haldane, L.C., in Attorney-General for the Com­ monwealth v. Colonial Sugar Refining Co. Ltd., 17 C.L.R. at pp. 651.-652).

I 231

Its [the American Federal Republic's] central or national government is not a mere league, for it does not wholly depend on the component communities which we call the States. It is itself a commonwealth as well as a uriion of commonwealths, because it claims directly the obedience of every citizen, and acts immediately upon him through its courts and executive officers.

Still less are its . minor communities, the States, mere subdivisions of the Union, mere creatures of the national government, like the counties of England or the departments of France. They have over their an authority which is their own, and not

delegated by the central government. They have not been called into being by that government. They-that is, the older ones among them-existed before it. They could exist without it" (Bryce, American Commonwealth, 1910, vol. 1, p. 16).

"The name of Federal government may be applied to any union ·of component members, where the degree of union between the members surpasses that of mere alliance, however intimate, and where the degree of independence possessed by each member sur­

passes anything which can fairly come under the head of merely municipal freedom" (Freeman, History of Federal Government in Greece and Italy, 2nd edn., p. 2). "A Federal Commonwealth in its perfect form is one which

forms a single State in its relations to other nations, but which consists of many States with regard to its internal government" (:Freeman, supra, p. 9). "A Federal State is one in which there is a central authority

that represents the whole, and acts on behalf of the whole in external affairs and in such internal affairs as are held to be of common interest; and in which there are also provincial authorities with powers of ·legislation and administration within the sphere

allotted to them by the Constitution" (Sir Herbert Samuel, Nineteenth Century, No. 428, p. 676). "A society or league formed for joint action or mutual support: now chiefly, a body formed by a number of separate States, societies, &c., each retaining control of its own internal affairs''

(Oxford English Dictionary). It was suggested before the Cm:nmission that "Federal" in covering clause 3 has not an exact meaning to which recourse might be had by the Courts for the purpose of restricting alterations of the Constitutions. In any case, however, it seems clear that the existing distribution of

powers between the Comonwealth and the States may be substantially changed without any infringement of the covering clauses, and that for most purposes at least any restrictions on change are to be found, not in covering clauses 1-8, but in the Constitution itself.

Referendums. Proposed laws for the alteration of the Constitution have been submitted to the people under section 128 on seven occasions-in 1906, 1910, 1911, 1913, 1919, 1926 and 1928. Recourse was also had to the

section in 1914 and 1915, but where the Senate, in 1914, initiated a pro­ posed law and failed to obtain the approval of the House of Repre­ sentatives, the question was not submitted to the people, and in 1915 the

1133

'i

'.

232

referendums, by arrangement with the State Premiers, were aban­ doned under the provisions of the Referendum ( 0 Alteration)

Act (No. 2) 1915 before a vote was taken. Except on two occasions­ in 1911 and 1926-the vote on a referendum has been taken on the day of a general election. In 1906 it was proposed to alter the dates of the periodical Senate elections. No party question was involved, and the proposed law was carried by large majorities, the total votes being 774,011 in favour, and

162,4 7 0 . against, with the six States voting for the proposaL In 1910 there "\Vere two referendums, which have been discussed in section xix of this report. . One related to section 105 of the Constitution, under which the Commonwealth Parliament could take over only those State debts which were in existence at the establishment of the Common­ wealth. It was proposed to make the section apply to all State debts irrespective of the date on which they were contracted. This proposal vvas carried, the total votes being 715,053, in favour, and 586,271 'against,

with all the States except New South Wales voting in favour. The qther proposal was (a) to allow the Commonwealth notwithstanding anything in the " Bradd on Clause " ( s. 87) to apply towards its

expenditure for the service of the year beginning on the 1§lt July, 1909, a f'Um not exceeding £600,000 over and above one-fourth of the net revenue from duties of customs and of excise; (b) to terminate the "Braddon Clause" six months before · the expiration of the ten years fwm the establishment of the Common wealth ; (c) to terminate section 93, which dealt with the payment of balances to the States in the initial s1:ages of Federation; (d) to terminate section 94, which deals with the

distribution of surplus revenue of the Commonwealth among the States; and (e) to insert a provision in the Constitution under which the Com­ monwealth should, as from the 1st July, 1910, make certain per capita payments to the States, together with a special grant to Western Aus­ t;ralia. This proposal was rejected, the total votes being ·645,514 in favour, and 670,838 against, with three States, Queensland, Western

Australia and Tasmania voting for, and three States, New South Wales, Victoria and South Australia, voting against the proposal. In 1911 there .began a series of proposals to increase the powers of the Commonwealth. In that year there were two referendums, one dealing

with certain legislative powers relating to commerce and industry, and the other dealing separately with monopolies. The former

grouped four matters, the object -. of the proposed law being to

,give the Commonwealth Parliament power to deal with (a) trade and commerce generally, including the -internal trade and commerce of the States; (b) the control and regulation of corporations of all, kinds except those formed not for the acquisition of gain; (c) labour and employ­ ment, including wages and conditions of labour and employment in any trade · industry or calling, and the prevention and settlement of

industrial disputes in relation to employment on State railways; and (d) combinations and monopolies in relation to the production, manu­ facture or supply of goods or services. This proposal was rejected, the total votes being 483,356 in favour, and 7 42,704 against, with only one. State, Western Australia, voting in favour. In regard to monopolies it was proposed to insert a new paragraph (xl) in section 51, under which, in any case where each House declared by resolution ·that the industry or business of producing, manufacturing or supplying goods,

233

or of supplying any specified services, was the subject of a monopoly, the Commonwealth Parliament should have power to make laws for carrying on the industry by or under the control of the Commonwealth, and acquiring for that purpose on just terms any property used in connexion

with the industry or business. This proposal was rejected, the total votes being 488,668 in favour, and 736,3Q2 against, with only one State, Western Australia, voting for the In 1913 the alterations which had been submitted in 1911 in two

proposed laws, four matters being grouped ·in one of them, were submitted in similar but not identical terms, together with a proposal in regard to employees on State railways, under which jurisdiction might be conferred on a Commonwealth tribunal. On this occasion the

proposals were submitted as six separate proposals, the voters being at liberty to vote for or against any one· or mor·e of them. The proposals were rejected, the total votes being as follows:-Trade and commerce, 958,419 in favour; 982,615 against.

C01·porations, 960,711 in favour; 986,824 against. Industrial matters, 961,601 in favour; 987,611 against. Railway disputes, 956,358 in favour; 990,046 against. Trusts, 967,331 in favour; 975,943 against.

Nationalization of monopolies, 917,165 in favour, and 941,947 against. Three States, Queensland, South Australia and Western Australia, voted for, and three States, New South Wales, Vi<;Jtoria, and Tasmania, voted against each proposal. ·

In 1915 it was proposed to alter the Constitution in regard to the legislative powers of the . Commonwealth Parliament somewhat differently from the proposals submitted in 1911, and 1913, but the 1vrits issued for· the submission of these modified proposals were, as

explained ·above, revoked before any vote was.taken. ·

In 1919 there were two alterations proposed, one to extend the legislative powers of the Commonwealth Parliament in regard to industrial disputes, and the other to confer power to deal with the nationalization of monopolies. Both proposals were rejected. Th?

total vo tes in regard to the industrial powers were 911,357 in favour, and 924,160 against. The total votes in regard to the power to

deal with nationalization of monopolies were 813,880 in favour, and 859,451 against. Three States, Victoria, Queensland a11d Western Australia, voted for, and three States, New South Wales, South Aus­ tralia, and Tasmania, voted against each proposal.

In 1926 there were two alterations proposed,_ one to industry and commerce, and the other to essential services. The former grouped three matters. J:>aragraph (xx) of section 51 was to be omitted, and in its stead a new paragraph inserted to give the Commonwealth Parlia­ ment power to make laws with respect to corporations, including the cr eation regulation control and dissolution of corporations, the regula­

tion control and dissolution of corporations formed under the law of a State, and the regulation and control of foreign corporations, but not including municipal or governmental corporations, or any corporation formed solely for religious, charitable, scientific or artistic purposes, or

any corporation not formed for the acquisition of gain by the corpora-. tion or its members. From paragraph (xxxv) of section 51, which deals with conciliation and arbitration for the prevention and settlement of

1_135

234

industrial disputes, the words which restrict the powers of the Common­ we alth Parliament to disputes " extending beyond the limits of any one State " were to be omitted. After paragraph ( xxxix) of section 51 three n ew paragraphs were to be inserted to give the Commonwealth Parlia­ ment power to make laws with respect to:-

. (xl) es tablishing authorities 1vith such powers as the Parliament confers on them with respect to the regulation and

determination of terms and conditions of industrial employment and of rights and duties of employers and employees wi th r es pect to industrial matters and things; (xli ) inves ting S tate authorities with any powers which the

P arliament, by virtue of paragraph (xxxv) or paragraph ( xl) of this section, has vest.ed or has power to vest in any authority established by the Commonwealth; ( xlii) trusts and combinations (whether composed of individuals

or corporations or both) in restraint of trade, trade unions, and associations of employers and employees for industrial purposes, including the formation, regulation, control and dissolution thereof. This proposal was rejected, the total votes being 1,247,088 in favour, and 1,619,655 against, with two States, New South Wales and Queens­ land, voting for, and four States, Victoria, South Australia, Western Australia and Tasmania, voting against the proposal.

In regard to essential services, it was proposed to insert a new paragraph (va) to give the Commonwealth Parliament power to make laws with respect to "protecting the interests of the public in the case of actual or probable interruption of any essential service". This proposal was rejected, the total votes being 1,195,502 in favour, and 1,597,793 against, with two States, New South Wales .and Queensland, voting for, and four States, Victoria, South · Australia, W estern Aus­ tralia, and Tasmania, voting against the proposal.

In 1928, after an agreement had been made between the" Common­ wealth and the States with respect to State debts and the borrowing of money by the Commonwealth and the States, which provided among other things that the Commonwealth would take the necessary action

to submit proposals for the alter ation of the Constitution .in a form which was set out in the agreement, the proposals were carried, the total vo tes being 2,237,3 91 in favour, and 773,8 52 against, with the six States voting in favour of the proposals.

I t ·will be seen that with the exception of the proposals to make section 105 of the Constitution apply to all State debts, whenever contr acted, · and to en able th e Commonwealth to make binding agree­ ments of a permanent character wi th the States in r egard to State debts and borrowi ng by the Coni m onw ealth and the States, each proposal to confer n ew legislative power s on the Commonwealth Parliament has been rejected, though in some instances by narrow majorities.

Suggested alterations of Seciion 128. Suggestions for an alteration of section 128 in order to give greater fl exibility to the Constitution will be found in the evidence of Mr. J. J. Kenneally, Feder al President of the Australian Labour Party (p. 1101), Mr. E. S. Pratt (p. 1197), Mr. A. C. V. Melbourne (p. 1537), and the Hon. F. W. Eggleston (p. 727).

235

Mr. Kenneally, giving evidence on behalf of the Australian Labour Party, submitted proposals which were intended to give the Common­ wealth Parliament "complete legislative powers, subject to such limitations only as will ensure the control of Parliament by the people".

The following extract is from pp. 1106-1107 of his evidence:-"We are of opinion that this can be done by granting to the Commonwealth Parliament power to alter the Commonwealth Constitution when and how desired by an absolute majority of the

Commonwealth Parliament, in order to give effect to the will of the people declared at a general election. The power of Parliament to alter the Constitution should not include power to extend the life of Parliament or to defeat the

operation of the initiative and referendum and . recall, nor to interfere with the adult franchise. These powers being fundamental should be embodied in the Constitution, and be alterable only by a vote of the people by referendum.

In a different category, but also fundamental to popular liberty and security, is the principle that the power of Parliament to alter the Constitution should not include power to impose conscription for military or naval service:

To give effect to these views we suggest that section 128 of the Commonwealth Constitution should be amended to read-128. The Constitution may be altered in the following manner:-The proposed law for the alteration thereof must be passed by

an absolute majority of each House of the Parliament. No alteration diminishing the proportionate representation of any State in either House of the Parliament, or the minimum number of representatives of a State in the House of Represen­ tatives, or increasing, diminishing, or otherwise altering the limits of the State or in any manner affecting the provisions of the

Constitution in relation thereto, shall become law unless the majority of the electors voting in that State approve the proposed law. No alteration of the Constitution extending the life of Parlia­ men t shall become law unless a majority of the electors of the

Commonwealth voting by referendum approve the proposed law. No alteration of section 8 or section 30 of the Constitution shall become law unless a majority of the electors in the Commonwealth voting by referendum approve of the proposed law.

Section 8 to be amended to read as follows:-The qualification of an elector of m embers of the House of Representatives shall be th at h e is a natural-born or naturalized subject of the King of the age of 21 years and upwards, and that he is an inhabitant of Australia and h as lived therein for at least

six months.

Section 30 to be amended to read as follows:-The qualification of an el ector of members of the Senate shall be that h e is a natural-born or naturalized subject of the King of the age of 21 years and upwards, and that he is an inhabitant of

Australia and has lived therein for at least six months. F.l251.-16.

1137

' I

236

New clause. No person shall be conscripted in Australia or in any territory under the control of Australia nor in any ship under the control of Australia for military or naval service. Notwithstanding anything hereinbefore contained, sections (as proposed above, also sections 80 and 116) of this Constitution shall not be altered, except in the following manner:-

The proposed law for the alteration thereof must be passed by an absolute majority of each House of the Parliament, and not less than two nor more than six months after its passage through both IIouses the proposed law shall be submitted in each State to the electors qualified to vote for the election of -members of the House of Representatives.

But if either House passes any such proposed law by an absoiute majority, and the other House rejects or fails to pass it or passes it with any amendment to which the first-mentioned House will not agree, and if after an interval of three months the first­

mentioned House in the or . the next session again passes the proposed law by an absolute majority with or without any amend­ ment which has been made or agreed to by the other House, and such other House rejects or fails to pass it or passes with any

amendment to which the first-mentioned House will not agree, the Governor-General may submit the proposed law as last proposed by the :first-mentioned :fiouse, and either with or without any amend­ ments subsequently agreed to by both Houses, to the electors in

each State qualified to vote for the election of the House of

Representatives. \Vhen a proposed law is submitted to the electors the vote shall be taken in such manner as the Parliament prescribes. If a majority of all the electors voting approve the proposed law,

it shall be presented to the Governor-General for the King's assent." A statement prepared by Mr. Pratt as a member of the study group of the Constitutional Association of New South Wales (evidence, pp. 1197-1198) set out proposals for a method of altering the Constitution which would not involve a direct appeal to the electors, at least in the first instance, but would, it was thought, furnish the necessary safeguards

against hasty and ill-considered changes. These proposals included two sets of provisions, one of which ·was to replace the normal procedure under section 128 in cases in which both Houses of the Commonwealth Parliament approve a proposed alteration, and the other was to replace the alternative procedure under that section in cases in which one House is unwilling to concur in a proposal made by the other to alter the Constitution. The Constitution, it was suggested, might be altered by a bill passed by a two-thirds majority of the total number

of members in each House on two occasions, after an interval of at least three months, in the life of the same Parliament, subject to the right of one half of the State legislatures to veto the bill, in which event the proposal would fail unless after a dissolution of the House of R epresentatives and a general election the bill were again passed by a two-thirds majority in each House. In cases in which one House on two occasions, with an interval of at least three months, failed to concur in a proposal made by the other House, the question might be determined by a two-thirds majority at a joint sitting of the two Houses, subject to the right of one half of the State legislatures to veto the bill.

237

Mr. Melbourne submitted proposals in which 1mt1ation and ratification of proposed alterations were separately considered in relation to ,'suggeste9. Council of the States and to the Senate as at present constituted. The following extract is from p. 1542 of his evidence:-

" Initiation.-(1) If it should be decided to create a Council of the States similar to that which has been indicated, the problem of initiation is not difficult. It should be within the power of

either the House of Representatives or the Council of the States to initiate proposals to amend the Constitution. (2) If no alteration is to be made in the composition of the

Senate . . . authority should be given to the governments of the States to initiate proposals to amend the Constitution. (3) It may seem to be desirable to apply the idea of initiation by petition. This is provided for in the Constitution of Germany,

and although probably it would not be used extensively, it would, in some circumstances, be of value. .

Ratification._.c(1) Should a Council of States be created, it would be sufficient to secure agreement between the House of Representatives and that body. . . . Should a proposal ·made by the House of Representatives be rejected by the Council of States,

or should a proposal made. by the Council of States be rejected by the House of Representatives, the proposal should be submitted to a referendum poll for final decision. (2) If no alteration is to be made in the present composition of

the Senate, it seems to be sufficient to obtain ratification of proposals to amend the Constitution from the legislatures of the States, not all of them, but, · say, two-thirds of them, to ensure a sufficient majority. . _. . .

. (3) It might be thought necessary, in the event of the adoption of these provisions, to preserve the ultimate authority of the people by making provision "for a referendum poll upon the petition of a sufficient number of electors." Mr. Eggleston suggested that the referendum should be retained for altering some provisions of the Constitution, e.g.) the distribution of

powers and the constitution of the Senate, and that other provisions might be altered by an absolute majority in each House of the

Parliament, though he recognised that it would be difficult to draw the line between the matters to which these two m ethods should be applied (evidence, p. 735). It was also suggested by several witnesses that section 128 should be

amended by making approval in the Commonwealth and in one half of the States sufficient.

0 onstittdional 0 onvention. The value of a constitutional convention as a means of altering · the Constitution was stressed by several witnesses, including Sir Josiah Symon Mr. Justice Piddington, 1h. Drummond, Mr. Eggleston, Mr. Mr. V. C. Thompson, M.P., and Mr. Windeyer, K.C.

(evidence pp. 1083, 1086, 17 4, 1229, 1231, 735, 1543, 1133, 212). Sir Joseph Carruthers expressed a different view (evidence, p. 1336). It was suggested that the necessai·y provision should be made in the Con­ stitution. It was thought that a representative convention on the lines

1139

238

of the Convention of 1897-1898 could deal with matters which would be too numerous, as well as too disputable, to lend themselves to treatment at an ordinary referendum, and that such a convention would have the advantage of being composed of men who had experience of the working of the Constitution. A proposal for holding a constitutional convention was discussed by the Commonwealth Parliament in 1920, and a bill for that purpose was introduced in 1921 but was abandoned (P.D. Vol. xci .• pp. 1233-1247, vol. xcviii., pp. 13019, 13472 et seqq., 14260).

Methods of altering Constitutions. An analysis is given in the evidence of Mr. E. S. Pratt (pp.

1198-1199) of the methods of altering the Constitutions of the United States of America, Canada, Germany, Mexico, Russia, South Africa, Switzerland, the Confederate States of America, the Leeward Islands, Brazil and Austria. These methods include alteration (a) by the

combined action of the federal a·nd state legislatures, as in the United States of America;- (b) by special majorities in the federal legislature, as in Germany; and (c) by the referendum, as in Switzerland. In some Constitutions, as in the United States of America, Germany and Austria, a distinction is drawn between different classes of alterations, special provisions applying to certain matters, e.g., the representation of States in the central legislature, and the alteration of the territory of a State.

According to the method adopted in practice in the United States of America, amendments are initiated at the instance of two-thirds of both Houses of Congress and take., effect when they have been ratified by the legislatures of three-fourths of the States. There is an

alternative provision, under which the legislatures of two-thirds of the States may request Congress to call a convention for proposing amend­ ments, but this provision has not been used. Amendments initiated' by Congress or proposed by a convention may be ratified either by the legislatures of three-fourths of the States or by conventions in three­ fourths of the States, as the one or the other mode of ratification may be proposed by Congress.

The German Constitution of the 11th August, 1919, may be amended by legislation (Art. 7 6) . For a decision by the Reichstag, which directly represents the people, two-thirds of the members must be present, and at least two-thirds of those present must give their consent to the pro­ posed amendment. A decision of the Reichsrat, which represents the

States, in favour of an amendment, also requires a majority of two­ thirds of the votes cast. If the Reichsrat objects, it may demand that the measure be submitted to the people. In Switzerland detailed provision is made for total and partial revision of the Constitution, but a change cannot be made until it has been submitted to the vote of the citizens and has been approved by a majority of those who vote, and by a majority of the Cantons.

Alterations suggested in the evidence. The suggestions made b:v witnesses before the Commission included proposals to alter the clauses, to substitute a unitary scheme of

government, and to alter the Constitution in various respects while preserving its federal character.

239

It was suggested that the Commonwealth should have further extra­ territorial legislative powers, and that there should be no limits to the validity of a Dominion statute except for repugnancy to an Imperial statute expressly extending to the Dominion, or for not being relevant

to the power to make laws for peace, order and good government of the Dominion. Apart from the suggestions to introduce a unitary system of govern­ ment, the proposals for altering the Constitution related, for the most

part, to the organs and powers of the central government, the method of distributing legislative powers between the Commonwealth and the States, the financial relations of the Commonwealth and the the right of a State to pass laws with respect to the introduction from

another State of diseased animals and plants, the method of establishing new States, and the method of altering the Constitution: In some instances verbal amendments were suggested with a view to greater clearness.

The suggestions in regard to the Commonwealth Parliament included proposals for extending the life of Parliament, increasing the number of members of the House of Representatives, removing disqualifications of a member of either House, substituting a Council of States for the

Senate, prescribing additional qualifications for Senators, making adult franchise a part of the Constitution, prescribing special qualifications for electors of Senators, providing for the representation of minorities, prohibiting pre-selection of candidates, introducing the initiative refer­

endum and recall and principles of direct government, giving the Parliament all powers not specifically assigned to the State Parliaments, and inserting constitutional guarantees in the nature of the prohibitions which are to be found in the American Constitution.

It was suggested that provision should be made for a Deputy Governor-General, and for the appointment of Lieutenant-Governors for the States by the Governor-General in Council instead of the appoint­ ment of State Governors by the King.

The suggestions as to specific powers and matters included sugges­ tions in regard to the following :-Aborigines, agriculture, aviation, broadcasting EJ,nd wireless transmission, censorship, cinematograph films, company law, "containers," courts, defence, drugs and foods, education, fauna and flora, fisheries, forestry, health, industrial matters, Inter­

State Commission, marketing, navigation and shipping, negotiable instruments, new States, new subject-matters (i. e., "matters which by reason of their nature were not matters of legislation before the passing of the Constitution Act"), office of pro-fit under the Crown, partnership,

probate and letters of administration, railways, ratification of inter­ national conventions, registration of doctors, dentists, pharmacists and nurses, registration of title to land acquired by the Commonwealth, revenue of the Commonwealth, soc]al laws, State instrumentalities,

State banking within the territory of an original State and of a new State formed by separation of territory from the original State, sur­ render of territory by the Commonwealth to a State, taxation, and trade and commerce.

The suggestions for making the Constitution more flexible by an alteration of section 128 have already been stated in this part of the report, and other suggestions have been stated or referred to in previous parts in with qf Constitution to which they

relate.

1141

240

XXII.-GENERAL RECOMMENDATIONS. GENERAL RECOMMENDATION IN FAVOUR A FEDERAL SYSTEM.

Many definitions of :Federalism, or of a Federal system, have been framed by writers on political science or constitutional law, but in recommending that the Federal form of government be retained in Australia, we are referring to a system which possess features common

to the Constitutions of Australia, Canada, and the United States. Between the Constitutions of these three countries there are important differences, but all three have in common certain elements or institu­ tions which may be described as fundamental. In all of them there is

one government having authority over the whole area, and

there are a number of governments having authority over areas less than the whole. The powers of these governments and their relations to each other are limited and defined by a written .document the terms of cannot be altered by the Parliament either of the whole or of

any lesser area. It cannot be interpreted except by a Court, and it is for this Court to determine whether any Act of any of the legislatures has the force of law, or is a nullity because it transgresses the limits defined by the Constitution. Another feature which these three systems have in common is that the po·wers exercisable by the Provincial or State Parliaments are not merely administrative, but are of sufficient importance to the people governed to attract political interest and to give to the decisions of the Legislatures or Executives of the States or Provinces an important influence on the well-being of the community. One distinguished writer on political science, Sir John Seeley, has denied that the difference between the Federal and unitary system is more than a difference of degree, the test in his opinion depending ori the extent to which local government is carried. In some modern European Constitutions the powers of the provincial governments do not appear to be any- greater than those that are assigned to local councils in unitary systems, such as that of South Africa or of the United Kingdom, but in recommending that the Federal system be retained in Australia we have in mind a system in which not only are the powers of the local and central legislatures ·defined by a charter but the powers of the local Legislatures and Executive Governments

are substantial and significant Australia is one of the largest continuous areas in the world under a single government; it includes many varieties of climate a:p.d soil, its population is unevenly distributed and in four out of the six States more than• forty-five per cent. of the population reside within the capital city or its suburbs. Large areas are very thinly populated, and of some it may safely be predicted that for a long period they will not be occupied by more than a very few people. The development of rural communications is still incomplete, and the legislation which has been enacted for the control of industrial conditions is still in an experimental stage. Partly because of this diversity in economic con­ ditions and partly for historical reasons there are marked differences in interest between the peoples of the different localities, and there is a marked difference in outlook between the residents of the different capitals. There appears to be developing in Australia, as in other parts of the world, a feeling that the people in the cities and those engaged in primary production have divergent interests. There is also a

241

m outlook and in attitude of mind which may have

originated in days when the States were self-governing units, but bas not been obliterated by 28 years of Federation. We think that the existence of these conditions furnishes a strong reason for the conclusion that the Federal system of government is

the system best suited to the needs of the Australian people at the present time. A central authority is necessary for the discharge of those functions on which Australia should speak and act as a whole, e.g., defence and relations with other countries, and is desirable for

the exercise of powers of legislation and administration with respect · to matters, e.g., weights and measure.s and coinage, in which uniformity is convenient. But in our opinion the existence of self-governing units within the area of the Commonwealth is also necessary. The advantage

of an independent right of self government may not be so obvious to - the residents of those States which are in close touch with the central authority, but it is of fundamental importance to States which are situated at a distance from the seat of government, and which by

reason of the sparseness of their populations have a relatively small representation in the Commonwealth Parliament. Where there are adequate powers of .self-government, there is scope for public spirit, local patriotism, and local knowledge, which would be lost if all legisla­ tive and administrative functions in Australia were absorbed in the central government. Again, the existence of the self-governing States does, we believe, provide the best means of supervising development

and the bast safeguard against a disastrous experiment. The

importance of confining economic and industrial experiments to limited areas was emphasized by several witnesses. It is greater in

Australia than in the United States where the Constitution contains prohibitions which restrain both Congress and State legislatures from legislating in certain directions. We are aware that the division of powers must lead to some

inconvenience _and has often been found irksome by Ministers both in the Commonwealth and State Parliaments. But this difficulty may be diminished by a re-adjustment of powers in the light of the of the past 28 years, and it has been diminished to a very large

extent by co-operation. If there had been further co-operation between the States and the Commonwealth, it is probable that the impression Qf the Constitution as an almost inflexible instrument would not have been formed. This conclusion appears to be supported by the history of the last constitutional amendment, but apart from the power of

amendment the inconvenience attributable to a division of powers has be.en greatly diminished by co-operation in administration, e.g., in health, in :fisheries, in navigation, and in the control of railways, as well as by the operation of certain Commonwealth instrumentalities

which work in conjunction with the States and are supported by the revenue or the credit of the whole of the Commonwealth. Again, the division of powers may be said to lead to subdivision of political intere.st, but if this is an objection we do not think that it outweighs the advantages of local self-government. On the contrary it seems to us that the concentration of all legislative and executive functions in one authority would be likely to produce that paralysis at

the centre and anaemia at the circumference which has been referred to by some writers on political science. The objection that in a Federal system the citizen feel s a divided loyalty is an objection which might

1143'

242

be urged with equal force against the Constitution of the British Empire or of the United States. We think that the loyalty of a citizen :finds its fullest scope, in a country of the size of Australia, when certain important functions are assigned to local authorities, and those which are truly ·national to the central government.

It is sai.d that the advantages claimed for the Federal system could be obtained under a unitary government, the central Parliament having autho'rity to delegate powers to provincial governments and to with­ draw powers so delegated. There would be, we think, an inevitable tendency for the central Parliament to endeavour to retain for itself all powers except thos-e of minor importance. We do not believe that the States with their present boundaries would attract suitable men to their service if their functions were seriously curtailed, and we do not think it possible to follow the example of the United States and divide the Commonwealth into a number of territorial divisions approximately

equal in size. There must always be many areas in Australia which cannot be developed except when supported by the capital or the credit of those more closely settled, and there are always likely to be cities which contain within themselves a population exceeding that of any rural State. The existence of these large cities on the one hand, and of large and sparsely inhabited areas on the other, appears to us to render the division of Australia into a large number of small provincial

areas impracticable. At the same tim-e we regard as undesirable the establishment of a number of areas as F ederal Territories dependent on the central authority. We do not recommend the substitution for the Australian Constitu­

tion of a Constitution containing a division of powers similar to that of the Dominion of Canada. The confusion resulting from two sets of enumerated powers is pointed · out elsewhere in this report in a passage cited from the evidence of Sir Robert Garran. By some witnesses, however, th-e Canadian system was referred to as a system in which the residuary powers are vested in the central government, no reference being made to the two sets of enumerated powers. Although inconveniences may result under the Australian system when a new subject of power, such as aviation, com es into existence, we think on the whole that it is more convenient that the enumerated powers which are express-ed in wide and general terms should be conferred on, the central government and that the unspeci:fied powers should remain with the States. Difficulties of interpretation would, it seems to us, 'arise if both enumerated and residuary powers be conferred on the

Commonwealth. In forming an opinion of the sufficiency of the powers of the central government it seems to us necessary to have regard not so much to the residue as to the extent of the powers which are carved out of the residue.

It has been suggested that the cost of government is increased by the existence of the several Parliaments in Australia. We are of opinion that under a unitary system it would be necessary to have a much larger Parliament, and to haYe proYincial councils and proYincial heads of departments, and that the total cost of goyernment under Federation is not higher, and may be less, than it would be under a unitary system.

Mr. Ashworth, Mr. Du ffy and Mr. MeN amara.-For the general recommendation of Mr. Ashworth, Mr. Duffy and Mr. MeN amara see pp. 243-247.

243

GENERAL REcOMMENDATION OF MR. AsHWORTH, MR. DuFFY AND MR. MeN AMARA IN FAVOUR OF THE CoNCENTRATION OF PowER AND RESPONSIBILITY IN THE NATIONAL pARLIAMENT.

The terms of the reference embodied in the Royal Commission require us to report on the nature and extent of the control which should be exercised by the Commonwealth over various elements in our national life. We dissent from the view of the majority of the Commis­ sion on this main issue.

We find it impossible to arrive at separate disconnected conclusions in respect of each of these compartments of national activity. We believe that logically we should first formulate the conclusion at which we have arrived, as the result of the evidence submitted to us and our

deliberations thereon, as to the major and determining problem of where the sovereign power of the people of Australia should reside. Sub­ ordinate problems of how that power should be exercised depend for their solution upon the answer to the major problem. The adoption of this course immediately raises the item of " New States," one of the questions specip.lly referred to the Commission, to its proper position

as involving and carrying with it the answers to many other items. We believe that the question of new States cannot be determined without considering the question of a general redistribution of govern­ mental powers between the Commonwealth and local bodies (whether called States or Provinces). Consequently our recommendation on the

item New States must at the same time supply our answer to the questions raised as to the allocation of governmental powers in resp'ect of any and all national activities. In framing our recommendation upon the major problem above­

mentioned we are particularly desirous of avoiding at the outset the misunderstanding that inevitably arises when terms of uncertain meaning are used such as "Unification" or "Federalism". We do riot accept either of these terms as applying to the system of government

outlined herein. In the Introduction to Political Science Sir John Seeley shows how the views and conclusions of many people are governed by abstract words which have but little correspondence with the facts of life. He shows how impossible it is to draw a clear line between Federal and Unitary systems of government. In this regard he writes:-

"Against the common way of conceiving this distinction I have the same sort of objection that I have to distinctions of monarchy, oligarchy, and democracy; it is too purely formal and verbal. .... Compare the union of the States in the United States with the

union of the boroughs and counties in the English State or of the departments in the French State. There is great difference in the degree, but no fundamental difference in the kind of union ..... I deny, then, that between unitary State and the Federation

or Federal State there is any fundamental difference in kind" (Sir J. R. Seeley, Introduction to Political Science, 1896, pp. 93-95). Next our attention is arrested by observing that there are several of the major sides of national life riow partly or wholly vested in the States as to which the interests of all Australia are uniform and indis­ solubly interconnected, and the control and regulation of which should certainly be the function of the national Parliament only. Apart from

1145

244

the profound question of the effect oi· a uniform system. in .moulding a . consistent national outlook referred to hereinafter, there is the enormous practical advantage that where legislation imposes a charge upon industry, this charge will be uniform throughout the continent. We refer particularly to the body of laws regulating the relations of employer and employee; and as it is difficult and hampering to industry

to separate interstate from intra-state trade and commerce, to the whole body of laws relating to trad.e and commerce, including. company laws, laws as to banking, standards of commodities, carriage of goods, &c. The arbitrary line drawn across trade and commerce making inter­ state matters subject to the control of one Parliament and intra-state the subject of control by another Parliament must uncertainty

as to the limits of one power or the other. A considerable amount. of legal decision surrounds this question, and is fully discussed .in section xiv. of this report; but notwithstanding all this it is difficult to say where interstate trade begins and ends. When a subject is divided

in this manner and produces uncertainty· and difficulty of. interpretation the logical thing to do is to place the whole undivided power in the hands of one authority; and since the control of interstate trade cannot be carried out by State or local authorities, there is only one place where the power can be satisfactorily placed, and that is in the hands of the central Parliament.

Trains and boats travelling from one State to another aTe engaged in the transport of goods for intra-state as well as interstate trade. The futility of the attempts by the Courts to separate trade and commerce into two areas was set out in a speech by Mr. W. H. Irvine (now Sir William Irvine, Chief Justice of Victoria) in the House of Representa­ tives in 1910. The following extract from that speech refers to the American cases on the trade and commerce power (evidence, p. 1105) :-

"These would sometimes make even a lawyer's head reel with confusion in the endeavour to follow the intricacies to which the Courts are reduced in trying to divide what is really and substan­ tially an indivisible whole-to divide the commerce of the com­ munity int.o parts, and to say that one part shall be under the government of one Parliament, and another part under another Parliament. Commerce is really an organic whole, and an organic whole of continually increasing complexity". Not only is trade and commerce one and indjvisible; there are·several powers which are so closely interwoven that any attempt to separate· the'm. by giving the control of some to the Commonwealth and others to the States can result only in confusion and economic loss. Customs duties, trading conditions and conditions of employment are all so interdependent-reacting so po·werfully each upon the other-that they should be placed under the same gove rnmental control. Since the Commonwealth necessarily controls the customs, we believe that full trade and commerce, company law, shipping, navigation, and industrial powers should be vested together in the central government.

Special reference must be made to industrial powers. The extent of the existing power has been the subject of much legal argument and progressive interpretation. Both the Arbitration Court and High Court decision s have changed with the changing personnel of those bodies. If the power is removed from the Commonwealth an,d vested in' the

245

States, .an intolerable condition of unfair competlt10n between manu­ facturers in different States owing to varying rates of pay and conditions of employment will be created. One of the benefits of a central govern­ ment is that it can remove danger of this character. That the danger

is real is demonstrated by a resolution of the Premiers' Conference of 1909 as follows:-(3) "That to meet the case where i.t is proved that interstate competition ·exists in industrial matters which is unfair, and the

State tribunals have failed to grant relief) the Parliament of the States should agree to vest the CommOIJ-Wealth with the power to adjust the grievance complained of ''.

When the various parts of Australia became separate colonies, com­ munication was difficult and intercourse between them was very limited. The position is now different, communication being rapid and

intercourse considerable, making the problems of commerce and industry of nation-wide importance. The establishment of new States would make this aspect' more pronounced, and the Constitution should be so modelled as to be ready for this change.

Evidence before the Commission indicated the desirability of uniform laws and upon many subjects such as· company law,

standards of foods and drugs, &c. Efforts have been made to secure the passing of uniform Acts by all the State Parliaments. Results have not been satisfactory. Even when successful, the delay and waste of effort involved in securing passage through eleven Houses of Parlia­

ment could be avoided by endowing the central Parliament with the necessary power. Administration could in many cases be left to local bodies. The present division of powers has led . to a considerable amount

of litigation in order to ascertain exactly what the words in the

Constitution mean. The economic waste entailed by taking constitu­ tional questions to the Courts is a heavy burden on the people. What is required is a Constitution simple as it is possible to make it so that the people can readily understand it without the necessity for High Court interpretation. The present position is such that the Commonwealth

Constitution is broad or narrow according to the way it is construed by the High Court, and the. Constitution depends upon the trend of thought of the individuals who for the time being form that body. The personnel of the Court has been changed recently, and it is possible

that some decisions now standing and accepted as the law of the Con.,. stitution may be upset in the future. Such uncertainty should be ended and the remedy appears to be to entrust the Commonwealth Parliament with the necessary powers; rather than to trust to the accident of the

occupancy of a High Court Bench lacking in the res ponsibility of a Parliamentary Legislature. We believe that the authority of the Commonwealth Parliament as a law-making body has been impaired by the paramount and incalc ulable powe r of the High Court in its

capacity as arbiter of the powers, and that the responsibility of Parlia-. ment and of the Cabinet have been lessened accordingly. Moreover, we believe that the adjudication of political issues by the Court is tending to lessen the Cour·t'-s prestige, decreasing popular res pect for it as an

·instrument of justice. These evils spring from the uncertainty of and the absence of definite principle in the distribution of powers.

1147

Under the system of dual authority operating at present political parties are enabled to make promises the non-performance of which can be excused on the ground of constitutional limitations. If the Com­ monwealth Parliament had complete power, these unfair vote-catching tactics would not be possible. The parties and the people would know that whatever the majority of electors voted for would come within the legislative competency "of Parliament. Those making the promises would do so with a sense of r esponsibility that is precluded by the existing division of powers.

The division of powers leads inevitably to over-government. Each authority is desirous of i ts own sphere. The manner in which

the conflict develops is illustrated in Australia in connexion with the industrial power. With sovereign power concentrated in one govern­ ment a more reasonable exercise may be looked for. The association of power and responsibility is fundamental in the British Cabinet system; it is the life principle of civilization. The dual authority of Commonwealth and States limits and restrains the sovereign power; it divides it; it assigns to government only specified and limited rights. Consequently, it lessens responsibility. To this defect we attribute many existing political and economic ills.

In the light of these considerations we are of opinion that the most suitable form of government for Australia is one that provides for all major national questions being dealt with by the central Parliament and that leaves matters of minor importance, as well as the administra­ tion of federal laws to a considerable extent, to local bodies (States or Provinces). We, therefore, recommend that full powers such as those embodied in the Constitutions of Great Britain, New Zealand, and South Africa be. vested in the Commonwealth Parliament. This alteration will necessitate the empowering of the Parliament to amend the Constitution how and when it finds it necessary for the construction and alteration of its laws. The flexibility thus obtained will enable Parliament to make those modifications in detail which are demanded from time to time by the ever-changing conditions of modern life, modifications which in the aggregate count for ·so much in promoting the social and economic welfare of the people. Moreover this flexibility will enable the transfer of powers from States to Commonwealth to be accomplished gradually, as and when necessary and desirable.

To grant full legislative power to the Commonwealth Parliament by a complete and sudden amendment of the Constitution would be to put the whole of the powers of the States into the melting pot at once, and until such time as the Commonwealth had conferred delegated powers to local authorities there would be interruption of the services now per­ formed by State Parliaments and Departments. The proposal submitted in this recommendation would remove all danger of the chaos indicated. If the suggested amendment of the Constitution were adopted by referendum, the Commonwealth Parliament would be enabled to amend from time to time such parts of the Constitution as it desired to operate, leaving the balance to the State or local authorities. Gradually, without upsetting the smooth working of the P arliamentary machine, the national Parliament would be invested with full control over the matters that the people desired. Broad national questions could then

be fully de11.lt with by the Commonwealth Parliament and purely local

247

affairs by local bodies. Overlapping and duplication would cease. Where to-day there are two laws and two sets of regulations covering the same spheres of legislation and administration, one would suffice. Opponents of full powers for the Commonwealth fear undue cen-

tralization of all governmental activities. There is no ground for this fear in the practice of other countries. In all systems of govern-ment certain functions must be discharged by a central authority; others must be decentralized. We believe that under such a system as is

outlined herein the existing States would be subdivided into smaller units of local government, not so small however as to be left without important functions. Powers over local development such as irrigation, harbours, roads, hydro-electricity, forestry, and land tenure for any

purpose, together with the control of health, education, local courts, municipal government and police would almost certainly be delegated by the central authority to local bodies (States _or Provinces). Whereas the existing States include widespread areas with conflict­ ing interests, these smaller units Cl)uld be based upon community of interest. Consequently, there would be more scope than at present for local patriotism, local knowledge, aud public spirit.

We believe that the prosperity nnd development of Australia calls for a redistribution of the areas of existing States-for the creation of new States. Evidence has been submitted to the Commission, to the effect that the State boundaries have not been planned in accordance

with any principle; they are mere historic accidents; they bear no relation to community of interest; they are not natural. Communica­ tion between country districts and the seaboard is restricted by these artificial boundaries. The system of government that we are advo­

cating would remove the existing constitutional hindrances to the creation of new States. It would open up the way for a more judicious centralisation and decentralisation of the functions of government than is possible under the existing Constitution.

·Despite some surface indications to the contrary, we believe that the Australian people are in a specially favourable position to achieve a consistent national outlook. We are nearly all of one race; approxi­ mately 9S per cent. of our people are British; the great need is a

constitution which will tend to still further develop national ideals. The Constitution of 1900 was a big step in the right direction. We record our conviction that the time has arrived for placing full power and responsibility in the national Parliament as the means of achieving ,qocial unity.

The supplementary views and individual recommendations of Mr. Ashworth are set out at pp. 277-293, and those of Mr. Duffy and Mr. MeN amara at pp. 301-304.

T. R. ASHWORTH. M. B. DUFFY. D. L. MeN AMARA.

1149

248

XXIII.-SPECIFIC RECOMMENDATIONS. AVIATION.

We recommend that a power to make laws with respect to aviation be conferred on the Commonwealth Parliament. All the expert witnesses on this subject who appeared before the Commission were agreed that the Commonwealth should have this power, and as is shown elsewhere in this report the State Premiers at one time passed a r esolution that it was desirable that the · power to make laws with respect to aviation, with certain reservations, should be transferred by the States to the Commonwealth.

Effect could, we think, be given to this recommendation by inserting in section 51 of the Constitution the following paragraph:-(vib) Air navigation and aircraft. Sir Hal Oolcbatch.-For the views of Sir Hal Colebatch see section xxiv., p. 298.

INDUSTRIAL PowERs.

vVe do not r ecommend that the Commonwealth Parliament be em­ powered to legislate with respect to industrial matters generally. In our opinion, the r easons which may be urged against the abolition of the Federal and the establishment of a unitary .system of government in Australia may be urged against the transfer of this power to the Com­ monwealth. In our opinion, industrial legislation should be regarded as a function of the States. In many matters industrial legislation is experimental, and each State . should decide for itself whether ·it is prepared to test the value of proposed legislation of this character and to accept the responsibility for its consequences. We also think that indus­

trial legislation peculiarly requires local supervision, and should be in the hands of the authority which is responsible for the maintenance of law and for the good order of the community. We think, further, that. the general power to legislate with respect to industrial matters should be in the hands of the legislature which has the general power to deal with

health, trade and commerce, mines, lands, public works, and the develo!Jment of a State. We do not think that it would be for the good · of Australia that the Commonwealth Parliament should be occupied with industrial questions or that Federal elections· should turn on industrial issues.

In our opinion paragraph (xxxv) of section 51 of the Constitution, which relates to conciliation and arbitration, should be deleted. We think that the Parliament which deals with industrial arbitration and conciliation should be the Parliament which has control of industrial matters generally. For the reasons given above we think that this control should be in the hands of the Parliament of each State.

We think that the history of the decisions on this paragraph shows ( 1) that the arbitration power, however exercised, should not be dis­ sociated from the power to legislate on industrial matters; and (2) that there would be great difficulty in framing a definition of dispute

which would ensure that only real disputes, in the sense in which that t.erm was used in the earlier judgments of the H igh Court, were brought before the Commonwealth Court.

249

We are of the opmwn that the arbitration power should not be exercisable by two authorities, and that it should be in the hands of the States and not of the Commonwealth. Mr. Ashworth, Mr. Duffy and Mr. MeN amara.-For the views of

Mr. Ashworth, Mr. Duffy and Mr. MeN amara, see section xxii., pp. 243-247.

THE INTER-STATE CoMMISSION.

Section 101 of the Constitution provides that there shall be an Inter-State CoiDiilission, and we recommend that the Inter-State Com­ mission be re-constituted. The duties of the Inter-State Commission are set out in sections 101

and 102 of the Constitution, but these sections are not exhaustive. By section 101 it is provided that the Inter-State Commission shall have such powers of adjudication and administration as the Parliament deems necessary for the execution and mainten ance within the Common­

wealth of this Constitution relating to tr ade and commerce and of all laws made thereunder. By section 102 it is provided that no prefer· ence or discrimination, by any State or by any authority constituted under a State, as to r ailways, is to be taken to be undue and unreason­

able or unjust to any State unless so adjudged by the Inter-State Com­ mission. Although preferences or discriminations by means of freights on railways have to some extent been adjusted by agreement among the Railway Commissioners, we think that ther e is still need for some

supervision over freights designed to attract goods from their natural geographic or economic outlets. We are also of opinion that there is scope for the work of an In tar­ State . Commission in carrying out the inquiries and investigations

emunerated in the Inter-State Commission Act of 1912 referred to on page 54 of this r eport, or such other inquiries and investigations as might be substit uted or added, and in exercising the powers of adjudi­ cation conferred by that Act, which may be validly conferred if sections 71 and 72 of the Constitution, r elating to the tenure of judges of courts created by the Commonwealth Parliament, are amended as we recom­ mend.

We think that important duties may be carried out by an Inter­ state Commission in addition to those mentioned in the Constitutiou ,lJ,nd .. ,A.ct of 1912, In the section of this report dealing .the

financial r elations of th e Commonwealth and the StateS-(seGtion xix.), r eference is m ade to th e sums of I!).Qney granted from time to time to the States of Western Australia and to Tasmania, and to the grant to South Australia r ecently recommended by a royal commission. These grants were recommended partly on the gr ou nd that the :finances of a

State had been adver sely affected by F eder ation and . partly · on the ground that the S tate was in financial difficulties. We think that a permanent body should be established which should continuously watch the effect of Federal laws and administrative machinery on the

various States, and should be in a position to advise, either with Ol' without a special inquiry, whenever applications for grants ar e m ade to the Commonwealth.

1151

250

The same permanent body should, we think, inquire into and report on such transactions as the agreement between the Governments of the Commonwealth and of the State of Queensland relating to the purchase and disposal of the sugar crop and the embargo on imported raw sugar, and inquire into and report on proposed bounties, and the effect of the Navigation Act on the various States.

The advantage of the establishment of such a body for these pur­ poses would, we think, be twofold. There would be a tribunal in exist­ ence equipped with a knowledge of Australian conditions and of the working of the Federation, and the claims of necessitous States would no longer afford an opening to the benevolence or the opportunism of political parties. An analogy may be found in the position of the Public Works Committee in the Commonwealth and in some of the

States. Public works costing more than a prescribed amount will not in normal circumstances be sanctioned by Parliament unless favour­ ably reported on by the Public Works Committee, and in our opinion it would be to the advantage of the Federation if it were provided by law that grants under section 96 were not to be made. unless first recom­ mended by such a body as the Inter-State Commission.

In making these recommendations we have not overlooked the fact that some of the duties originally assigned to the Inter-State Commis­ sion have been carried out by other bodies, and that very important duties are now carried out by the Development and Migration Com­ mission. As has been pointed out elsewhere in this report the value of an Inter-State Commission has been acknowledged by the royal com­ mission which inquired into the :finances of Western Australia and

by that which inquired into the :finances of South Australia. We do not think that the reasons for the opinions expressed by these royal commissions have been diminished by the proposed appointment of an economic adviser by the Commonwealth.

In this connexion we would also draw attention to the provisions of the Industrial Peace Act relating to the appointment of an. Indus­ trial Council, and to the evidence in favour of the appointment of an Industrial Council or Parliament given by Mr. Kneebone and Mr. Sutcliffe, and to the suggestion by Professor Cumbrae Stewart that a committee be appointed for the purpose of bringing about uniformity in State laws. Certain of the functions of the Industrial Council which might be of great value to the Commonwealth might well be carried out by the Inter-State Commission, and the same body might perform a v,aluable duty in bringing about uniformity in the laws of the State, in the commercial laws.

Ashworth, Mr. Duffy and Mr. -the views Jf

Mr. Askworth-, }4:r. Duffy and Mr. MeN amara, see section xxii., pp. 243-247. . '" . . --- .. - ·- ---' .

JUDICIAL PowER.

Remov.al of difficulties without curtailing the authority of the High Court. From the section of this report under the heading of " the High Court and the Judicial Power of the Commonwealth" (section ix.) , it will be seen that a number of difficulties and anomalies have

arisen in the administration of justice in the Commonwealth, and

251

that· the causes of these difficulties and anomalies are to be found partly in the provisions of chapter III. of . the Constitution and

partly in the manner in which the Parliament of the Commonwealth has exercised the powers conferred on it by that chapter. In our

opinion it is desirable that alterations be made in chapter III. of the Constitution which, without curtailing the authority of the High Court, will of themselves remove certain of these difficulties, or will remove the causes which have impelled the Parliament to legislate with results described in the extracts from the evidence set out on pages 99- 110 of this report.

Sections 71 and 72. Life tenure of ju dges. The first class of difficulties arises from the combined effect of sections 71 and 72 of the Constitution, which have- been interpreted so as to prevent any tribunal established by the Commonwealth

Parliament from exercising any judicial functions unless the mem­ bers of that tribunal are appointed for life. We think that it may at any time be convenient for the Com.:. monwealth to havfl power to establish a tribunal for a specified pur­ pose and to appoint the members for a specified term. In our opinion,

power should be conferred on the Commonwealth Parliament to establish such tribunals and to fix the term for which the members are to be appointed. We think that the provisions of section 72 with respect to mode of removal and to remuneration, which are designed

to secure the independence of courts created by the · Parliament as well as of the High Court, should apply to a tribunal established by the Parliament, whether the tenure is for life or for a specified term. We also think that any alteration of the Constitution for the purpose

of conferring on the Parliament power to fix a term for which the members. of the tribunal are to be appointed should be accompanied by a provision empowering the High Court to grant leave to appeal from decisions of the tribunal, if the High Court thinks that leave

should be granted. Such a provision ·would, · we believe, prevent the authority of the High Court as the interpreter of the Constituti011 from being displaced or curtailed by legislation. In our opinion, life tenure should be retained for the Justices of the High Court, subject• to a provision in the Constitution

fixing an age for the retirement of any future Justices. A similar question was carefully considered in England by a royal commission which was appointed to inquire into certain matters in connexio11 with the King's Bench Division and whether any reforms should be adopted, and which presented its report on the 28th November, 1913

(eel. 7177). That Commission recommended ·that future Judges of the King's Bench Division should be r equired to retire on attaining the age of seventy-two years or after an absence of more than six months from the sittings of the Court, unless reques ted to continue · in office for a period to be named by a committee, consisting of the

Lord Chancellor and certain other members of judicial eminenqe. Dr. Brissenden, K.C., who presented a memorandum from a joint sub-committee of the Bar Council and of the Incorporated Law In­ stitute of New South Wales, expressed the view that, while life tenure

should be maintained in the case of Judges of the High Court, the tenure should be subject to a provision for some retiring age (evidence, p. 1120). On the other hand Mr. Owen Dixon, now Mr. Justice Dixon, F.l25I.-17

252

gave reasons why a life tenure for judges 1s desirable, and

expressed an opinion against fixing any retiring age (evidence, p. 782). A similar view, at least as regards the tenure for Justice, .:.:

of the High Court, was expressed by Sir Josiah Symon and Mr.

Inglis Clark, now Mr. Justice Inglis Clark (evidence, pp. 1085, 932), while Sir Edward Mitchell stressed the difficulty of laying down any general rule (evidence, p. 7 64). Legislation has been enacted. in New South Wales and Queensland under which a judge retires on attaining the age of seventy years, subject to a proviso in 'N ew · South Wales that if he is granted r etiring leave, he is to retire on the

expiration of the leave. We recommend. that the retiring age for future Justices of thA High Court should be fixed at seventy-two years. Effect could, we think, be given to our recommendations in regard to tribunals established by the Commonwealth Parliament, and ir1 regard to a retiring age for the Justices of the High Court, by

amendments of sections 72 and 73 of the Constitution.. The suggested amendment of section 73 will be dealt with under the next heading "Section 73," though, as already indicated, our recornmendatioT1 that the . Parliament should be empowered to fix the term for which the members of tribunals established by it are to be appointed, i:; dependent on our recommendation that the High Court should be · empowered to grant leave to appeal. The suggested amendment of section 72 might, we think, be made by inserting at the end of the section

the following paragraphs :-The Justices of the High Court shall be appointed for life, and shall retire on attaining the age of seventy-two years, but this provision shall not apply to any Justice appointed before the · day. of

The Justices of any Court created by the Parliament shall be appointed for such term as the Parliament may fix. JI!Ir. Ashworth.-Mr. Ashworth does not concur in the first paragraph

of this suggested amendment .

. , . . Section 73. Appellate jurisdiction of the High Court. It is, we think, important that the High Court should be at liberty to grant specialle'ave to appeal from the decisions of any court created by the Commonwealth Parliament, if the High Court is of opinion that such leave should be granted.

Under section 73 of the Constitution the I-Iigh Court is to have jurisdiction to hear and determine among .others (a) appeals from any Justice or Justices exercising the original jurisdiction of the . High Court, and (b) appeals from any other federal court, ot· court

exercising federal jurisdiction. This appellate jurisdiction of the High Court is subject to such exceptions as the Parliament prescribes, though no exception is to prevent the High Court' from hearing and determining any appeal from the Supreme Court of a State in anv matter in which at the establishment of the Commonwealth an appeal lay from the Supreme Court to the Queen in Council. . It may be noted that, by section 21A A of the Conciliation and

Arbitration Act, the Parliament has exercised the pow er to prescribe

253

exceptions to the appellate jurisdiction of the High Court, but that the .Justi.ces have . OVercome the difficulty arising from the absenCP of any. nght of appeal by referring doubtful ques tions to the Full Court.

We think that the paragra1:'>li of sectio n 73. 1vhich limits the power of the Parliament to prevent appeals to the High Co urt, should be extended to cover any case in ·which the I-Iigh Co urt may see :fit to grant special leave to from any Justice or Justices of the High

Court or from any other federal court or from any court exercising federal jurisdiction. "Ve have already r ecommended under the preceding heading "Sections 71 and 72-" that the Parliament should have pow er to estah-tribunals for sp ecifi.ed purposes a11d to fi.x . the term for 1;v·hich thr'

members of those tribunals are to be appointed, provided that the _alteration of the Constitution conferring that po1ve r is 'accompanied by a provision empowering the High Court to grant leave to· appeal. Effect could; we think, be given to our recommendation in regard

to section 73 of the Constitution by adding at the end of the· paragraph beginning "But no exception or regulation prescribed by the Parlia­ ment " the following words:-"or from hearing and dctenniniug any appeal, if the High

Court-shall see. fit ·to grant special leave of appeal, from any Justice or · J ustiees of ·the I-Iigh Court or from any other f ederal co urt or from any court exercisi11g federal jurisdictio11. "

Section 7 4 . . Appeals on constitutional A number of ·witnesses, including 1'h. F . \N. Eggleston, Sir EC'lHV Barwell, and Mr. W. A . Holmau, K.O., urged that it was des irablr; that there should be a right of appeal to the King in Council from n

d ec ision of the High Court on question s as to the liinits inter se of the powers of the Conunonwealth a11d the States, .and Sir Edward Mitchc1l, K.C., the opinion that if a right of appeal to the King

in Council vve re permitted on · all constitu tional questioi1s, there ·would be a greater uniformity in the interpr etation of the Constitution, and counsel '"'ould be able to advise on consti tu tional questions 1-vi th greater certainty than they can at present. We arc of opinion that greater uniformity iu constitutional decision s would be welcomed no t only by prospective litigants but by the legislature, and we may add

that the value of an appeal · on questions betwee ri the S ates and the Co-mmonwea lth to a tribunal (c'Xtc rnal to .\ n stral ia IYas cinphasizecl in the debates in the I-Iouse of Lords when t h e Co nstitution Bill was before the Imperial Parlinment. V·-..Te arc of opinion, 'ho1v eve r, that

Australian sentiment is now, as it was cbim ecl to De at tha.t date, in favour of confining the ·right of in terpreting the Consti tut1 on to the High -CouTt of Australia, m1cl would on th e whole be opposed to gi·anting a1i. unrestricted right of appeal to th e Privy Co unci l.

The Constitution r estricts appeals from the High Cou rt to the Privy Council, and empowers the Parliament to 811act further r estric­ tions, subject to the proposed l aw being r eser ved for th e royal assent, but it does not restrict appeals from the Supr eme Co ur t of a State to

the Privy Council or directly empower the Parbament to enact r es tric­ tions in regard to such appeals. In any matter, however, in ·whi cb the High Court has original jurisdiction under section 75, or in which

1155

..

254

the Parliament may confer original jurisdiction on the High Court under section 76, the Parliament may, by exercising the powers con­ ferred on it by section 77, preclude appeals from the Supreme Court of a State to the Privy Council. The matters in which the Parlia­

ment may do this include matters -arising under. the Constitution or involving its interpretation. In having recourse to section 77 for the purpose of precluding appeals from the Supreme Court of a State to the Privy Council on constitutional questions, it appears to be inevi­ table that difficulties will be created in the administration of justice, as they have been by the provisions of the Judiciary Act already quoted. We think that these difficulties should be avoided by an amendment of the Constitution precluding appeals from the Supreme Court of a State to the Privy Council on constitutional questions.

Effect could, we think, be given to this recommendation by insert­ ing at the beginning of section 74 of the Constitution the following paragraph:-"No appeal shall be permitted to the Queen in Council from

a decision of the Supreme Court of a State upon any question, howsoever arising, involving the interpretation of this

. Constitution ". In drafting the amendment it seems to be convenient to use . the words "Queen in Council" in view of the definition in covering clause 2 and of the fact that those words are already used in section 74 of the Constitution.

Section 75. Original jurisdiction of the High Court. We think that section 7 5 of the Constitution should be amended by deleting paragraphs (i) and (ii), and portion of paragraph (iv). If these amendments are made, the matters in which the High Court is to have original jurisdiction under that section will be (a) matters in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party; (b) matters between States; (c) matters in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth.

We recommend that these amendments be made, partly in order to secure greater clearness and to avoid confusion, and partly because, in our opinion, the provisions proposed to be deleted are not required in the Constitution, as some of them were, or were sup­

posed to . be, in the American Constitution (see section ix., pp.

Paragraph (i) relates to matters arising under a treaty. In Aus­ tralia, it is not clear what matters can arise under a treaty. This

paragraph would have an application in the United of America; but it is doubtful whether it could have any application in Australia. Paragraph (ii) relates to matters affecting consuls or other repre­ sentatives of other countries. This paragraph may lead to confusion,

as it is not clear what are matters affecting consuls or other repre­ sentatives of other countries. Portion of paragraph (iv) relates to matters between residents of different States, or betvveen a State and a resident of another State. There does not seem to be any necessity for this paragraph in the Australian Constitution. The historical reasons for its insertion in

255

' the Constitution of the United States are discussed in the decision o£ the High Court in Austrazas,ian Temperance and General Mutual Life Assurance Society v. Howe (31 C.L.R. 290). Further, it is ananomaly that jurisdiction should be conferred over individuals which is not exercisable over companies, if any reasons exist for retaining this juris­ diction. The difficulties of defining the residence of a company are set

out in the decision above quoted, as well as in the recent decision of the House of Lords in Egyptian Delta Land and Investment Co. Ltd. v. Todd (1929 A.C. 1). ·

Advisory Opinions.

Different views were expressed before the Commission on the question whether it is desirable that the High Court should have power to give advisory opinions. - The witnesses who were in favour of an amendment of the Constitution for that purpose included the late Mr. Justice Higgins, Sir Robert Garran, and Dr. Brissenden, the last named presenting a memorandum from a joint sub-committee of the Bar Council and of the Law Institute of New South Wales, while

the witnesses who expressed opinions against such an included Mr. Owen Dixon, now Mr. Justice Dixon, and Mr. Inglis Clark, now Mr. Justice Inglis Clark, who was a member of a committee of the Southern Law Society of Tasmania which prepared memoran­ dums for the Commission (evidence, pp. 438, 59-60, 1,120, 791, 932). In

our opinion the advantage of having the advice of the High Court upon the validity of legislation before. the community incurs the trouble and expense of acting upon legislation which may or may not be valid outweighs the objections to any judicial pronouncement being made

as to the validity of legislation except· in regard to a concrete case in litigation ins.tituted between parties. Provision is made in Canada for advisory opinions (Revised Statutes of Canada, 1927, c. 35, s. 55), and a provision of this nature was inserted in the Government of Ireland Act, 1920 (s. 51).

We recommend that· the Commonwealth Parliament should be empowered to authorize the High Court to give opinions as to the validity of Commonwealth or State legislation, without fettering the discretion of the Court to abstain from giving an opinion where such a course appears to the Court to be desirable. We think that requests for advisory opinions should be restricted to questions relating to enactments actually made by the Commonwealth or a State,

·and that th'e Court should not be asked to give opinions on bills or abstract questions. Where it is desired to have the opinion of the Court before an Act comes into force there will presumably be no difficulty in passing the Act with a provision that it is not to come into force until a day to be proclaimed by the Governor-General or by

the Governor of a State, as the case may be, or with such suspending dause as may be thought proper. Effect could, we think, be given to this recommendation by insert­ ing at the end of chapter III. of the Constitution the following

section:-" 80A. Notwithstanding any other provision of this Constitution the Parliament may make laws authorizing the High Court to advise as to the validity of any enactment of the Commonwealth

or of any State."

1157

256

S ·ir Hal Colebatch.-For the comments of Sir Hal Colebatch, see xxiv., p. 300. ·

Mr. Duffy and Jl£1· . . Jlfd\Ta/inara.-Mr. Duffy and :Mr .. think that the High Court should be the :final court of appeal in all eases. :For their vievvs, see section xxiv., p. 304.

NAVIGATION AND SHIPPING.

In our opinion the requirements for coastal navigat{on should be the same whether the ships navigated trade between one or more States or ·along the coast _of one State only. Further, we are of opinion that the administration of the laws . relating to navigation should be under one

central authority, adequate provision being made for a decentralized administration and the subordinate officers having an adequate dis­ cretion. We fully accept the evidence of a number of expert witnesses to the effect that the State and Federal authorities have worked har­ moniously, but we think that there should nof be the opportunity for friction and for overlapping which must exist under the present method of control. Further, we are of .opinion that there. should· not oe any

room for the doubts which have arisen to the laws under which an offence m:iy be punishable, or as to the authority which inay appoint courts of inquiry, - ·which have arisen in a number of recent cases referred to by witnesses before this Commission.

vVe recommend that the Commo1rwe.alth Parliament be empowered tO legislate \7\,T ith. r_espeCt tO navigation and Shipping. , .·

Effect could, we think, be given to this recommendation by inserting m section 51 of the Constitution the following paragraph:-(via) Navigationand ,shipping. _

Colonel Abbott .and th e Ohairinl:t.n.----,-Colonel .Abbott and the Chair m:an think that it should be made clear that th:1 power of,the wealth Parliament to legislate with respect to -navigation" and shipping vvill not include intra-state trade, commerce or industry carried on by shipping.

Sir Hal Colebatch.-For the viev;rs of Sir Hal Colebatch see section xxiv., p. 299. . ·

NEw STATES.

_ We recommend t):lat an 3Jternative method of creating new States should be provided in· the Constitution so that in a proper case· a ne:w State may be created out of an State without the: consent· of,

the State Parliament. .We think; however, that · tlw ·:vvhole - of people of a State, and not merely the people of an area which is to

be included in a new State, are vitally interested, · and .that the n.ew State .should .not be established until .::tn opportunity has been given both to the people of the area and to the people of the State 'to expr,ess· their wishes at a referendum. ·

The proposal s4ould, in our opinion, be initiated. by a pe,ti'tion to q1e Commonwealth Parliament from at least. twenty per cen't. p£ the electors of an area which is not less. in· extent than the State of ·

Tasmania. · ·' · · ·

257

If the Parliament sees fit to take action, we think that a commis­ sion should be appointed to determine the boundaries of the proposed new State, regard being had to the boundaries mentioned in the petition, community of interest, physical features, existing boundaries

of States and other relevant matters, and that if the Parliament

approves of these boundaries it s'hould determine the terms and condi­ tions upon which it is prepared to establish the new State. The Parliament should, think, make the ·necessary provisio11 for the holding of a convention, the members to be elected by the

people of the area. . The convention would have the task of framing a constitution for the new State. The constitution should include provisions for the transfer to the new State of assets used in connexim1 with any department or branch of the public service of the existing

State which is to be transferred to the new State, and provisions for adjusting the financial relations of the new State and the existing State. The convention should be empowered to submit proposals to the Parliament for a variation of boundaries and for a variatio.n of the terms and conditions on which the Parliament is prepared to establish the new State. The convention should also be empowered to consider any variation of the proposed constitution which the Parlia­ ment may require before it is willing to take further steps.

After the constitution and boundaries of the new State been finally approved by the Parliament, an inquiry should, we think, be held by a competent body with instructions to investigate the circum­ stances of the area, the value of the assets that are to be transferred

to the new State, and such other matters as the Parlia.ment may

deem proper, in order that the people of the area and of the existing State may have the requisite information before recording their votes for or against the proposal to establish the new State. At the referendum the electors should, we think, be asked whether they are in favour of the new State being established upon the terms

and conditions and with the constitution approved by the convention and by the Parliament.. ·

If the voting in the area and in . the State is in favour of the

proposal; it may, we think, be assumed that the Parliament would give effect to the wishes expressed by the electors, and it i.s, in our opinion, desirable that Parliament should have power to make any necessary or convenient provision, including the fixing of the date, for the actual establishment of the new State.

If the voting in the area is in favour, and the voting in the State is against the proposal, the Commonwealth Parliament should have power to decide within a specified period whether the new State is to be. established, provided at least sixty per cent. of the votes cast in the

area, and at least forty per cent. of the votes cast in the State are

in favour of the proposal. In stating our views as above, we have for conciseness referred to the creation of a new · State out of one existing State, but our sug­ gestions are intended to apply also to the creation of a new State ont of parts of two or more existing States, and to apply separately

in respect of each State or part of a State. Two or more

States or parts of States should not, in our opinion,. be considered as one State or area for the purposes of the petition by \vhich the pro­ posal is ·to be initiated or for the purposes of the r eferendum.

1159

258

Effect could, we think, be given to our recommendation by omitting from section 124 of the Constitution the words "but only" after the words "a State" and also after the words "parts of States," and by inserting after section 124 the following section:- .

124A. Notwithstanding any other provision of this Con­ stitution a new State, having a territory not less than the territory of the State of Tasmania, may be formed by separa­ tion of territory from a State, or by the union of parts of two or more States, in the following manner:-

The proposal for the establishment of the new State shall · be initiated by a petition to the Parliament signed by one-fifth at least of the electors in the territory of the proposed new State, provided that where the territory includes parts of two or more States the petition shall be signed by one-fifth at least of the electors in each part.

The Parliament may, by resolution of each House, direct such inquiry to be ·made as the Parliament thinks fit in order· that it may determine, with due regard to the boundaries .mentioned in the petition, community of interest, physical / features, existing boundaries of States, and such other matters

as are deemed relevant, what should be the limits of the new State, if established. The new State shall not be established unless in a con­ vention, the members of which shall be chosen by the electors in the territory of the new State as defined at the time of

election, a majority of the members approve the limits of the new State and a constitution therefor, and unless . the question whether the new State should be established is submitted to the electors in the territory of the new State as defined at the time when the question is submitted, and in the State or States affected, and- ·

(i) unless in the territory of the new State, _ or where the territory includes parts of two or more States, then in each part a majority of the electors> voting approve the proposed establishment, and unless in the State or in each State affected a majority of the electors voting approve the proposed establish­ ment, of the new State; _or ( ii) unless in the territory of the new State, or where the

terri tory includes parts of two or more States, then in each part three-fifths at least of the electors voting approve the proposed .establishme_ nt, and unless in the State or each State affected two-fifths

at least of the electors voting approve the proposed establishment, of the new State. · · ·

The ques tion whether the new State. should be established shall not be submitted to the electors until after an inquiry is made into the circumstances of the new State, the value of the assets to be transferred thereto from any State, and such other matters as the Parliament deems proper in order that the

electors may have the requisite information before voting on the question, and until after the report of the inquiry is '

published. ·

259

The new State shall not be established unless the establish­ ment thereof is proclaimed within two years after the vote is taken. ·

Subject to the provisions of this section the Parliament may make laws-( i) prescribing the manner in which a petition for the establishment of a new State may be presented, and

the information which shall be given in or ·with the petition; (ii) defining the limits of the n ew State ; (iii) prescribing the terms and conditions on which the

new State may be established; (iv ) providing for a convention which shall be charged with the duty of framing a constitution for the new State, and shall be authorized to suggest to the

Parliament any variation of the limits of the new State and any variation of the terms and conditions on which the new State may be established; ( v) prescribing the manner in which the question whether

the n ew State should be established shall be sub­ mitted to the electors and the manner in which the vote shall be taken ; (vi) establishing the :new State if the establishment is

appr·oved as required by this section. The provisions of this section referring to the electors refer to electors qualified to vote for the election of the House of Representatives. Sir H a.l Colebatch a.nd the OhaiTman.-Sir Hal Cole batch and the Chairman do .not concur in the part of this recommendtaion which provides for the Commonwealth Parliament having power to establish a new State notwithstanding that a majority of the votes cast in the existing State is against the proposal.

Mr. Duffy and Mr. McNamara.-Mr. Duffy and Mr. McNamara are of opinion that the Constitution should not prescribe any minimum area for a new State.

TAXATION.

'The existing poweT .. Excise.

We do not think that the power of the Commonwealth P arliamen t with respect to taxation should be in any way curtailed, nor do we think that the constitutional restrictions which ar e alluded to in the evidence of Mr. Ewing, and which were passed for the purpose of safeguarding the position of the Senate, should be removed. We think, however; that the position of the States has been prejudiced by the interpre­ tation which has been placed upon the term "excise". There does not appear to be any sufficient r eason why the Commonwealth should have exclusive power over all indirect taxation imposed immediately upon .or in respect of goods, as the Commonwealth is said to have in one

of the judgments in , the P etrol case (s ee section xii. of this r eport), nor is it desirable that there should be any doubt as to the right of a State to impose indirect taxation which does not interfere with the customs policy of the Common wealth. We, therefore, suggest that

1161

260

excise should be taken to apply only to those goo.ds which . are for the time being the subject of c1.1stoms dutie·s, as was suggeste<;l _in the 1891 draft of the Constitution (see Chapter IV., clause 4). We recommen d that section 90 of the Constitution should be amended so that the power of the Commonwealth Parliament to impose duties of excise should only be exclusive in respect of such goods.

Effect could, we think, be given to this recommendation by insert­ ing at the end of section 90 the following paragraph:-"Notwithstanding any other provision of this Constitution . power of the Parliament to impose duties of .excise shall not be

exclusive in respect of goods which are not for the tjme being the subject of customs duties." ·

Residents of another State.

Although under section 117 of the Constitution a State may not tax a resident of another State at a higher rate than it taxes its own residents, it is not prevented from discriminating on the ground of domicile (se e Da,vies and Jones 1J . Western Australia, 2 C.L.R. 29; and section xii of this report), and in some instances a State does in fact discriminate on this ground. Under the New So'uth Wales Stamp Duties Act 1920, as amended by subsequent Acts, death duty in respecT of the estate of a deceased person is payable although the :final balance of the estate does not exceed £1,000, if the person was domiciled without, but not if he domiciled within, New South Wales, (see s. -101 and the third schedule of the Act). In our opinion, it is not

within the spirit of section 117 of the Constitution that a State should be permitted to discriminate in taxation on the ground· of domicile in any other part of the Commonwealth. We that section

117 should be amended so as to prevent such discrimination. Effect could, we think, be given to this recommendation by adding at the end of section 117 of the Constitution the following paragrap_h :::--"For the purpose of any law of a State imposing taxation a

person resident or domiciled in any part -of the -- Commonwealth shall not be subject to any discrimination which would not be equally applicable to him if he were resident or domiciled ·in that State."

Double TaXation.

We think th.at the Commonwealth Parliament should have power to· deal with taxation by two or more States in respect of the same asset or other subject of taxation. Amendments with the object of preventing such double _ taxation · were suggested by a conference of @tate taxation officials held in 1924, and by Mr. Fitzpatrick, Com­ missioner of Stamp Duties, Queensland (evidence, pp. 1561-1562). Neither of these suggestions appears to us to be entirely satisfactory. We recommend that power should be conferred on the Commonwealth Parliament to make laws with respect to the matter.

Effect could, we think, be given to this recommendation by insert­ ing in section 51 of the Constitution the following paragraph:-" (iia) Taxation by two or more States of the same person or property so as to regulate or prevent double taxation."

261

TRADE AND CoMMERCE WITH OTHER CouNTRIEs AND AMONG THE STATES.

· \Ve do not recominend that an unlimited power to make ' laws with respect to ·trade .and commerce should be conferred on the Common­ wealth Parliament. The terms "trade and commerce'' have a very wide copnotation) and if the power to legislate with respect to trade and commerce ··were transferred to the Commonwealth Parliament, vve think that it ·would · be difficult to. say what powers were left to a State, or what Acts of a

, State Parliament might not be overridden Federal laws. We do not think that the same reasons against limiting-the Federal power to trade and commerce with other countries and among the States exist in tralia as mig_ ht be urged with regard to the Constitution of the United

States of America. In Australia, where the States are relatively few and large, the population is concentrated in a few cities and

each capital is on or adjacent to the coast, it is much easier for the

States to control commercial activities and to deal with any abuses ·that may arise than it w;o\lld be if the States small and approxi­

. equal in size. · 1In our opinion a wise course was followed in

the 1891 .draft ap.d in the Constitution itself ·when, instead of a com­ plete _power to legislafe ·with . respect to trade . commerce bei11g ·conferred, certain· elements of. that po;ver were mentioned · separately, · powers 1vere conferred on the Commonwealth Parliament as

it was thought cou_ ld conveniently be exercised _by a central legislature. ' Mr. D·uffy and J.11r . .AfcNama.ra.-For .the views of

Mr. Ashworth,. Mr. Duffy and Mr. MeN amara see section xxii., pp. 243-247.

TRADE AND CoMMERCE BETWEEN STATEs AND TERRITORIEs.

Section 51 (i) of the Constitution does not appear to confer

power on the Commonwealth Parliament to regulate trade and com­ merce between States and Territories. The Parliament may, under section 122, allow a State to trade freely with a Territory, but it has, it seeems, no power to direct that a Territory may trade freely with a

State notwithstanding any law of the State to the contrary. We recommend that power be conferred on the Commonwealth Parliament to enable it to make laws with respect to trade and

commerce between States and Territories. Effect could, we think, be -given to this recommendation by inserting at the end of paragraph (i) of section 51 of the Constitution the fol-lowing words ;- ·

" and · between any Teri·itory or Territories and any State or States."

:MARKETING.

We do not recommend that power to legislate ·with respect to marketing be conferred on the Commonwealth Parliament. " An alteration of the Constitution with the object of conferring thiR power was urged by several witnesses. The advantages claimed for the

amendment by several, but not by all, of the witnesses who urged it,

1163

262

have, we think, been secured by recent Commonwealth legislation in the exercise of the power conferred by section 51 (i). An unlimited power to legislate with respect to marketing would, we think, involve an unnecessary and dangerous interference with the internal government of the States, and might be so interpreted as to enable the Common­ wealth Parliament to control the disposal of all products and the use of all lands or factories employed in production. ·

Mr. Ashworth, Mr. Du.ffy and Mr. MeN amara.-For the views of Mr. Ashworth, Mr. Duffy and Mr. McNamara see section xxii., pp.243-247.

WIRELESS 'TRANSMISSION AND BROADCASTING.

The Commonwealth Parliament may legislate with respect to wireless telegraphy under the power conferred by section 51 (v) of the Constitution to make laws with respect to postal, telegraphic, tele­ phonic and other like services. It is possible that all wireless trans­ mission and broadcasting would be included in the phrase " other like ser.vices ", but as to broadcasting this interpretation has been doubted. · It may also be suggested that the Parliament may legislate with respect to wireless transmission and broadcasting under the trade and com­ merce power conferred by section 51 (i).

In our opinion full power to make laws with respect to wireless transmission and broadcasting should be conferred on the Common-wealth Parliament in express terms. ,

Effect could, we think, be given to this recommendation ., by insert­ ing in section 51 of the Constitution the following paragraph:-. " ( va) Wireless · transmission, including broadcasting and other like services ".

CINEMATOGRAPH FILMS.

We recommend that the Commonwealth Parliament should have power to legislate with respect to films and the censorship of films. The Commonwealth exercises a censorship over imported films, and claims that it is entitled, in the exercise of its powers under section 51 (i), to direct the manner in which an imported film shall be used after it has left the hands of the original importer. The Commonwealth has no power to control films made in Australia. We think that the

authority which controls imported films should control all films within Australia, and that this authority should be the Commonwealth. Effect could, we think, be given to this recommendation, by inserting in section 51 of the Constitution the following paragra:ph :-

" (:x;viiia) Oi;;ematograph films." .

FREEDOM oF TRADE, CoMMERC:Jll AN:P INTERCOURSE AMONG THE STATES.

We recommend that section 92 be amended for the sake of greater clearness. An amendment was suggested by lfr. Owen Dixon, K.C., now Mr. J ustic_ e Dixon, in the evidence given by him on behalf of the Committee of Counsel of Victoria. Since this evidence was given a great diversity of judicial opinion on the interpretation of this section has been further illustrated by the decisions of the High Court in the

263

cases of Roughley v. New South Wales and Nelson v. Couch (35 Argus L.R. 1, 21). The difficulties of interpretation disclosed in previous decisions are enumerated by Mr. Owen _ Dixon at PP.· 777-778 of the evidence :- · r

" The difficulties in understanding what this provision really means are threefold:--(1) In terms it does not refer to State or Federal Parlia­ ments, nor indeed to legislation at all. If, however,

·it intends to include the Commonwealth in its prohi­ bition, there appears to be an opposition between a provision which says that trade and commerce among the States shall be absolutely free and the provision of _section 51 (i) which says that the Federal Parliament

may make laws with respect to trade and ·commerce among the States. If "free" means free of all legal restriction, and the provision applies, as its terms seem to make it, to the Commonwealth, it would follow that the Federal Parliament's power to make laws in relation to interstate trade did not include the enactment of

any restrictive law at all. This has led to the ·argu­ ment that either the word " free " must mean free of something less than all legal restriction, or· else the provision cannot apply to the Commonwealth. The High Court has now adopted the latter of these

alternatives.

(2) It seems incredible that the immunity given by section 92 f;!hould operate to . prevent the States from including, in general prohibitions relating to transactions of trade and commerce, transactions which form part of

interstate trade. The suppression of lotteries, for instance, in a State, upon a logical application of the. view that freedom means freedom from all legal restriction, could not extend to a lottery conducted

by inter:state communications. (3) There is no reference to Federal territories in section 92. So far as its provisions are concerned, there

p.ppears nothing to prevent either State ParliamentB or the Parliament of the Commonwealth interfering to the extent of fully prohibiting trade, commerce and intercourse between the Northern Territory and the rest of Australia." To the instances there given we may add that it seems incredible that the States were to be prevented from passing a price-fixing law

applicable to goods which are, as well as to goods which are not, the subject of an interstate contract (McArthttr·'s case, 28 C.L.R., 530), o1· that the States were not to be prevented from· impeding trade and com­ merce between the States by an executive act.

Alternative amendments suggest themselves. One is an amend­ ment limiting the freedom prescribed by the section to freedom from pecuniary imposts. This amendment would enable the States to pass laws regulating an influx ,.of criminals or the introduction of diseased

animals or plants, subject to the overriding power of the Common­ wealth Parliament. In view of the existence of this overriding

1165

264

power, which may not have been present to the· minds of the members of the Convention, and was at one time denied by tb,e }fjgh Cou;rt, .it seems that an amendm13nt so limiting the terms of the section w·ould e:ffect all the· objects for w);lich the section was framed. _ .

J\n alternative is the ''amendment suggested by Owen Dixm, in the following terms:-" The States shall :t;J. Ot by any discriminatory law or executive act impair the freedom of trade, commerce and inter­ course among the States and the Territories of the Gommonvvealth." It seems doubtful whether, if the section ·were so amended, the States would have power to pass laws regulating the passage of diseased animals or plants over their borders.

Another alternative is to substitute a new section on the lines of clause 4 of chapter IV. of the 1891 draft of the Constitution. That clause was as follows:- ·

"The Parliament of the Commonwealth may· make laws pro­ hibiting or annulling any law or regulation made by any State, or by any authority constituted by any_ State, having the effect of derogating from freedom of trade _ _ co1p.merce between the different parts of the Commonwealth." · vV e recommend that section 92 of the · Constitution be amended so as to make it plain that, the section is intended to prevent a State from restricting trade C01J1merce or intercourse by pecuniary imposts, and not to · prevent it from protecting itself against the introduction of diseased or plants. We _ think that any_ amendment should

extend the section so as to apply it to the Territories. We also think that the Commonwealth Parliament should be empowered to prohibit, modify or annul any State enactment which derogates from freedom

of trade commerce or intercourse between the different parts of the Commonwealth. '

Effect can, we think, be given to these recommendations (a) by . inserting after the words_ "trade, commerce and intercourse among the States" in section 92 of the Constitution the following words:-" or between a State · and a Territory"; (b) by adding after the words

"shall be absolutely free" the following words:-" from any pecuniary impost or from any restriction or lia-bility imposed by reason only of goods or persons passing int-o a State from another State or from a Territory"; and (c) by inserting after the :first paragraph of section 92, as amended) the following paragraph:-

"The Parliament of the Commonwealth may make laws pro- · hibiting, modifying or annulling any law or regulation made by any State, or by any authority constituted by any State, having the effect of derogating from freedom of trade, commerce or inter­ course among the States or between any Territory or Territories

and any State or States.

SEcTION 96.-FrNANCIAL AssisTANCE TO STATEs. Section 9.6, which empowers the Commonwealth Parliament to grant financial assistance to any St-ate, begins with the words' "During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides ". We think

that these words are ineffective and may lead to confusion. ·\Ve ·recom­ mend that they be deleted from the section.

265

SECTION 99.-PREFERENCE TO STATES.

We recom,rnend that to section 99, which provides that the Com-iOnwealth shall not, by any law or regp.lation of trade, commerce, or .revenue, give preference to any State or' any part thereof over another State or any part thereof, the words be added "except upon the recom­ 'iTiendation of the Inter-State Commission" (see evidence of Professor

Brigden, at pp. 844-845). Section 99 appears to have been introduced into the Constitution for the purpose of protecting the States which have a relatively small population. As events have happened, however, it may be suggested

that it would be for the advantage of the ·s.rhaller States if the Com- · monwealth had power to enact special legislation relieving them from the consequences 'Of Commonwealth policy. We have dealt elsewhere with the proposal to reinstate the Inter-State Commission, and we

think if that, or some similar body, were directed to inquire into the effects of Federal policy, it would be wise to give the Commonwealth Parliament power to act on its recommendations, if it were to find that one or more States were adversely affected by legislation which was deemed by Parliament to be in the interests of Australia as a whole.

The section as it stands does not forbid legislation which is in fact beneficial · to one or more States rather than to the whole of Australia. It forbids. only preferences in relation to localities considered as parts vf States. ·· We are of opinion that the section as it stands does not

effect any useful or necessary purpose, . and may prevent the passage of legislation which is desirable and which might eliminate much of the feeling against the which was expressed before this

Commission in some of the States . ·

REGISTRATION oF DocTORS1 DENTISTS1 PHARMACISTS AND NuRsEs. Recommendations are made in section xxiv. of this report by one or more members of the Commission as to the nature and scope of the po·wer that should be conferred on the Commonwealth Parliament in Tegard to . health generally. The recommendations made in this part of the report as to the registration of doctors, dentists, pharmacists and nurses, and under the next heading as to drugs and standards of foods, are submitted i.ndependently of those recommendations.

V\Te recommend that the Commonwealth Parliament be empowered to legislate -vvith r es pect to the Tegistration of physicians, surgeons, dentists, pharmacists and medical and surgical nurses. Apart from the convenience of one registration being r ec ognized throughout the Com­ monwealth, so that duly qualified persons who had been in practice in

one State might, without any unnecessary delay, carry on thei.r callings in another State, whether temporarily, as is sometimes con­

venient for a doctor acting as locurn t enens) or in an emergency or per­ manently, we think that there is great force in the view expressed by Dr. Storie Dixson, President of the New South Wales Medical Board, that " all these people are dealing with human well-being and life, and there­

fore ..... there should be a law securing a high and uniform standard jn all these different branches " (evidence, p. 1642). Effect could, we think, be given to this r ec ommendation by inserting 111 seGtion 51 of the Constitution the following paragraph:-

(ixa). Registration of physicians, surgeons, dentjsts, pharma­ . cists and medical and surgical nurses.

1167

266

DRuGs AND STANDARDS oF FooDs.

Similar Acts with respect to the purity of foods and drugs have been passed in all the States, and reference has already been made, in section xvii. of this report, to the steps which have been taken from time to time with a view to a uniform standard for the Commonwealth, but there are still some differences. ·

We recommend that the Commonwealth Parliament be empowered to legislate with respect to drugs and standards of foods. E:ffnct could, we think, be given to this recommendation by inserting 111 section 51 of the Constitution the following paragraph:-

(ixb ). Drugs and standards of foods. ,

Si1· Hal Oolebatch.-For the views of Sir Hal Colebatch, see section xxiv., p. 299.

ADOPTION AND LEGITIMATION.

Although adoption of children as a legal institution whereby a family relationship is created with defined consequences has a long history in other countries, it is a new institution in England and Aus­ tralia. In the state of the law which was in force at the establishment of the Commonwealth, the question of conferring a power on the ·com­ monwealth Parliament to make laws with respect to adoption may not have appeared to be of sufficient importance to require· the making of any provision in the Constitution for that purpose. A system of adop­ tion is now in existence in three of the States of the Commonwealth, New South Wales, Victoria, and Western Australia, as well as in N e\Y Zealand and England. It was suggested by Miss Cocks, representing

the Laws Committee of the National Council of Women of New South Wales (evidence, p. 1183) that the Commonwealth Parliament should be empowered to legislate with respect to adoption. \Vhat has l:;leen said above as to adoption being a new institution in Australia, but having a long history in other countries, applies also to legitimation of children, where the parents have subsequently become husband and wife. Provision for legitimating children in such circumstances by r egistration at the instance of the father has been made in New South Wales by the L egitimat·ion Act 1902 .

.. We think that reasons similar to those which make it desirable

that there should be an Australian law of marriage are strong argu­ ments in favour of the Commonwealth Parliament having power to legislate with respect to adoption and legitimation, and we recommend that this power be conferred on the Commonwealth Parliament.

Effect could, we think, be given to this recommendation by inserting at the end of paragraph xxi. of section 51 of the Constitution, which deals with marriage, t he words "adoption and legitimation " .

PROBATE AND LETTERS 01<' ADMINISTRATION.

The position of an executor or administrator, where the assets of a deceased person are situated in two or more States, is shortly stated at page 136 of this report. We recommend that the Commonwealth Parliament be empowered to legislate with respect to the operation of probate or letters of adminis­ tration throughout the Commonwealth.

267

Effect could, we think, be given to this r ecommendation by inserti11 g in section 51 of the Constitution th e f ollowing paragr aph:-(xxiia ) . The operation throughout the Commonwealth of pro­ bate or letters of administration gr anted in any S tate or T erritory

or in the Uni ted Kingdom or in any British possession.

ELECTION OF S ENATORS.

At presen t, as alr eady mentioned in section v. of this repor t, although p arties may be almost equally divided in th e constituencies) one par ty may so far predomina te in the Sen a te that th er e may be no opportu nity f or the presen tation of differ ent points of view. We think th at $UCh

a condition of affairs is undesirable, and th at the Sen ate would be bette1· qualified to act as a ch amber of r evision if sen ators were elected under a system of representation. W e recommend that th e Con­

stitu tion should be amended so a·s to provide f or the adoption of such a system f.or a period of at least ten years. Effect could, we think, be given to this .r ecommendation by inser ting a t the end of section 7 of the Constitution t he following paragr aph:-

D uring a p eriod of ten year s after the day of and ther eaf ter until the P arli-ament

otherwise pi·ovicles, the election of Senator s shall be according to the principle of p roportion al representation . Mr. A shworth.- F or the vie\vs of }Jir: Ashwor th, see section xxiv., p p. 277-293.

Sir H al Colebatch.- For th e views of Sir Hal Cole batch, see section xxiv., p . 300 .

D EFENCE.

Desp ite th e wide scope of the defence power it appears from th e judgment of the H igh Court in Commonwealth v. Australian Common­ weallh Shippin,q Board (39 C.I ,.R 1) th at th e Commonwealth Parlia­ ment co uld not confer authority on the Shipping Board to enter, in time of peace, into such a con tr act as "the Bunner ong Con tr act" for doing work at. the Oockatoo I sland D ockyard fo r oth er than Commonweal th

au thorities (see section xi. of this r eport). Wh atever view may be taken as to the p olicy of carrying ou t ·wo rk for civilian pur poses in regar d to any ma t ter for which private en terprise p r ovides adequate facilities, we thiT)k that the limi tation of th e defe nce power referred to a hove

sh ould be r emoved, and

that the Commonweal th Parliament should be

empowered to auth orize the carryi11g ou t of wo rk. for civilian purposes where such a course is deemed Jtecessary in order to put Aust ralia in a state of prepar ation fo r war 01· war emergencies. Vv e, th erefore, recom­ mend that paragr aph ( vi ) of scctiou :)1 of th e Constitu tiO!J, which

deals with def euce, should be amended so as to include busi ness opern ­ tions carried on as par t of the p reparation for defence. For clearness we also recommend th::tt the paragr aph mentioned above be amended by omitting the words " naval and milita ry". W e

do not think th at it is desirable to specify par ticula r aspects of def en ce by inserting wor ds expr essly referring to air defence, or by

ret 1 ai.ning words expressly r eferring to "naval an d mili tary" defence. F.l 251.-18

1169

Effect could, we think, be given to these ·recommendations· by deleting from paragraph (vi) of section 51 of the Constitution·. the words "naval and military" and by inserting in that paragraph after the words "defence of the Commonwealth and the several States", the following words:- " any preparation deemed necessary fpr.·· such defence". ·

RESIGNATIONS OF MEMBERS OF PARLIAMENT.

For clearness we recommend that sections 19 and 37 of the Consti­ tution be amended so as to make it plain that the resignation of a

member of Parliament takes effect from the receipt of the writing addressed to the President, to the Speaker, or to the Governor-General, as the case may be. Effect could, we think, be given to this recommendation by omit­ ting the word "thereupon" in sections 19 and 37 and adding at the ·end

of each section the words "upon the receipt -of the writing"·.

LIFE OF p .ARLIAMENT.

We recommend that the life of Parliament should be increased to at least four years. This recommendation is intended to apply to the term for which members of the House of Representatives are elected, and not to affect the term for which members of . the Senate are

elected. In our opinion, the period of three years is inadequate for the

Parliament of the Commonwealth in view of the great size of Australia,. the large area of some of the constituencies, the distance of some of them from the Seat of Government, the number and importance of the problem& with which each Parliament has to deal, the fact that a portion only of the term for which members are elected can be devoted to the transaction of the business of Parliament, the extent to which that 'term is in effect curtailed by the time taken up in settling doW11 after an election and in the preparation for a new election, and the necessity of the Pri,me Minister attending an Imperial Conference.

We, therefore, recommend that section 28 of the Constitution be amended by omitting th8 word "three" and inserting in its place the word "four". Mr. Ashworth, Mr. Duffy and Mr. McNamara.-For the views of Mr. Ashworth, Mr. Duffy and Mr. MeN amara, see section xxiv., p. 304.

'

SuRRENDER OF AN AREA OF A TERRITORY BY THE CoMMONWEALTH TO A STATE.

Section 111 of the Constitution empowers the Parliament of a State .to surrender any part of the State to the Commonwealth, but does not empower the Parliament of the Commonwealth to surrender any part of a Territory to a State. It may at times be desirable for

the Commonwealth to have power to surrender an area of a Territory to a State in an adjustment of boundaries or for convenience of ad­ ministration. There is, for instance, a portion of the Federal . Territory

26£>

which the Federal Capital Commission has no desire to acquire, and which could be conveniently administered as part of the Municipality of Queanbeyan, if that portion were re-transferred to the State of New South Wales (evid(mce, p. 142). We recommend that a power

to surrender any area of a Territory to a State be conferred on ti1e Commonwealth Parliament. EffecC could, vve think, be given to this recommendation by m­ serting at the end of section 111 the following paragraph:-

The Parliament of the Commonwealth may surrender to ft State any part of a Territory for the government of which the Pa,rliament may make laws, and such surrender shall take efiect upon the thereof . by the State.

OFFICE OF PROFIT UNDER THE CROWN.

We do not recommend that section 44 of the Constitution should be amen4ed so that a civil servant may be capable of being chosen or of sitting as a senator or a member of the House of Representatives. _Mr . Dtcffy and Jl1r . JllcN amCi1'a.-For the views of Mr. Duffy and :Mr. MeN amara, see sectio.n xxiv., p. 303.

CoNsTITUTIONAL CoNVENTioN.

\¥ e do 110t r ecommend that provision be made in the Constitution for the holding of a convention to consider and frame proposals for the alteration of the Constitution, -vvhethe.r the p1'oposals are to be sub­ mitted as recommendations to Parliament or direct to the electors.

Jvlr. Ashworth.-If the method of altering the Constitution recom­ mended by Mr. Ashworth, Mr. Duffy and Mr. MeN amara in section xxii. (pp. 243-247) is not adopted, Mr. Ashworth thinks that provision should be made in the Constitution for the holding of a convention to consider and frame proposals for the alteration of the Constitution, and

that the proposals should be submitted direct to the electors.

RAILWAYS.

\Ve do not recommend that the control of railways be tra nafcrrcct to the Commonwealth. · We think that railway administration j s closely bound up with internal development, and that this is a functio11 of the States. W e also think that the problem of communicatiot,

should be considered as a whole, and that the authority which controls toads and harbours should also control railways. Further, we thinl\. that the planning and building of railways is a subject ·which r equire::J local knowledge and i·s not a subject which could be satisfactoTily

controlled bv a central authority. 2vi1 ·. Nlr. and Jl1r . lVIcN amara.- For the views nf

Mr. Ashworth, Mr. Duffy and :Mr. MeN amarn. see sec6on xx11.. pp. 243-247.

11t71

270

ABORIGINES.

We do not recommend that section 51 ( xxvi) be amended sp as to empower the Oomp1onwealth Parliament to make laws with respect to aborigines. We that the effect of the treatment of

aborigines on the reputation of Australia furnishes a powerful argu­ ment for a transference of control to the Commonwealth. · But we think that on the whole the States are better equipped for controlling aborigines than the Commonwealth. The States control the poli'ce and the lands, and they to a large extent control the conditions of industry. · We think that a Commonwealth authority would be at a disadvantage in dealing with the aborigines, and that the States are better qualified to do so. A.t the same time we think that every endeavour should be made to ensure the adoption of the best methods of administration by periodical conferences, and that every encouragement sho'uld be given · to those voluntary bodies which in many of the States have worked for the improvement of the condition of aborigines.

Jlt!r. Ashwm·th, Jlfr. Duffy and jfr. _MeN amara.-For the vie'\vs of J\tir. ·Ashworth, Mr. Duffy and Mr. MeN amara see section xxiv., p. 303.

FAUNA AND FLORA.

We do not recommend that the Commonwealth Parliament be granted power to legislate with respect to fauna or flora. We think that the States, through their control of the police, of education and of local government, are better qualified to judge of the best means of safeg-uarding fauna and flora than the central authority could be. At

the same time we think that the difficulties experienced by the States furnish a strong argument for the amendment of section 92 as we have recommended elsewhere. On ·.thtJ whole, as far as the evidence enabled us to judge, we are of opinion that the States are carrying out their duties efficiently, but we express the opinion that there should be more effective co-operation between the Customs authorities and· the authorities of the States, and that a strong case might be made out for the biolo'gical survey recom­ mended by Dr. Brooke Nicholls with the object of preventing valuable species of Australian fauna from becoming extinct .

. N!r . Ashworth, Mr. Duffy a.nd Mr. the of

Mr. Ashworth, Mr. Duffy and Mr . . MeN amara see Bection xxiv., p. 303.

LIQUOR LAws.

We do not recommend that the Commonwealth Parliament should have power to make -laws with respect to the sale of liquor or with respect to prohibition, as was urged by Mr. Crawford Vaughan. 'l;'his power should, we think, be in the hands of the authority which has control of the police, and the experience of the United States of America

appears to us to confirm this view. Further, we are of opinion that there is so much diversity between the conditions of the different States that each State should be at liberty to decide for itself on this question. Section 113 of the Constitution enables each State to control or pro­ hibit the use, consumption, sale, or: storage of liquor within its ow11

borders, whatever view may be taken as to its power to prevent the importation of liquor from another State or from overseas (s ee the evidence of Sir Robert Garran, page 82).

271

AND RECOMMENDATIONS BY ONE

OR MORE MEMBERS OF THE COMMISSION. Supplement by CoLONEL ABBOTT. I desire to supplement what has been said in t he recommendation of the majority in favour of retaining a Federal system of government for Australia, and to state my views as to the provision of increased facilities for the creation of new States or Provinces. Anything that

would be calculated to destrov the Federal nature of the Constitution would, in my opi,nion, the reconstruction of the whole

scheme of relations as between the Commonwealth and the States. The can be preserved in its fundamental usefulness,

·with such amendments as experience has shown or may show to be d.esirable, and at the same time satisfactory provision ·can be made for increasing the number of States from time to time, with adequate safeguards for their right to legislate on all matters of local or State

concern. Any proposal that would bring about unification, or the complete vesting of all legislative power in one Commonwealth Parliament, leaving the States o.r Provinces only powers of local regulation and administration, would not be approved by a majority of the people, but I believe that large numbers of people, particularly in such areas as Northern New South Wales and Central Queensland, are prepared to vote in favour of the establishment of new States, provided that the terms and conditions on which they are to be established are arranged

to the satisfaction of the people of the areas, and provided that their right to deal with their own affairs is properly safeguarded. It would be impossible to have adequate safeguards for this purpose under a scheme of unification. I believe that the people of the area in which it is

proposed to establish a new State should have the fullest opportunity to initiate a proposal to obtain such a constitution as they think will be best suited to their needs, and to conduct direct negotiations with the Commonwealth for the establishment of a new State on terms and con­ ditions satisfactory to the people of the area. If the people of the area and of the existing State are not in agreement, the question whether a new State is to be established should, in my opinion, be left to the decision of the Commonwealth Parliament. The adoption of such a principle, with provisions under which a proposal for the establishment of a new State may be properly investigated so that the essential facts shall be before the people both in the area and in the existing State when they are called upon to vote on the proposal, is the most practicable

way at the present time of getting increased facilities for the creation of new States. I do not think that there is any necessity to provide in the Constitution that any prescribed period must elapse after an unsuccessful attempt has been made to bring about the establishment of a new State. If there is not a r easonable prospect of another attempt

being successful, it is unlikely that it will be made. If there should be such a change in public opinion either in the area or in the existing State as would warrant reconsideration, I do not think that there is any sufficient reason for inserting in the Constitution any provision

which would prevent such reconsideration. An amendment of the Constitution which would permit a new State to be established in the way above suggested would get rid of the diffi­ culty which now confronts those who believe in the creation of new

1173

272

States in particular areas. In view of the last paragraph of section 128 it seems that before such an amendment can take effect in regard to any particular State, it must be approved by a majority of the voters in that State as well as by a majority of the voters in the Commonwealth and a majority of the voters in three other States. Once, however, the amend­ ment is made in regard to any State, it will be a provision of the Co,n­ stitution under which a new State can be established in that State, and accordingly the last paragraph of the Constitution will not in any way affect its establishment.

With proper facilities for the creation. of new States or the existing provisions for the amendment of the .Constitution are adequate. It has been shown i;n the State debts and financial agree­ ment referendums that when all parties in the Commonwealth and

the States are in accord with a proposed ;xlteration, the approval of the majo'rity of voters and the necessary number of States is readily obtained. P. P. ABBOTT .

. (

273

REcoMMENDATIONs BY CoLONEL ABBOTT, MR. BowDEN, AND THE CHAIRMAN.

Company Law.

We recommend that the Commonwealth Parliament should have power · to make laws with respect to companies, the extent of the power to be defined in the set out below.

We are of opinion that uniformity in company law in Australia for the purpose both of safeguarding the public and of providing facilities for investment is desirable. The. power which, in our opinion, should be vested in the Common­

wealth in regard to companies is a power to pass a com­

pany ·law for the whole of Australia in the sense in which the term " company law " is generally understood. We think, therefore, that an amendment of · the Constitution for this purpose should be drafted in such a way as to make it clear that the intention is to confer a power

to pass such a law, and not to confer a power to legislate with respect to the trade commerce or industry carried on by companies. The extent to which the Commonwealth Parliament is to control such trade com­ merce or industry should, in our opinion, depend on the extent to which

the Parliament is authoi·ised by other provisions of the Constitution to deal wHh these matters. ·

We think that the povver should extend to all matters of "company law", including incorporation, winding up and dissolution, but should not extend to any municipal or governmental corporation, or any corpora­ tion formed solely for religious, charitable, scientific or artistic pur­

poses, or any corporation not formed for the acquisition of gain by thP corporation or its members. We also think that the power to pass a company law should be qualified in a way as to ensure that any legislation enacted by the

Commonwealth Parliament under this power shall not preclude or affect any State legislation with respect to co-operative societies unless the Commonwealth Parliament expressly declares its intention to the con­ trary. This qu.alification is, in our opinion, desirable, as each State may need different legislation, and so long as a society incorporated

under a State Ac.t is genuinely

are s,et out or referred to in section xx of this report, should be ignored, but we think that the difficulties may be overcome by conferring the pow!'lr in the terms set out below, and by care in administration. Under the following heading, "Partnerships," we make a recom­ mendation on similar lines in regard to partnerships, which might be

dealt with in a new paragraph ( xx). Effect could, we think, be given to our recommendation in regard to companies by omitting paragraph (xx) of section 51 of the Con­ stitution, and inserting the following paragraph:-

( xxa) Corporations, but not including-( a) municipal or governmental corporations, or any corporation formed solely for religious, charitable, scientific or artistic purposes, or any corporation not formed for the acquisi.

tion <;>f by the

1175

274

·(u) any corporation formed for the acqms1tlon of gain by the corporation or its members which is a po-operative society within the :riteaning of the law of a State, unless the

Parliament of the Commonwealth expressly declares that any such corporation is not a co-operative society within the meaning of the law of the Commonwealth; or ( r;) the trade commerce or industry of corporations except so

far as the Parliament has power under any other pro­ vision of this Constitution to make laws with respect to such trade commerce or industry.

Mr. Ashworth) Mr. Duffy. and fitlr. McNamara.-For the views of Mr. Ashworth, Mr. Duffy and Mr. MeN amara see general recommenda­ tion in section xxii., pp. 243-247.

Sir Hal Colebatch.-For the views of Sir Hal Cole batch see section xxiv., pp. 298-299.

Partnerships.

In our opinion, it would be convenient and would prevent uncer­ tainty in legislation, if the same Parliament which has power to legislate with respect' to trading and :finanqial companies, which in effect are ner·ships incorporated and regulated by statute, should also 4ave express power to· legislate with respect to partnerships.

We recommend that the Commonwealth Parliament be empowered to legislate ·with respect to partnerships, but not with respect to the trade commerce and industry of partnerships except sp far as it has that power under any other provision of the Constitution (see under the previous heading "Company Law").

Effect could, we think, be given to this Tecommendation by inserting the following paragraph in section 51:- · ·

(xx) Partnerships, but not including the trade commerce or in­ dustry of partnerships except so far as the Parli;'Jment has power under any other provision of this Constitution to make laws with . I"espect to such trade commerce or industry.

Mr. Ashworth) JI!Ir. Duffy and Jl!fr. McNamara.-For the views of Mr. Ashworth, Mr. Duffy and Mr. MeN amara see general recommenda­ tion in se?tion xxii., pp. 243-247.

Sir ·Hal Colebatch . ...:_For the views of Sir Hal Cole batch section XXlV., pp. 298-299. ·

11 ealth.

We recommend that po-vv er to make laws with respect to co-operation between the Commonwealth and the States in regard to health be con-f erred on the Commonwealth Parliament. ·

W e think that the exercise of power by the Commonwealth in regard to health must be depende11t fo.r success upon agreement l;>etween the Commonwealth and the States as to their· r elative spheres of legislation and administration, but it ·is not, in our opinion, immaterial whether the power is conferred without qualification, or whether it is conferred ·with some qualification indicating that the activit:fes of "the Common­ wealth are be in aid of the States and not exclusive.

275

The evidence placed before the Commission shows, in our opinioll, both the value and the practicability of co-operation between the Com­ monwealth and the States in regard to health, and we believe that the advantages of the co-operation which has been already. established can

be best preserved and extended by giving the Parlia­

ment power to make agreements with any State and to make laws for giving effect to those agreements. The Commonwealth Parliament at present legislates with respect to quarantine, ·and it has take11 the Yiew that under the quarantine power it may make provision for isolation, disinfection, and segregation. It has

assumed power to deal with a number of problems relating to disease wherever it may occur, but it has no power, except by appropriation of money, to deal with the preve11tion of disease. It has assisted the States in safeguarding the health of the people by establishing clinics, by

research, and in other ways, but its power to legislate in aid oJ these mEmsures is · doubtful. - ·

In our opinion there is need and room for both Commonwealth and State effort. It seems probable that in some directions the proper fields for Commonwealth and State action have already been by

the experience through co-operation. It may, for instance, be

suggested that the task of the should include such

matters as conducting national inquiries, formulating basic principles, -and promoting research into the causes and the means of preventio11 of disease, and that the task of the States should include the adminis­ tration of public health measures through local government bodies as

well as through officers and agencies of the State governments. We do -Dot think, however, that an attempt should be made to specify in the Constitution the limits of the spheres o£ the Common,wealth

and the States in regard to health, and in our opinion the exte,nt 1of Commonwealth and State authority and responsibility should be defined by agreement from time to time after problems of health have been consider.ed by such a body as the Federal Health Council.

Further, we think that a power to co-operate with the States in regard to health would carry with it a corresponding responsibility, with the result that the States should, as to some of the matters covered by an agreement with the Commonwealth, either receive financial assist­ ance or be relieved of the duty of providing for public health.

We think that the power could be conferred by inserting in sectioiJ. 51 of the Constitution the following · paragraph:-( ixa.) Co-operation with any State in respect of health, and the giving effect to any agreement made between the· Com­

monwealth and the State in relation thereto. P. P. ABBOTT. E. K. BOWDEN. J. B. PEDEN.

1177

27.6

RECOMMENDATION BY ' CoLONEL ABBO'rT, SIR HAL CoLEBATCH AND THE CHAIRMAN.

State Instrumentalities.

Apart from the reasons given in the recommendation in section xxiii. of this report ·with to industrial matters, there are, we think,

special reasons why each State 'should have control of matters relating to its own employees. We · think that each State should be responsible for carrying on the government of the State, and for carrying on the trading and other enterprises and activities that it may see :fit to under­ take, and that Commonwealth control of the terms and conditions of State employment is incompatible with respon.sible government. Until the decision in the Engineers' case in 1920, the Constitution was inter­ preted as containing · an implied prohibition · against the exercise of Commonwealth · powers in such a way as to fetter or control State instrumentalities, and this principle was regarded as essential to the satisfactory working of the Federal system.

We recommend that the Constitution be amended so as to provide expressly · that Commonwealth powers are not to extend to the terms and ·conditions of State employment. Effect could, we think, be given to this recommendation by . insert­ ing at the end of section 107 of the Con.stitution the following

The Commonwealth shall not make any law with respect to the terms and conditions of employ:rp.ent of any persons by any State or by a:ny authority constituted by a State. ·

llfr. Bowclen.- If paragraph (xxxv) of section 51 of the Constitution is not deleted, as suggested in the recommendation of the majority in section xxiii. of this report, Mr. Bowden does not concur in this re­ commendation with respect to State instrumentalities.

P. P. ABBOTT. HAL COLEBATCH. J. B. PEDEN.

277

S u PPLE M ENT .A N D RECOMMENDA TIO N S BY MR. AsHWORT H.

Pad I.-Pre lim'ina1·y.

Concerning the majority recommendations embodied in the report of the Commission my criticism is fundamental. With the exception of the majority and minority statements contained in section xxii., there are no recommendations designfld. to , cure the more deep-seated ·

defects of the Co nstitution revealed by Although parlia­

mentary parties play a mo st important Pflrt in the wo rking, although the electo:zal method-the machinery by 'means of which the electors perform their function-is o£ the same. vital concern as the

machinery of Parliament, although the . evil of corruption of

constituencies is . known to students of . political science as

the besetting · danger of democracies, there is ·_ not, in, my

opinion, sufficient ·recognition of the importance of these matters in the report. r Ther e is a consider able quantity of 1evidence to s'l?-ow tha,t .the Senate has not functioned as intended, either as a States house, or as a chamber of review.; there is no reco:mmendation for improvement in these respects. Ther e is no recognition of the re action of the Constitu­ tion, as a whole, upon the life and character of the people.

Believing these several matters to be vital to the proper government of the Australian people, I deem · it my imperative duty to s·tate my own conclusions and.recommendations in 'r egard to them. I agree· with Mr. R. Windeyer, K.C., that "there may be seeds of ruin in .the ·present constitutional system which ultimately may destroy democratic in­

stitutions, but which at present may be hard to discove.r ". Mr.

Windeyer added that " it is none the less our duty to try to discover them, and I have approached this subject from the point of view, not of trying to see how. the best can be made of the . present Constitution, but from tile aspect of discovering whether there are, or are not, defects

in the constitutional system of Australia that may ultimately lead to disaster ". ·

I believe .that the separate amendments of in·dividual powers and sections recommended in the . report will serve to excise r.ninor di s­ abilities or cure minor ailments; and that the amendments recom­ mended by the minority in section xxii. would effect a general im­ provement throughout the whole area of government. I a1n nevertheless convinced that there will still be "seeds of ruin" in the Constitution

au'd that pending certain further and. drastic changes some of the worst political and economic ills from which the peo ple of Austr alia are now suffering will remain.

Part I I .-C om pl eJYities of the A Constitution.

It is generally and loosely understood that the Australian Con­ stitution is one of the most democratic extant, and that consequently it must yield better results than the Constitutions of less advancerl countries. That representative democracy is the most complex and difficult of any of the forms of government; that the complexities are

much greater in a f ederal than in a unitary system; that our Constitu­ tion is a combination of two incompatible systems of government­ the British and the· American; in a word, tha:t the Australian Consti­ tution in its accumulation of these complexities and difficulties pr esents

an exceptionally difficu 1 t problem of gover nm ent to the Austr a 1i an

1179

278

people is not yet generally or sufficiently recognized. Our Constitutio11 is what is known as a federalism, and as such is modelled on that of the United States of America. Upon this model we have superimposed that mass of conventions known to students of political science as the British Cabinet system. This system postulates as its major thesis the

responsibility of the executive to the legislature. .Australia is the first and only country that has attempted to cross the British an d .American Constitutions. It may be objected that I overlook Canada. That co untry is but superficially a f ederalism. The English publicist and con- . stitutional historian, Sir John Marriott, speaks of the f' distinctly unitarian bias of the Canadian Constitution" (The Mechanism of the Modern State, vol. II., p. 415). In contrast to the .Australian scheme, the Dominion Government may disallow measures passed by a provincial legislature; residual powers are vested in the Dominion; there are Dominion Law Courts only. In the legislative and judicial functions of government the Dominion is paramount.

The .Australian Constitution is the first of its kind; it has no pre­ cedent; it is an experiment. Both the system of Cabinet Government and the Federalism with its inevitable adjunct legal system are com­ plex and delicately adjusted mechanisms, and the contact one with the other may well be out of alignment. The Constitution is an attempt to combine the parts of two machines of government, differing in essential features, into one machine. In the concrete and

less difficult sphere of physical machinery, such an attempt would not be made. It were just as reasonable to amass the gears of an .Americ!Ul ro adster with the engine of a light British motor car and look for a uniform and serviceable article in the result.

Part III.-Oabinet, Presidential and Constitutions.

In different ways the .American Presidential and British Cabinet systems of government are designed to ensure that political power shall he associated with responsibility. The separation of the legisla­ tive and executive functions of government in the Presidential plan enables this to be done by placing executive power in the hands of the P resident. In some of the States the device known as the recall · been adopted to enhance the responsibility of legislators as well as the executive. The separation of powers also enables the initiative and referendum to be used. These devices vest power and responsibility in

the people instead of in Parliament. .As might be expected from its genesis, the Presidential system with its splitting up of power and responsibility is sui table to a federal system in which sovereign powers are divided between central and local bodies.

The legislative and executive functions of Government are linked together in the British sy;stem. Instead therefore of dealing with the various divisions of government in their detacbmept, as in the .American plan, the British system demands that they be taken together and operated and judged as a whole. .All the powers and all the

responsibility are concentrated in and upon one body-the Cabinet. This result can be obtained in a unitary state but not in a federation. Like most hytn·ids, the .Australian Constitution is lacking in the distinctive merits of each of its progenitors. Sover eign powers being divided between Commonwealth and States, the central Parliament

279

cannot be held responsible as in Britain for government as a whole. The legislative and executive functions being linked together, those entrusted with their operation cannot be held responsible in separated parts by the people as they are in the United States. The initiative referendum and recall, being the very antithesis of the Cabinet system,

cannot be employed.

Obviously, the ills which t.he Australian people are now suffering through the attempt to join two incompatible systems of together can be removed by the adoption of either in complete form. If the recommendations of the minority contained in section xxii 'are

accepted, the Cabinet system will serve the purpose. The alte rn'a'tive is the Presidential system together with the initiative, r eferendum and recall.

The Presidential form commends itself chiefly because of its com­ parative simplicity. In this respect the Constitution of the United States enjoys a decided advantage over that of Britain. An American citizen can focus the executive in an indi,vidual-the President; the

Englishman must examine a group of persons-the Cabinet. But it must be remembered that the admitted intricacies of the Cabinet prin­ ciple are alleviated in Britain by association with a unitary system, whereas the Presidential plan of the United States is linked up with

the complexities of a federalism.

One witness gave evidence in Of the referendal system. The Jistinguishing features of this system as embodied in the Swiss Con­ stitution are:-(1) The principle of 'popular inidati'on and popular r ef er en­

dum in relation to proposed legislation. This takes the place of the legal sovereign ty 'of Parlia­ ment in the British system. ( 2) The principle of the elective ministry in place of the

British party ministry. (3) In the electorate, the principle of proportional representa-tion of minor groups.

The Swiss Constitution has been true to promise. I :find the explana­ tion for its success in (a) the sympathetic relationship that binds these features into a common whole ; ( b) the simplicity a,nd directness qf the individual mechanisms; (c) the isolation of

through natural barrier s ; (d) the small ar eas of the local units; (e) the tradition of direct government. Constitutions, however, which are suitable for one people or stage of culture may easily r ank as failures for other peoples or differ ent grades of civilization. Geographica l conditions also must be taken into account. There can be little doubt

that, if designed to meet the emergencies of a continent nation such as Australia, equipped as it is with a more complex social and industrial life than that of Switzerland, a referendal constitution would not reproduce the success achieved in the land of its origin. I.n its

entirety therefore the Swiss Constitution would be an ill advised importation into Australia. The initiative and referendum can, h ow­ ever, be utilised to strengthen the Presidential sys tem in the legislntivc function without in any way disturbing thE> equilibrium between the

executive and the legislature.

1181

·â€¢

If Austl:alia;Il peo:r;>le desire to retain a F ederal ·constitution, I report my behef tha:t the Presidential system affords the

only hope ·of success. But as between a · Presidential federal system and a Oa_qinet unitar,y syste!ll I , the · latter . .. Therefore I urge

of the proposals set -forth in the recommendations of

the minority contained in sedHon xxii. · ·

While there is good to believe that the concentration of

all sovereign powers in . central Parliament would be a· big step in the direction of better gov ernment, much more is required. The Cabinet system is not working as well as formerly in Britain. Sir John Marriott, who has rbeen already quoted, attributes the declin e to the appearance of · t'vl o third par'ties in succession during the past forty years. He states Sir Courtney Ilbert, " a particularly close

observer of our Parliamentary Constitution, has declared that the ·Cabinet system p:t esupj:wses not only a •party· system· but a system". A similar1 conclusion has been arrived at by a number of other competent- observers. .A. Lawrence Lo·well declares:-

" If the existence of . a re.sponsible ministry normally involve6 government by pa;rty, :it also requires as ·a co-qdition of · success that there shall be only two " (The Go1Jernment of England, Vol. I., ·p. 458). : The follmying is taken from Bryce's AmeTican

Commonwealth, Vol. I., pp. 286, 287 :-"It (the Cabinet system) i s a system whose successful working presupposes the existence of two great parties and no more." :Many other authorities ·could be quoted to the same effect including Bagehot in his standard work The British Constitution, Bodley in his work France, and Profess.or· Paul Reinsch in World Pelitics. In the light of the conclusions of these eminent authorities, the fact that we

have three Parliamentary parties in 'Australia should be viewed with grave concern. .

I believe that the Oa:binet system is the highest form of government and that it affords the best hope for the future of democracy in a

progressive modern state.. .At the same time I agree with the declara­ tion of Sir John Marriott that the Cabinet system "is of all forms of constitution the most delicate in its adjustments and therefore the mos t easily thrown out of gear. Deperiding for the most part' upon con­ ventions; perpetually adapting itself to new conditions, social and political; subject to continuous modifications in detail, it demands from those responsible ; for its working unceasing · vigilance, a clear apprehension alike of practical conditions and of philosophical implica­ tions; above all it demands a reverence, almost religious in character, for the inner spirit "-'-which has inspired and still inspires it" ('l'he M cchanisrn of the J.l![ odern State, Vol. II., p. 444).

Marriott's list of difficulties is far from being exhaustive. The Cabinet system has been tried by many States in which conditions other than those mentioned by him and essential to successful operation have been wanting. Most countries of Continental Europe are divided in to xacial, religious, and class groups to an extent that precludes the

creation of the two necessar y con stitutional parties . But in Australin we are all of one race ; the bitterness which exists between Catholicc and Liberals do es not exist ; and while it is true that .class cliffei:e,nces have been promoted by the class line of division between political

281

parties, the general social and economic conditions of Australia make for social unity. The questioiJ,. remains: have the people of Australia the mental outlook stressed by John Marriott? In my opinion they have not at the present time; but .I believe that outlook can be generated by means of an electoral mechanism so designed to be in compJete

adjustment with the parliamentary mechanism of the Cabinet system.

Par-t IV.-Sectionalism., The Cor-r-uption of Constit¥e ncies.: A multiplicity of parties :i·esults . i n in-stability, lack of of policy, and corruption in goverumeui. Similar evils ·will acci·ue whe11 party division is not based upon fuudamental principles entailing differences as to what is good policy for the community as a whole. The

divisions should not arise from religion, class or race. We must avoid undue sectionalism. We should not tolerate · the organizing of groups for the purpose of exchanging votes for concessions. Such organizations spring from the tariff in its present for.m, the Arbitration Courts, the

Navigation Act, the sugar embargo, and the concession of bounties to certain favoured industries. Government grants, ·institutions and policies which serve to raise costs to producers or prices to consumers are not only uneconomical-they are demoralizing and injurious politically. They sap the spirit of self-help and independence in the community; they undermine the foundations of parliamentary govern­ ment. Nor is the cancer of undue sectionalism confined to industrial groups. Public servants and returned soldiers are found organized for the lucrative pursuit of their own advantage. Whole States are eager

suppliants for special subsidies from the Commonwealth Exchequer. Such groupings open the flood gates of corruption; they facilitate the purchase of votes by a party of easy virtue. That the above statement.:; are based upon fact is borne out by the following utterance of an ex­

State Minister of Victoria (Mr. R. G. M enzies, K.C., M.L.O.), who was reported to the following effect on the 18th of July last in the Melbourne press:-" Most governments in Australia had got into the habit of pouring out money that did not belo-ng to them. The people's money was eagerly put into the pockets of any sectional interest which had a political pull. Every time an industry struck a bad patch it came

to the Government and said, we want a bonus, or grant, or a guarantee. o1· ·whatever you like t o call it, and if you r efu se you will r eceive no votes from us." The tendency of all democracies to venality and corruption is str essed

by many observers. Professor H carnshaw writes :- " Under the subtle guise of improvement in economic conditions, demands for doles a t th e public expense are made by powerful sections of the c

and to a similar r evelation of the debasem ent of American institutions from E. L. Godkin in Problems of Modern D emo c1·acy} Hearnshaw goes on ·to say " from every other modern democracy the same story of venality comes."

Part V.-Political Parties. A Dangerous Dividing Line. In the organization of party, sectionalism produces its very worst consequences when it is based upon class . Almost h alf a cen tury ago. Bryce was· very uneasy as to the possibility of a class line of divisiou

1183

; -I

I

282

between the political parties in the United States of America. After pointing out tliat since the Civil War combinations of States have ahvays acted through the national parties, he writes:-" This is an important security against disruption, and a similar secu'rity against the

risk of civil strife or revolution is to be found in the fact that

parties are not based on, nor sensibly affected by, either of

wealth or social position. The cleavage is not horizontal according to social strata but vertical. . . . It (the cleavage) rhight cease

to be true if the new Labour Party were to grow till it absorbed or super­ seded either of tlie existing parties" (Arner·ican Commonwealth, \Tal. IJ. p .. 38). What Bryce regarded as an important security against civil strife still obtains in America; but it is sur•ely most ominous to note that this security no longer exists in Australia. The trade unions have become part and parcel of a Parliamentary party:; the line of cleavage between the parties is a horizontal 9ne-a line of class. This threatening develop­ ment, if ,not due to, has certainly been assisted by, deep-seated

defec'ts >ih th'e Constitution. · '

It would be u:qfair and unreasonable to attach sp_ ecial blame to the trade unions for the deplorable division in politics.. Bryce gave

utter'ance to a profound truth when he said:-" Constitutions arE expressions of national character, as they in turn mould the character of those who use them. Forms of government are causes as vvell as effects." It seems strange that the reaction of the Constitution-the ftlndamental law-upon tl}e .character and conduct of citizens is but little recognised. The influence of other social machinery-legal, educational, religious- is clearly apprehended. It will be contended

the parts of this statement following that the multiplicity of political parties, the disruptive class line between parties, and the evils of other forms of undue sectionalism are the result mainly of defects in the Constitution. The remedies .suggested for the Temoval or mitigation of these evils are ( 1) the inclusion in the Constitution of a definite method of ele9tion designed so as to prevent the debasement of Government

through the corruption of constituencies and in other ways; and (2) a complete change in the character and constitution of the Senate.

Part VI.-The Philosophic Basis of the Two-Party System. The case for the fixation in the Constitution of the electoral method propounded in Part vii of this statement and designed to secure the interplay of two parties will be immensely strengthened if it can h.c demonstrated that a system (the British Cabinet system)

rests- upon a sound philosophic basis. In the histories of the several sciences, and in history, I_ evidence

of such a b.as1s. The ·o\'lef expos1t10n of ,a philosophy m th1s part of my statement in which the political aspects are stressed will suggest an underlying synthesis, not only of political science, but of the whole group of social sciences as well. It may be extended even further; it may le.ad to the widest generalisation of all. Can it be dei)ied that

inorganic organic and super-organic or social development every· where fulfilled through the interaction of opposi11g· principles?

The primary function of representative goven; ment is the 'organiza­ tion of national life. In ancient times the problem was to organize· each gTonp as a unit against external pressure, and in, the military struggle

283

the groups those with the best m eans of orgamzmg survived.

In th1s way natural selection played upon the mechanisms institu­ tions of society as well as upon the human element. I n modern pro­ gressive states, however, the ext ernal pressure has been r elaxed for long periods, notably so in Britain, and the problem of internal organiza­

tion has presented itself. Represen tative m achinery has solved the problem. There is r·eason t o believe that neither accident nor the inherent political capacity of the B ritish people accounts sufficien tly for the solution being found in Britain. Owing to insular position, ext ernal

pressure was less.

R epresentation was discover c_ d in B:·itain j n the t hirteenth century. The idea of agency was not unknown in the ancient vvorld; but the idea that agents should be invested \vith powe r t o bind those for whom they acted was new. Those possessing such power b ecome leaders ; leader ship cannot be given effect to without organization. So we arrive at organiza· t ion and leadership as the underlying principles of representation. Amplifying "this conception somewhat: organization takes the form of party; leadership implies responsibility. The m achinery of r epresenta­

tion should be so moulded as to give effect to party organization and r es ponsible leadership.

Party organization means two parties only; responsible leadership means the power of a majority behind the leader. Take away that po·wer, split parliament into groups not one of which can command a majority, and clearly, responsible leadership is impossible. It is evident

that the principles underlying r epresentation d emand that parties shall not be more than two. There are certain other principles of univer sal application which indicate the same conclusion. They go further: they show clearly what ·the dividing line between parties has been in Brit ain

and America, and what it should be at all times and in all places.

Bryce . h as· visualized the political history of all nations and· con­ stitutions as the ceaseless struggle of forces centripetal and ce ntri­ fugal. A wealth of instances can be quoted to prove the truth of this wide generalization. In Greece, as Aristotle has demonstrated, there is

th e cycle from ty r an ny to anarchy and back again. The ending of the anarchy of the Long Parliament by Cromwell, that of t he

French Revolution by Napoleon, that of Italy by Muss olini,

that of Russia by L enin, that of Sp ain by River a, ar e a few of the

instances of the alternating phases of centrifugal and centripetal among the moderns. I n t h e spher e of governmen t th e opposi1ig principles can be identified as liberty, the extr em e of which is anarchy, and au th ority with its extr eme expression in tyr anny. I n B ritain and the Uni ted States the phenomena in r ecent times hav e been guided into the peace fu] vying of liberty and authority ; in less advanced co untr ies the expression

of the Grecian cycle still ob tains. The alter n ation s of liberty and authority wer e r epresented in B rita in by Roundhead and Cavalier, Whig and Tory, and Liber al and Conser vative ; in the United S tates of America by D emocrats and R ep ublicans. T h er e is no j ustifi cation f or

the one-sided theoretical worship of liberty so prevalent in all de­ mocracies ; to-day th e Am erican nation in establishing a commission of its leading citizens to consider th e better enforcem ent of law r ecognizes th e nee d fo r curbing liber ty and str ess ing auth ority. When the people

_ F.l25l.-19

1185

284

of the United States recognize in theory, as they do in practice, that the principle of authority has equal value with that of liberty, they will be impelled to erect the statue of another goddess in New York harbour.

The constant or continuous change, the apparent instability of out­ look resulting from the interaction of opposing principles, should, on reflection, excite no wonderment. It is intrins-ic in both ·community and individual. It is an essential to the natural process of evolution. For this antagonism between rival principles is by no means limited to politics. It is to be found in the physical sciences both organic and inorganic. In the realm of natural philosophy it takes shape in the action and reaction of forces; in books on chemistry it :finds expression in attraction and repulsion; in the laboratory of the biologist there is patent the evidence of heredity and variation. Centralization and de­ centralization, integration and disintegration, force and resistance are varying terms for the same fundamental ideas. Since these competing forces are but a , manifestation of the :p.at_ ural march of evolution, it should be our aim to select that form of governance that will ensure for us the. maximum of good from such phenoruena. The ideal government

will mitigate .the extent of the :fluctuations; it will modify effects; it will adjust dislocation in periods of transition; it will substitute moderation for violence. Authority will take the place of

tyranny, and liberty of anarchy. The replacement of peaceful oscil­ lations for violent swings between extremes is most likely of realization where the Cabinet system affords a basis of responsible parliamentary government r esting upon a sound and sympathetic electoral m(:lthod.

The :flexibility of such a system will easily, and with the minimum of passion, enable the change from authority to liberty, and in reverse from liberty to authority; the device or expedient will be a change of ministry. The balance between the opposing forces is in the hands

of the people. The Cabinet system, in the last analysis, is the means or machine, and in my belief, the best machine known, by which a democracy may combine the principle of authority stressed by the Tory Hobbes with the principle of liberty expounded by Locke, the philo­ sopher of the Whig Revolution of 1689. The reading of modern British practical politics confirms the thesis that both Hobbes and Locke, taken apart, are incomplete; each sees but one of the requisite factors in the interplay of forces and events, so that in the synthesis each is necessary and supplemental to the due fullness of the other.

Sir John Seeley de:fines political liberty as "primarily the absence of restraint or the opposite of government; but in a secondary sense, which is also convenient, it is the absence of excessive r estraint or the opposite of over-government " (Introduction to Political Science) p. J 20). Similarly the t€rm authority may be used in a secondary sense. And it is in the secondary sense of both terms that liberty and authority are referred to in this statement as the underlying principles of political party.

Since practice precedes theory, one would expect the principles of party and representation to have shaped the machinery of the British Cabinet system so as to ensure two parties only. Analysis of that system reveals that each conYention or working part is so designed. The executive power vested in the Cabinet with the rule that the Cabinet shall r esjgn if it fails to retain the support of a majority tends to the

285

continuous organization of two bodies of opinion, one for and one against the Ministry; the solidarity of the Cabinet helps to prevent divisions within the Ministerial party and to unite t he Opposition; the power of dissolution which resides in the Cabinet enables it to appeal to the country against an adverse majority in the House, thus dividing the

electors into two parties, the one in favour of, and the other opposed to, the ministerial programme; the arrangement of seats in the House by vvhich the Ministry and its supporters take their places to the right of the Speaker and the Opposition members range themselves on the left creates a sharp division into two camps. Jl:nalysis of the parliamentary

mechanism of the British Constitution demonstrates that its unwritten conventions and practices help to organize Parliament into the parties of His Majesty's Ministry and His Majesty's Opposition. The electoral mechanism is not so well cast.

In his recent work, The End of Laissez .Faire, J. M. Keynes has pointed out that Herbert Spencer was the first to recognize that the parallelism between laissez faire and Darwinism is very close indeed. Spencer and his school taught that political institutions are a natural growth arising out of national character, and that man is the sport of a process of evolution over which he has no control, except to do harm by interference. In the one-sided view of Keynes this school is dead. The opposing school of idealists believe that man can artificially direct the evolutionary process to secure his ends. The half truths embodied in each of these conceptions were long since recognised by Professor Ritchie, who, in his work Darwinism and Politics, outlined a definite

policy of national progress free from the pessimism of laissez faire and the impracticability of the idealists. Representative government is not a natural growth; nor is it an artificial construction; it partakes of the nature of both. It is the result of the co-operation of man with nature.

Each step in its growth is a human invention, which in turn becomes an artificial variation upon which natural selection plays. The lesson is that our only hope of progress lies in improving the machinery of our institutions and harmonising our ideals with them. ·

An attempt will be made in the part to this statement following to show how the machinery of the British Cabinet system can be improved. The proposal will be designed to prevent more than two parties from entering the political arena. The obj ection to such a proposal is that the people have a right to divide up into as many parliamentary groups as they please. The answer is that political rights are not absolute; they are relative to the Constitution. To allow an abstract idea of right to block the way to the removal of serious evils such as the

corruption of constituencies is indefensible. If there is good reason to believe that the well-being of the people will be promoted by the proposed limitation, it becomes the duty of minorities to work through the con­ stitutional parties. The most important right of a minority is the

right to turn itself into a majority if it can. Questions which have no immediate prospect of securing the support of a majority of the people should be kept out of Parliament altogether. The functions of the political machine are to deal with what is practical and attainable and to maintain the conditwns under which those questions only shall be

raised. The ideals of existing minorities are in harmony with the exist­ ing Constitution-they are sectional. The proposed change in the electoral mechanism together with the changes in the distribution of

1187

286

powers recommended in the minority statement in section xxii. will tend to make those ideals national. The elector in disregarding the temptations of sectionalism and self interest will work the two-party system in the consciousness that he is performing a high ethical duty.

Part VIJ..-Electoral Systems.

E lectoral methods are just as vital to a system of Cabinet govern­ ment as is the responsibility of the Executive to Parliament. The significp.nce of electoral machinery is insufficiently recognized in our British communities. The electorate is a poorly developed chapter in the scheme of political science; the r esult is that its regulation is in general relegated to the haphazard mercies of ill-considered legislation.

I believe that we should make the same definite provision· in the Constitution for the proper functioning of electors as we do for the functioning of members of Parliament. Only in that way vvill we recognize the true significance of the electorate; only in that way will it be surrounded by the respect and protection that it merits. The machinery available to members of Parliament in the discharge of their function is well cast for .securing organization and responsible leadership

through the interaction of two national parties; the machinery which the electors have to work in the discharge of a function of equal

importance is destructive of party and responsibility. To secure the effective functioning of the whole the two machines must be brought into adjustment. The electors must have the wherewithal to enable them to function properly. · I desire to dwell on the importance of the electorate in the make up of the parliamentary system.

The Commonwealth Constitution is the incorporation of the essential:' of two constitutions--that of Britain and that of the United States of America, and as I endeavoured to show in Part II. of this statement, it is a combination of machines that are ill suited to such adaptation. I believe that we are similarly at fault in our choice of an electoral system. I believe that we have subjoined to our parliamentary arrangements an

electoral edifice altogether foreign to the nature and implications of those arrangements. The fundamental weakness of the single member electorate is that it encourages voters to subordinate national to sectional interests. This evil became so pronounced in Victoria in the case of State railway employees and civil servants that an Act was passed in 1901 giving these bodie.s separate representation in P arliament. The trouble was that by organizing themselves into a separate section for political purposes, public servants hold the balance of voting power in many constituencies. This enabled them to secure pledges for class programmes not -vvith the general weal. representa­

tion was enacted as the remedy. The class orgamsat1on had been yoluntary; under the law it became compulsory. The mischief was transferred from the electorate to Parliament. Public servants are not the only section seeking to exchange votes for concessions, and to penalise one class fo.r a practice that had become general was unfair. After a brief trial the experiment was abandoned.

Another grave defect of the single member electorate is that if more than one candidate of a party is nominated, that party's chances of success are lessened accordingly. To remedy this weakness, pre-selectio11 has become the rule and has generated further evils. It thwarts the

287

elector in the exer cise of his function; it confines his choice to parties; he has . no say in the selection of party candidates. What is known as preferential voting has been instituted to obviate the need for pre­ selection and widen the elector's choice. It certainly tends to bring more

than one candidate into the field for each party, but it sets up an

internecine struggle for first preferences. The party becomes dis­ organised; its campaigning strength is diffused among several candi­ dates. If one party pre-selects, order replaces confusion; the party strength is concentrated on one standard bearer; and when one side

pre-selects, the other is compelled to follow suit. Preferential voting h as failed completely; it has not put an end to· pre-selection; it has intensifi ed the subordination of national to sectional interests. Despite pre-selection, pref er ential vo ting tends to bring more than two candidates

into the field for each constituency in more ways than one. Calling for a wider choice for electors, it encourages independent candidates and it makes also for party multiplicity . . In both the 1914 and 1917 Federa1 elections there were three constituencies only in which more than two

candidates vvent to the poll. Two parties only were in the fi eld.

Preferential voting became law in 1918, and at the next succeeding election in 1919 there were twenty-six with more than two

candidates, and as the result a third party of fourteen members made it.s appearance in the House of Representatives. Preferential voting is a direct encouragement of party multiplicity; on that account it is out of asljustment with the Cabinet system.

Many people favour the Hare system-the single transferable vote for plural member constituencies. Under this device it is possible for a minority of one-sixth in a five-member . constituency to secure the . return of its candidate. The Hare scheme is well suited to the Swis0

referendal system of government; but it is even more out of adjustment with a tw·o-party parliamentary m echanism than preferential voting in single member constituencies. Experience of its application in New South \Vales has won for it very few advocates in Australia.

The List method is familiar to the constituencies of continental Europe. It is admirably suited to securing proportional representation for minor groups in plural member constituencies; and like the Hare method it stimulates the group interest to the material detriment and.- · demoralisation of national policy. But it has a distinctive which can be made the basis of a method suitable to the Cabinet sys.tenr -electors vote for a party list instead of for individual candidates. · By

tl.e expedient of restricting the lists to two and introducing· other modifications an electoral method can be secured which will be in P?rfect adjustment with the. machinery. I.

such a method of which the followmg are the essentials :--;::: .. ,. · .V.:. . \ = ,.

1. The Commonwealth shall be divided for irit0

districts, each returning three, four or five me:rnbe-t:Js. · > ... •

2. Before the close of nominations each to the returning officer for the district in he desires to be classified as a supporter _ u} or of tho

pposi tion. ·.- .:.. . . :, ·

. 3. Ballot indicate whether can­

dld ates are lvflmstenahst or _ .-

,\ .. · ....

•'

.J -

1189

288

4. In the case of electoral districts that are to return three

or four members each elector shall be entitled to vote for two candidates; in the case of electoral districts that are to return five members he shall be entitled to vote for three candidates. 5. A unit of representation shall be ascertained in each electoral district by dividing the total number of valid votes cast by the number of me'mbers to be returned for that district.

6. In every electoral district the number of aggregate valid votes cast for the Ministerial candidates and the number of aggregate valid votes cast for the Oppositionist candidates shall be divided respectively by the unit of representation, and thereupon each party shall be entitled to the return of a number of members equal to the

quotient thus respectively arrived at. In this computation,. any fraction less than one-half is ignored; any fraction greater than one-half will count as a whole number. 7. To fill the number of seats ascertained for a party iu

accordance with proposition number six above the candidates of the party who have received the highest number of votes shall be declared elected. ·

8. In the event of a 'tie between candidates the decision shall rest with the returning officer against whose decision there shall be no appeal. I append in summary form, a table to illustrate how in praetice this method will operate. The assumptions are:

(a.) a five member electorate in which the electors voting number 40,000 and the total valid votes cast is 120,000; (b) twelve candidates are standing; (c) candidates A B 0 D E F are in the Ministerial interest

and candidates G H I J K I-- are declared Opposi­

tionists.

The distribution of votes is as follows:-Ministerialists. Oppositionists.

A 15,000 G 16,000

B 13,000 H 14,000

0 12,000 I 13,000

D 9,000 J 8,000

E 7,000 K 5,000

F L

62,000 58,000

unit of :representation being 24,000, the Ministerial

party tWo a of is entitled three

se 'ts Oppos1tlomst party w1th two. umts and a remamder of

10 '000 'to two "'8';-eats. A, B, 0, G, and H w1ll be declared elected (see .r above) ..

In thet to th1s P.art of my statemen.t I sha!l endeav?ur

to set out the.sahe.nt- of thls mechamsm-v1rtues.

in their ·and: total!(Y far outwe1gh any that can be reahzed m

any system of voting of I am aware: . .

The issues placed· elector w1ll be. there w1ll be

no inducement for m.terests or cons1deratwns to be thrust

289

before him. Suppose that in the illustration just given, candi­

dates D, E and F are canvassing members of an organization such as that of the public servants with the promise of concession or prefer· ment. In that case, Ministerialist supporters may vote for candidates A, B and C without in any way endangering the position of . the

Ministry or in any way being forced to give their votes to candidates with whose political programme they are out of sympathy. The solid support of Ministerialist suffrages will secure the return of candidates 11.., B, and 0, and the public sen·ants finding that their class vote m erely

had the effect of increasing the total of one party, would see the

futility of voting otherwise than on main party lines. Similarly a Ministerialist elector who may be tempted to vote for a co-religionist in the Oppositionist camp, will, under the method I propose, have a choice of Ministerialist candidates, one or more of whom will be

acceptable from the standpoint of his religion. In this way provision is made for the elector to vote on national in place of sectarian lines. A trade unionist of moderate views will no longer be compelled to choose at times between class-biassed extremists of either Labour or

Capital. Since candidates will each represent various shades or degrees of the respective party policies, an elector will :find it possible to award his votes to the wisest, most upright and most moderate members of either or both panels. The elector will no longer :find his choice unduly circumscribed at the hustings. The principal incentive to

bribery and corruption will be removed. The politician will be little subjected to the temptation of exercising his ingenuity to manipulate electoral boundaries-a practice known as gerrymandering. We shall reasonably look to an improvement in the type of representative in

our parliamentary assemblies. Uncontested seats, which for many voters are the equivalent of disfranchisement, will be unknown. W e shall escape the necessity for pre-selection and its accompanying evil, party machine contr:o1 of nominations. No longer will one party out

of all proportion be represented in the legislature, for every vote cast will be effective. The fact that one party has more candidates in the field than the other will in no way redound to its prejudice since votes cast for rejected candidates are not lost; they are not ineffective as

with our existing methods; they are thrown into the party aggregate. Cross voting is no longer to be feared; it no longer defeats its purpose. In brief we shall by the adoption of this method, I claim, establish a scienti:flc, just and moral electoral system. We shall show that we

agree with Aristotle that politics should not be divorced from ethics . ·'

Part 11111.- Th e S enate.

Of the major parts of the Commonwealth constitutio:Q.al machinery, the Senate or upper chamber of the Federal legislature is clearly the most defective. The S enate has failed in the aims for which it was designed. Its mission was the safeguarding of State rights against

any attempt at F ederal encroachment. It was fashioned on the model of the second chamber of the United States. But in the process of imitation and adaptation i t was em asculated, for the control of foreig11 policy and appointments to high place-functions that lend a peculiar

authority and dignity to the American prototype-wer e stripped from the Australian body. Our Senate was conceived and born in f ea r­ fear of Federal aggression.

1191

290

In accordance with the requirements of a federal system, the Jligh Court stands .stern guardian to watch ov er and preserve inviolate the sancity of sectiou 51 of the Constitution-the section which defines, in specific language, the powers alloca(ted to the F.edern l Parliament. State rights are effectively buttressed: the wide residual powers vested in the States maintain the independent rights of the States. In purpose, therefore. the Senate wa·s a redundancy, and, as would any other organism which has no longer a distinctive and suffi­ cient function to exercise, it is slowly atrophying. Bryce ("Modern Democracies ", vol. II., at page 204) passes judgment thus:-" Not having any special functions such as that of control of appointments and of foreign policy which give authority to the American Senate, its Australian copy has proved a mere r eplica, and an inferior replica of the House". lt is not a house of revision; it discharges no function that is not better undertaken by the House of Representatives; it lacks the sense of responsibility which comes from the knowledge that the fate of the government depends on its decision. Obviously, therefort.:, this unnecessary member should be forthwith lopped off in the general good, or, in the alternative, a new purpose should be infused into ita veins. I believe that the Senate should be retained and that it should be reformed into a new life.

A second chamber has a mission to fulfil; it should be composed of experts, technical and philosophic, whose object would be the reviewing or suspending of measures that the lower house has rushed through in an hour of fever or passion. Bryce and de Tocqueville are equally emphatic that the two-chambered co-ordination should be regarded as an . axiom of political science. Bicameralism makes due r :'o-.- for the fire and youthful impetuousity of the first chamber axl the .sobering hand and reflective mind born of years that will look {or a home in a second house. My argument in regard to the Senate is equally applic­ able to a federal or a unitary system, although it isgenerally that a Senate representing the States is an essential of fed eralism. Tho fact that the Senate has functioned as a party house and not as a states house during the past twenty-eight years shows that the representation of State.s as States is not necessary.

To secure the best r esults from a sec ond chamber, I believe that it · should be constituted to represent the various interests and vocations in place of States or localities. This is the age of association; in every phase of modern activity a merger impelled by common interests is the

integrating force. Group representation must obtain a proper recog­ nition in the ordering of our political life. I believe that we should look to the IIouse of Representatives as the sole body with a territorial basis; the Senate should be __ confined to the representation of important interests. In my reading I have been greatly impressed with the make­ up and function of the German Federal Economic Council, particularl;v in its relation to the Reichstag. This Council consists of representatives of both employers and employees, and of certain other elements, and by virtue of Article 165 (a) of the German Constitution, it is to be so constituted that "all important vocational groups shall be represented thereon according to their economic and social importance." Then sub­ section (b) of the same Article proceeds:-" All bills of fundamental

jmportance dealing with matters of social and economic legislation shall, before being introduced, be submitted by the F ederal Government to the

291

Federal Economic Council for its opinion. The Feder.al Economic Council shall have the right itself to propose such legislation. In cases where the :Federal Government is not in agreement with .any such proposal, it shall nevertheless be bound to introduce it into the Reichstag,

accompanied by a statement of its view thereon. The Federal Economic Uouncil may arrange for any such proposal to be supported in the Reichstag by one of its members." As .comment, I would like to refer to Mr. Herman Finer's annotation of this section-the words are

contained on page 102 of his work, Representative Government and a Parliament of 1 ndustry. He says:-" Clearly the political parliame!1t (the Reichstag) and .the people are the :final authorities over legislation and the Federal Economic Council is subordinate. It has the r ight to scrutinise and report upon Government bills, and to initiate, and is guaranteed a certain effect upon the Reichstag through compulsory introduction by the Government, and direct advocacy by one of its

members. But it is a consultative, not a decision-making body." Mr. Finer adjudges _the results of the Provisional Council thus:-" No Parliament in any of the countries, France, England, Italy, the United States of America, in its full assemblies and its committees, could render

such services to the process of government as the discussion and method of work of the Economic Council. Its work is well arranged, simply discussed, thoroughly thought out. It has constructed the proper technical apparatus for Committees, has secured the best personnel for its purposes, it has made a good use of experts, has recognised its duty

to come into direct, not second-hand, touch with the interests of the community, and has never forgotten that its great fruitfulness lies in making suggestions and in initiating inquiries and discussions and the providing the Government Departments with reports that contain every

element of creative research." The Provisional Economic Council dealt with by Finer is the precursor of the Economic Council to be organised under the Constitution. Speaking of the latter a former Under

Secretary of State (Herr Delbruck) said before the National Assembly ·that the Economic Council is without doubt, by the side of the Reichstag and Reichsrat, a third legislative assembly. For such an assembly, . "called upon to deliberate on the most important questions in the

national life, will necessarily have a natural lendency to enlarge its powers. We are undoubtedly on the eve of a period in which the

Reichstag and the Reichsrat -vvill be considered as on one side of the balance and the Economic Council on the other. Behold in this J

wholly new political evolution. There will a day when the

Economic Council will seek to become the heir of R eichsrat and to take its place" (German Constitution, pp. 264-269, Rene Brunet). I commend the Federal Economic Council as a model for our Federal second chamber. In its constitution, of course, it would be widened to include every important interest, economic and otherwise. Such a

reform, drastic though it be, would ensure for us that very necessary co-ordination or liaison between industrial and political governance. In Australia, we have, in this respect, a ludicrous severance, fraught with elements of real danger. ·An objection has been urged that while a second

chamber on the lin es indicated might be ideal for its purpose, the proposal is of no practical value unless it can be sho wn the nomina­ tions can be 1 made satisfactorily . On this point the German experience is helpful; the difficulties were over come. But I am of opinion that n.

better method can be devised for _ ustralia. Following the German

1193

292

model to some somewhat more than two-thirds of the r epresenta­ tion might be given to organisations of employers and employees on the basis of general groupings such as- Agriculture and various branches of rural production; pastoral; mining; manufactures; commerce, banking, insurance; transport.

The remainder of the representation might be given to such bodies as-Universities; public undertakings; liberal professions.

With the exception of Universities and managements of public undertakings for whom suitable special arrangements could be made, any organisation or combination of organisations with a membership of not less than, say, 1000 in the case of employers and 5000 in the case of employees, would be entitled to nominate one or more candidates in accordance with its numerical strength to a panel for the appropriate group. The amount of representation of each group would be deter­ mined by its relative importance. All that would r emain would be to select the representatives for each group from the panels. It is at this point that difficulty is apprehended. Surely, however, there are several ways .in which a satisfactory selection may be made.

The Irish Constitution makes provision for a S enate composed of citizens who have done honour to the nation by reason of useful public service, or "because of special qualifications or attainments, they r epre­ sent important aspects of the nation's life." .A. p anel of candidates

possessing th ese qualifications having been constituted, selection from a;mong them to the number required is made by members of parliament voting in accordance with the Hare method of the single transferable vote. In my opinion a better method would b e to give each nominating

organization as many votes· as there are vacancies to be :filled for th f> group to which it belongs, and then to allow the vo tes to count in accordance with the membership strength of the organization. This would mean the application of the Block Vote method, so inequitable whim applied to p arties, but unquestionably the best when personal qualifications only should be consider ed. The outstanding objection t o the various preferential methods of voting is that sections can ensure the defeat of a gener al favourite. The Block Vote principle obviates this danger. It assists the return of men of breadth and vision- the candidates in favour with all sections.

The method of ?electing nominees for the panels might well be left to the organizations. This would admit of the simple procedure of determination by the executive of the .body. On the other hand, if desired, the matter could be decided by a ballot of membm·s, and in this event, the Block Vote method should be used.

A bicamer al legislatm;e on the lines indicated her ein should give Hvery satisfaction. The territorial constituencies of the House of R epresentatives, the Cabinet system, the new electoral procedure after the manner that has been suggested in Part VII. of this statement would provide the underlying structure of the people's house; the

Senate, r ecast along the lines indicated to convert it into a body of experts, would be, in effect, a chamber advisory, r evisory and suspensory in nature, with a special mission to protect minorities. In this way the essential play of the centripetal and centrifugal principles would be achieved Parliament would be truly representative of the gener al

293

interest and of the various sectional interests, and in practice would be a reconciliation of the opposing monistic and pluralistic conceptions of the State. For the theoretical reconciliation students of political science are referred to Part VI. of this statement.

Part I X.- The S eat of Gover·nment. Section 125 is one of the compromises -of the Constitution. In the belief that the people of N ew South W ales would not vote fo1·

Federation if the way was left open for Melbourne to become the capital of Australia, and that the people of Victoria would object equally to Sydney, both cities were ruled out by the provision that "the seat of Government shall be in the State of New South Wa les and

be distant not less than one hundred miles fr om Sydney ". -The consequ ences of section 125 are, in my opinion, disastrous. Canberra is a heavy, unnecessary and increasing burden upon the people. It is remote from the centres of population and main lines of transport. The surrounding ar ea is of such a ch ar acter as to afford no basis for the establishment of industries. Public servants all the time, and members of Parliament when the Houses are in session, are cut off from the life and interests of the people. The char acter of government must suffer because (a) many of those best qualified to discharge legislative and administrative functions will refuse to live in Canberra, and (b ) those who live there, lacking the stimulus of

contact with the big community interests, will be less fit to deal with the problems of The direct and indirect costs due to the disabilities of government in Canberra must grow with the development of Australia. I am

convinced that it would be good policy to cut the loss at the earliest possible moment. I recommend that section 125 be deleted so as to r emove

all restrictions on the discretion of Parliament regarding the matter of the seat of government, or alternatively that the section be so amended as to r emove the obstacles now existing to the establishment of the seat of government at Sydney or in any other part of New South

Wales.

Part X .- Addendum.

It is now a generation since our Constitution became law.

Constitutions are r elative; they must be amended to suit the changing requirements of their people. But I go further. The conclusions of the framers of our Constitution wer e more or •less influenced by ex­ traneous pressure the chief of which was State interests. What is known as the "Feder al Compact" was a compromise ; the colonia)

p':lliticians feared the overriding power of an Australian P arliament. We need from time to time to revalue our values. Above all, we must recognize that it is no longer necessary to cOJ;npromise on essential . principles. To examine afresh foundations of the Constitution

denotes no lack of respect or grat1tude for those who took part in the several Conventions; it passes no necessary or implied reflection 011 their labours. In the light of the experience of 28 years we are now called upon to review their judgment.

T. R. ASHWORTH.

1195

294

SuPPLEMENT AND RECOMMENDATIONs BY SIR HAL CoLEBATCH.

Whilst eordially endorsing the report so far as it sets out the powers of the Commonwealth I>arliament, and r eviews the working of the Constitution since the commencement of Federation, I am unable to agree with the majority of my colleagues in regard to some of the recommendations. I think it desirable to emphasize the fact that I am the only member of the Commiss ion who has been closely associated with the public life of one of the outlying States of smaller population. From this circumstance I approached the task entrusted to the Com­ mission with a somewhat different outlook from that of my fellow members whos e activities have been chiefly connected with the central States of New South Wales and Victoria, but, in common with other members of the Commission, I have consi dered every question in

r elation to Australia as a whole as ·well as in relation to particular States.

Unequal operation of Federal Policy. The investigations made by the Commission in the different States, and .the evidence tendered in Western Australia, South Australia and Tasmania, indicate that certain phases of Commonwealth policy­ whatever their immediate effect upon Australia as a whole- have been

seriously detrimental to those States of smaller population that depend for the most part upon primary production. The public finances and the commercial and industrial development of those States have been prejudiced to an ex tent quite incompatible with the requirements of a Federal union, and dangerous to the well-b eing and progress of the

Commonwealth as a whole. It is not without significance that this conclusion is in accordance with the :findings of the three royal commissions-in each case com posed of persons entirely dissociated from the States concerned­

that have made independ ent inquiries into the disabilities of the States of ·w estem Australia, Tasmania, and South Australia. The same opiniou was expressed by the Imperial Economic Delegation that recently visited Australia, and by the informal committee of experts set

up by the Prime Minister to report on the economic effects of the Australian tariff. From the reports of these bodies, and the evidence submitted to this Commission, it appears to me to be cl ear that a con dition of affairs has been created that cannot be met by temporary grants or other forms of palliative. The continued prosperity and advancement of the Commonwealth must de pend very largely on the capacity of the now sparsely peopled States to exploit their r esources and

to absorb additional peo ple- r esults that cannot be achieved unless they are accorded a s ufficient measure of financial and economic freedom to enable them to work out t heir own salvation.

On this point I desire to direct attention to the statement submitted to the Commission by Professor .T. B. BI"igd en and Mr. L. F. Giblin, M.A., appearing on pages 1700 to 1710 of the evidence, and also to the concluding pages of the r eport of the informal committee of experts already referred to and which consisted of J. B. Brigden, M.A., Economist and Deputy Chairman of Executive, Australian Overseas Transport Association; D . B . Copland, M.A., D .Sc., Professor of Commerce, Unive rsity of Melbourne; E. C. Dyason, B.Sc., B.M.E.; L. F. Giblin, M.A., Ri tchie Professor of Economics, University

295

nf Melbourne; C. H . Wickens, I.S.O., F.LA.. F .S .S., Ron. M.S.S. (Paris), Commonwealth Statistician and Actuary. In Appendix W to its report the committee of exp erts declares that "the unequal effects between States are probably the most embarras·sing consequences of the tariff ", and that the tariff has " materially affected the r elative prosperity of the different States". As indicating the ve1:y marked

difference in the effect of the tariff on different States, the committee points out that the subsidies to production through the tariff are twice as great per head of population in Victoria and Queensland as in Western Australia, South Australia and Tasmania, whilst on the other

hand the costs of protection fall much more heavily on the three latter States. Summarizing its conclusions regarding these States the committee says : " Their taxable capacity is lowered, so that their rates of taxation have to be inc1·eased ; industry is further encouraged to

concentrate in the more fortunate States, and the cumulative effects which follow intensify the inequalities created by the tariff itself".

It was pointed out in ev idence before this Commission that similar disabilities to those imposed upon States depending chiefly on primary production are equally imposed upon the pastoral and agricultural portions of other States. From the constitutional point of view,

however, as regards the relationship of the Commonwealth to the States, I am at the moment concerned with the unequal operation in the

different States, rather than with inequalities as between city and country in the same State: a matter which is probably of quite equal importance.

Constitutional and other causes of inequality.

The constitutional defects that have made these inequalities possible are not obvious. I am, however, strongly of opinion that whilst some disability is inseparable from the position of a weaker member in a Federal partnership, the disabilities have been intensified by (a) the unexpected operation of certain provisious of the Constitution; and (b)

the unexpected expansion of Federal powers and activities. Under the · first of these headings I would include (1) the fact that the Senate has largely failed to function as a States house, having become, after the first few years of Federation a party chamber; (2) the obstacles which have been raised against members of the State legislatures-whose experience should peculiarly fit them to represent the State-seeking election to the

Commonwealth Parliament (Commonwealth Elec toral Act 1902, section 96, and Commonwealth Electoml A ct 19 21, section 2); aJJd (3) the system of appropriating Commonwealth revenue which has beeu adopted ever since the SU'rpltts R evenue Act 1908, and which has pre­

vented there being any surplus revenue for the States unde1' section 94 of the Constitution or under the provisions of the Surplus Revenue Act 1910 or the States Grants Act 1927. ·

Unde.r the second heading a long list of the expansion of Federal .powers and activities migb t be compiled, but I shall quote only a few characteristic examples :-1. The extension of paragraph xxxv. of section 51 of the Constitu­

tion to cover almost any form of industrial dispute in almost any kind of industry anY'vhere in the Commonwealth.

1197

296

2. The extension