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§ 385. “Exceptions as to Bounties.”

THE BOUNTY QUESTION.—The question of State bounties—as clearly appears from the discussions in the Convention—bears a close analogy to the question of discriminating railway rates. Both bounties and discriminating rates may have a lawful or an unlawful purpose. They may be used purely for the development of the resources of a State, or they may be used te create unfair and unfederal competition with the trade of another State. The Convention was therefore not satisfied with the absolute prohibition of bounties, any more than with the absolute prohibition of preferences; they wished to protect purely developmental bounties, while forbidding unfederal bounties. The difficulty was, however, to frame a definition. Bounties on mining for metals were, without much dispute, accepted as developmental; but as regards other bounties, no definition was possible, and the matter was left to the decision of the Federal Parliament in much the same way as the question of unfederal rates is left to the Inter-State Commission.

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