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§ 386. “Nothing in this Constitution Prohibits a State from Granting.”

These words qualify the provisions of sec. 90, which otherwise would prohibit a State from granting any aid or bounty which came within the description “bounty on the production or export of goods.” If the State is not prohibited from granting certain bounties, it must follow that it is not prohibited from legislating for that purpose, and therefore that to that extent an exception is made to the exclusive nature of the power of the Federal Parliament.

It is submitted that the wide words, “nothing in this Constitution prohibits,” do not exempt such grants of bounties from the provisions of the Constitution generally, but only from those prohibitions which relate specifically to bounties. The declaration that the Constitution does not prohibit a State from granting certain bounties does not mean that such bounties may not be unlawful if they do not comply with the


  ― 842 ―
requirements of the Constitution, or of federal statutes, in other respects. These particular bounties are excluded, qua bounties, from all the constitutional prohibitions against granting bounties; but they are not exempted from the whole ambit of the Constitution.

Suggestions were made throughout the debate that State bounties might be unconstitutional, without express provision to that effect, on the ground that they derogated from freedom of trade among the States. (See, for instance, Conv. Deb., Adel., pp. 840 seqq.; Conv. Deb., Melb., pp. 910 seqq.) It is extremely doubtful, however, whether a local encouragement to industry could ever be held to be a violation of the constitutional provision for freedom of trade. It might, indeed, and often would be a derogation from equality of trade, and therefore be unfederal; but it is hard to say that encouragement by a State of its own industries, by means of bounties on production or export, can interfere with the freedom of inter-state or foreign trade. (See notes to sec. 92.)

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