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§ 387. “Any Aid to or Bounty on Mining for… Metals.”

It was not contended at the Convention that aids to the development of mineral resources—at least as regards metals—would be likely to interfere with equality of trade. The sums so spent at present are chiefly in the way of rewards for the discovery of gold-fields. It was suggested at the Adelaide Convention that these payments might be held to be bounties on the production of goods. (Conv. Deb., Adel., pp. 843, 850.) The chief reason for inserting this provision seems to have been to remove doubts on this point; though of course the words have, and were intended to have, a wider scope. (See Conv. Deb., Melb., p. 966.)

As regards bonuses for mining discoveries, it is submitted that they could not, in any case, be held to be “bounties on the production of goods.” The bounty contemplated by the section is a sum paid to the producer in respect of the goods produced; and even admitting that mining is the “production of goods” within the meaning of the Constitution, it is clear that a reward paid for discovery is essentially different from a reward paid for production. It is submitted, therefore, that rewards for discovery do not come within the meaning of a bounty, and do not need the protection of this section; but may be given in respect of any industry.

The reasons for limiting the exemption in favour of mining bounties to “gold, silver, and other metals” is stated by Mr. O'Connor (Conv. Deb., Melb., p. 965).

“The clause as it stands was the result of a long discussion in Adelaide. It was held that bounties granted for the production of metals stood in a different position altogether from bounties granted on the production of goods which might be the objects of commerce between different States. It is because a bounty on the production of metals would have no effect on the price that this clause was agreed to..... The reason why you are not allowed to give a bounty on butter, or any other article of that kind produced in a State, is because the bounty would interfere with the price and the sale in commerce between the States, and exactly the same consideration would apply to a mineral like coal, which is the subject of sale.”

The distinction thus made, between bounties which affect and which do not affect the price of a commodity the subject of inter-state commerce, is a sound one; but the line drawn in the section, between metals and non-metals, is hardly so satisfactory. As regards gold and silver on the one hand, and coal on the other, it applies well enough; but it does not seem clear why the price of such a metal as iron—which, if produced in any State, would be distinctly an article of inter-state commerce—might not be affected by bounties almost as much as the price of coal.




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