§ 423. “An Inter-State Commission.”

The establishment of an Inter-State Commission for the Commonwealth was directly suggested by the Inter-State Commerce Commission created in the United States by an Act of Congress in 1887; but in some respects it bears a closer resemblance to the Commission constituted by the English Railway and Canal Traffic Act, 1888 (51 and 52 Vic. c. 25). The functions of the American Inter-State Commerce Commission were in turn based to some extent on those of the English Railway Commissioners appointed under the Regulation of Railways Act, 1873 (36 and 37 Vic. c. 48); and the original prototype of all these commissions is the Committee of the Queen's Privy Council, familiarly known as “the Board of Trade”—that very “Committee on Trade and Plantations” which in 1849 devised the first crude scheme of Australian Federation (see p. 83, supra). A short account of the English and American Commissions thus formed will help to an understanding of the nature of the Inter-State Commission, and the part which it is intended to play in this Constitution.

ENGLISH COMMISSIONS.—The idea of a railway commission dates back as far as 1840. “In that year powers were given to the Board of Trade not unlike those now exercised by the Massachusetts Railroad Commission [i.e., powers to report and secure publicity]. These powers were further defined in 1842. The Board of Trade was as well adapted to the work as any body then existing. It had for years past performed similar functions in connection with shipping. It failed where the Massachusetts Commission succeeded, not because of a difference in the law, but because the English public sentiment with regard to railroads was not sufficiently active to give such a body the necessary moral support to make up for lack of legal authority.” (Hadley, Railroad Transportation, p. 171.) A railway Commission was appointed in 1844 with more specific powers, but the following year it “died of too much work and too little pay.” It was succeeded in 1846 by another abortive Commission with no powers at all, which “died of too much pay and too little work.” (Id.)

The Railway and Canal Traffic Act, 1854 (17 and 18 Vic. c. 31), which first made definite provision against “undue preferences,” and the withholding of “reasonable facilities” for through traffic (see Notes, § 430, infra), had been framed with a view to submitting questions arising under it to the Board of Trade. By the influence of the railway companies, it was so amended in the House, that these questions came under the jurisdiction of the Court of Common Pleas. Many of the questions raised, however, were of a technical character with which the Court declined to grapple, and in consequence the remedial scope of the Act was seriously narrowed.

At last, by the Regulation of Railways Act, 1873 (36 and 37 Vic. c. 48), this jurisdiction was transferred to Railway Commissioners, with judicial powers to hear and determine complaints arising under the Act of 1854 (sec. 6). The Commissioners were empowered, and at the request of a party were required, to state a case for the Court of Appeal upon any question of law; but otherwise their decisions were final.

“The Railway Commission was a Court. Not an executive body, but to all intents and purposes a court of law. And in establishing this new Court, in addition to those already existing, Parliament had two ends in view: (1) To have a tribunal which would and could act, when others would or could not. (2) To avoid the expense, delay, and vexation incident to litigation under the old system. Neither end was well fulfilled.” (Hadley, Railroad Transportation, p. 173.) The chief reasons for failure seem to have been that the jurisdiction of the Commission was too restricted, and that it had no executive power to enforce its decrees.

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On the face of the Act of 1873, the decisions of the Commission, as to what were questions of fact or questions of law, appeared to be final. But by writ of mandamus from a court of appeal the decision on this point could at once be taken out of the hands of the Commission by compelling them to state a case, which could then be made the subject of action in the higher court. So this important power was made of no effect.

By the Railway and Canal Traffic Act, 1888 (51 and 52 Vic. c. 25), the Railway Commissioners were replaced by the Railway and Canal Commission, with greatly enlarged jurisdiction, and with power to award damages to complainants. Sec. 17 gave an appeal from the decisions of the Commission to the Court of Appeal, “but not on any question of fact or locus standi;” and provided that the Commission should not be restrained by prohibition, injunction, certiorari, or otherwise.

THE AMERICAN INTER-STATE COMMERCE COMMISSION.—“In the United States, before the passing of the Inter-State Commerce Act, attempts had been made in many of the States to deal with the problem of railway rates by means of Commissions. Some of these Commissions were empowered to establish rates; others (the most successful of which was the Massachusetts Railroad Commission) had little or no power to act, but were simply established for the sake of securing publicity.” (Hadley, Railroad Transportation, p. 136.)

In 1887, the Inter-State Commerce Act was passed by Congress. The provisions of that Act dealing with preferences and discriminations are dealt with in the Notes to sec. 102; here we are only concerned with the constitution and general powers of the Inter-State Commerce Commission created by the Act. Sec. 11 establishes the Commission, and provides for the appointment and tenure of its members. Sec. 12 authorizes the Commission to inquire into the management of the business of “all common carriers subject to the provisions of this Act” (i.e., all common carriers engaged in inter-state or foreign commerce), to keep itself informed as to the manner and method in which such business is conducted, and to obtain from such carriers full and complete information necessary to enable the Commission to perform the duties and carry out the objects for which it was created. The Commission is further authorized to require the attendance of witnesses and production of documents, and to invoke the aid of the federal courts in case of disobedience to its summons. Sec. 13 provides that any person complaining of any act done by a carrier in contravention of the Act may apply to the Commission by petition. The Commission is then to call upon the carrier to satisfy the complaint, or answer it. If the carrier does not satisfy the complaint, or if there appears to be reasonable ground for investigating the matters complained of, it is the duty of the Commission to investigate them. The Commission may also investigate any complaint forwarded by the Railroad Commission of any State, or may institute any inquiry on its own motion.

It is the duty of the Commission to make reports of all investigations, including the findings of fact on which its conclusions are based, and its recommendations, if any, as to what reparation should be made by the carrier to any persons injured; and such findings are in all judicial proceedings prima facie evidence as to the facts found. (Sec. 15.) If the Commission is satisfied that any carrier has violated the Act, or that any party has sustained injury by such violation, it must forward to the carrier a copy of its report, with a notice to desist from such violation, or to make reparation, or both. (Sec. 15.) If a common carrier violates or disobeys any order of the Commission, it is the duty of the Commission, and lawful for any person interested, to apply in a summary way, by petition, to the proper Circuit Court, alleging such violation or disobedience; and the Court must hear and determine the matter speedily, as a court of equity, but without formal pleading or proceedings, and in such manner as to do justice, and may restrain the carrier by injunction or other process, mandatory or otherwise, and may enforce such process by attachment or fine, and may order the payment of costs. When the subject in dispute is of the value of $2000 or more, either party may appeal to the Supreme Court. (Sec. 16.)

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The constitutionality of the gift of these powers to the Commission rests entirely upon the power to “regulate commerce,” and has been the subject of much litigation. It has been clearly laid down that the Commission is a purely executive body, and neither judicial nor legislative. “It cannot be judicial, for its members are not appointed to hold office during good behaviour.” (Prentice and Egan, Commerce Clause, p. 289; citing Kentucky Bridge Co. v. Louisville, &c., Co., 37 Fed. R. 567.) In Inter-State C.C. v. Brimson, 154 U.S. 447, it was argued that the power of investigation to determine whether an offence had been committed was essentially of a judicial nature, and could not be constitutionally exercised by the Commission. The majority of the Court held that the power to investigate and to summon witnesses was an executive power, which was validly vested in the Commission. It seems, however, that an enquiry as to the past—whether rates already collected are reasonable—is judicial (Inter-State C.C. v. Cincinnati, &c. Co., 167 U.S. 479); and such an enquiry is perhaps beyond the powers of the Commission (Prentice and Egan, Com. Cl. p. 390).

That the Commission is not a legislative body is equally clear. “Congress has not conferred upon the Commission the legislative power of prescribing rates, either maximum or minimum or absolute. As it did not give the express power to the Commission, it did not intend to secure the same result indirectly by empowering the tribunal to determine what in the past was reasonable and just, whether as maximum, minimum, or absolute, and then enable it to obtain from the courts a peremptory order that in future the railroad companies should follow the rates thus determined to have been in the past reasonable and just.” (Inter-State C.C. v. Cincinnati, &c., R. Co., 167 U.S. 511; following Cincinnati, &c., R. Co. v. Inter-State C.C., 162 U.S. 184. Followed in Inter-State C.C. v. Alabama Midland R. Co., 168 U.S. 144.)

The American Commission is a corporate body, with power to sue and be sued in the federal courts. (Texas and Pacific R. Co. v. Inter-State C.C., 162 U.S. 197.)

THE INTER-STATE COMMISSION.—In this Constitution it was deemed advisable not to rely upon the trade and commerce power for the right to establish an Inter-State Commission, but to provide for its establishment in the Constitution itself. The first clause framed for this purpose was merely an enabling one, to remove any doubt that might exist as to the power of the Parliament to constitute such a Commission, with powers of adjudication and administration. But at Melbourne the case assumed a somewhat different complexion. The contest whether the Parliament or the Court was the proper judge of what constituted an unreasonable preference was compromised by referring the question of reasonableness absolutely to the Inter-State Commission. The Commission thus assumed the form of an arbiter between the States, exercising its judgment independently of Parliament; and it was accordingly determined not merely to empower, but to require the Parliament to execute it, and the independence of its members was adequately secured.

But although the establishment of the Inter-State Commission is directed by the Constitution itself, no powers are given to it by the Constitution. It is to have such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance of the law relating to inter-state and foreign trade and commerce. In one respect, however—namely, as regards the control of railway rates—the legislative power given to the Parliament cannot be carried into effect except through the agency of the Commission; so that whenever legislation under sec. 102 is resorted to, the power to adjudge a preference or discrimination be to undue or unreasonable, or unjust to a State, cannot be assigned to any other tribunal.

The Inter-State Commission thus provided for has points of resemblance to and difference from the Inter-State Commerce Commission in America and the Railway and Canal Commission in England. As an administrative body, to supervise the execution and prevent the violation of laws relating to inter-state and foreign commerce, it chiefly resembles the American Commission; as a body which is to have power to adjudicate, and whose decisions are to be final on questions of fact, it resembles the English Commission.

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The powers of adjudication which may be given to the Inter-State Commission, and which cannot be given to any other body, mark a wide distinction between it and its American prototype. The American Commission can investigate and prosecute, but it cannot adjudicate; it is wholly dependent on the courts to confirm and enforce its decrees. Even its findings on fact are only prima facie evidence, which may be rebutted before the court. But though the powers which may be given to the Australian Commission are far wider than those which have been given to the American Commission, they are not so wide as those which may be given to the American Commission, if Congress chooses. The powers of the Australian Commission cannot exceed the limits prescribed by the Constitution itself. The Parliament cannot give it any powers except those of adjudication or administration, or authorize it to disregard the financial responsibilities incurred by a State, or make its decisions final on matters of law. The provisions of the Australian Constitution, by defining the scope of the Commission, limit the extension of that scope. On the other hand Congress, which passed the Inter-State Commerce Act, could if it wished pass an Act giving it widely-extended powers; could constitute the Commission in such a way that it might exercise judicial powers; and could even (so far as this did not involve a delegation of legislative power—see Prentice and Egan, pp. 309–313) empower the Commission to fix rates.

STATE RAILWAYS.—There is one important respect in which, owing to the difference in Australian conditions, the duties of the Inter-State Commission will differ widely from those of the English and American Commissions. In Australia, nearly the whole of the railways are owned by the Governments of the States; in England and America they are owned almost wholly by private corporations. The American Inter-State Commerce Commission is an arbiter between innumerable competing or monopolizing railway companies on the one hand, and the public on the other hand. It is only indirectly and occasionally that it becomes an arbiter between the States. But in Australia the railway companies are the States; and the Inter-State Commission—so far as railways are concerned—will be chiefly an arbiter between the States. In one aspect this circumstance will immensely simplify the work of the Commission. It will not have to cope with all the secret rebates and drawbacks, all the personal discriminations to favoured shippers, all the ingenious devices, born of the strain of commercial competition, for the purpose of evading the law. The competing interests will be fewer and less complex, and governments may be expected to obey at least the letter of the law. But if simplified in one way, the work of the Commission will be more responsible, and perhaps more difficult, in another. If the competing interests are fewer, they will be correspondingly greater, and will perhaps be involved with large political issues. The chief object of establishing the Commission was to secure an impartial and non-political tribunal to interpret and administer the laws of the Federal Parliament relating to rates on State railways. (See Notes to sec. 102.)