§ 426. “The Parliament May.”

This section, though enabling in form, is really restrictive in effect. It was held in Inter-State C.C. v. Brimson, 154 U.S. 447, that the Congress of the United States has plenary power, subject to the limitations imposed by the Constitution, to prescribe the rule by which commerce among the several States was to be governed; and it was said to be indisputable that the prohibition of unjust charges, discriminations, or preferences by carriers engaged in inter-state commerce was a proper regulation. In this Constitution, State railways are expressly made subject to the trade and commerce power; so it would appear that the power to prohibit unjust charges would exist independently of this section.

The object of the section is partly to ensure the existence of such powers; but chiefly to ensure their limitation. At Adelaide (see Historical Note) the clause was originally drawn in a restrictive form; and when it was afterwards altered at Melbourne to an enabling form, it was hedged round with the restrictions, express and implied, contained in this section and sec. 104.

The express limitations are:—

  • (1.) That due regard must be had to the financial responsibilities incurred by any State in connection with the construction and maintenance of its railways.
  • (2.) That no preference or discrimination shall be taken to be undue and unreasonable, or unjust to any State, unless so adjudged by the Inter-State Commission.
  • (3.) That a rate upon a State railway cannot be declared unlawful if it is deemed by the Inter-State Commission to be necessary for the development of the territory of a State, and if the rate applies equally to goods within the State and to goods passing into the State from other States.

The implied limitations seem to be:—

  • (1.) That the Parliament cannot, upon State railways, forbid any charge which is not either a preference or a discrimination.
  • (2.) That the Parliament cannot forbid a preference or discrimination except on the ground that it is undue and unreasonable, or unjust to a State.