§ 452. “The Parliament of a State may Surrender.”

A State, through the legislative action of its Parliament, may surrender any part of its territory to the Commonwealth. The Commonwealth, through the Federal Parliament, may accept the surrendered territory, which thereupon becomes subject to its exclusive jurisdiction.

This provision was contained in the Bill of 1891, and seems to have had reference to two other provisions of that Bill:—namely, Clause 53-ii., Chap. I., which, following the words of the Americal Constitution, gave the Federal Parliament exclusive power with respect to the government of any territory “which may by surrender of any State or States and the acceptance of the Parliament become the seat of Government of the Commonwealth,” and the exercise of like authority over all places acquired by the Commonwealth with the consent of a State for public purposes; and Clause 3, Chap. VI., which empowered the Parliament to make laws for the provisional government of any territory surrendered by the State to or accepted by the Commonwealth.

The Bill of 1891 thus contemplated two kinds of territory which the Commonwealth might acquire from a State by surrender and acceptance: namely, (1) territory surrendered to the Federal Government for the special purpose of the seat of Government, or other public purposes; and (2) territory surrendered, to be provisionally administered by the Federal Government until the time should be ripe for its establishment as a new State or States. Between these two kinds of federal territory the American authorities show that there is a fundamental difference. Territory ceded to the “exclusive jurisdiction” of the Federal Government for special purposes cannot be erected by the Federal Government into new States, or given anything but purely municipal powers of self-government. Exclusive jurisdiction does not necessarily mean unlimited jurisdiction; the Federal Government cannot delegate this exclusive power to a local legislature—though it can, by ceding the territory back to the State from which it was obtained, or to some other State, extinguish the exclusive power altogether. (Stoutenburgh v. Hennick, 129 U.S. 141; Burgess, Pol. Sci. II. p, 160; Von Holst, Const. Law, p. 173.) On the other hand, territory ceded to the Federal Government to be organized under a territorial Government may be so organized, and may, in the discretion of the Federal Legislature, be erected into a State. (Burgess, Pol. Sci. II. p. 161.)

The two kinds of territories were clearly contrasted by Marshall, C.J., in Loughborough v. Blake, 5 Wheat. at p. 324, when he distinguished between “a part of the society which is either in a state of infancy, advancing to manhood, looking forward to complete equality so soon as that state of manhood shall be attained, as is the case with the Territories; or which has voluntarily relinquished the right of representation, and has adopted the whole body of Congress for its legitimate government, as is the case with the District.”

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Whether this clause was primarily designed to meet the case of the seat of Government, and other places surrendered for public purposes, or whether it was intended to apply to territories generally, there is nothing in the debates to show. Even without this clause, the two other provisions, quoted above, would have clearly implied a power to acquire both kinds of territory; and this clause was probably added to remove any doubt that might exist as to whether the States — not having had, before Federation, the sovereign power of ceding territory—could do so without an express grant of power.

Under the Constitution as it now stands the acquisition of territory for the seat of Government seems to be provided for by sec. 124, and the power to acquire territorial possessions by surrender and acceptance seems sufficiently implied by sec. 122. This section, however, will enable the Commonwealth to acquire territory for special purposes by negotiating with the States, and without the necessity for the exercise of its power of eminent domain under sec. 51—xxxi. Territory thus acquired for special public purposes cannot be erected into a State or granted any but purely municipal powers of self-government; nor can its inhabitants be given any rights which, under the Constitution, belong only to the people of the States. (See authorities cited supra.)

States may levy charges for inspection laws.

112. After uniform duties of customs have been imposed, a State may levy453 on imports or exports454, or on goods passing into or out of the State, such charges as may be necessary for executing the inspection laws455 of the State; but the net produce of all charges so levied shall be for the use of the Commonwealth; and any such inspection laws may be annulled by the Parliament of the Commonwealth.

UNITED STATES.—No State shall, without the consent of Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts laid by any State on imports or exports shall be for the use of the Treasury of the United States, and all such laws shall be subject to the revision and control of the Congress. (Const. Art. I., sec. X. sub-s. 2.

HISTORICAL NOTE.—Clause 13 of Chap. V. of the Commonwealth Bill of 1891 was as follows:—

“A State shall not impose any taxes or duties on imports or exports, except such as are necessary for executing the inspection laws of the State; and the net produce of all taxes and duties imposed by a State on imports and exports shall be for the use of the Commonwealth; and any such inspection laws may be annulled by the Parliament of the Commonwealth.”

At the Adelaide session, the same provision was adopted, but with the introductory words “After uniform duties of customs have been imposed,” and with the substitution of “imposts or charges” for “taxes or duties.” At the Melbourne session, a suggestion by the Legislative Council of New South Wales to omit the second part of the clause was negatived. Mr. Isaacs pointed out that, according to American decisions, the prohibition did not apply to inter-state trade, and would not affect the police powers of the States. A question was raised by Mr. Henry whether the clause applied to wharfage rates, and whether marine boards and harbour trusts would be affected. Mr. Barton replied that charges for services were not imposts. Mr. Glynn proposed to add, after “inspection laws of the State,” the words (suggested by the Parliament of Tasmania):—“Or by way of payment for services actually rendered in improvement or maintenance of ports or harbours or in aid of navigation.” Mr. Barton thought the amendment dangerous, and it was withdrawn for further consideration. (Conv. Deb.,

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Melb., pp. 646–52.) Before the first report, the clause was thrown into the enabling, instead of the prohibitive form—the prohibition being already contained in secs. 90 and 92. After the fourth report the clause was further amended by the addition, after “imports or exports,” of the words “or on goods passing into or out of the State.”