previous
next

7. Powers of the Parliament.

Legislative powers160 of the Parliament.

51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government161 of the Commonwealth with respect to:—

UNITED STATES.—The Congress shall have power:—Art 1., sec. 8. CANADA.—It shall be lawful for the Queen, by and with the advice and consent of the Senate and House of Commons, to make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater certainty, but not so as to restrict the generality of the foregoing terms of this section, it is hereby declared that (notwithstanding anything in this Act) the exclusive legislative authority of the Parliament of Canada extends to all matters coming within the classes of subjects next hereinafter enumerated, that is to say:—B.N.A. Act, 1867, sec. 91.

HISTORICAL NOTE.—In the Commonwealth Bill of 1891, the general words of this section were:—“The Parliament shall, subject to the provisions of this Constitution, have full power and authority to make all such laws as it thinks necessary for the peace, order, and good government of the Commonwealth, with respect to all or any of the matters following, that is to say.” At the Adelaide session, 1897, these words were reproduced, except that the word “laws” was substituted for the phrase “all such laws as it thinks necessary.” At the Sydney session, there was a short debate upon the words “peace, order, and good government.” (Conv. Deb., Syd., 1897, pp. 1035–7.) At the Melbourne session, drafting amendments were made before the first report and after the fourth report.

§ 160. “Legislative Powers.”

This important section, containing 39 sub-sections, enumerates the main legislative powers conferred on the Federal Parliament. They are not expressly described as either exclusive powers or concurrent powers, but an examination of their scope and intent, coupled with subsequent sections, will show clearly that, whilst some of them are powers which either never belonged to the States, or are taken from the States and are


  ― 509 ―
vested wholly in the Federal Parliament to the exclusion of action by the State legislatures, others are powers which may be exercised concurrently by the Federal Parliament and by the State legislatures.

CLASSIFICATION OF POWERS.—The powers conferred on the Federal Parliament may be classified as (1) the new and original powers not previously exercised by the States, such as “Fisheries in Australian waters beyond territorial limits,” “external affairs,” “the relations of the Commonwealth with the islands of the Pacific,” &c.; (2) old powers previously exercised by the colonies and re-distributed, some being (a) exclusively vested in the Federal Parliament, such as the power to impose duties of customs and excise, and the power to grant bounties on the production or export of goods, after the imposition of uniform duties of customs; and others being (b) concurrently exercised by the Federal Parliament and the State Parliaments such as taxation (except customs and excise), trade and commerce (except customs, excise, and bounties), quarantine, weights and measures, &c. The rule of construction is, that the legislative authority of the Federal Parliament with respect to any subject is not to be construed as exclusive, “unless from the nature of the power, or from the obvious results of its operations, a repugnancy must exist, so as to lead to a necessary conclusion that the power was intended to be exclusive;” otherwise, “the true rule of interpretation is that the power is merely concurrent.” (Story, Comm., § 438.)

PLENARY NATURE OF THE POWERS.—An important point to consider is whether the Legislative powers vested in the Federal Parliament are to be regarded as plenary, absolute, and quasi-sovereign, or whether they are merely entrusted to the Federal Parliament as an agent of the Imperial Parliament, so as to come within the effect of the maxim delegatus non potest delegare (Broom's Leg. Max. 5th ed. p. 840), according to which a person or body to whom an office or duty is assigned by law cannot lawfully devolve that office or duty on another unless expressly authorized. The distinction between the two classes of powers, plenary and delegated, was discussed by the Privy Council in the case of The Queen v. Burah (1878), 3 App. Ca. p. 889. The question there raised was the legality of a section of an Act passed by the Governor-General in Council of India, conferring on the Lieutenant-Governor of Bengal the power to determine whether the Act or any part of it should be applied to certain districts. The Privy Council, per Lord Selborne, said:—

“Where plenary powers of legislation exist as to particular subjects, whether in an imperial or a provincial Legislature, they may (in their Lordships' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient. The British Statute Book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when constituting the Indian Legislature, contemplate this kind of conditional legislation as within the scope of the Legislative powers which it from time to time conferred.” Per Lord Selborne, The Queen v. Burah, 3 App. Ca. 906.)

At the same time their Lordships were of opinion that the Governor-General in Council could not create in India, and arm with general legislative authority, a new legislative body not created or authorized by the Imperial Act constituting a Council.

In the case of Hodge v. The Queen (1883), 9 App. Ca. 117, the question raised for the decision of the Privy Council was the constitutionality of the Liquor License Act (1877), ss. 4, 5, by which the Provincial Legislature of Ontario gave authority to a Board of Commissioners to enact regulations for the government of taverns. The appellant had been convicted for a breach of one of the regulations passed by the Commissioners, and he appealed on the grounds (inter alia) that the British North America Act, 1867, conferred no authority on the Provincial Legislatures to delegate their powers to Commissioners or any other persons; that a Legislature committing the power to make regulations to agents or delegates thereby effaced itself; and that the power conferred by the Imperial Parliament on the local Legislatures could be exercised in full by these bodies only, according to the maxim delegatus non potest delegare. The Privy Council


  ― 510 ―
in considering the legislative power of the Provincial Legislatures pointed out the difference between their constitution and that of the Legislative Council of India.

“They are in no sense delegates of, or acting under any mandate from the Imperial Parliament. When the British North America Act enacted that there should be a legislature for Ontario, and that its Legislative Assembly should have exclusive authority to make laws for the Province, and for provincial purposes in relation to the matters enumerated in sect. 92, it conferred powers not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by sec. 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme, and has the same authority as the Imperial Parliament, or the Parliament of the Dominion, would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make by-laws or resolutions as to subjects specified in the enactment, and with the object of carrying the enactment into operation and effect. It is obvious that such an authority is ancillary to legislation, and without it an attempt to provide for varying details and machinery to carry them out might become oppressive, or absolutely fail. The very full and very elaborate judgment of the Court of Appeal contains abundance of precedents for this legislation, entrusting a limited discretionary authority to others, and has many illustrations of its necessity and convenience. It was argued at the bar that a legislature committing important regulations to agents or delegates effaces itself. That is not so. It retains its power intact, and can, whenever it pleases, destroy the agency it has created, and set up another, or take the matter directly into its own hands. How far it shall seek the aid of subordinate agencies, and how long it shall continue them, are matters for each legislature, and not for Courts of Law, to decide. (Per Sir B. Peacock: Hodge v. The Queen, 9 App. Ca. 132.)

Applying the principles established in the foregoing cases to the Constitution of the Commonwealth, we may draw the conclusions: (1) As the words of the Imperial Act, creating the Federal Parliament and conferring on it legislative powers, are similar in substance and intent to those of the British North America Act, conferring exclusive legislative authority, it follows that the Federal Parliament is in no sense a delegate or agent of, or acts under any mandate from, the Imperial Parliament. (2) Its authority within the limits prescribed by the Constitution are as plenary and ample as the Imperial Parliament in its plenitude possessed and could bestow. (3) Within those limits the Federal Parliament can do what the Imperial Parliament could do, and among other things it can entrust to a body of its own creation power to make by-laws and regulations respecting subjects within its jurisdiction.

LIMITATIONS OF FEDERAL LEGISLATIVE POWER.—As we proceed with an analytical examination of section 51 it will be seen that whilst several of its sub-sections contain grants of legislative power in general and unlimited terms, the grants conveyed by other sub-sections are qualified or subject to restraints. These are known as constitutional limitations. Take sub-section 1. There, the Federal Parliament is assigned power to legislate respecting trade and commerce “with other countries and among the States;” the words quoted are words of limitation excluding from Federal control the internal commerce of each State. This is obviously a federal limitation, justifiable by considerations of federal policy. It is not founded on any distrust of the Federal Legislature; it is not designed for the protection of individual citizens of the Commonwealth against the Federal Legislature. It is, in fact, one of the stipulations of the federal compact. So the condition annexed to the grant of taxing power is, that there must be no discrimination between States in the exercise of that power. This, again, is not a limitation for the protection of private citizens of the Commonwealth against the unequal use of the taxing power; it is founded on federal considerations; it is a part of the federal bargain, in which the States and the people thereof have acquiesced, making it one of the articles of the political partnership, as effectually as other leading principles of the Constitution. Another federal limitation annexed to a grant of legislative power is that bounties granted by the Federal Parliament “shall be uniform throughout the Commonwealth.” The authority of the Federal Parliament over bounties is fettered in the same manner and for the same reasons that its authority to tax is fettered.




  ― 511 ―

Attention having been drawn to federal limitations to be found in grants of power contained in sec. 51, the subject may be here further elucidated by the statement that sec. 51 is not the only section of the Constitution in which limitations to the grants therein made are to be found. Logically, if not for perspicuity, the limitation of a power ought to be associated with or in proximity to the conveyance of power. But this rule is not uniformally observed in the drafting of Constitutions. Thus the grant of power over trade and commerce in sec. 51-i. is subject to further qualifications and restrictions contained in subsequent sections. By sec. 92, the Federal Parliament, in common with the State Parliaments, is restrained from interfering with the freedom of inter-state trade and commerce, after the imposition of uniform duties of customs. By sec. 98, the Federal Parliament is unable to pass commercial regulations which may give preference to one State over another State. In like manner the taxing power is subject to other qualifications and restrictions. The Federal Parliament cannot impose a tax which would operate in derogation of the freedom and equality of inter-state trade and commerce; secs. 92 and 98. It cannot impose a tax on property of any kind belonging to a State; sec. 114.

The first part of sec. 115 declares that the Commonwealth (Federal Parliament) shall not make a law establishing any religion. This is an absolute prohibition, an absolute denial of power, which stands in contrast to a limitation or cutting down of a power which is granted. There is, in the Constitution, no express or implied grant of power over religion which the first part of this section can possibly qualify or limit (see Note § 462). The last part of the section, providing that “no religious test shall be required as a qualification for any office or public trust under the Commonwealth,” is a true and legitimate limitation of a power granted by sec. 69; yet that limitation cannot be described as a federal limitation, warrantable and explainable by federal considerations. It is a notable instance of a national, as compared with federal, limitation. It is an example of the limitation of power founded on what Mr. Lefroy calls “distrust of Legislatures.” (Law Quarterly Review, July, 1899, p. 286. See also Lefroy, Legisl. Power in Canada, Introd. p. xlv.)

NATURE AND DISTRIBUTION OF POWERS.—It was competent for the people to invest the Federal government with all the powers they might deem proper and necessary, to extend or restrain these powers, and to give them a paramount authority. (Martin v. Hunter's Lessee, 1 Wheat. 304; Baker, Annot. Const. p. 15.)

The Federal government can claim no powers not granted to it by the Constitution; powers actually granted must be such as are given expressly or by necessary implication. The instrument is to have a reasonable construction according to the import of its terms; where a power is expressly given in general terms it is not to be confined to particular cases, unless that construction grows out of the context or by necessary implication. (Id.)

The Constitution deals in general language. It does not provide for minute specifications of powers or declare the means by which those powers shall be carried into execution. (Id.)

“I now pass to that which is, perhaps, the most delicate and most important part of this measure, the distribution of powers between the central government and the local authorities; in this, I think, is comprised the main theory and constitution of Federal Government; on this depends the principal working of the new system; the real object which we have in view is to give to the central government those high functions and almost sovereign powers by which general principles and uniformity of legislation may be secured on those questions that are of common import to all the provinces, and at the same time to retain for each Province such an ample measure of municipal liberty and self-government as will allow, and indeed compel, them to exercise those local powers which they can exercise with great advantage to the community.” (Lord Carnarvon, in presenting the Canadian Constitution to the House of Lords, 1867.)

§161. “Peace, Order, and Good Government.”

These, or words nearly similar, have been used in most of the Constitutional Act passed by the Imperial Parliament, conferring local legislatures on British colonies. The Act 14 Geo. III. c. 83, s. 12, authorized the legislative body appointed thereunder to make


  ― 512 ―
ordinances for “the peace, welfare, and good government” of the province of Quebec. The Act 31 Geo. III. c 31 established legislatures for Upper Canada and Lower Canada respectively, with power to make laws for “the peace, welfare, and good government” thereof. The Act 3 and 4 Vic. c. 35, which united the Upper and Lower Provinces established a Parliament of two Houses with power to make laws for “the peace, welfare, and good government” of Canada. The British North America Act, 1867, (30 and 31 Vic c. 3) gave the Parliament of the Dominion of Canada power to make laws for “the peace, order, and good government of Canada,” in relation to matters not exclusively assigned to the Provinces. By the Act of 9 Geo. IV. c. 83, s. 20, 1829, his Majesty was empowered to constitute, in the colonies of New South Wales and Van Diemen's Land respectively, Councils to make laws for “the welfare and good government” of the said colonies. By the Act 10 Geo. IV. c. 22, 1829, his Majesty was enabled to authorize any three or more persons resident in the settlement then known as Western Australia, to make and ordain laws, institutions and ordinances for “the peace, order, and good government” of the settlement. The Act 3 and 4 Vic. c. 62, s. 3, 1840, authorized Her Majesty to appoint a Legislative Council in any colony or colonies which might be erected in any islands comprised within the dependencies of New South Wales, and such Council was to be authorized to make laws for “the peace, order, and good government” of such colony. By 5 and 6 Vic. c. 76, 1842, there was created a legislative Council in and for New South Wales, with power to make laws for “the peace, welfare, and good government” of the colony. In the Act 13 and 14 Vic. c. 59, s. 14, 1850, the Governors and Legislative Councils of Victoria. Van Diemen's Land, South Australia, and Western Australia, established, or to be established under that Act, were authorized to make laws “for the peace, welfare, and good government” of the said colonies. By the Constitution Act of New South Wales, scheduled to 18 and 19 Vic. c. 54, a new legislature was created to make laws for the “peace, welfare and good government” of the colony. The Victorian Constitution Act, scheduled to 18 and 19 Vic. c. 55, established a legislature to make laws in and for Victoria in “all cases whatsoever.” The Constitution Act of Tasmania (then Van Diemen's Land) of 1st Nov., 1854, called into existence a new legislature which was declared “to have and to exercise all the powers and functions of the Legislative Council” which it superseded. The Constitution Act of South Australia, No. 2, 1855-6, was similarly worded. The Order in Council of 6th June, 1859, creating a legislature in and for the colony of Queensland, authorized it to make laws for the good government of the colony, and to alter or repeal the Order in Council. By the Act to consolidate the law relating to the Constitution of Queensland dated 28th Dec., 1867, it was declared that Her Majesty by and with the advice and consent of the Council and Assembly could make laws for “the peace, welfare, and good government of the colony in all cases whatsoever.”

SIGNIFICANCE OF THE WORDS.—The Federal Parliament has not general power to make laws for “the peace, order, and good government of the Commonwealth,” but only with respect to matters that are specifically enumerated in the section. The question has been raised as to whether the words “peace, order, and good government” may be construed so as to qualify, limit, or restrict the grant of power. Another question has been raised as to whether they will tend to increase, enlarge, or magnify the grant of power. These two questions will be found referred to in the extracts and cases given below.

Reference may be here made to a third question which has been raised, as to whether the words “for the peace, order, and good government of the Commonwealth” will prevent the Federal Parliament from passing a law which may be confined in its operation to a particular State. On this point some assistance may be derived from several leading Canadian cases. In Russell v. The Queen (1882), 7 App. Cas. 829, the Privy Council held that the Canada Temperance Act, 1878, which was passed by the Dominion Parliament, in order to abolish the retail traffic in intoxicating liquor within every provincial area, or local option district, in which a majority of the electors adopted


  ― 513 ―
the Act, was a general law relating to the order, safety, and good morals of the Dominion, and was therefore within the power conferred upon the Dominion Parliament to make laws for “the peace, order, and good government of Canada.” In Huson v. South Norwich (1895), 24 S.C.R. (Can.) p. 146, Strong, C.J., said “It is established by Russell v. The Queen that the Dominion, being invested with authority by section 91 to make laws for the peace, order, and good government of Canada, may pass what are denominated local option laws. But, as I understand that decision, such Dominion laws must be general laws, not limited to any particular Province.”

In the Liquor Prohibition Appeal Case, which came before the Privy Council (1896), App. Ca. 348, these observations of the Chief Justice were quoted by Mr. Haldane, when the following remarks were made:—Lord Watson: “I do not know that they must be general laws, not limited to any particular Province, that they must be for the benefit of the whole of the Provinces.” Lord Herschell: “But to legislate in a matter which is a local matter, for one Province only, and merely say we thought it would be for the benefit of all Canada that Ontario should be made a sober place, would be to my mind legislation about which there would be a good deal of question. I think it is too narrow to say that the law must extend to every Province; but, on the other hand, it must not be local legislation in a particular Province.” Lord Morris: “I think the Chief Justice is only dealing with the local option laws... It is the local option laws, and I think he is strictly right.” (Printed Report of Case, pp. 149-50.)

Mr. Lefroy considers that Mr. Edward Blake's argument on the appeal contains a correct summary of the whole matter:—“You have,” said Mr. Blake, “the powers limited, when you come to the Province, by the area and the objects; provincial area and provincial objects are the scope. I think each one of the provincial powers is indicated in itself to be for provincial purposes. Instead of setting that out generally at the commencement, in each one of the articles it is specifically stated. But you find, on the contrary, unlimited, save by the express exception, general powers both as to scope, area, and objects in the Dominion. There is, therefore, as I submit, nothing whatever to indicate in the least degree that the power of the Parliament of Canada was so limited as to those subjects on which it might enact that it could not, if the welfare of the whole community in its opinion demanded, enact with reference to particular parts of that community, the legislation which the conditions of that part might, in the interest of all, specially-demand. It is quite true that it was hoped and expected, and it was a reasonable hope and expectation, that, as a rule, the legislation would be general, extending over the whole area, the subjects being common. But there is nothing in these powers which prescribes any such limitation, and it is perfectly clear that the peace, welfare, and good government of the whole community may demand, within the undisputed bounds of the legislative powers of the Dominion, an Act of Parliament affecting directly not the whole area, not the whole community, but some part of that community, as to these matters on which the Dominion has power to legislate for all.” (Lefroy, Leg. Pow. in Canada, p. 580.)

“These words are copied from the several Acts of the Imperial Parliament providing for the establishment of legislatures in the various Australian colonies, and are perfectly appropriate when used in reference to the establishment of the legislature which is to possess plenary legislative powers, and have unlimited jurisdiction on all questions relating to the protection of life and property, and the enforcement of contractual rights of every kind; but it is very doubtful if they ought to find a place in connection with the definition and delegation of limited legislative powers which do not include matters relating to the daily protection of life and property, or to enforcement of private rights and obligations in general. It is true that they find a place in the 91st section of the British North America Act, which establishes a federal constitution for Canada; but the primary object of that Act is to limit the powers and jurisdiction of the provincial legislatures, and to vest the residuum of legislative authority in the Dominion of Canada in the federal parliament. The words in question may, therefore, fitly find a place n that Act, and they were relied upon in the case of Attorney-General of Canada v. the Attorney-General of Ontario, which was decided by the Privy Council last year (App. Ca. 1896) to uphold the Act of the Dominion Parliament, which had been challenged on


  ― 514 ―
the ground that it had encroached upon the domain of the provincial legislatures. That decision, in effect, appears to me to be an argument against the insertion of the words in question in connection with the definition and delegation of the legislative powers of the Parliament of the Commonwealth, because they might, in some unforeseen and unexpected controversy, afford ground for an argument in favour of the jurisdiction of the Parliament of the Commonwealth in matters which the several States might claim to be wholly within their own legislative powers. It cannot be contended that they are required for the purpose of giving the Parliament of the Commonwealth full power to legislate with regard to all subjects mentioned in the sub-sections of section 51; and, if they are not required for that purpose, they must inevitably encourage the contention that they are inserted for some additional purpose. But, if their insertion is not intended to add in any way to the powers of Parliament, in relation to the matters mentioned in the sub-sections of section 51, then they violate the canon of drafting, which requires that no unnecessary words should be used in giving expression to the intention of the legislature. They are very properly inserted in section 52, because that section confers upon the Parliament of the Commonwealth plenary and exclusive powers in regard to the several matters mentioned in the sub-sections of that section. But their presence in section 51 tends to create a resemblance in the scope of the powers conferred by the two sections, whereas it would be much more desirable to make the difference in the purport of each section as apparent and emphatic as possible.” (Memorandum by the Hon. A. Inglis. Clark, M.P.. Attorney-General for Tasmania, presented to the Federal Convention, Sydney Session, 1897.)

“I should like to submit for the consideration of the leader of the Convention the question whether the words which the legislature of Tasmania have proposed to omit, might not raise the question whether legislation of the Federal Parliament was in every instance for the peace, order, and good government of the Commonwealth. Take, for instance, navigation laws. Might it not be contended that certain navigation laws, were not for the peace, order, and good government of the Commonwealth, and might there not be litigation upon the point? We are giving very full powers to the Parliament of the Commonwealth, and might we not very well leave it to them to decide whether their legislation was for the peace, order, and good government of the Commonwealth? Surely that is sufficient, without our saying definitely that their legislation should be for the peace, order, and good government of the Commonwealth. I hope the leader of the Convention will give the matter full consideration with a view to seeing whether these words are not surplusage, and whether, therefore, they had better not be left out of the bill altogether.” (Mr. N. E. Lewis, Conv. Deb., Syd., 1897, p. 1037.)

The point submitted for consideration by Mr. Clark and Mr. Lewis did not lead to any debate in the Convention. Mr. Barton stated he had read the reasons through very carefully, and he had been unable to discover that any of the evils which his hon. and learned friend Mr. Clark feared might be expected from leaving those words as they were. The powers were powers of legislation for the peace, order, and good government of the Commonwealth in respect of the matters specified. No construction in the world could confer any powers beyond the ambit of those specified.

In the case Riel v. The Queen, 10 App. Ca. 675, the question was raised as to the validity of a Canadian Act, 43 Vic. c. 25, providing for the administration of criminal justice in the North-west Territories. This Act was passed by the Dominion Parliament under the British North America Act, 1871, 34 and 35 Vic. c. 28, s. 4, which provided that that Parliament might, from time to time, make laws for the administration of peace, order, and good government, of any territory, not for the time being included in any Province. In delivering the judgment of the Privy Council, Lord Halsbury, L.C., said:—

“It appears to be suggested that any provision differing from the provisions which in this country have been made for administration, peace, order, and good government cannot, as matters of law, be provisions for peace, order, and good government in the territories to which the statute relates; and, further, that if a court of law should come to the conclusion that a particular enactment was not calculated as a matter of fact and policy to secure peace, order, and good government, that they would be entitled to regard any statute directed to these objects, but which a court should think likely to fail of that effect, as ultra vires and beyond the competency of the Dominion Parliament to enact. Their lordships are of opinion that there is not the least colour for such a contention. The words of the statute are apt to authorize the utmost discretion of enactment for the attainment of the objects pointed to. They are words under which the widest departure from criminal procedure, as it is known and practised in this


  ― 515 ―
country, have been authorized in Her Majesty's Indian Empire. Forms of procedure unknown to the English common law have there been established and acted upon, and to throw the least doubt upon the validity of powers conveyed by those words would be of widely mischievous consequence.” (10 App. Ca. 678, 1885.)

51. (i.) Trade and commerce162 with other countries, and among the States163:

UNITED STATES.—To regulate commerce with foreign nations and among the several States and with the Indian tribes.—Const. Art. I. sec. 8, subs. 2. CANADA.—The Regulation of trade and commerce.—B.N.A. Act, s. 91-2.

HISTORICAL NOTE.—Earl Grey's Committee of the Privy Council in 1849 proposed to give the General Assembly power with respect to “The imposition of dues or other charges on shipping in every port or harbour” (p. 85, supra). Wentworth's Constitutional Committee in 1853 specified “The coasting trade;” and the Bill attached to Wentworth's memorial in 1857 specified “Navigation of connecting rivers.” (Pp. 91, 94, supra.)

The sub-clause in the Commonwealth Bill of 1891 was worded “The regulation of trade and commerce with other countries, and among the several States.” In Committee, the questions of railway gauges and railway tariffs were discussed. (Conv. Deb., Syd., 1891, pp. 662-70.) The same words were adopted at the Adelaide session, 1897. At the Sydney session, the liquor question was discussed (see Notes, sec. 113). (Conv. Deb., Syd., 1897, pp. 1037-65.) At the Melbourne session, after the second report, the river question was discussed (see Notes, sec. 100). (Conv. Deb., Melb., pp. 1947-90.) After the fourth report, the words “the regulation of,” and the word “several,” were omitted.

§ 162 “Trade and Commerce.”

PRELIMINARY DEFINITION.—Trade means the act or business of exchanging commodities by barter, or by buying and selling for money; commerce; traffic; barter. It comprehends every species of exchange or dealing, either in the produce of land, in manufactures, in bills, or in money, but it is chiefly used to denote the barter or purchase and sale of goods, wares, and merchandise, either by wholesale or retail. (Webster's Internat. Dict.) Commerce means the exchange or buying and selling of commodities; especially the exchange of merchandise on a large scale between different places or communities; extended trade or traffic. (Webster's Internat. Dict.) The courts of the United States have, in a series of decisions, defined commerce to be both intercourse and traffic, and the regulation of commerce to be the prescribing of the rules by which intercourse and traffic shall be governed. (Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196.) The object of investing the Federal Parliament with the power to deal with trade and commerce, was to secure uniform legislation, where such uniformity is practicable, against conflicting State legislation. (Western Union Telegraph Co. v. Pendleton, 122 U.S. 347.) The object is to secure uniformity against discriminating State legislation. (Welton v. Missouri, 91 U.S. 275.) Commerce includes all commercial traffic and intercourse. (Gibbons v. Ogden, 9 Wheat. 1; The Daniel Ball, 10 Wall. 557.) Sale is an ingredient of Commerce. (Brown v. Maryland, 12 Wheat. 419; Leisy v. Hardin, 135 U.S. 100.) It means intercourse for the purpose of trade of all descriptions. (Corfield v. Coryell, 4 Wash. 371.) It comprehends everything that is grown, produced, or manufactured. (Welton v. Missouri, supra.) It extends to persons who conduct it as well as the means and instrumentalities used. (Cooley v. Port Wardens, 12 How. 299.) It includes vessels, railways, and other conveyances used in the transport of merchantable goods, as well as the goods themselves. (The Brig Wilson v. United States, 1 Brock. 423.) It embraces navigation and shipping.


  ― 516 ―
(Cooley v. Port Wardens, supra); including free navigation of the navigable waters of the several States. (Corfield v. Coryell, supra.) It covers the right to improve navigable waters (South Carolina v. Georgia, 93 U.S. 4); and to remove nuisances and obstructions interfering with navigation. (Miller v. Mayor of New York, 109 U.S. 385.) It embraces railways, highways, and navigable waters along and over which commerce flows. (Willson v. Blackbird Creek Marsh Co., 2 Pet. 245.) It includes the freights and fares charged for transport. (State Freight Tax Cases, 15 Wall 232.) It includes passengers. (Passenger Cases, 7 How. 283.) Bills of exchange are instruments of commerce. (Nathan v. Louisiana, 8 How. 73.) Sending a telegraph message is commerce. (Western Union Telegraph Co. v. Alabama, 132 U.S. 472.) The power to regulate commerce is held in the United States to imply the power to construct railways, to promote and carry commerce. (California v. Central Pacific R. Co., 127 U.S. 1. See cases collected, Prentice and Egan's Commerce Clause of the Federal Constitution, U.S. [1898], p. 43.)

The power of the Congress of the United States is “to regulate trade and commerce.” The power of the Parliament of Canada extends to “the regulation of trade and commerce.” In this Constitution the words “the regulation of” have been omitted, and the Federal Parliament has been given power to make laws “in respect of trade and commerce.” It has been held by the Privy Council that the power of the Parliament of Canada to regulate trade does not imply the power to prohibit trade. (Att.-Gen. for Ontario v. Att.-Gen. for Canada [1896], App. Ca. 363; and see note, § 163 infra, “Does Regulation Include Prohibition?”) The omission of the words “the regulation of” can certainly not be held to narrow the scope of the power, and may perhaps in some degree extend it.

AIDS TO THE COMMERCE POWER.—There are several important sections in Chapter IV. of this Constitution, which strongly re-enforce the grant of power over commerce contained in this sub-section. By section 98 the power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State. By section 101 the Federal Parliament is authorized to appoint an Inter-State Commission, with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder. By section 102 the Parliament may, by any law with respect to trade or commerce, forbid, as to railways, any preference or discrimination by any State, or by any authority constituted under a State, if such preference or discrimination is undue and unreasonable, or unjust to any State.

LIMITS OF THE COMMERCE POWER.—The Federal power over commerce is not absolute or universal or unrestricted; it is subject to certain limitations and prohibitions, which will be found enumerated in the next note.)

§ 163. “With Other Countries and Among the States.”

LIMITS OF THE COMMERCE POWER.—The power of the Federal Parliament to legislate concerning trade and commerce, whilst unbounded as regards the subject matter, is limited as regards its area and operation. Unlike the Parliament of Canada, whose commercial power is expressed by the words “trade and commerce,” without qualification, the Parliament of the Commonwealth, like the Congress of the United States, can only deal with trade and commerce “with other countries and among the States.” It therefore embraces inter-state trade and commerce, and foreign trade and commerce, but it cannot invade the domain occupied by the internal trade and commerce of a State. Commerce among the States is traffic, transportation and intercourse, between two points situated in different States. (Wabash, St. Louis and Pacific R. Co. v. Illinois, 118 U.S. 557.) Commerce among the States is commerce which begins in one State and ends in other, and it may pass through one or many States in its operation. (Gibbons v. Ogden, 9 Wheat. 1.) Freight carried from points without a State to points within


  ― 517 ―
that State, or vice versa, is as much commerce among the several States as is freight taken up at points without the State and carried across it to points in other States. (Fargo v. Michigan, 121 U.S. 230.) The regulation of inter-state and foreign commerce is vested in the Federal Parliament, both as against the States and as against the other departments of the Federal Government. (Robbins v. Shelby Taxing District, 120 U.S. 489. See also Notes, § 427, infra.)

In addition to the constitutional limitations of the Federal power over commerce, expressed by the words “with other countries and among the States,” the Federal power is subject to several other limitations and prohibitions. By section 92, trade, commerce, and intercourse among the States become absolutely free on the imposition of uniform duties of customs; so that the Federal Parliament, whilst it may assist and facilitate inter-state freetrade, is disabled from interfering with, or impairing the rule of, inter-state commercial freedom: By section 99 the Commonwealth is prohibited from giving preference to one State over another State, by any regulation of trade, commerce, or revenue.

CONTROL OF DOMESTIC COMMERCE OF STATES.—The control of the internal trade and commerce, which begins and ends in a State, and which does not cross its limits, is reserved exclusively to the State; it is beyond Federal control, and the right of regulating it, in each State, belongs to the State alone. (License Cases, 5 How. 504.) To this exclusive reservation of power over domestic trade and commerce of the States there is one notable exception; they cannot impose duties of excise on commodities produced or manufactured within their borders; the right of imposing duties of excise is exclusively vested in the Federal Parliament. (See sec. 90.)

COMMERCE FURTHER DISCUSSED.—Commerce is said to be the interchange of goods between nations or individuals, and transportation is the means by which it is carried on. There could be no commerce without transportation. (Philadelphia Steamship Co. v. Pennsylvania, 122 U.S. 326.) Actual transportation is the characteristic of inter-state and foreign commerce. The Federal authority over commerce extends to places, such as ports and harbours, in which vessels receive and discharge their frieght; to means and instrumentalities by which commerce is transported, such as ships and railways, and to the subjects of commercial intercourse such as commodities. (Von Holst, Const. Law, pp. 144-146.)

TRANSPORTATION.—Federal control over the transportation of commerce embraces every agency employed in the movement of commerce, by land or by water, such as roads, stage coaches, railways, bridges, ships, navigable waters, ports and harbours. All these are means or instruments by or through which the subjects of commerce are transferred, in order to facilitate exchange and intercourse. A ship is not commerce, but it is one of the chief means by which commerce is conducted. A railroad is not commerce, but it is one of the most important agencies by which commerce is transported. Telegraphs and telephones are instruments of commerce. Foreign or inter-state bills of exchange are instruments of commerce. (Nathan v. Louisiana, 8 How. 73.) The Federal control over commerce necessarily implies control of the means and instrumentalities of commerce. Accordingly it has been decided in the United States that the Federal power over commerce give the Federal legislature authority—

  • To establish or authorize the establishment of a bridge which obstructs the navigation of a river, or to order the removal of such a bridge, if its removal is necessary for the preservation of freedom of commerce. (Pennsylvania v. Wheeling Bridge Co., 18 How. 421; The Clinton Bridge, 10 Wall. 454; Miller v. Mayor of New York, 109 U.S. 385; Bridge Co. v. United States, 105 U.S. 470.)
  • To regulate boats carrying inter-state freight and passengers between two points within the same State. (The Daniel Ball, 10 Wall. 557.)



  •   ― 518 ―
  • To regulate the liability, or immunity from liability, for accidents, of the owners of boats, plying the high seas between two points in the same State. (Lord v. Steamship Co., 102 U.S. 541.)
  • To improve the navigation of ports, harbours, and rivers. (Wisconsin v. Duluth, 96 U.S. 379.)
  • To establish railroads in order to promote inter-state commerce. (California v. Central Pacific R. Co., 127 U.S. 1.)
  • To establish telegraph companies authorized to carry on inter-state telegraphic business. (Pensacola Telegraph Co. v. Western Union Tel. Co., 96 U.S. 1; Western Union Telegraph Co. v. Alabama, 132 U.S. 472.)
  • To regulate liens on vessels. (White's Bank v. Smith, 7 Wall. 646.)
  • To grant corporations carrying on inter-state trade the right of eminent domain through a State. (Winconsin v. Duluth, 96 U.S. 379.)

TRAVEL.—The movement and personal intercourse of individuals engaged in commerce, or entitled to be so engaged, is a branch of commerce. The arrival and departure of passengers from one State to another, and the embarkation and disembarkation of passengers by sea, is also a branch of commerce. (Passenger Cases, 7 How. 283; Welton v. Missouri, 91 U.S. 275; Mobile v. Kimball, 102 U.S. 691.)

THE SUBJECTS OF COMMERCE.—Commodities, ordinarily intended and fit to be exchanged, are the usual subjects of commerce. The question whether an article is or is not a subject of commerce has to be determined by the usages of the commercial world; it does not depend upon the declaration of any State. (Bowman v. Chicago, &c., R. Co. 125 U S. 465; Leisy v. Hardin, 135 U.S. 100.) Passengers from one State to another, or from foreign States to federal jurisdiction, are subjects of the commerce power.

WHAT ARE NOT SUBJECTS OF COMMERCE.—All commodities are not always the subjects of commerce; they, at certain stages, may lose that quality. Of course land, not being transportable, could never become the subject of commerce. At the same time certain things, though capable of being transported and exchanged, do not come within the true definition of commerce. Thus meat, at one time, may be a fit article of commerce; if it becomes putrid it ceases to be merchantable; it loses its commercial quality and passes beyond the domain of the commercial power. Obscene books and noxious drugs, though capable of being exchanged, are not subjects of commerce. (Preston v. Finley, 72 Fed Rep. 850.) Indecent publications and articles may be excluded from Federal mails by Federal authority, and their transportation may be forbidden either by Federal or State authority. The maxim is that there can be no commerce in disease, pestilence, crime, pauperism and immorality. (Per Chief Justice Taney in License Cases [liquor], 5 How. 585; Railroad Co. v. Husen, 95 U.S. 465.) Passengers, goods, or animals infected with disease, and passengers who are known to be criminals, paupers, idiots, lunatics, or persons likely to become a public charge on a State, are not subjects of commerce; hence they may be excluded from a State by State legislation in the exercise of its reserved police power. (See authorities collected, Prentice and Egan, Commerce Clause, p. 56.) As a further illustration, it may be mentioned that a corpse is not property, and is not capable of being a legitimate subject of commerce. (Re Wong Yung Quy, 6 Sawy. 442.) Banks and insurance companies are not commercial institutions. (See Federal Commerce.)

PRODUCTION AND MANUFACTURE.—The growth, production and manufacture of commodities, and their preparation for transit, do not constitute commerce. Commerce only begins where manufacture and production end. (Kidd v. Pearson, 128 U.S. 1.) The mere fact that commodities have been manufactured, and are intended for other States or countries, does not bring them within federal protection and control. (Prentice and Egan, Commerce Clause, p. 55.) Hence a State may forbid the manufacture of commodities such as intoxicating liquors and oleomargarine, provided that such prohibition is not in conflict with the exercise of any other federal power, such as a law offering bounties for production or export. (See note, § 456.)




  ― 519 ―

OCCUPATIONS NOT WITHIN FEDERAL CONTROL.—It has been decided in the United States that the following occupations do not come within federal commerce: the business of a building and loan association, loaning money, dealing in foreign lands, conducting a manufacturing establishment in another State, mining, practicing medicine in connection with the sale of imported drugs.

WHEN FEDERAL CONTROL OVER COMMERCE BEGINS.—Commerce does not come within Federal protection or control until its transportation from one State to another, or from a State to a foreign country, has begun. Even preparation for exportation is not sufficient. The deposit of logs in a river running within one State, in order to ship them into another State, does not mark the beginning of Federal jurisdiction. (Coe v. Errol, 116 U.S. 517; Pace v. Burgess, 92 U.S. 372.) Other cases seem to suggest that inter-state commerce begins with negotiations and contracts looking to transportation among the States (Walling v. Michigan, 116 U.S. 446; Robbins v. Shelby Taxing District, 120 U.S. 489.) When the products of the farm or the forest are collected and brought in from the surrounding country to a town or station serving as an entrepot for that particular region, whether on a river or a line of railroad, such products are not yet exports, nor are they in process of exportation, nor is exportation begun until they are committed to the common carrier for transportation out of the State to the State of their destination, or have started on their ultimate passage to that State. (Per Mr. Justice Bradley in Coe v. Errol, 116 U.S. 517; see, however, note, § 427 infra.)

DURATION OF FEDERAL CONTROL.—As long as the goods are in transitu they remain the subjects of Federal commerce. (The Daniel Ball, 10 Wall. 557.) A transhipment of freight which has once started upon its passage to another State does not break up the carriage so as to bring it within the control of a single State.

INTERRUPTION OF TRANSIT.—Goods and passengers in course of transportation from one State to another do not lose their inter-state character by a temporary stoppage in an intermediate State. Having once started on their passage from a State to a State, they do not break their carriage by a transhipment in an intermediate State, so as to bring them within the taxing power of that State. (The Daniel Ball, 10 Wall. 557.) Where coal was shipped in Pennsylvania by a company to its agents in New Jersey, in which State it was assorted and reshipped to New York as advice of sales was received, it was held that the temporary delay in New Jersey had not terminated its transit so as to subject it to State taxation in New Jersey. (State v. Engle, 34 New Jers. L. 435.) In Kelley v. Rhoads (51 Pac. Rep. [Wyo.] 593), the validity of a tax collected by the State of Wyoming, on a flock of sheep which was being driven from Utah through Wyoming to Nebraska, was questioned. The court recognized the principle that “no tax could be laid upon property in transit from one State to another, but, if the sheep were brought into the State to find grazing grounds, inter-state transportation ceased when the grazing grounds were found. The question upon which the validity of the tax depended was, therefore, a question of purpose—whether the grazing was incidental to the transportation, or whether the transportation was incidental to the grazing. It is not true that every time a person drives his herds into a State, intending, at some future period, to pass from it into another State, his cattle are wholly beyond State jurisdiction. It would be possible under such a rule, by selecting a circuitous route, to avoid taxation upon grazing animals.” (Prentice and Egan, Commerce Clause, p. 64.) “In considering the question of situs in such cases, it is necessary to look to the course and method of travel, the character of the live-stock and of the territory grazed upon, the time employed, possibly the time of year, and all other considerations which would throw light upon the purpose of the owner; and where, upon such examination, it is found that property is kept within the State for some other purpose than that of transportation, the original movement must be considered as abandoned.” (Id.)

THE END OF TRANSIT.—Goods and passengers, subjects of Federal commerce, having once started on their passage, remain subject to Federal control and entitled to Federal protection until the end of the transit, and until they are lost and intermingled in the


  ― 520 ―
general mass of property and people of the State in which they arrive. (Passenger Cases, 7 How. 405; Head Money Cases, 112 U.S. 580.) Some embarrassment has been experienced in determining the exact point of time and place at which this commingling is accomplished, when Federal control ends and when municipal control begins. In the great case of Brown v. Maryland, the Court referred to the difficulty of distinguishing between the restriction placed upon the power of the States to lay taxes on imports, and their acknowledged power to tax persons and property within their jurisdiction. It was observed that the two, “though quite distinguishable when they do not approach each other, may yet, like the intervening colours between white and black, approach so nearly as to perplex the understanding, as colours perplex the vision in marking the distinction between them; yet the distinction exists, and it must be marked as the cases arise.” The Court, after observing that it might be premature to state any rule as being universal in its application, held that “when the importer has so acted upon the thing imported that it has become incorporated and mixed up with the mass of property in the country, it has perhaps lost its distinctive character as an import, and has become subject to the taxing power of the State; but, while remaining the property of the importer in his warehouse, in the original form and package in which it was imported, the tax upon it is too plainly a duty on imports to escape the prohibition in the Constitution.” (Per Marshall, C.J., in Brown v. Maryland, 12 Wheat. 419, Boyd Const. Cases, p. 197.)

In delivering the judgment of the Court in Welton v. Missouri, 91 U.S. 275, Mr. Justice Field, referring to this judgment, said:—

“Following the guarded language of the Court in that case, we observe here, as was observed there, that it would be premature to state any rule which would be universal in its application to determine when the commercial power of the Federal Government over a commodity has ceased, and the power of the State has commenced. It is sufficient to hold now that the commercial power continues until the commodity has ceased to be the subject of discriminating legislation by reason of its foreign character. That power protects it, even after it has entered the State, from any burdens imposed by reason of its foreign origin.”

NAVIGATION, SHIPPING AND RAILWAYS.—The power of the Federal Parliament to make laws with respect to trade and commerce extends to navigation and shipping and to railways, the property of any State. See section 98.

INTERNAL IMPROVEMENTS.—The power over commerce carries with it the power to authorize internal improvements necessary for the promotion and advancement of commerce. For this purpose the Federal legislature may make surveys of coasts, rivers, harbours, and highways, and may construct works tending to increase the facilities for transportation by sea and by land; may construct bridges over navigable waters; may clear and keep clear navigable streams; may remove wrecks from rivers and harbours. So liberal a construction has this power received in the United States, that it has been held sufficient to authorize the incorporation of railway and highway companies, having a right to engage in inter-state commerce, and to compulsorily acquire private property within the States for that purpose. (Cherokee Nation v. South Kansas Railway Co., 135 U.S. 641; California v. Central Pacific R. Co., 127 U.S. 1.)

FREIGHTS AND FARES.—The States may regulate freights and fares charged for domestic transportation, but they cannot regulate inter-state freights and fares. (Wabash Railway Co. v. Illinois, 118 U.S. 557; Smyth v. Ames, 169 U.S. 466.) The question was for a considerable time discussed in America, whether the mere grant of power to regulate commerce conferred on the Federal legislature authority to fix the rates for inter-state carriage. It was admitted that Congress had power to prevent unjust discriminations in inter-state transportation, and that it could make legislative provision enabling those having just cause of complaint to bring actions at law to recover unreasonable charges. Hence it was argued that, if Congress could prohibit unreasonable charges, it impliedly had the power to determine what charges should be deemed reasonable. (Prentice and Egan, Commerce Clause, p. 287.) If the States were deprived of jurisdiction to settle freights and fares in inter-state traffic, it was


  ― 521 ―
reasoned that the power must be lodged in the Federal legislature. It is now admitted that Congress has plenary power to regulate the rates of inter-state and foreign commerce. (Covington and Cincinnati Bridge Co. v. Kentucky, 154 U.S. 204; New York Board of Trade v. Pennsylvania R. Co., 3 Inter-State Com. Rep. 417; Kauffman Milling Co. v. Missouri Pacific Railroad Co., 3 Inter-State Com. Rep. 400.)

INTER-STATE COMMERCE COMMISSION.—The Constitution of the United States contains no clause authorizing Congress to appoint an Inter-State Commerce Commission; but such a Commission has been authorized and appointed under and by virtue of the power vested in Congress to regulate commerce. This is a striking illustration of the vastness and elasticity of the commerce power. The first Inter-State Commerce Act was passed on 4th Feb., 1887; it was amended on 2nd March, 1889; again amended on 10th Feb., 1891, and finally on 11th Feb., 1893. The general outlines of this legislation and the principles deducible therefrom will be found discussed in Inter-State Com. Commission v. Baltimore and Ohio Railroad Co., 1892, 145 U.S. 263; Inter-State C. C. v. Brimson, 1894, 154 U.S. 447; Inter-State C. C. v. Alabama Midland Railway Co., 1896, 5 Inter-State Com. Rep. 685; Inter-State C. C. v. Alabama Midland Railway Co., 1897, 168 U.S. 144. (See Notes, secs. 101, 102.)

LEADING AMERICAN COMMERCE CASES.—A review in their chronological sequence of some of the leading cases decided by the Supreme Court of the United States, under the Commerce Clause of that Constitution, and a reference to the dominating principles which run through them, will serve as an introduction to the study of the Commerce Clause of the Constitution of the Commonwealth. Among those decisions some will appear to be inconsistent with others. The explanation is that the current of legal construction has not been, at all times, along and within the same lines of progress; its course has been, at certain stages, influenced by different principles of interpretation. Changes in the personnel of the Court, the growth of new commercial interests conflicting with old ones, the expansion of commerce simultaneously with the growth of the nation, the determination of the State rights party, at the period of Federal history preceding the Civil War, to enforce their views in favour of State sovereignty, the ultimate over-throw of that party and its dangerous doctrines, the progress of the nation and the national idea gradually overshadowing the idea of State supremacy, were circumstances which occasionally and naturally found expression in the, at times, varying and apparently irreconcilable judgments of the Supreme tribunal.

Gibbons v. Ogden, 9 Wheat 1 (1824).—This was the first great case decided under the Commerce Clause of the United States. It stands like a high land-mark in the constitutional history of that country. The facts were few and brief. The legislature of the State of New York gave to Robert Livingstone and Robert Fulton the exclusive right to navigate all waters within the jurisdiction of the State with vessels propelled by steam. Ogden acquired the rights of Livingstone and Fulton. Gibbons, having obtained a license to run a steam-boat under the Acts of Congress regulating the coasting trade, navigated the Bay of New York with a steamer between New York city and Elizabeth Port in New Jersey. Ogden commenced a suit against Gibbons in the New York Courts in order to restrain him from navigating those waters, in breach of his exclusive right under the laws of the State. The State Courts held that the statute of New York was valid, and granted an injunction restraining Gibbons. Gibbons then appealed to the Supreme Court of the United States, his contention, as presented by his counsel, Daniel Webster, being that the New York statute contravened the clause of the Constitution conferring upon Congress the power to regulate commerce among the States, and that it was therefore void.

The judgment of the Court was delivered by Chief Justice Marshall, the first great champion and interpreter of the Constitution. That judgment has been described by competent authorities as a master-piece of reasoning and a monument of learning, well worthy of the momentous issue involved. The following passages from this historical judgment will be read with interest:—




  ― 522 ―

“The subject to be regulated is commerce; and our Constitution being, as was aptly said at the bar, one of enumeration and not of definition, to ascertain the extent of the power it becomes necessary to settle the meaning of the word. The counsel for the appellee would limit it to traffic, to buying and selling, or the interchange of commodities, and do not admit that it comprehends navigation. This would restrict a general term, applicable to many objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is something more: it is intercourse. It describes the commercial intercourse between nations and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse. The mind can scarcely conceive a system for regulating commerce between nations, which shall exclude all laws concerning navigation, which shall be silent on the admission of the vessels of the one nation into the ports of the other, and be confined to prescribing rules for the conduct of individuals, in the actual employment of buying and selling or of barter.

“If commerce does not include navigation, the government of the Union has no direct power over that subject, and can make no law prescribing what shall constitute American vessels, or requiring that they shall be navigated by American seamen. Yet this power has been exercised from the commencement of the government, has been exercised with the consent of all, and has been understood by all to be a commercial regulation. All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation. It was so understood and must have been so understood when the Constitution was framed. The power over commerce, including navigation, was one of the primary objects for which the people of America adopted their government, and must have been contemplated in forming it. The Convention must have used the word in that sense, because all have understood it in that sense, and the attempt to restrict it comes too late.

“If the opinion that ‘commerce,’ as the word is used in the Constitution, comprehends navigation also, requires any additional confirmation, that additional confirmation is, we think, furnished by the words of the instrument itself. It is a rule of construction acknowledged by all, that the exceptions from a power mark its extent; for it would be absurd, as well as useless, to except from a granted power that which was not granted— that which the words of the grant could not comprehend. If, then, there are in the constitution plain exceptions from the power over navigation, plain inhibitions to the exercise of that power in a particular way, it is a proof that those who made these exceptions, and prescribed these inhibitions, understood the power to which they applied as being granted.” (9 Wheat. pp. 189–191.)

“To what commerce does this power extend? The Constitution informs us, to commerce ‘with foreign nations, and among the several States, and with the Indian tribes.’ It has, we believe, been universally admitted that these words comprehend every species of commercial intercourse between the United States and foreign nations. No sort of trade can be carried on between this country and any other, to which this power does not extend. It has been truly said that commerce, as the word is used in the Constitution, is a unit, every part of which is indicated by the term. If this be the admitted meaning of the word, in its application to foreign nations, it must carry the same meaning throughout the sentence, and remain a unit, unless there be some plain intelligible cause which alters it.” Id., p. 193.

“We are now arrived at the inquiry—what is this power? It is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. These are expressed in plain terms, and do not affect the questions which arise in this case, or which have been discussed at the bar. If, as has always been understood, the sovereignty of Congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations, and among the several States, is vested in Congress as absolutely as it would be in a single government,


  ― 523 ―
having in its Constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States. The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are, in this, as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse. They are the restraints on which the people must often rely solely, in all representative governments.

“The power of Congress, then, comprehends navigation within the limits of every State in the Union, so far as that navigation may be, in any manner, connected with ‘commerce with foreign nations, or among the several States, or with the Indian tribes.’ It may, of consequence, pass the jurisdictional line of New York, and act upon the very waters to which the prohibition now under consideration applies.” (Id. pp. 196–7.)

Applying the principles here discussed to the facts of the case, the Chief Justice decided the following propositions:—

1. That the law of New York giving the exclusive right of navigation to Livingstone and Fulton and their assigns was in collision with the Federal law regulating the coastal trade; that the Federal law on this subject was the supreme law; that the State laws must yield to that supremacy, even though enacted in pursuance of powers reserved to the State. (9 Wheat. 210.)

2. That a coasting license under an Act of Congress passed for the regulation of the coasting trade gave a legal permission to carry on that trade. (9 Wheat. 212.)

3. That the Act of Congress regulating the coasting trade applied to steamers as well as to sailing ships. (9 Wheat. 219.)

This case did not decide that the mere grant to Congress, by the Constitution, of the power to regulate foreign and inter-state commerce excluded ipso facto the States from the exercise of a similar power. At the same time some of the reasoning of the Chief Justice evidently led to that conclusion, while Mr. Justice Johnson was distinctly of that opinion. It did, however, expressly decide that the grant in the Constitution, coupled with Federal legislation in pursuance thereof, removed the subject matter absolutely from the jurisdiction of the States. (Pomeroy, Constitutional Law, 10th ed. p. 284.)

We have now to consider how far the principles affirmed in Gibbons v. Ogden would be applicable to the interpretation of the Australian Constitution. In order to determine this question, the power granted by sec. 51—i. must be read in conjunction with secs. 108–109, which, shortly summarized, provide that a State law, relating to any matter within the powers of the Federal Parliament, shall continue in force in the State; that until provision is made in that behalf by the Federal Parliament the Parliament of the State may alter or repeal any such laws; that when a law of a State is inconsistent with a law of the Commonwealth the latter prevails, and the former, to the extent of the inconsistency, becomes invalid. These clauses may be compared with Art. VI. sec. 2 of the Constitution of the United States, which declares that the Constitution, and the laws of the United States made in pursuance thereof, shall be the supreme law of the land. It seems clear, therefore, that should a similar conflict arise in the Commonwealth between rights claimed under a State law and rights claimed under a Federal law, the High Court would give a decision similar to that rendered in Gibbons v. Ogden. This statement leaves out of consideration the question discussed by Chief Justice Marshall, but not necessarily decided, whether the mere grant of power to Congress to regulate foreign and inter-state commerce ipso facto excluded the State legislatures from the exercise of a concurrent power, even in the absence Federal legislation. This point pervades the argument in most of American commerce cases, and it was not finally settled until the case of Cooley v. Port Wardens, 12 How. 299, see infra. On account of the special provisions of secs. 90 and


  ― 524 ―
108 the question of exclusiveness or concurrency of the commerce power will not prove such an embarrassing and perplexing problem, in the interpretation of the Constitution of the Commonwealth, as it has been in the interpretation of the Constitution of the United States. Section 108 is intended to confer on the Parliaments of the States the right known in Federal jurisprudence as that of concurrent legislation; that is, the right to legislate on subjects transferred to the Federal Parliament, until the Federal Parliament interferes, and deals with those subjects in a manner inconsistent with State laws. That right of concurrent legislation, however, is expressly limited by sec. 90. By that section the power of the Federal Parliament to impose duties of customs and of excise, and to grant bounties, becomes exclusive on and after a certain event; with reference therefore to customs, excise, and bounties, State laws will be null and void absolutely on and after the given event, irrespective of the question of consistency or inconsistency. But other State laws relating to commerce will only be void to the extent of their inconsistency either with the Constitution or with Federal laws made in pursuance thereof.

But sec. 108 will only enable the State Parliaments to deal with such a question as was involved in Gibbons v. Ogden, until the Federal Parliament has legislated and authorized others to use the navigable waters; then the Federal license will override the previously granted State monopoly.

Brown v. Maryland, 12 Wheat. 419 (1827).—The State of Maryland passed a statute requiring every importer of foreign goods by bale or package, and every person selling the same by the wholesale bale or package, to take out a license, for which a fee was required; in default of a license he was liable to a penalty. One Brown violated the statute by importing foreign goods and selling them without a license. He was indicted in the State courts, and he demurred to the indictment, contending that the State law was contrary to the Constitution, and therefore null and void. The courts of Maryland gave judgment against him, and he then appealed to the Supreme Court of the United States. The constitutionality of the State law was assailed on the grounds:—(1.) That it contravened the clause in the Constitution forbidding States to lay duties on imports, and (2) that it contravened the laws granting to Congress power of regulating foreign and inter-state commerce. The judgment of the court was delivered by Chief Justice Marshall. It was held that the State law was void on both grounds. The right to import had already been granted by Congress, and that right, the Court said, involved a right on the part of the importer to sell; and any State law which imposed a tax upon the exercise of that right was in collision with the Federal law, and therefore invalid. It was also held that the State law was repugnant to that clause of the Constitution which empowered Congress to regulate foreign and inter-state commerce. The judgment then proceeded:—

“If this power reaches the interior of a State, and may be there exercised, it must be capable of authorizing the sale of those articles which it introduces. Commerce is intercourse; one of its most ordinary ingredients is traffic. It is inconceivable that the power to authorize this traffic, when given in the most comprehensive terms, with the intent that its efficacy should be complete, should cease at the point where its continuance is indispensable to its value. To what purpose should the power to allow importation be given, unaccompanied with the power to authorize a sale of the thing imported? Sale is the object of importation, and is an essential ingredient of that intercourse, of which importation constitutes a part. It is as essential an ingredient, as indispensable to the existence of the entire thing, then, as importation itself. It must be considered as a component part of the power to regulate commerce. Congress has a right, not only to authorize importation, but to authorize the importer to sell. . . What would be the language of a foreign government, which should be informed that its merchants, after importing according to law, were forbidden to sell the merchandise imported? What answer would the United States give to the complaints and just reproaches to which such an extraordinary circumstance would expose them? No apology could be received or even offered. Such a state of things would break up commerce. It will not meet this argument to say that this state of things will never be produced, that the good sense of the States is a sufficient security against it. The Constitution has not confided this subject to that good sense. It is placed elsewhere. The question is, Where does the power reside? not, how far will it probably be abused? The power


  ― 525 ―
claimed by the State is, in its nature, in conflict with that given to Congress; and the greater or less extent in which it may be exercised does not enter into the inquiry concerning its existence. We think, then, that if the power to authorize a sale exists in Congress, the conclusion that the right to sell is connected with the law permitting importation, as an inseparable incident, is inevitable. If the principles we have stated be correct, the result to which they conduct us cannot be mistaken. Any penalty inflicted on the importer for selling the article, in his character of importer, must be in opposition to the act of Congress which authorizes importation. Any charge on the introduction and incorporation of the articles into and with the mass of property in the country, must be hostile to the power given to Congress to regulate commerce, since an essential part of that regulation, and principal object of it, is to prescribe the regular means for accomplishing that introduction and incorporation.” (Per Chief Justice Marshall in Brown v. Maryland, 12 Wheat. pp. 446–7.)

The principles affirmed in Brown v. Maryland would be sustained by the High Court in a similar case arising under the Constitution of the Commonwealth, by virtue of the provision of sec. 90, subject, however, to sec. 113.

Willson v. Blackbird Creek Marsh Co., 2 Pet. 242 (1829).—The Blackbird Creek Marsh Co. was incorporated by a statute of Delaware, and it owned certain marsh land bordering on the Blackbird Creek, a small stream in which the tide ebbed and flowed from the ocean. The company was authorized by the State to make a dam across the creek and to embank the marsh, the object being to reclaim and improve the adjacent land. The company constructed the dam, owing to which the navigation of the stream was obstructed. Willson was the owner of a sloop licensed to trade by the law of the United States. In order to navigate the stream he broke the dam, and the company sued him to recover compensation for the destruction of the dam. The defendant justified the trespass, contending that he had a right to navigate the creek, by virtue of his Federal license and enrolment; that, the dam being an unlawful obstruction to his right, he was entitled to remove it. The company demurred to this defence, and the question was then raised as to the validity of the State statute. The courts of Delaware sustained the statute and gave judgment against Willson, who then appealed to the Supreme Court of the United States. The appeal was dismissed, the State statute being held valid. The judgment of the Court was delivered by Chief Justice Marshall. In the course of the judgment he said:—

“The act of assembly, by which the plaintiffs were authorized to construct their dam, shows plainly that this is one of those many creeks passing through a deep, level marsh adjoining the Delaware, up which the tide flows for some distance. The value of the property on its banks must be enhanced by excluding the water from the marsh, and the health of the inhabitants probably improved. Measures calculated to produce these objects, provided they do not come into collision with the powers of the general government, are undoubtedly within those which are reserved to the States. But the measure authorized by this act stops a navigable creek, and must be supposed to abridge the rights of those who have been accustomed to use it. But this abridgment, unless it comes in conflict with the Constitution or a law of the United States, is an affair between the government of Delaware and its citizens, of which the Court can take no cognizance. The counsel for the plaintiff in error insist that it comes in conflict with the power of the United States ‘to regulate commerce with foreign nations and among the several States.’ If Congress had passed any act which bore upon the case; any act in execution of the power to regulate commerce, the object of which was to control State legislation over those small navigable creeks into which the tide flows, we should not feel much difficulty in saying that a State law coming in conflict with such act would be void. But Congress has passed no such act. The repugnancy of the law of Delaware to the Constitution is placed entirely on its repugnancy to the power to regulate commerce with foreign nations and among the several States; a power which has not been so exercised as to affect the question. We do not think that the act empowering the Blackbird Creek Marsh Company to place a dam across the creek can, under all the circumstances of the case, be considered as repugnant to the power to regulate commerce in its dormant state, or as being in conflict with any law passed on the subject.” (2 Pet. pp. 251–3.)

The decision of the Court in the Blackbird Creek case, though often criticized as being inconsistent with Gibbons v. Ogden and Brown v. Maryland, has never been overruled, but has always been sustained. (Pound v. Turck, 95 U.S. 459; Hatch v. Willamette Iron Bridge Co., 6 Fed. Rep. 326.) It is now considered that the true principle,


  ― 526 ―
by which the Blackbird Creek case can be reconciled with its two memorable predecessors, is that the Delaware statute, by which the dam was authorized, was purely a police regulation for the reclamation of the adjacent marshes, in the interests of public health. This at any rate was the solution of the apparent conflict suggested in Pennsylvania v. The Wheeling Bridge Company (13 How. 566). A similar decision would, no doubt, be given under the Constitution of the Commonwealth, especially in view of sections 108 and 109.

New York v. Miln, 11 Pet. 102 (1837).—The State of New York passed a statute providing that every master of a vessel arriving in the port of New York from another State, or from a foreign country, should, within twenty-four hours, report to the local authorities the name, age, and last place of settlement of every passenger; in default thereof he was liable to a penalty. Miln, the master of the ship Emily, omitted to give the required report and was sued for the penalty; his defence was that the statute of New York assumed to regulate commerce between New York and foreign countries, and was therefore unconstitutional and void. The case came before the Supreme Court of the United States. It was twice argued; after the first argument, and before judgment was given, Chief Justice Marshall died, and was succeeded by Chief Justice Taney. The case was then re-argued, and the judgment of the Court was delivered by Mr. Justice Barbour. It was held that the New York statute was valid; that it was not a regulation of commerce, but merely a police regulation. Mr. Justice Story dissented from the judgment. He was of opinion that, though the New York statute might be a police regulation, it was certainly also a regulation of commerce; that the power to regulate commerce was exclusively vested in Congress; that full power to regulate a particular subject implied the whole power and left no residuum; that a grant of the whole to one was incompatible with a grant of a part to the other; and that the police powers of the States could not be enforced by laws which trenched upon the exclusive powers of Congress. This case is interesting as containing an authoritative definition of the police powers of a State, as will be seen from the following extracts:—

“We shall not enter into any examination of the question whether the power to regulate commerce be or be not exclusive of the States, because the opinion we have formed renders it unnecessary. In other words, we are of opinion that the Act is not a regulation of commerce, but of police; and that, being thus considered, it was passed in the exercise of a power which rightfully belonged to the States. … If, as we think, it be a regulation, not of commerce, but police, then it is not taken from the States. To decide this, let us examine its purpose, the end to be attained, and the means of its attainment. It is apparent, from the whole scope of the law, that the object of the legislature was to prevent New York from being burdened by an influx of persons brought thither in ships, either from foreign countries or from any other of the States; and for that purpose a report was required of the names, places of birth, &c., of all passengers, that the necessary steps might be taken by the city authorities to prevent them from becoming chargeable as paupers. Now, we hold that both the end and the means here used are within the competency of the States. … We choose rather to plant ourselves on what we consider impregnable positions. They are these: That a State has the same undeniable, unlimited jurisdiction over all persons and things within its territorial limits, as any foreign nation, where that jurisdiction is not surrendered or restrained by the Constitution of the United States. That, by virtue of this, it is not only the right, but the bounden and solemn duty of a State, to advance the safety, happiness, and prosperity of its people, and to provide for its general welfare, by any and every act of legislation which it may deem to be conducive to these ends, where the power over the particular subject, or the manner of its exercise, is not surrendered or restrained in the manner just stated. That all those powers which relate to merely municipal legislation or what may, perhaps, more properly be called internal police, are not thus surrendered or restrained; and that, consequently, in relation to these, the authority of a State is complete, unqualified, and exclusive.” (11 Pet. pp. 132–139.)

The case of New York v. Miln was the first one in which an important judicial decision was given in the direction of the recognition of State rights. It is said that the judgment went far beyond the point which it was necessary to decide. Mr. Justice Barbour enunciated, for the first time, the doctrine that the police power reserved to the States was in itself a “complete, unqualified, and exclusive power,” a doctrine


  ― 527 ―
which was afterwards elaborated with dangerous persistency until it was finally destroyed by the Civil War.

It is quite probable, however, that whilst neither the extreme doctrine of the Federal exclusiveness of the commercial power contended for by Mr. Justice Story, nor the extreme doctrine of the exclusiveness of the police power of the State advocated by Mr. Justice Barbour, could be applied to the construction of the Constitution of the Commonwealth, the decision itself in New York v. Miln would be followed by the High Court on the ground that the demand of information by the State authorities, as to the name, age, and last place of settlement of those about to land and to become added to the population of the State, would not interfere with that freedom of commerce and intercourse required by sec. 92.

The License Cases, 5 How. 504 (1847).—These were three cases known as Thurlow v. Massachusetts, Fletcher v. Rhode Island, and Peirce v. New Hampshire. In each of these cases a private individual was prosecuted by a State for selling spirituous liquors within the State without having a license as required by the law of the State. In each case the validity of the law of the State was called in question, on the ground that it was repugnant to the Commerce Clause of the Federal Constitution. In the Massachusetts and Rhode Island cases the liquor sold was not imported by the defendant, but had been bought by him from the original importer. The Supreme Court had no difficulty in holding that those cases were distinguishable from Brown v. Maryland inasmuch as the liquor had passed beyond the hands of the original importer, had become a part of the general property of the State, and was therefore subject to the power of the State to regulate purely internal commerce and to pass police laws. In the New Hampshire case, however, the defendant had bought a barrel of gin in Boston, in the State of Massachusetts, and carried it coastwise to a port in New Hampshire, where he sold it in its original package. A strong attempt was made to commit the court to the theory that jurisdiction over commerce was, in all cases, concurrent in the nation and in the States. It is absolutely impossible, however, to say what the court decided. Although all the judges came to the same conclusion—that the State laws were valid— hardly two, much less a majority, agreed in the reasons for their judgment, and the rules of law applicable to the cases. (Pomeroy's Constitutional Law, 10th ed. pp. 293–4.) Chief Justice Taney was of opinion that even in the New Hampshire case the facts were different from those in Brown v. Maryland, the State statute in the latter case applying to foreign goods, in respect to the importation of which Congress had fully legislated. But Congress had not legislated in regard to goods carried from one State to another; the navigation laws did not apply to the goods which are transported, but only to the vessels which transport; the foreign importation statutes covered the introduction of articles from abroad, but no corresponding statute applied to traffic among the States. In the opinion of the Chief Justice, the question was therefore directly presented, whether the mere grant to Congress of power to regulate commerce was exclusive and prohibitory upon the States, or whether it required a statute of the national legislature, passed in pursuance to such grant, to oust the States of jurisdiction. He adopted the latter of these views, and therefore held the law of New Hampshire valid. The case which he principally relied upon, as confirmatory of his doctrines, was Willson v. Blackbird Creek Marsh Co. (Pomeroy's Constitutional Law, 10th ed. pp. 294–5)

Mr. Justice Woodbury took a middle course, and, for the first time in the history of the court, formulated the modern rule. In several respects, he said, the power granted is not in its nature more exclusive of action on the part of the States than are other powers granted to Congress. So far as regards the uniformity of a regulation reaching to all the States, the commercial power “must of course be exclusive,” but in many local matters it not only permits but requires the concurrent and auxiliary action of the States. “There is much in connection with foreign commerce which is local within each State, convenient for its regulation and useful to the public, to be acted on by each till the power is abused or some course is taken by Congress conflicting with it.


  ― 528 ―
Such are the deposit of ballast in harbours, the extension of wharves into tide water, the supervision of the anchorage of ships, the removal of obstructions, the allowance of bridges with suitable draws, and various other matters that need not be enumerated, beside the exercise of numerous police and health powers, which are also by many claimed upon different grounds.” (Prentice and Egan, Commerce Clause, p. 24.)

Referring to this decision, Dr. Pomeroy says:—“In reviewing these extraordinary License Cases, it is plain that the court did not overrule the former decisions of Gibbons v. Ogden and Brown v. Maryland. On the other hand, it would appear that five of the justices, Taney, Catron, Daniel, Nelson, and Woodbury, concurred in the proposition that it requires, at least, a statute of Congress, passed in pursuance of the general grant of power in the Constitution, to inhibit the State legislatures from enacting laws which regulate commerce; while two of the justices, McLean and Grier, did not adopt this view. Two, Daniel and Woodbury, pushed their conclusions much further; and two, Wayne and McKinley, were absent, or took no part in the decision. Whatever rule, however, was established by this judgment, was entirely unsettled by the next cases which came before the same high tribunal for adjudication.” (Constitutional Law, 10th ed. pp. 296–7.)

How far are these cases applicable to the Constitution of the Commonwealth? It appears that in the Massachusetts and Rhode Island cases the liquor had passed out of the hands of the original importer; it had consequently ceased to form a part of interstate commerce; it had merged into and become a constituent of the general mass of the internal commerce of a State. It was therefore liable to the local licensing laws of the State; and this would be so held under our Constitution. Such licensing laws would not be contrary to section 92, which provides that commerce and intercourse among the States shall be “absolutely free,” because the liquor had passed beyond the stage of inter-state commerce; it had passed beyond Federal protection and control. In point of fact it ceased to be a part of inter-state commerce immediately after the first sale within the State. In the New Hampshire case, however, the facts were different. There Peirce had bought a barrel of gin in one State, Massachusetts, and imported it into another State, New Hampshire, where he sold it in its original package without a license, for which he was convicted. Now according to sec. 92 of our Constitution, Peirce would have been entitled to demand the free admission of the barrel of gin from one State into another, but the question then arises, what effect has sec. 113, if any, in modifying sec. 92? Section 113 is as follows:—

“All fermented, distilled, or other intoxicating liquids passing into any State or remaining therein for use, consumption, sale, or storage, shall be subject to the laws of the State as if such liquids had been produced in the State.”

These two sections 92 and 113 have to be read together. What is the meaning of “passing into a State?” Will the doctrine of Peirce v. New Hampshire apply so as to prohibit the first sale in the original package except in accordance with the licensing laws of the State? If that be so, and the goods cannot be sold without a license, how will the commerce be “absolutely free” under sec. 92? These points require careful consideration. Meanwhile we may add to this note respecting Peirce v. New Hampshire, that it was subsequently overruled in the case of Bowman v. Chicago R. Co., 125 U.S. 465; Leisy v. Hardin, 135 U.S. 100. (See Note, § 456, infra.)

The Passenger Cases, 7 How. 283 (1849).—In these cases, Smith v. Turner from New York, and Norris v. Boston from Massachusetts, the defendants were prosecuted for breach of State laws. A statute of New York provided that the health officer of the port should he entitled to receive from the master of every vessel arriving in port a certain sum for each steerage passenger brought to the port from another State, or from a foreign country. This money, when collected, was applied to the support of a marine hospital. Masters neglecting to pay the sum demanded in respect to each passenger were liable to be prosecuted and fined. A similar statute was passed in Massachusetts. The defence raised in each case was that the State statute was unconstitutional; in


  ― 529 ―
reply to which it was contended that the provisions of the Acts were merely rules of internal police, and that the cases were identical in principle with New York v. Miln. The Court distinguished the principles at issue from that affirmed in New York v. Miln. The police regulation in that case did not interfere with commerce in any way. No duty was laid, either upon the vessel or passengers; nothing but a report was required from the master of each vessel, and the decision was that every State had an unquestionable right to keep a register of the names of persons who came within to reside there temporarily or permanently. But in these cases the regulations imposed a tax or duty on the passengers, officers, and sailors, holding the master responsible for payment of the amount at the end of the voyage, and necessarily before the passengers had set their feet on land. The tax on each passenger, if in the discretion of the State legislature, might have been 5 dollars, or 10 dollars, or any other sum, amounting even to a prohibition of the transportation of passengers. There was no doubt that the transportation of passengers was a branch of commerce, and that the duties charged by the local regulations amounted to a tax on commercial intercourse. Except to guard its citizens against diseases and paupers the Court held that the municipal power of the State could not be exercised to prohibit the introduction of foreigners permitted to enter under the authority of Congress. But in guarding the safety, the health, and the morals of its citizens, a State was restricted to appropriate and constitutional means. The principles affirmed in this case were (1) That when the Federal authority has, in the exercise of its general power, passed a statute to regulate commerce, the States are absolutely prohibited from making any laws which will interfere with the legislation of the Federal authority. (2) That persons, as well as goods, are subject to commercial laws. (3) That the States, in adopting regulations of internal police, are not entitled to include in them provisions conflicting with the commercial power. (4) That the commercial power and the police power are not to be regarded as two equal and competing forces, but that in case of conflict the commercial power prevails. The dissenting judges were of opinion that the State laws could be sustained on the grounds of—(1) The general concurrent power of the States; (2) The authority to pass police regulations; (3) A denial that persons can be the objects of commerce; (4) The consequent result that Congress has no authority to legislate respecting the importation of persons, that matter being left exclusively to the States. (Pomeroy, Const. Law, 10th ed. p. 299.)

“This,” says Dr. Pomeroy, “was the last great contest in the Supreme Court between the forces of national and of state sovereignty. The national idea was triumphant through the steadiness of two southern members of the Court, Wayne of Georgia, and Catron of Tennessee.” (Constitutional Law. 10th ed. p. 299. See also Crandall v. Nevada, 6 Wall. 35.)

Cooley v. Port Wardens, 12 How. 299 (1851)—The question raised in this case was whether the States may pass laws establishing pilots, and prescribing the duties of masters of vessels arriving in ports in respect to such pilots. This was an action to recover half-pilotage fees, which the defendants had forced the plaintiff to pay. In March, 1803, the legislature of Pennsylvania passed an Act to establish a Board of Wardens for the Port of Philadelphia, and for the regulation of pilots and pilotages. The scope of the Act was, as indicated by its title, to deal with the whole subject of the pilotage of the port. The plaintiff claimed to be exempted from payment of the sums of money demanded under the State law, because the law contravened several provisions of the Federal Constitution. In this celebrated case the question was again discussed as to whether the Federal power over commerce was exclusively vested in Congress, or concurrently in Congress and in the States. The constitutionality of the State pilot regulations had been previously argued, but not decided. They could only be sustained on the ground that the power to regulate commerce was concurrent. But in the Passenger Cases it had been shown to what a dangerous and chaotic state a concurrent system of commercial control would lead; whilst on the other hand, to sustain the theory of exclusiveness would involve the declaration of the invalidity of pilot laws which had


  ― 530 ―
remained unquestioned for over fifty years. A solution of the problem was found in the dictum first laid down by Mr. Justice Woodbury, in the License Cases, to the effect that the commercial power was partly exclusive and partly concurrent; that in matters admitting of uniformity of regulation and requiring national action the commercial power was exclusive, but that in many local matters, admitting of a variety of treatment, the concurrent action of the States was admissible. This principle was authoritatively adopted as the judgment of the Court in Cooley v. Port Wardens, and has now become the well established rule of the Federal Courts. In delivering the judgment of the Court, Mr. Justice Curtis said:—

“The diversities of opinion, therefore, which have existed on this subject, have arisen from the different views taken of the nature of this power. But when the nature of a power like this is spoken of, when it is said that the nature of the power requires that it should be exercised exclusively by Congress, it must be intended to refer to the subjects of that power, and to say they are of such a nature as to require exclusive legislation by Congress. Now, the power to regulate commerce embraces a vast field, containing not only many, but exceedingly various subjects, quite unlike in their nature; some imperatively demanding a single uniform rule, operating equally on the commerce of the United States in every port; and some, like the subject now in question, as imperatively demanding that diversity which alone can meet the local necessities of navigation. Either absolutely to affirm, or deny that the nature of this power requires exclusive legislation by Congress, is to lose sight of the nature of the subjects of this power, and to assert concerning all of them what is really applicable but to a part.” (12 How. p. 319.)

“The States may establish port regulations, regulations of pilotage, may improve their harbours and rivers, erect bridges and dams, and exercise many other local powers. In the exercise of its proper authority, a State may enact laws providing for the inspection of goods, to determine whether they are fit for commerce, and to protect the citizens and the market from fraud. But in all such cases, as was said in Leisy v. Hardin, though the States may exercise powers which may be said to partake of the nature of the power granted to the general government, they are strictly not such, but are merely local powers, which have full operation until circumscribed by the action of Congress in effectuation of the general power. In matters admitting uniform regulation throughout the country and affecting all the States, the inaction of Congress is to be taken as a declaration of its will that commerce shall be ‘free and unrestricted,’ so far only as concerns any general regulation by the States. It can hardly be considered that this phrase means more than freedom from such regulations as admit of uniformity, for it is only to this extent that the jurisdiction of Congress over inter-state commerce is exclusive of State regulation. On the other hand, in matters of local nature, such as are auxiliary to commerce rather than a part of it, the inaction of Congress is to be taken as an indication that for the time being, and until it sees fit to act, they may be regulated by State authority. Since the decision of Cooley v. Port Wardens, the rule therein laid down has, with one important exception which will be hereafter noticed, been followed in every case in the Supreme Court upon this subject. It is perhaps the most satisfactory solution which has ever been given of this vexed question, and may be considered as expressing the final judgment of the Court. It is not easy at this time to exaggerate the importance of the case by which this rule was established. It offered a logical principle for the construction of the constitutional provision, such as no previous case had offered. More than this, it marked, in 1851, the end of the struggle, lasting more than thirty years, and which had been begun in Ogden v. Gibbons, in the New York courts.” (Prentice and Egan, Commerce Clause, pp. 27-9.)

The problem which caused such a long controversy in the Supreme Court of the United States, as to whether the power over commerce was exclusive or concurrent, or partly exclusive and partly concurrent, should never arise or occasion any trouble in the interpretation of the Constitution of the Commonwealth, in which two principles are clearly and unmistakably established: that on and after the imposition of uniform duties of customs, the power of the Federal Parliament to impose duties of customs and excise, and to grant bounties, becomes absolutely and irrevocably exclusive, and this is the limits of its exclusive power; that as to other matters relating to commerce, the States will continue to exercise concurrent authority, and the State laws in respect to such matters will be perfectly valid, until laws inconsistent therewith are passed by the Federal Parliament.

Pennsylvania v. Wheeling Bridge Co., 13 How. 518 (1851).—The defendant company was incorporated by an Act of the legislature of Virginia, which authorized them to


  ― 531 ―
construct a suspension bridge across the river Ohio, at Wheeling. The bridge was constructed, and hindered the passage of boats ascending and descending the river at that point. Prior to this Congress had recognized the Ohio as a navigable stream, and a channel of commerce, but it had never authorized the erection of bridges at that part of its course. The State of Pennsylvania brought a suit in the Supreme Court against the company, praying that the bridge might be removed as a public nuisance. On behalf of Pennsylvania it was argued that the legislature of Virginia could not constitutionally authorize the erection of a bridge which obstructed free commerce on the Ohio. The Court sustained this contention; it was held that the power to regulate commerce among the States extends to the navigable streams whereon that commerce is carried; that commerce includes navigation; that Congress had recognized the Ohio as a great navigable river, and the highway of an immense commerce; that the bridge interfered with such navigation; that the Virginian statute authorizing the bridge was therefore in conflict with the power granted to and exercised by Congress. (Pomeroy, Const. Law, 10th ed. pp. 301-2.)

This case is especially interesting, owing to the development which followed. After the judgment was given declaring the bridge a nuisance and ordering its removal, Congress passed an Act legalizing the bridge as it then stood, and authorizing it to be allowed to remain. Another suit was then brought by Pennsylvania against the Bridge Company (18 How. 421), in which the question was raised whether this Act was within the constitutional authority of Congress. The Supreme Court ruled that Congress, having power to regulate commerce, could as legally obstruct commerce as free it from obstruction—could as legally fetter it as liberate it; and therefore that the Act was within the Constitution. (See Miller v. Mayor of New York, 109 U.S. 385; Escanaba Co. v. Chicago, 107 U.S. 678.)

Gilman v. Philadelphia, 3 Wall 713 (1865).—This was another bridge case, which is apparently inconsistent with Pennsylvania v. Wheeling Bridge Co. The Schuylkill River flows through the city of Philadelphia and empties into the Delaware; it is a tidal river for seven miles from its mouth. It is navigable for vessels drawing about 20 feet of water. A considerable trade is done upon it by barges and small steamers, licensed under the laws of the United States. Gilman was the owner of coal wharves on the river, below any bridge, but he was not the owner of any licensed vessels. The legislature of Pennsylvania authorized the city of Philadelphia to erect a new bridge across the river, below the plaintiff's wharves. The plaintiff feared that the bridge would prevent masted vessels from passing it, would greatly interrupt the navigation of the river, and would so injure his business. Congress had made the city of Philadelphia a port of commercial entry. Gilman brought a suit against the city corporation to restrain it from building the proposed bridge. The judgment of the Court was delivered by Mr. Justice Swayne; who said that the power to regulate commerce covered a wide field, and embraced a great variety of subjects. Some of these subjects called for uniform rules and national legislation; others could be best regulated by rules and provisions suggested by the varying circumstances of different localities, and limited in their operation to such localities. To this extent the power to regulate commerce might be exercised by the States. But even in respect to this latter class of rules and provisions, Congress could interpose, whenever it should be deemed necessary, by general or special laws; and their interposition would sweep away the local State legislation. Within the sphere of their authority, both the legislative and the judicial powers of the nation were supreme. Mr. Justice Clifford dissented, on the ground that Congress had already sufficiently legislated to cover the subject-matter and to deprive the State of power to build the bridge in question. This legislation consisted in the navigation laws, which, as had been repeatedly held, enabled vessels registered or enrolled and licensed to enter all navigable waters free from State interference; but especially in the statute declaring Philadelphia to be a port of entry. He asserted that Willson v. Blackbird Creek Marsh Co. had no application; because


  ― 532 ―
the statute of Delaware was upheld in that case as a measure of police, a means to reclaim marsh lands and improve the health of the neighbourhood.

Referring to this decision, Dr. Pomeroy says: “I cannot refrain from saying that the dissenting opinion of Judge Clifford is a most overwhelming answer to the positions taken by the Court. Leaving out of view the Blackbird Creek case, the judgment in Gilman v. Philadelphia is opposed to the whole scope and tenor of all prior decisions, and is in direct conflict with Pennsylvania v. Wheeling Bridge Company. Indeed, these two cases are absolutely identical in their facts; in each case the plaintiff sought to protect his rights as proprietor on the banks of the river above the bridge; in each a State, by its statute authorizing a permanent bridge, had interfered with those rights; in neither had Congress directly legislated upon the subject of bridges. Yet the Court overthrew the statute of Virginia and upheld that of Pennsylvania; they deliberately adopted, in the Philadelphia case, the position of Chief Justice Taney in the dissenting opinion which he delivered in the Wheeling case, although in the latter Congress had only acted by recognizing Ohio as a navigable stream, while in the former, Congress had directly legislated by declaring Philadelphia to be a port of entry. I repeat that, while it cannot be supposed the Court intended to overrule the long series of great and most ably considered cases which have been referred to, they have placed themselves in antagonism to many of those decisions.” (Const. Law, 10th ed. pp. 305-6.)

It seems to be now well settled that in the absence of Federal legislation a State may authorize a navigable stream within its limits to be obstructed by a dam, bridge, or highway (Pound v. Turck, 95 U.S. 459); that in the improvement of her waterways a State may alter the course of a river (Withers v. Buckley, 20 How. 84); that a State may practically turn a river into a canal and charge vessels for its use to pay for such improvement (Sands v. Manistee River Improvement Co., 123 U.S. 288; Ruggles v. Manistee River Improvement Co., 123 U.S. 297); that a State may improve her harbours (Mobile v. Kimball, 102 U.S 691); that a State may build and own wharves (Ouachita Packet Co. v. Aiken, 121 U.S. 444). A State, however, cannot use such improvements, or any other public property, as a means of regulating commerce. Though a State can charge rent for the use of a wharf, based on the tonnage of the vessel, or for its occupation by imported goods, which she could not do as a tax, or in the exercise of any reserved power, she cannot discriminate in her charges against vessels loaded with the products of other States. (Guy v. Baltimore, 100 U.S. 434.)

Case of the State Freight Tax, 15 Wall. 232 (1872).—In the Reading Railroad Co. v. Pennsylvania, generally known as the State Freight Tax Case, the State of Pennsylvania had imposed a tax on every ton of freight carried within the limits of the State; no distinction or discrimination was made between domestic and inter-state traffic. The tax was justified by the State, as made in the exercise of its right of taxation. It was claimed that the State had a right to tax all property within its jurisdiction, and that it was entitled to do so as long as it abstained from discrimination. The Supreme Court, however, declared the State law void on the ground that it was a regulation of commerce among the States. This judgment is valuable as affirming (1) That freight, the reward for the transportation of the subjects of commerce, whether by land or water, is a constituent of commerce; (2) That the bringing of goods from the seller to the buyer is commerce; (3) That a tax upon freight, transported from State to State, is a regulation of commerce.

Welton v. Missouri, 91 U.S. 275 (1875).—In this case Welton sold, in the State of Missouri, certain sewing machines which had been manufactured outside the State. He sold without having a State license, as required by a State Act. The Act in question provided that whoever should sell goods, wares, or merchandise “which are not the growth, produce, or manufacture of this State.” by going from place to place to sell the same, was “declared to be a peddler.” Other sections of the Act prohibited peddling in the State without a license, and provided a penalty for breach of the prohibition. No license was required to peddle goods the growth, produce or manufacture of the


  ― 533 ―
State. Welton was arrested and fined. The Supreme Court of the State declared that the State law was valid. Welton appealed to the Supreme Court of the United States, which held that the Missouri law was unconstitutional. In giving the judgment of the Court Mr. Justice Field said that the license tax was sought to be maintained as a tax upon a calling. The general power of a State to impose license taxes on businesses within its limits was admitted, but must be exercised subject to the Constitution. Where the business consisted in the sale of goods, a tax upon the business was in effect a tax upon the goods themselves. “It would be premature to state any rule which would be universal in its application to determine when the commercial power of the Federal Government over a commodity has ceased, and the power of the State has commenced. It is sufficient now to hold that the commercial power continues until the commodity has ceased to be the subject of discriminating legislation by reason of its foreign character.”

Munn v. Illinois, 94 U.S. 113 (1876).—In this case the question raised was whether the General Assembly of Illinois could legally fix by law the maximum charges for the storage of grain in warehouses, in Chicago and other places in the State, in which grain was stored in bulk, and in which the grain of different owners was mixed together. The Supreme Court of the United States upheld the validity of the law. It was not everything which affected commerce that amounted to a regulation of commerce. The warehouses referred to were situated, and their business conducted exclusively, within the limits of the State of Illinois. They were used as instruments by those engaged in State as well as by those engaged in inter-state commerce; but they were no more necessarily a part of the commerce itself than a dray or cart by which grain could be transferred from one railway station to another. Incidentally they might become connected with inter-state commerce, but not necessarily so. Their regulation was a thing of domestic concern, and certainly, until Congress acted in reference to their inter-state relations, the State might exercise all the powers of government over them, even though in so doing it indirectly operated upon commerce outside its immediate jurisdiction. “We do not say,” continued Chief Justice Waite, “that a case may not arise in which it will be found that a State, under the form of regulating its own affairs, has encroached upon the exclusive domain of Congress, in respect to inter-state commerce, but we do say that, upon the facts as they are represented to us in this record, that has not been done.” (94 U.S. 135.)

Railroad Co. v. Husen, 95 U.S. 465 (1877).—In this case a statute of Missouri prohibited the driving or conveying of any Texas, Mexican, or Indian cattle into the State during certain periods of the year. It was held that this law was a regulation of commerce, and therefore contrary to the Constitution. Mr. Justice Strong said that the transportation of property from one State to another was a branch of inter-state commerce, and that though a State had full power over commerce which was completely internal, it could no more prohibit or regulate inter-state commerce than commerce with foreign nations. In reference to the argument that the statute called into question was a lawful exercise of the police power, he said:—

“What that power is, it is difficult to define with sharp precision. It is generally said to extend to making regulations promotive of domestic order, morals, health and safety.… The police power of a State justifies the adoption of precautionary measures against social evils. Under it a State may legislate to prevent the spread of crime or pauperism, or disturbance of the peace. It may exclude from its limits convicts, paupers, idiots and lunatics, and persons likely to become a public charge, as well as persons afflicted by contagious or infectious diseases.… The same principle … would justify the exclusion of property dangerous to the property of citizens of the State; for example, animals having contagious or infectious diseases. All these exertions of power … are self-defensive.… While for the purpose of self-protection it (i.e., a State) may establish quarantine and reasonable inspection laws, it may not interfere with transportation into or through the State, beyond what is absolutely necessary for its self-protection. It may not, under the cover of exerting its police powers, substantially prohibit or burden either foreign or interstate commerce.” (95 U.S. pp. 470-2.)




  ― 534 ―

Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1 (1877).—The State of Florida granted to the Pensacola Telegraph Company the exclusive right to establish and maintain telegraph lines in certain counties of that State. Prior to this, Congress had passed a law providing that telegraph lines might be established over any portion of the public domain of the United States, along military and post roads, and across navigable streams and waters. The Western Union Company filed with the Postmaster-General its acceptance of the terms of the Act. The Pensacola Company thereupon instituted a suit to restrain the Western Union Company from constructing lines in derogation of its exclusive rights. In the judgment of the Supreme Court it was stated that the commercial powers granted to Congress were not confined to the instrumentalities of commerce, or the postal system, as known and used when the Constitution was adopted, but that they kept pace with the progress of the country and adapted themselves to the new developments of times and circumstances. They extended from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies were successfully brought into use to meet the demands of increasing population and wealth. These commercial powers were intended for the government of the business to which they related. They were entrusted to the Government for the good of the nation; it was not only the right but the duty of the Federal legislature to see that intercourse among the States and the transmission of intelligence were not obstructed or unnecessarily impeded by State legislation. The Court held that the electric telegraph had become an indispensable means of inter-communication, especially in commercial transactions. It could not for a moment be doubted that this powerful agency of commerce and inter-communication came within the controlling power of Congress, certainly as against hostile State legislation. It was therefore held that the State of Florida, in attempting to confer on a single corporation the exclusive right of transmitting news by telegraph over part of its territory, had encroached upon the domain of commercial power vested in Congress, and the claim of the Pensacola Company to restrain the Western Union Company was not sustained.

Escanaba Co. v. Chicago, 107 U.S. 678 (1882).—The Escanaba Company, created by the law of Michigan, was the owner of three steam vessels engaged in the carrying trade between ports in different States, on Lake Michigan and on the navigable waters connecting it. Its vessels were enrolled and licensed for the coastal trade under the laws of the United States. They did a large business in carrying iron ore from Escanaba to the south branch of the Chicago River in the city of Chicago. In their course up the river they were required to pass through draws of several bridges, constructed over the stream by the city of Chicago. By an ordinance of the city the draws were closed for an appointed hour of the morning and evening during week days, and the time during which a draw might be left open for the passage of a vessel was limited to ten minutes. The Company complained of these obstructions and limitations, and applied for an injunction to restrain the city from enforcing the ordinance. The Court upheld the validity of the State law, on the ground that it came within the rule of matters of internal police—including in that general designation whatever would promote the peace, comfort, and convenience, of the people of the State, and embracing the construction and control of roads, canals, bridges, and other means of internal communication. Such power the State could exercise, so long as it did not unnecessarily obstruct the navigation of the river or its branches; when that occurred Congress could interfere and remove the obstruction.

Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196 (1885).—The Gloucester Ferry Company was incorporated under the law of New Jersey, and established a ferry between Gloucester, in the State of New Jersey, and Philadelphia, in the State of Pennsylvania. At its landing place in each State it had a dock; the one in Gloucester it owned, the one in Philadelphia it leased. The entire business of the Company consisted in ferrying passengers and freight across the river; its boats were registered


  ― 535 ―
in New Jersey, where it was domiciled and held all its property, except the lease of its dock in Pennsylvania; its boats remained in Pennsylvania only long enough to discharge and receive passengers and freight. In 1879 the legislature of Pennsylvania passed an Act imposing taxes on corporations, domestic or foreign, doing business or employing capital in Pennsylvania. The State sued the Company to recover taxes on its business done between the two States. The Supreme Court of the State sustained the tax. The Company appealed to the Supreme Court of the United States. In support of the tax, it was argued that the Company did business within the State of Pennsylvania, because it landed and received passengers and freight at its wharf in Philadelphia; that its whole income was derived from the transportation of freight and passengers between Gloucester and Philadelphia; that at each of these points its main business was transacted; that for such business it was as much dependent upon the laws and protection of one State as of the other; that as it could only purchase its wharf at Gloucester by the will of the legislature of New Jersey, so it could only lease the one in Philadelphia with the consent of the legislature of Pennsylvania. It was therefore contended that the Company was dependent equally, not only for its business, but for its power to do that business, upon both States, and consequently it might be taxed by both. The Supreme Court had no difficulty of disposing of these arguments. Mr. Justice Field, in delivering the judgment of the Court, said:—

“The business of landing and receiving passengers and freight at the wharf in Philadelphia is a necessary incident to, indeed is part of, their transportation across the Delaware River from New Jersey. Without it that transportation would be impossible. Transportation implies the taking up of persons or property at some point and putting them down at another. A tax, therefore, upon such receiving and landing of passengers and freight is a tax upon their transportation; that is, upon the commerce between the two States involved in such transportation.… According to the decision in the Standard Oil Company case, and by the general law on the subject, the company has no domicile in Pennsylvania, and its capital stock representing its property is held outside of its limits It is solely, therefore, for the business of the company in landing and receiving passengers at the wharf in Philadelphia that the tax is laid, and that business, as already said, is an essential part of the transportation between the States of New Jersey and Pennsylvania, which is itself inter-state commerce. While it is conceded that the property in a State belonging to a foreign corporation engaged in foreign or inter-state commerce may be taxed equally with like property of a domestic corporation engaged in that business. we are clear that a tax or other burden imposed on the property of either corporation because it is used to carry on that commerce, or upon the transportation of persons or property, or for the navigation of the public waters over which the transportation is made, is invalid and void as an interference with, and an obstruction of, the power of Congress in the regulation of such commerce.… The cases where a tax or toll upon vessels is allowed to meet the expenses incurred in improving the navigation of waters traversed by them, as by the removal of rocks, the construction of dams and locks to increase the depth of water and thus extend the line of navigation, or the construction of canals around falls, rest upon a different principle. The tax in such cases is considered merely as compensation for the additional facilities thus provided in the navigation of the waters.… Upon similar grounds, what are termed harbour dues or port charges, exacted by the State from vessels in its harbours, or from their owners, for other than sanitary purposes, are sustained. We say for other than sanitary purposes, for the power to prescribe regulations to protect the health of the community, and prevent the spread of disease, is incident to all local municipal authority, however much such regulations may interfere with the movements of commerce. But, independently of such measures the State may prescribe regulations for the government of vessels whilst in its harbours; it may provide for their anchorage or mooring, so as to prevent confusion and collision; it may designate the wharves at which they shall discharge and receive their passengers and cargoes, and require their removal from the wharves when not thus engaged, so as to make room for other vessels. It may appoint officers to see that the regulations are carried out, and impose penalties for refusing to obey the directions of such officers; and it may impose a tax upon vessels sufficient to meet the expenses attendant upon the execution of the regulations. The authority for establishing regulations of this character is found in the right and duty of the supreme power of the State to provide for the safety, convenient use, and undisturbed enjoyment of property within its limits; and charges incurred in enforcing the regulations may properly be considered as compensation for the facilities thus furnished to the vessels.… The power of the States to regulate matters of internal police includes the establishment of ferries as well as the


  ― 536 ―
construction of roads and bridges. In Gibbons v. Ogden, Chief Justice Marshall said that laws respecting ferries, as well as inspection laws, quarantine laws, health laws, and laws regulating the internal commerce of the States, are component parts of an immense mass of legislation, embracing everything within the limits of a State not surrendered to the general government; but in this language he plainly refers to ferries entirely within the State, and not to ferries transporting passengers and freight between the States and a foreign country.… Such a ferry is a means, and a necessary means, of commercial intercourse between the States bordering on their dividing waters, and it must, therefore, be conducted without the imposition by the States of taxes or other burdens upon the commerce between them. Freedom from such imposition does not, of course, imply exemption from reasonable charges, as compensation for the carriage of persons, in the way of tolls or fares, or from the ordinary taxation to which other property is subjected, any more than like freedom of transportation on land implies such exemption. Reasonable charges for the use of property, either on water or land, are not an interference with the freedom of transportation between the States secured under the commercial power of Congress.” (114 U.S., pp. 210–217.)

The judgment of the Supreme Court of Pennsylvania was, therefore, reversed. It must be noted, however, that this judgment does not impugn the right of States, or of towns and cities acting under State authority, to regulate the use of wharves on navigable rivers and to impose charges for such use. In the case of the Packet Co. v. Keokuk, 95 U.S. 80, it was said by Mr. Justice Strong:—

“The principal question presented by the record of this case is, whether a municipal corporation of a State, having by the law of its organization an exclusive right to make wharves, collect wharfage, and regulate wharfage rates, can, consistently with the Constitution of the United States, charge and collect wharfage proportionate to the tonnage of the vessels from the owners of enrolled and licensed steamboats mooring and landing at the wharves constructed on the banks of a navigable river. If the charge is clearly a duty, a tax, or burden, which in its essence is a contribution claimed for the privilege of entering the port of Keokuk, or remaining in it, or departing from it, imposed, as it is, by authority of the State, and measured by the capacity of the vessel, it is doubtless embraced by the constitutional prohibition of such a duty. But a charge for services rendered or for conveniences provided is in no sense a tax or a duty.… It is a tax or a duty that is prohibited; something imposed by virtue of sovereignty, not claimed in right of proprietorship. Wharfage is of the latter character.… A passing vessel may use the wharf or not, at its election, and thus may incur liability for wharfage or not, at the choice of the master or owner.… It has always been held that wharfage dues may be exacted.” (95 U.S. pp. 84–5. See Cannon v. New Orleans, 20 Wall. 577.)

In the later case of Transportation Co. v. Parkersburg, 107 U.S. 691, the question raised was whether an ordinance of the city of Parkersburg, imposing a wharfage due upon all vessels discharging or receiving freight at the city wharves on the Ohio River, was valid. The plaintiff alleged that the charge demanded was not one of wharfage, but of tonnage. The court held that wharfage was a charge against a vessel for using or lying at a wharf or landing, such charge being collected by the owner of the wharf, or landing, as a rent for the temporary use of the property. On the other hand, a duty of tonnage was a charge imposed and collected by the government for the privilege of entering, trading, or lying in a port or harbour.

Bowman v. Chicago and North-western Railway Co., 125 U.S. 465 (1888).—A law of the State of Iowa prohibited common carriers from bringing intoxicating liquors into the State from any other State, without first being furnished with a certificate as prescribed. This law was declared by the Supreme Court of the United States to be invalid, as being a regulation of commerce among the States. The Court did not determine the question whether the right of transportation of an article of commerce from one State to another included, by necessary implication, the right of the consignee to sell it, in unbroken packages, at the place where transportation terminated; that point was in terms reserved, yet the argument of the majority led irresistibly to that conclusion.

Minnesota v. Barber, 136 U.S. 313 (1890).—A law of the State of Minnesota, entitled an “Act for the protection of the public health, by providing for inspection, before slaughter, of cattle, sheep, and swine, designed for slaughter for human food” required that animals thus described should be inspected by State officers within twenty-four


  ― 537 ―
hours before they were slaughtered. If found fit for slaughter it was provided that certificates to that effect should be given; if not found fit they had to be removed and destroyed. Barber was convicted before a Justice of the Peace of Minnesota, of having wrongly sold, for human food, part of an animal slaughtered in the State of Illinois, but which had not been inspected in Minnesota. The State Courts held that the Act was repugnant to the Constitution, and void, and annulled the conviction.

The State authorities appealed to the Supreme Court of the United States. It was argued that the statute was passed in good faith for the purpose expressed in its title—to protect the health of the people of Minnesota. Mr. Justice Harland, in delivering the opinion of the court, said that the good faith of the State was to be presumed, but that presumption could not control the final determination of the question whether the State law was unconstitutional or not. There might be no purpose on the part of a State legislature to violate the provisions of the great instrument of government, and yet a statute enacted by it under the forms of law might be destructive of rights intended to be secured by the Constitution. Dealing with the arguments on behalf of the State, the Court said that the enactment of a similar statute by each one of the States composing the Union would result in the destruction of commerce among the several States, so far as such commerce involved the transportation from one part of the country to another of animal meat designed for food. If the object of the statute had been to deny altogether to the citizens of other States the privilege of selling, within the limits of Minnesota, any fresh meat from animals slaughtered outside of that State, and to compel the people of Minnesota either to purchase meat taken from animals inspected and slaughtered in the State, or to incur the cost of purchasing meat, when desired for their own domestic use, at points beyond the State, that object was attained by the Act in question. The duty of the Government, to maintain the Constitution, would not permit it to shut its eyes to these obvious and necessary results of the Minnesota statute. If this legislation did not make such discrimination against the products and business of other States, in favour of the products and business of Minnesota, as interfered with and burdened commerce among the several States, it would be difficult to enact legislation that would have that result. In the opinion of the Court, the statute in question was in violation of the Constitution and void.

Leisy v. Hardin, 135 U.S. 100 (1890).—The plaintiffs were brewers doing business in the State of Illinois, and they shipped beer in sealed packages to Keokuk, in the State of Iowa, where it was offered for sale. By the law of Iowa, the manufacture or sale of intoxicating liquors, or the keeping of them with the intent to sell, except for medicinal, chemical, and sacramental purposes, was prohibited. A quantity of the beer imported by the plaintiffs was seized by Hardin, the city marshal of Keokuk, purporting to act under the authority of the law of the State, and the plaintiffs sued Hardin to recover the value of the beer seized. The local court gave judgment for the plaintiff, but the Supreme Court of Iowa reversed that decision. The plaintiffs then appealed to the Supreme Court of the United States. The sole question involved was the validity of the State prohibition law. Chief Justice Fuller delivered the judgment of the Court, which applied the principles established in Bowman v. Chicago to the sale of liquor imported from another State, in the package in which it was imported. This was no new principle; it had been decided by Chief Justice Marshall, in Brown v. Maryland, that a package remained the subject of inter-State commerce until the importer sold it, or broke the package in which it was imported. The Court therefore held that the law of Iowa, so far as it prohibited the sale by the importer, in the packages of importation, of liquor brought from other States, was invalid, because it was in conflict with the will of Congress. The Court interpreted the silence of Congress, in not passing any law to regulate the sale of imported liquors and in not allowing the States to do so, to indicate its will that such commerce should be free and untrammelled. Referring to the Federal law at the time of the adoption of prohibition in Iowa, Chief Justice Fuller said:—




  ― 538 ―

“Up to that point of time, we hold that in the absence of congressional permission to do so, the State had no power to interfere by seizure, or any other action, in prohibition of importation and sale by the foreign or non-resident importer. Whatever our individual views may be as to the deleterious or dangerous qualities of particular articles, we cannot hold that any articles which Congress recognizes as subjects of inter-state commerce are not such, or that whatever are thus recognized can be controlled by State laws amounting to regulations, while they retain that character; although, at the same time, if directly dangerous in themselves, the State may take appropriate measures to guard against injury before it obtains complete jurisdiction over them. To concede to a State the power to exclude, directly or indirectly, articles so situated, without congressional permission, is to concede to a majority of the people of a State, represented in the State legislature, the power to regulate commercial intercourse between the States, by determining what shall be its subjects, when that power was distinctly granted to be exercised by the people of the United States, represented in Congress, and its possession by the latter was considered essential to that more perfect union which the Constitution was adopted to create Undoubtedly, there is difficulty in drawing the line between the municipal powers of the one government and the commercial powers of the other, but when that line is determined, in the particular instance, accommodation to it, without serious inconvenience, may readily be found, to use the language of Mr. Justice Johnson in Gibbons v. Ogden, 9 Wheat. 1,238, in ‘a frank and candid co-operation for the general good.”’ (135 U.S. pp. 124-5.)

Referring to the case of Peirce v. New Hampshire (5 How. 504), Chief Justice Fuller said that, in so far as it rested on the view that the law of New Hampshire was valid because Congress had made no regulation on the subject, it must be regarded as having been distinctly overthrown by numerous cases. In consequence of the decision in Leisy v. Hardin, Congress on 8th Aug., 1890, passed a measure, now known as the Wilson Act, the text of which is as follows:—

“That all fermented, distilled, or other intoxicating liquors or liquids transported into any State or Territory, or remaining therein for use, consumption, sale or storage therein, shall, upon arrival in such State or Territory, be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police powers, to the same extent and in the same manner as though such liquors or liquids had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise.”

A section containing provisions similar in substance to that of the Wilson Act has been embodied in the Constitution of the Commonwealth. (See sec. 113.)

Addyston Pipe and Steel Co. v. United States, 175 U.S 211 (1899).—In this, the most recent case on the meaning of the commerce clause, it was decided that Congress, under its power to regulate commerce, may forbid contracts and combinations between private individuals which operate directly and substantially in restraint of trade. Six companies, situated in four different States, entered in 1894 into a combination, agreeing that there should be no competition between them, in certain States and Territories, in regard to the manufacture and sale of cast-iron pipes. The object and effect of the combination was to enhance the prices of their goods. The United States took proceedings against them, under the Federal Act of 1890, entitled “an Act to protect trade and commerce against unlawful restraints and monopolies,” and prayed for a perpetual injunction against the defendants working under the combination agreement, as being in restraint of trade. The Trial Court dismissed the case, but the Circuit Court reversed this decision, and ordered the injunction to be granted. The defendants then appealed to the Supreme Court of the United States.

On behalf of the appellants it was argued that the power of Congress was limited to preventing interference by the State legislatures, or by regulations made under the authority of a State by some political department thereof—including congressional power over common carriers, and elevator, gas, and water companies, for reasons stated to be peculiar to such carriers and companies—but that it did not include the general power to interfere with or prohibit private contracts between citizens, even though such contracts had inter-state commerce for their object, and resulted in a direct and substantial obstruction to or regulation of that commerce. The whole purpose of the commerce clause, it was urged, was to guard against discriminating legislation by


  ― 539 ―
the States. The clause which forbade Congress to pass any law impairing the obligation of contracts was also relied on.

The judgment of the Court was delivered by Mr. Justice Peckham. He maintained the absolute and unlimited power of Congress to regulate inter-state trade and commerce, and declined to recognize the suggested limitation. The opinion of the Court is clearly expressed in the following extract:—

“If certain kinds of private contracts do directly, as already stated, limit or restrain, and hence regulate, inter-state commerce, why should not the power of Congress reach those contracts just the same as if the legislation of some State had enacted the provisions contained in them ? The private contracts may indeed be as far-reaching in their effect upon inter-state commerce as would the legislation of a single State of the same character. … What sound reason can be given why Congress should have the power to interfere in the case of the State, and yet have none in the case of the individual? Commerce is the important subject of consideration, and anything which directly obstructs and thus regulates that commerce which is carried on among the States, whether it is State legislation or private contracts between individuals or corporations, should be subject to the power of Congress in the regulation of that commerce.” (175 U.S. pp. 229-30.)

The Court held that under the commerce power Congress may legislate to declare void and prohibit the performance of any contract between individuals or corporations, where the natural and direct effect of such a contract is, when carried out, to directly, and not as a mere incident to other and innocent purposes, regulate to any extent inter-state or foreign commerce; that the provision in the Constitution regarding the liberty of the citizen is to some extent limited by the commerce clause, and the power of Congress to regulate inter-state commerce comprises the right to enact a law prohibiting a citizen from entering into those private contracts which directly and substantially, and not merely indirectly, remotely, incidentally, and collaterally, regulate to a greater or less extent commerce among the States; and that, since the Anti-Trust Act of 1890, any agreement or combination which directly operates, not alone upon the manufacture, but upon the sale, transportation, and delivery of an article of inter-state commerce, by preventing or restricting its sale, thereby regulates inter-state commerce to that extent, and thus trenches upon the powers of the national legislature, and violates the statute. The contracts in this case were held to have this effect, and to violate the Anti-Trust Act; and the judgment of the Circuit Court, though held to be too wide so far as it extended to internal commerce, was affirmed so far as inter-state commerce was concerned.

BEGINNING AND END OF FEDERAL CONTROL.—“Any article of foreign commerce is protected against the power of the States from the moment, in the case of an export, that this quality attaches to it, and to the moment, in the case of an import, when it is divested of the same; i.e., from the moment, in the first case, when it is delivered to the first common carrier for exportation, and to the moment, in the second case, when it has passed into the hands of the purchaser of the unbroken package from the original importer, or has been broken up for retail by the original importer.” (Coe v. Errol, 116 U.S. 517; Turpin v. Burgess, 117 U.S. 504; Brown v. Maryland, 12 Wheat. 419. Burgess, Political Sc. ii. 135.)

EXTENT OF THE COMMERCIAL POWER.—“The commercial system of the United States has also been employed for the purpose of revenue; sometimes for the purpose of prohibition, sometimes for the purpose of retaliation and commercial reciprocity; sometimes to lay embargoes; sometimes to encourage domestic navigation and the shipping and mercantile interests by bounties, by discriminating duties, and by special preferences and privileges, and sometimes to regulate intercourse with a view to mere political objects, such as to repel aggressions, increase the pressure of war, or vindicate the rights of neutral sovereignty.” (Story, Comm. § 1076.)

TRAFFIC AND INTERCOURSE.—“Commerce undoubtedly is traffic, but it is something more. It is intercourse. It describes the commercial intercourse between nations, and parts of nations, in all its branches; and is regulated by prescribed rules for carrying on that intercourse.” (Story, Comm. § 1061.)

“It may, therefore, be safely affirmed that the terms of the Constitution have at all times been understood to include a power over navigation, as well as trade; over intercourse, as well as traffic, and that, in the practice of other countries, and especially in


  ― 540 ―
our own, there has been no diversity of judgment or opinion. During our whole colonial history, this was acted upon by the British Parliament as an uncontestable doctrine. That Government regulated not only our traffic with foreign nations, but our navigation and intercourse as unquestioned functions of the power to regulate commerce.” (Story, Comm. § 1064.)

“This power of the Constitution extends to commerce with foreign nations, and among the several States, and with the Indian tribes. In regard to foreign nations, it is universally admitted that the words comprehend every species of commercial intercourse. No sort of trade or intercourse can be carried on between this country and another to which they do not extend. Commerce as used in the Constitution is a unit, every part of which is indicated by the term.” (Id. § 1065.)

NAVIGATION AND SHIPPING (see Notes, § 410, infra).—The power to regulate commerce includes the regulation of navigation. (Cooley v. Port Wardens, 12 How. 299, 315; the Barque Chusan, 2 Story, 455.) A bill providing for the recording of mortgage, hypothecation, or conveyance of any vessel, is a regulation of commerce, and is consequently within the power over commerce. (White's Bank v. Smith, 7 Wall. 646.) Under its power to regulate commerce the Federal Legislature has authority to establish a lien on vessels of the Union in favour of material-men, uniform throughout the whole country. In particular cases, until the Federal Legislature acts, the States may continue to legislate. Hence, a lien granted by State law to material-men who furnish necessaries to a vessel in its home port in such State is valid. (The Lottawanna, 21 Wall. 588.) The power over vessels is co-extensive with the power over the cargo. (The Brig Wilson, 1 Brock. 423.) Condensed from Baker, Annot. Const. p. 21 and 34.

DAMS AND BRIDGES ACROSS NAVIGABLE WATERS (see Notes, § 417, infra).—A bridge erected across a navigable river so as to obstruct navigation is a nuisance, and an Act of a State Legislature authorizing its construction affords no justification to the person erecting it. (Pennsylvania v. Wheeling Bridge Co., 13 How. 518.) The power to regulate commerce comprehends the control for that purpose of all the navigable waters of the Union which are accessible from a State other than that in which they lie. It is for the Federal Legislature to determine when its full powers will be exercised, and what regulations it will make. (Gilman v. Philadelphia, 3 Wall. 713.) A bridge constructed in accordance with Federal and State legislation is a lawful structure; and it cannot thereafter be treated as a public nuisance. (Miller v. Mayor of New York, 109 U.S. 385.) Condensed from Baker, Annot. Const. p. 21.

RIVER WITHIN A STATE (see Notes, § 417, infra).—If a river is not of itself a highway for commerce with other States or foreign countries, or does not form such highway by its connection with other waters, and is only navigable between different places within the State, it is not a navigable water of the Union, and a federal law for the enrolment and license of vessels does not apply. (The Montello, 11 Wall. 411.) Where a river is wholly within the limits of a State, the State can authorize any improvement which, in its judgment, will enhance its value as a means of transportation from part of the State to another. The internal commerce of a State—that is, commerce which is wholly confined within its limits—is as much under its control as foreign or inter-state commerce is under the control of the general government. (Mobile v. Kimball, 102 U.S. 691; Huse v. Glover, 119 U.S. 543; Sands v. Manistee Riv. Imp. Co., 123 U.S. 288.) Until the Federal Legislature acts respecting navigable streams entirely within a State, the State has plenary powers; but it is not concluded by anything that the State may have done, from abating any erections that may have been made, and preventing any other from being made, except in conformity with such regulations as it may impose. (Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1.) Condensed from Baker, Annot. Const. p. 23.

The Penobscot River is wholly within the State of Maine. The lower eight miles is crossed by several dams, and is not navigable. Above that there is imperfect navigation. A law of the State providing for the improvement of this upper navigation, and granting exclusive privileges to the company improving the same, is constitutional. (Veazie v. Moor, 14 How. 568. Baker, Annot. Const. p. 21.)

IMPROVEMENT OF NAVIGATION AND REMOVAL OF OBSTRUCTIONS. (See Notes, § 417 infra.)—The right to regulate commerce includes the right to regulate and improve navigable waters and ports, and the Federal legislature may for that purpose close to navigation one of several channels in a navigable stream. (South Carolina v. Georgia, 93 U.S. 4. Baker, Annot. Const. p. 22.)

The Federal Legislature has the control of all navigable rivers between the States, or connecting with the ocean, so as to preserve and protect free navigation. As a corollary of this, it has the paramount right to determine what shall be deemed an obstruction to commerce. (Miller v. Mayor of N.Y., 109 U.S. 385. Baker, Annot. Const. p. 22.)




  ― 541 ―

A federal act appropriating money for the improvement of navigation of Willamette River, a stream wholly within the State of Oregon, was no assumption of police power. Nor does it, by conferring the privilege of a port of entry on a town, conflict with the police power of the State, exercised in bridging a navigable stream of the State at that point. (Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1. Baker, Annot. Const. p. 23.)

The Federal Legislature may authorize the erection of railroad bridges across navigable waters to facilitate commerce among the States. (Railroad Co. v. Richmond, 19 Wall. 584. Baker, Annot. Const. p. 23.)

The Federal Legislature has power to prevent the obstruction of any navigable river which is a means of commerce between any two or more States. The exercise of this great public right is not incompatible with the enjoyment of local rights. The public right consists in an unobstructed use of a navigable water connecting two or more States. The local right is to cross such water. The general commercial right is paramount to the State authority. (Works v. Junction R.R. Co., 5 McLean, 426. Baker. Annot. Const. p. 24.)

No State can obstruct a navigable stream which extends to other States or is connected with a river or lake which falls into the sea. (Palmer v. Cuyahoga Co., 3 McLean, 226. Baker, Annot. Const. p. 24.)

A steam boat enrolled and licensed under a federal act is entitled to the protection of the general government while engaged in carrying on commerce between different States; her owners have a right to use the navigable streams of the country free from all material obstructions to navigation. (Jolly v. Terre Haute Draw-bridge Co., 6 McLean, 237. Baker, Annot. Const. p. 24.)

Commerce embraces navigation; and the improvements of the harbours and bays along our coasts, and of navigable rivers within the States connecting with such bays and coasts, falls within the commercial power. (Mobile v. Kimball, 102 U.S. 691. Baker, Annot. Const. p. 26.)

RAILWAYS, FEDERAL CONTROL OF.—The Federal Legislature has authority, in the exercise of its power to regulate commerce among the States, to either construct, or authorize persons to construct, railroads across the States and territories of the Union. (California v. Pac. R.R. Co., 127 U.S. 1; Cherokee Nation v. South Kansas, 135 U.S. 641. Baker, Annot. Const. p. 41. See note, § 221, infra.)

TELEGRAPHS.—Communications by telegraph are in their nature both postal and commercial, and when passing between different States of the Union such communications are “commerce among the several States,” and subject to federal regulation. A general license tax imposed by State law upon such company, doing inter-state as well as domestic business, is unconstitutional. The property of such company situated within a State may be taxed by the State, not its inter-state business. (Leloup v. Port of Mobile, 127 U.S. 640. Baker, Annot Const. p. 31.)

The telegraph is an instrument of commerce, and when used between different States is an instrument of inter-state commerce and subject to federal control. A State cannot tax on messages sent out of the State. A tax on messages between private parties sent from point to point wholly within the State is not repugnant to this clause. (Telegraph Co. v. Texas, 105 U.S. 460; Pensacola Tel. Co. v. Western Union Tel. Co., 96 U.S. 1. Baker, Annot. Const. pp. 31, 33.)

Whatever authority a State may possess over the transmission and delivery of messages by telegraph companies within her limits, it does not extend to the delivery of messages in other States. (W.U. Tel. Co. v. Pendleton, 122 U.S. 347. Baker, Annot. Const. p. 40.)

No tax can be imposed by a State upon telegraphic messages sent into the State from without, or out of the State from within. Sending a telegraphic message is commerce, and when the same passes from point to point in different States it is commerce among the several States. (West. Union Tel. Co. v. Alabama, 132 U.S. 472. Baker, Annot. Const. p. 20.)

PILOTAGE.—The power to regulate commerce, as conferred on the Federal Legislature, does not exclude the exercise of authority by the States to regulate pilots. (Steamship Co. v. Joliffe, 2 Wall. 450. Baker, Annot. Const. p 24.)

Pilot regulations are regulations of commerce. State pilotage laws, however, are valid, but are subject to the power of the Federal Legislature over the matter. (Ex parte McNiel, 13 Wall. 236.) A statute of Louisiana authorizing the port officers of New Orleans to demand, in addition to other fees, the sum of five cents whether called upon to perform any service or not, for every vessel arriving in port, is in violation of this clause. (Steamship Co. v. Port Wardens, 6 Wall. 31; Spraigue v. Thompson, 118 U.S. 90. Baker, Annot. Const. pp. 24, 25.)




  ― 542 ―

COMMERCIAL MARINE.—The whole commercial marine of the country is placed by the Constitution under Federal regulation, and all Federal laws on that subject, whether in relation to foreign or coastwise trade, are supreme; and where a State law contravenes such Federal laws it must give way. (Sinnot v. Davenport, 22 How. 227; Foster v. Davenport, id 244. Baker, Annot. Const. p. 25.)

ROADS, BRIDGES, AND CANALS.—The Federal Legislature has power to regulate commerce, but this has never been construed to include the means whereby commerce is carried on within a State. It has never attempted to regulate canals, turnpikes, and bridges, which do not interfere with Federal commerce. The establishment of post-offices and post-roads does not affect or control the absolute power of the State over its highways and bridges. The police power to make bridges is as absolutely vested in a State as is the commercial power in Congress. (Milnor v. New Jersey R.R., cited Baker, Annot. Const. p. 25.)

FEDERAL TAX ON PASSENGERS.—A Federal Act imposing upon the owners of steam sailing vessels a tax of fifty cents for every passenger, not a citizen of the Union, who is brought from a foreign port, is a valid exercise of the power to regulate commerce. The right to make such regulation is exclusively in the Federal Legislature, and any such regulation when imposed by a State is invalid. (Edye v. Robertson, 112 U.S. 580. Baker, Annot. Const. p. 28.)

TORTS IN CONNECTION WITH COMMERCE.—Until the Federal Legislature has made some regulation upon the subject of the liability of parties for marine torts resulting in death of the person injured, a State law giving to the representatives of such person a right of action where his death was caused by the negligence of another, within the limits of such State, is not void as an interference with the commerce clause. (Sherlock v. Alling, 93 U.S. 99. Baker, Annot. Const. p. 34.)

A State law which imposes no tax, but simply declares a general principle respecting liability of all persons within the State for torts resulting in the death of the party injured, and applicable alike to all persons, whether engaged in navigation or not, is not repugnant to the commerce clause. (Sherlock v. Alling, 93 U.S. 99. Id.)

STATE LEGISLATION AFFECTING COMMERCE.—It may be said generally that, until the Federal Legislature has dealt with the subject, the legislation of a State, not directed against commerce, but relating to the rights, duties, and liabilities of citizens, and only indirectly affecting the operations of commerce, is binding upon citizens within its jurisdiction, whether on land or water, or engaged in commerce, foreign or inter-state, or in any other pursuit. Legislation may in a great variety of ways affect commerce and persons engaged in it without constituting a regulation of it within the meaning of the Constitution. (Sherlock v. Alling, 93 U.S. 99; State Tax on Gross Receipts Case, 15 Wall. 284. Baker, Annot. Const. p. 35.)

AMERICAN AND CANADIAN POWERS CONTRASTED.—In the case of Thurlow v. Massachusetts, 1847, 5 How. 586, Chief Justice Taney said that although Congress had, under the Constitution, power to regulate the importation of goods, yet where Congress had made no regulation on the subject, traffic in unregulated articles became subject to State laws as soon as they were introduced into the territory of a State, and a tax could be imposed upon them, or a license required, according to the discretion of the State Legislature. This doctrine was cited in several leading Canadian cases with a view to applying it to the interpretation of the Canadian Constitution. Referring to the suggested analogy of the two Constitutions, Chief Justice Richie, in Regina v. Justices of King's County, said:—“Cases from the United States Courts were cited as bearing on this question, but there is a very clear distinction between the powers of Congress and the powers of the Dominion Parliament. In the United States, Congress has not the same full power of regulating trade and commerce that belong to the Dominion Parliament. The power of Congress, as we understand it, is confined to ‘regulating commerce with foreign nations and among the several States,’ giving no right to interfere with the internal commerce of an individual State; that it does not extend to that commerce which was completely internal, carried on within the particular State, and which did not extend to, or affect, other States, but is restricted to that commerce which concerns more States than one, reserving the completely internal commerce of a State for the State itself, and, therefore, State license laws have been held constitutional and valid.” (Per Ritchie, C.J., in Reg. v. Justices of King's County, 1875, 15 N. Bruns. [2 Pugs.] 535. Wheeler, C.C. 59. In another case the same learned judge


  ― 543 ―
said:—“Much has been said as to the analogy of the Dominion Parliament and local Legislatures with the Congress of the Federal Government and the State Legislatures of the United States; but the Constitution of the United States and the Constitution of the States, as regards the powers which each may exercise, are so different from the relative powers of the Dominion Parliament and the Provincial Legislatures that the cases to be found in the American books with regard to the State Legislatures, in regard to prohibiting the sale of intoxicating liquors, afford no guide whatever in the determination of the powers of the local Legislatures and the Dominion of Canada. The Government of the United States is one of enumerated powers, and the Governments of the States possess all the general powers of legislation. Here we have the exact opposite. The powers of the Provincial Governments are enumerated, and the Dominion Government possess the general powers of legislation.” (Per Ritchie, C.J., in City of Fredericton v. Reg., 1880, 3 S.C.R. [Can.] 505. Wheeler, C.C. pp. 60–1.)

COMMERCIAL CONTRACTS.—The legislature of the province of Ontario passed an Act 39 Vic. c. 24, intituled an Act to secure uniform conditions in policies of Fire Insurance. It provides that the conditions set forth in the schedule to the Act should be deemed to be part of every policy of fire insurance in force in Ontario, unless expressly varied by the policy itself. This Act was impeached by an Insurance Company, as being in excess of the legislative power of the Parliament of the Province. On appeal to the Privy Council it was held valid. Sir Montague E. Smith; in delivering the judgment of the Judicial Committee, said:—

“A question was raised, which led to much discussion in the Courts below, and at this bar, viz., whether the business of insuring buildings against fire was a trade. This business, when carried on for the sake of profit, may, no doubt, in some sense of the word, be called a trade. But contracts of indemnity, made by insurers, can scarcely be considered trading contracts, nor were insurers who made them held to be ‘traders’ under the English bankruptcy laws; they have been made subject to those laws by special description. Whether the business of fire-insurance properly falls within the description of ‘a trade’ must, in their Lordships' view, depend upon the sense in which that word is used in the particular statute to be construed; but in the present case their Lordships do not find it necessary to rest their decision on the narrow ground that the business of insurance is not trade. The words ‘regulation of trade and commerce,’ in their unlimited sense, are sufficiently wide, if uncontrolled by the context and other parts of the Act, to include every regulation of trade, ranging from political arrangements in regard to trade with foreign governments, requiring the sanction of Parliament, down to minute rules for regulating particular trades. But a consideration of the Act shows that the words were not used in this unlimited sense. In the first place, the collocation of No. 2 with classes of subjects of national and general concern affords an indication that regulations relating to general trade and commerce were in the mind of the legislature when conferring this power on the Dominion Parliament. If the words had been intended to have the full scope of which, in their literal meaning, they are susceptible, the specific mention of several of the other classes of subjects enumerated in sec. 91 would have been unnecessary; as, 15, banking; 17, weights and measures; 18, bills of exchange and promissory notes; 19, interest; and even 21, bankruptcy and insolvency. ‘Regulation of trade and commerce’ may have been used in some such sense as the words ‘regulations of trade’ in the Act of Union between England and Scotland (6 Anne, c. 11), and as these words have been used in other Acts of State. Article V. of the Act of Union enacted that all the subjects of the United Kingdom should have ‘full freedom and intercourse of trade and navigation’ to and from all places in the United Kingdom and the colonies, and Article VI. enacted that all parts of the United Kingdom from and after the Union should be under the same ‘prohibitions, restrictions, and regulations of trade.’ Parliament has, at various times since the Union, passed laws affecting and regulating specific trades in one part of the United Kingdom only, without it being supposed that it thereby infringed the Articles of Union. Thus the Acts for regulating the sale of intoxicating liquors notoriously vary in the two kingdoms. So with regard to Acts relating to bankruptcy and various other matters. Construing therefore the words ‘regulation of trade and commerce’ by the various aids to their interpretation above suggested, they would include political arrangements in regard to trade, requiring the sanction of Parliament, regulation of trade in matters of interprovincial concern, and it may be that they would include general regulation of trade affecting the whole Dominion. Their Lordships abstain, on the present occasion, from any attempt to define the limits of the authority of the


  ― 544 ―
Dominion Parliament in this direction. It is enough for the decision of the present case to say that, in their view, its authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance, in a single Province.” (Citizens Insurance Co. v. Parsons, 7 App. Ca. pp. 111–3.)

COMMERCIAL POWER OF THE DOMINION.—In considering the Canadian Constitutional Cases, and in comparing them with those of the United States, attention must be paid to the fact that the Dominion has by express words in the Constitution exclusive legislative authority over “the regulation of trade and commerce,” whilst the Provinces have exclusive legislative authority to make laws in relation to—(1) Direct taxation within the Province in order to the raising of a revenue for provincial purposes. (2) Municipal Institutions. (3) Shop, saloon, auctioneer, and other licenses in order to the raising of a revenue for provincial, local, or municipal purposes. (4) Property and civil rights. (5) Matters of a merely local, private, or provincial nature. In the interpretation of the Canadian Constitution the great problem has been to reconcile the operation of the legislative power of the Dominion, within the exclusive area assigned to the Dominion, with the operation of the legislative power of the Provinces within the exclusive area assigned to the Provinces. In some legislation of the Dominion, under the trade and commerce section, there has been a tendency to encroach upon the local, private, and municipal authority of the Provinces and their power to deal with civil rights and property. The occasional conflict and overlapping of these two powers will be seen illustrated in a few of the leading cases which have arisen under the Constitution of the Dominion.

In 1877 a brewer named John Severn was prosecuted by the provincial authorities in Ontario for selling liquor by retail without having a provincial license, as required by the local Act 37 Vic. c. 32. The Supreme Court of Canada held that the provincial Act was ultra vires, being in conflict with the power of the Federal Parliament to regulate commerce. (Severn v. The Queen [1877], 2 S.C.R. [Can.] 70.) It will be seen that the accuracy of this decision was subsequently doubted. In the case of Reg. v. The Justices of King's County, 15 N. Bruns. (2 Pugs.) 535, the facts were that in February, 1875, one McManus applied to the Justices in session for a tavern license. In the exercise of the discretion conferred upon them by the New Brunswick Act, 36 Vic. c. 10, the Justices refused to grant the license. McManus was shortly afterwards fined for selling without a license. He then applied for a mandamus to compel the Justices to grant him a license. The provincial authorities opposed the application and contended—(1) That the power given to the Parliament of Canada by the B.N.A. Act, 1867, sec. 91, sub-sec. 2, meant trade and commerce with foreign countries; and that the power to make laws respecting tavern licenses belonged exclusively to the provincial legislatures by sec. 92; (2) that by the Act of Assembly, 36 Vic. c. 10, s. 2, it was entirely in the discretion of sessions whether they granted licenses or not; that it was an arbitrary discretion, which could not be questioned. In delivering the judgment of the Court, Ritchie, C.J., said:—

“To the Dominion of Canada is given the power to legislate on the ‘regulation of trade and commerce,’ and the power of ‘raising money by any mode or system of taxation.’ The regulation of trade and commerce must involve full power over the matter to be regulated, and must necessarily exclude the interference of all other bodies that would attempt to intermeddle with the same thing. The power thus given to the Dominion Parliament is general, without limitation or restriction, and therefore must include traffic in articles of merchandise, not only in connection with foreign countries, but also that which is internal between different Provinces of the Dominion as well as that which is carried on within the limits of an individual Province. As a matter of trade and commerce, the right to sell is inseparably connected with the law permitting importation. If, then, the Dominion Parliament authorize the importation of any article of merchandise into the Dominion, and places no restriction on its being dealt with in the due course of trade and commerce, or on its consumption, but exacts and receives duties thereon on such importation, it would be in direct conflict with such legislation, and with such right to raise money by any mode or system of taxation, if the local legislature of the Province into which the article was so legally imported, and


  ― 545 ―
on which a revenue was sought to be raised, could so legislate as to prohibit its being bought and sold and to prevent trade or traffic therein, and thus destroy its commercial value and with it all trade and commerce in the article so prohibited, and thus render it practically valueless as an article of commerce on which a revenue could be levied. Again, how can the local legislature prohibit or authorize the sessions to prohibit (by arbitrarily refusing to grant any license) the sale of spirituous liquors of all kinds without coming into direct conflict with the Dominion Legislature on the subject of Inland Revenue, involving the right of manufacturing and distilling, or making of spirits, &c., as regulated by the Act 31 Vic. c 8, and the subsequent Acts in amendment thereof, and the excise duties leviable thereby, and the licenses authorized to be granted there-under?” Rule absolute for a mandamus. (Wheeler, C.C. 59.)

In 1878 the Dominion Parliament passed the Canada Temperance Act, 1878, which was intended to enable the people of cities and counties, throughout Canada, to prohibit the sale of intoxicating liquors therein, subject to certain exceptions where they might be required for medicinal or sacramental purposes. The substantial principle of the Act was the suppression of the liquor traffic in municipal districts, severally, by a separate vote in each. What was intended to be effected was local prohibition by local option. The prohibitions of the Act were to be brought into force in each district by the determination of the persons entitled to vote at the election of members of Parliament. A bare majority was to decide in each voting district. If upon a poll being taken the majority of electors were against the adoption of the prohibitions of the Act, the question could not be re-opened for a period of three years.

In the case of the Queen v. the City of Fredericton (1879), 19 N. Bruns. (3 Pugs. and Burb.) 139, the question was raised as the validity of the Canada Temperance Act of 1878. The Supreme Court of New Brunswick held that the Act was beyond the power of the Dominion Parliament to pass. It was admitted that the Dominion Parliament could pass an Act to prohibit the sale of liquor. What was denied was the power to authorize the inhabitants of each town or parish to regulate or prohibit the sale of liquor within its limits. On appeal to the Supreme Court of Canada this decision was reversed and the validity of the Canada Temperance Act was confirmed.

“With us the Government of the Provinces is one of enumerated powers, which are specified in the B.N.A. Act, and in this respect differs from the Constitution of the Dominion Parliament, which, as has been stated, is authorized ‘to make laws for the peace, order, and good government of Canada in relation to all matters not coming within the classes of subjects by the Act assigned exclusively to the Legislatures of the Provinces;’ and that ‘any matter coming within any of the classes of subjects enumerated shall not be deemed to come within the class of matters of a local or private nature comprised in the enumeration of the classes of subjects assigned exclusively to the Legislatures of the Provinces.’ Therefore ‘the regulation of trade and commerce’ being one of the classes of subjects enumerated in sec. 91, is not to be deemed to come within any of the classes of a local or private nature assigned to the Legislatures of the Provinces. To my mind it seems very clear that the general jurisdiction or sovereignty which is thus conferred emphatically negatives the idea that there is not within the Dominion Legislature power or authority to deal with the question of prohibition in respect to the sale or traffic in intoxicating liquors or any other article of trade or commerce. It is said a power to regulate does not include a power to prohibit. Apart from the general legislative power which I think belongs to the Dominion Parliament, I do not entertain the slightest doubt that the power to prohibit is within the power to regulate. It would be strange indeed that, having the sole legislative power over trade and commerce, the Dominion Parliament could not prohibit the sale and traffic if they deemed such prohibition conducive to the peace, order, and good government of Canada. There seems to be no doubt on this point in the United States.” (Per Chief Justice Ritchie, in City of Fredericton Case, 3 S.C.R. (Can.) 505; Wheeler, C.C. 61.)

In the case of Russell v. The Queen (1882) 7 App. Cas. 829, the appellant had been convicted by the Police Magistrate of Fredericton, New Brunswick, for unlawfully selling liquor contrary to the provisions of the Canada Temperance Act, 1878. It was contended that it was not competent for the Parliament of Canada to pass such Act on the ground that it involved an invasion of jurisdiction exclusively belonging to the Provincial Legislatures. In deference to the judgment of the Supreme Court of Canada in the City of Fredericton case, the Supreme Court of New Brunswick refused to quash


  ― 546 ―
the conviction. Russell then appealed to the Privy Council, which sustained the validity of the Act.

“The declared object of Parliament in passing the Act is that there should be uniform legislation in all the Provinces respecting the traffic in intoxicating liquors, with a view to promote temperance in the Dominion. Parliament does not treat the promotion of temperance as desirable in one Province more than another, but as desirable everywhere throughout the Dominion. The Act as soon as it was passed became a law for the whole Dominion, and the enactments of the first part relating to the machinery for bringing the second part into force, took effect and might be put in motion at once and everywhere within it. It is true that the prohibitory and penal parts of the Acts are only to come into force in any county or city upon the adoption of a petition to that effect by a majority of electors, but this conditional application of these parts of the Act does not convert the Act itself into legislation in relation to a merely local matter. The objects and scope of the legislation are still general, viz., to promote temperance by means of a uniform law throughout the Dominion. The manner of bringing the prohibition and penalties of the Act into force, which Parliament has thought fit to adopt. does not alter its general and uniform character. Parliament deals with the subject as one of general concern to the Dominion, upon which uniformity of legislation is desirable, and the Parliament alone can so deal with it. There is no ground or pretence for saying that the evil or vice struck at by the Act in question is local or exists only in one Province, and that Parliament, under colour of general legislation, is dealing with a provincial matter only. It is therefore unnecessary to discuss the considerations which a state of circumstances of this kind might present. The present legislation is clearly meant to apply a remedy to an evil which is assumed to exist throughout the Dominion, and the local option, as it is called, no more localizes the subject and scope of the Act than a provision in an Act for the prevention of contagious diseases in cattle that a public officer should proclaim in what district it should come into effect, would make the statute itself a mere local law for each of these districts. In statutes of this kind the legislation is general, and the provision for the special application of it to particular places does not alter its character. Their Lordships having come to the conclusion that the Act in question does not fall within any of the classes of subjects assigned exclusively to the provincial Legislatures, it becomes unnecessary to discuss the further question whether its provisions also fall within any of the classes of subjects enumerated in sec. 91. In abstaining from this discussion, they must not be understood as intimating any dissent from the opinion of the Chief Justice of the Supreme Court of Canada and the other judges, who held that the Act, as a general regulation of the traffic in intoxicating liquors throughout the Dominion, fell within the class of subject, ‘the regulation of trade and commerce,’ enumerated in that section, and was, on that ground, a valid exercise of the legislative power of the Parliament of Canada.” (Per Sir Montague E. Smith, in Russell v. The Queen, 7 App. Ca. 841–2.)

The next important case involving the interpretation of the Canadian Constitution was that of Hodge v. The Queen (1883) 9 App. Ca. 117. The appellant had been convicted for unlawfully keeping open a billiard-room in connection with a tavern in Toronto, Ontario, during the time prohibited by the Ontario Liquor License Act, and contrary to the resolutions of the License Commissioners. The operation of this Act was confined to municipalities within the Province of Ontario. License Commissioners were appointed to meet in each municipality, and were empowered to pass, under the name of “resolutions,” by-laws or rules defining the conditions and qualifications requisite for obtaining licenses for the sale by retail of intoxicating liquors and for limiting the number of licenses, and to impose penalties for the infraction of their resolutions. The appellant challenged the validity of the Provincial law. The Privy Council sustained the validity of the law, on the grounds that the powers conferred by the Act in question were in the nature of police or municipal regulations of a local character for the good government of taverns, and calculated to preserve public decency and to repress drunkenness and disorderly conduct. As such they could not be said to interfere with the general regulation of trade and commerce which exclusively belonged to the Dominion Parliament, and they did not conflict with the provisions of the Canada Temperance Act, which had not yet been locally adopted. There was therefore no repugnancy between the Provincial law and the Dominion law.

In 1883–4 the Dominion Parliament passed amending Liquor License Acts designed to supplement and enforce the Canada Temperance Act, 1878. The Government of the Dominion was authorized to issue licenses, and no person who was not the holder of a


  ― 547 ―
license was to be allowed to deal in intoxicating liquors. Various classes of licenses were provided for; such as wholesale licenses, saloon licenses, hotel licenses and vessel licenses. Provision was made for limiting the number of licenses to be issued in the various licensing districts. In those parts of Canada where the Temperance Act had not been adopted by local option, it was intended to regulate the traffic by reducing the number of licenses. In the case of the Governor-General of the Dominion v. the Four Provinces, 1885 (Wheeler, C.C. 144), the Privy Council was called upon to consider the constitutionality of the amending Acts of 1883–4. Their Lordships decided that both the amending Acts were not within the legislative authority of the Parliament of Canada.

The latest and most important Canadian case dealing with the constitutional power of the Dominion and the Provinces, is that of the Att.-Gen. of Ontario v. the Att -Gen. of the Dominion (1896), App. Cas. 348. The principal question raised in that case was whether the Legislature of Ontario had jurisdiction to pass the Act 53 Vic. No. 56, as explained by Act 54 Vic. No. 46, intituled “An Act Respecting Local Option in the Matter of Liquor Selling.” This law gave the Council of every city, town, or village, authority to prohibit the sale by retail of intoxicating liquors, provided that by-laws intended to prohibit the sale should be submitted to and approved by the electors of the municipality. The Supreme Court of Canada held that the Act was invalid. (24 S.C.R. Can. 170.) Leave to appeal to the Privy Council was granted. Their Lordships held that the liquor law prohibitions authorized by the Legislature of Ontario were within the powers of a Provincial Legislature, but such prohibitions would be inoperative in any locality which had adopted or might hereafter adopt the local option provisions of the Canada Temperance Act.

“If the prohibitions of the Canada Temperance Act had been made imperative throughout the Dominion, their Lordships might have been constrained by previous authority to hold that the jurisdiction of the Legislature of Ontario to pass sec. 18, or any similar law, had been superseded. In that case, no Provincial prohibitions, such as are sanctioned by sec. 18, could have been enforced by a municipality, without coming into conflict with the paramount law of Canada. For the same reason Provincial prohibitions in force within a particular district will necessarily become inoperative, whenever the prohibitory clauses of the Act of 1886 have been adopted by that district. But their Lordships can discover no adequate grounds for holding that there exists repugnancy between the two laws in the districts of the Province of Ontario where the prohibitions of the Canadian Act are not, and may never be, in force. In a district which has, by the votes of its electors, rejected the second part of the Canadian Act, the option is abolished for three years from the date of the poll; and it hardly admits of doubt, that there could be no repugnancy whilst the option given by the Canadian Act was suspended. The Parliament of Canada has not, either expressly or by implication, enacted, that so long as any district delays or refuses to accept the prohibitions which it has authorized, the Provincial Parliament is to be debarred from exercising the legislative authority given by sec. 92, for the suppression of the drink traffic as a local evil. Any such legislation would be unexampled; and it is a grave question whether it would be lawful. Even if the provisions of sec. 18 had been imperative, they would not have taken away or impaired the right of any district in Ontario to adopt, and thereby bring into force, the prohibitions of the Canadian Act. Their Lordships, for these reasons, give a general answer to the seventh question in the affirmative. They are of opinion that the Ontario Legislature had jurisdiction to enact sec. 18, subject to this necessary qualification, that its provisions are or will become inoperative in any district of the Province, which has already adopted, or may subsequently adopt, the second part of the Canada Temperance Act of 1886” (Per Lord Watson, 1896, Appeal Cases 348.)

“Severn's case was reviewed by the Privy Council, in 1885, in the Bank of Toronto v. Lambe (12 App. Cas. 575, 586). In that case the Judicial Committee decided that a Province could impose direct taxation on commercial corporations carrying on their business in the Province. Lord Hobhouse said: ‘Since the Severn case was decided the question has been more carefully sifted.’ The words ‘regulation of trade and commerce’ are indeed very wide, and in Severn's case it was the view of the Supreme Court that they operated to invalidate the license duty which was there in question. But since that case was decided the question has been more completely sifted before the Committee in Citizens Insurance Co. v. Parsons.” (Wheeler, C.C. p. 54.)

DOES REGULATION INCLUDE PROHIBITION?—“It is said a power to regulate does not include a power to prohibit. Apart from the general legislative power which I


  ― 548 ―
think belongs to the Dominion Parliament, I do not entertain the slightest doubt that the power to prohibit is within the power to regulate. It would be strange indeed that, having the sole legislative power over trade and commerce, the Dominion Parliament could not prohibit the importation or exportation of any article of trade and commerce, or, having that power, could not prohibit the sale and traffic if they deemed such prohibition conducive to the peace, order and good government of Canada. There seems to be no doubt on this point in the United States.” (Per Ritchie, C.J., Wheeler, C.C. p. 61.)

“The object of the Canada Temperance Act of 1886 is not to regulate retail transactions between those who trade in liquor and their customers, but to abolish all such transactions within every provincial area in which its enactments have been adopted by a majority of the local electors. A power to regulate naturally if not necessarily assumes, unless it is enlarged by the context, the conservation of the thing which is to be made the subject of regulation. In that view, their lordships are unable to regard the prohibitive enactments of the Canadian statute of 1886 as regulations of trade and commerce. They see no reason to modify the opinion which was recently expressed on their behalf by Lord Davey in Municipal Corporation of the City of Toronto v. Virgo, 7 App. Ca. 93.” (Per Lord Watson in Att.-Gen. of Ontario v. Att.-Gen. of the Dominion, 1896, App. Ca. p. 363.)

“Their lordships think there is marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed.” (Per Lord Davey in the Municipal Corporation of the City of Toronto v. Virgo, 1896, App. Ca. 93.)

“It is not impossible that the vice of intemperance may prevail in particular localities within a Province to such an extent as to constitute its own cure by restricting or prohibiting the sale of liquor a matter of a merely local or private nature, and therefore failing prima facie within No. 16. In that state of matters, it is conceded that the Parliament of Canada should not imperatively enact a prohibitory law adapted and confined to the requirements of localities within the Province where prohibition was urgently needed.” (Per Lord Watson in the Att.-Gen. of Ontario v. Att.-Gen. of the Dominion, 1896, App. Ca. p. 365.)

It is to be noticed that the legislative power given to the Parliament of the Commonwealth is not a power to make laws with respect to “the regulation of” trade and commerce, but a power to make laws “with respect to trade and commerce.” (See Historical Note, p. 515, and Note, § 162, supra.)

LIQUOR LAWS UNDER THIS CONSTITUTION.—The Federal Parliament is not equipped with the same general control over the liquor traffic as that exercised by the Parliament of Canada in passing the Canada Temperance Act, 1878. The Parliament of Canada has power to regulate trade and commerce generally; it is not confined to inter-state and external commerce. The Parliament of the Commonwealth has power to deal only with trade and commerce (1) with other countries and (2) among the States. This excludes the trade and commerce which begins and ends in a State. A federal law authorizing the establishment of a system of local option, under which the sale of liquor could be prohibited in defined localities, would not be a law relating to trade and commerce “among the States,” but a law relating to trade and commerce in those defined localities “within the States.” In addition to this the power to legislate concerning the liquor traffic is expressly reserved to the States as a State right by section 113 of the Constitution, which provides that “all intoxicating liquids passing into a State or remaining there for use, consumption, sale or storage, shall be subject to the laws of the State, as if such liquids had been produced in the State.” (See Notes, § 456, infra.)

Whilst the Federal Parliament has no power to directly prohibit the manufacture of intoxicants or to establish the local option system in any State, it has the exclusive power to impose duties of customs and excise, which will enable it to tax heavily or lightly all intoxicating liquids imported into the Commonwealth or produced in any State. This power may be exercised in a manner calculated to influence the liquor traffic in a material degree (sec. 90). It has also the exclusive authority to grant bounties on the production or import of goods (sec. 90). This will enable it, if thought necessary, to directly encourage the manufacture of intoxicants by a pecuniary subsidy. The Parliament of a State would probably be enabled, under sec. 113, to prohibit the


  ― 549 ―
production or sale of intoxicants within the State limits, but should the Federal Parliament pass a law offering bounties for the production or export of those intoxicants, an inconsistency would arise, and the State law in that case would be invalid to the extent of the inconsistency. (See sec. 110 and Note, § 456, infra.)

51. (ii.) Taxation164; but so as not to discriminate between States or parts of States:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States.” (Art. I., sec. 8, subs. 1.) It also provides that “direct taxes shall be apportioned among the several States which may be included within this Union according to their respective numbers.” (Art I., sec. 2, subs. 3.) Sec. 91 of the British North America Act gives the Parliament of Canada exclusive power in respect of “the raising of money by any mode or system of taxation” (subs. 3); whilst sec. 92 gives to the Provincial Legislatures exclusive power in respect of “direct taxation within the Province in order to the raising of a revenue for provincial purposes” (subs. 2).

Earl Grey's Committee of the Privy Council, in 1849, recommended that the General Assembly should have power to make laws with respect to “the imposition of duties upon imports and exports” (p. 85, supra). Wentworth's Committee in 1853 specified “Intercolonial tariffs” as a federal subject (p. 91, supra).

In the Commonwealth Bill of 1891, the taxation power was contained in two sub-clauses:—“(2) Customs and excise [and bounties], but so that duties of customs and excise [and bounties] shall be uniform throughout the Commonwealth, and that no tax or duty shall be imposed on any goods exported from one State to another. (3) Raising money by any other mode or system of taxation; but so that all such taxation shall be uniform throughout the Commonwealth.” In Committee, some members doubted the wisdom of giving the Federal Government general powers of direct taxation; but the danger of limiting the taxing powers was apparent, and the sub-clause was agreed to. (Conv. Deb., Syd., 1891, pp. 670–9.)

At the Adelaide session both these sub-clauses were adopted. In Committee, there was some discussion about the words prohibiting a tax on goods exported from one State to another. (Conv. Deb., Adel., pp. 761–7.)

At the Sydney session, amendments by the Legislative Council of New South Wales, to omit the taxing powers, were negatived. There were some discussion as to export duties, and the meaning of the word “excise.” (Conv. Deb., Syd., 1897, pp. 1065–8.)

At the Melbourne session, before the first report, the taxation power was thrown into one sub-clause thus:—“Taxation, but so that all taxation shall be uniform throughout the Commonwealth, and that no tax or duty shall be imposed on any goods passing from one State to another.” Subsequently, however, it was thought that a doubt might arise as to the meaning of “uniform,” in view of Mr. Justice Field's judgment in the Income Tax cases” (Pollock v. Farmers' Loan and Trust Co., 157 U.S. 586), and the sub-clause was amended to read:—“Taxation, but not so as to discriminate between States or parts of States, or between persons or things passing from one State to another.” (Conv. Deb., Melb., pp. 1990, 2397.) After the fourth report, verbal amendments were made—the last words being omitted as superfluous.




  ― 550 ―

§ 164. “Taxation.”

NATURE OF THE TAXING POWER.—The origin of modern taxation may be traced to the feudal aids, burdens and services originally exacted by the Crown from its tenants-in-chief. After property in land underwent subdivision, and new kinds of property sprang into existence, taxation became less feudal in its character, and the ancient aids, burdens and services were commuted into money grants and subsidies freely and voluntarily voted by Parliament representing the taxpayers. (May, 10th ed. p. 553.) Taxation may be now defined as any exaction of money or revenue, by the authority of a State, from its subjects or citizens and others within its jurisdiction, for the purpose of defraying the cost of government, promoting the common welfare, and defending it against aggression from without. Taxation may assume various shapes, and be known by different names; thus, taxes on land, its capital or annual value=a land tax; taxes on fixtures annexed to land=a hearth tax, a house tax; taxes on goods, chattels, and commodities generally=duties of customs and duties of excise, imposts; taxes on the transfer of property=registration fees and succession duties; taxes on passing over roads or along rivers=tolls; taxes on individuals=a poll tax, capitation tax; taxes on the produce of property generally, as well as on the earnings of labour=income tax; taxes on certain trades and occupations=license fees.

The term taxation covers every conceivable exaction which it is possible for a government to make, whether under the name of a tax, or under such names as rates, assessments, duties, imposts, excise, licenses, fees, tolls, &c. (Hylton v. United States, 3 Dall. 171; United States v. Tappan, 11 Wheat. 419.)

LIMITS OF THE TAXING POWER.—From the foregoing definition it appears that the taxing power of the Federal Parliament is very wide and comprehensive, and that it is capable of operating against every individual and on every conceivable form of realizable property. At the same time there are certain limitations, qualifications and restraints to be found in or inferred from several sections of the Constitution, which may be here grouped in the sequence in which they occur, for the purpose of showing how the general grant of taxing power is cut down.

DISCRIMINATIONS.—The Federal Parliament may not impose a tax which discriminates between States or parts of States (s. 51—ii.) This is a limitation which has been provided for federal reasons, viz., for the protection of States which might not possess sufficient strength in the Federal Parliament to resist the imposition of a system of taxation designed to press more heavily on people or property in some States than on people or property in other States. To discriminate obviously means to make differences in the nature, burden, incidence and enforcement of taxing law; to impose a high tax on commodities or persons in one State and a low tax on the same class of commodities or persons in another State, would be to discriminate. Such discriminations are forbidden, and uniformity of taxation throughout the Commonwealth is an essential condition of the validity of every taxing scheme. Any deviation from this rule would invalidate a tax. The provision against discrimination is practically the same in substance as the requirement of Art. 1, s. 8, sub-s. 1, of the United States Constitution that “all duties, imposts and excises shall be uniform throughout the United States.' It has been held in that country that “uniform” means at the same rate on the same article wherever found. (Head Money Cases, 112 U.S. 580; Burgess, Pol. Sci. ii. 151.)

MODE OF EXERCISING THE TAXING POWER.—Next, there is an important regulation or qualification of the mode in which the taxing power is to be exercised by the Parliament. Laws imposing taxation must deal only with the imposition of taxation; any provision in a tax-raising law, dealing with matter foreign to the tax, is declared to be a nullity, of no effect (sec. 55). Kindred to this is the mandate that laws imposing taxation must deal with one subject of taxation only. To this there is an exception in the case of customs duties and excise duties. A law imposing customs duties may include any number of items of taxation, and a law imposing excise duties may deal with


  ― 551 ―
any number of items of taxation. It would be very inconvenient, and almost unworkable, to require a separate Act for every item in the tariff. With respect to other taxes the rule is that each tax must be passed by a separate law.

RESTRAINT ON THE TAXING POWER.—Whilst the Federal Parliament has general power to legislate with respect to trade and commerce, and to lay and collect taxes on trade and commerce, throughout the Commonwealth, there are two fundamental prohibitions: It cannot impose a tax on any property belonging to a State (sec. 114); and, it cannot tax inter-state trade and commerce—that is, trade and commerce flowing from one State into another (sec. 92). The Federal Parliament may impose excise duties on the production of commodities throughout the Commonwealth, and those excise duties may be collected on the taxable articles wherever and whenever they are found, but it may not impose a tax on the carriage or transport of those articles or of any commodities from one State into another. Nor may it tax the commercial instrumentalities, used in connection with inter-state business. This is conclusively established by sec. 92, which declares that, on the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, “shall be absolutely free.” Cases illustrating the principle of equality and uniformity of taxation required by the Constitution of the United States of America will be found in Cooley's Cons. Lim. 6th ed. pp. 608-18.

PREFERENCES.—Another restraint on the taxing power of the Federal Parliament is contained in sec. 99, which provides that “The Commonwealth shall not, by any law or regulation of trade, commerce or revenue, give preference to one State, or any part thereof, over another State or any part thereof.” Without this prohibition a Federal revenue law or a Federal commercial law might be made so favourable in its incidence, and so mild and ineffective in its enforcement, in one State, as to have the effect of drawing trade and commerce from another State to that State. Such a preference would, under this section, be as unlawful as a discrimination under s. 51—ii.

STATE PROPERTY AND OFFICERS.—The Commonwealth is by section 114 prevented from imposing a tax on property of any kind belonging to a State. It may be argued, by necessary implication, that the Federal Parliament could not levy a tax on the salaries of officers of a State Government, because it would thereby conflict with the laws of a State made in pursuance of the powers reserved to it by the Constitution. (Buffington v. Day, 11 Wall. 113; Dobbins v. Erie County, 16 Pet. 435.)

AREA OF FEDERAL TAXATION.—The power of the Federal Parliament to lay and collect taxes is co-extensive with the limits of the Commonwealth. It has therefore power to impose and enforce taxation within the Territories as well as within the States. The taxing power of the Federal Parliament is exclusive within Federal territory forming no part of a State. (Loughborough v. Blake, 5 Wheat. 317.)

TAXING POWER NTO EXCLUSIVE.—The power of taxation vested in the Federal Parliament is not exclusive, except to the extent and in respect of matters as to which it is declared exclusive by the Constitution, or is so by necessary implication. The only taxes which by express words are exclusively vested in the Federal Parliament are duties of customs and excise (sec. 90). Upon the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and excise becomes exclusive. With respect to other subjects of taxation the States possess the concurrent power of levying taxes, within their jurisdiction, subject to the restrictions, (1) that they cannot tax public property of any kind belonging to the Commonwealth (s. 114); (2) that by necessary implication they cannot tax any of the constitutional means or instruments employed by the Commonwealth (McCulloch v. Maryland, 4 Wheat. 316); (3) that they cannot tax the compensation or official income of officers of the Commonwealth. (Dobbins v. Erie County, 16 Pet. 435; Leprohon v. City of Ottowa, 1878, 2 Ontario App. Rep. 522; Wheeler, C.C. p. 70.




  ― 552 ―

POWER OF STATES TO TAX CORPORATIONS.—Important questions may hereafter be raised as to the power of States to tax banks, insurance companies, and other corporations established under the provisions of Federal law. Several leading American and Canadian cases may be here cited and compared, with the prefatory observation that the American cases will be found more applicable to the Constitution of the Commonwealth than some of the latest Canadian decisions. The first important case on this branch of Federal law was that of McCulloch v. Maryland, 4 Wheat. 316, in which it was held that a law of the State of Maryland imposing a tax upon notes issued by a branch of the Bank of the United States, chartered by Federal law and established in that State, was unconstitutional. It was held to be a tax on the operations of the bank, and therefore a tax on a means or instrumentality employed by the Government of the Union in pursuance of the Constitution. It was said that the power to tax implied the power to impair, and possibly to destroy, an institution established by Federal authority. As such it was an abuse and a usurpation of power which the people of a single State could not give or exercise through its legislature. But it was carefully stated that the decision applied only to a tax on the operations of the bank, not to a tax on its property. “This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the State, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the State. But this is a tax on the operations of the bank, and is, consequently, a tax on the operation of an instrument employed by the Government of the Union to carry its powers into execution. Such a tax must be unconstitutional.” (Per Marshall, C.J., McCulloch v. Maryland, 4 Wheat. p. 436. See Union Pacific R. Co. v. Peniston, 18 Wall. 5.) Referring to the decision in McCulloch v. Maryland, William Pinckney is reported to have said that in it he saw “a pledge of the immortality of the Union;” whilst Kent declares that “a case could not be selected, from the decisions of the Supreme Court of the United States, superior to this one of McCulloch v. The State of Maryland for the clear and satisfactory manner in which the supremacy of the laws of the Union have been maintained by the Court, and an undue assertion of State power overruled and defeated.” (Kent, Comm. I. 427.)

This principle was afterwards followed and affirmed in other cases. In Osborn v. The Bank of the United States, 9 Wheat. 738, the Court adhered to its prior decision, ruling that a State could not tax the franchise of the Bank of the United States. In Dobbins v. Erie County, 16 Pet. 435, it was ruled that the compensation of an officer of the United States is fixed by the laws thereof, and a State law seeking to tax such compensation is unconstitutional, because it conflicts with the law of Congress made in pursuance of the powers conferred by the Constitution. The rule of exemption of Federal agencies and instrumentalities from State taxation was, in a modified form, applied in the case of California v. Central Pacific R. Co., 127 U.S. 1, in which it was decided that a law of California, by which the franchise or business conferred by Act of Congress upon a railroad corporation was taxed, was repugnant to the law and Constitution of the United States; that franchises conferred by Congress cannot be taxed by States without the consent of Congress.

An attempt was unsuccessfully made to extend the exemption to other cases. In Thomson v. Union Pacific R. Co., 9 Wall. 579, it was held that a railroad constructed under the direction and by authority of Congress, for the postal and military purposes of the United States, but the stock of which was owned by private parties, was not exempt from taxation by the States through which it ran, in the absence of any legislation by Congress declaring such exemption. In the Union Pacific R. Co. v. Peniston, 18 Wall. 5, the doctrine of exemption was not applied to the case of a State tax upon the real and personal estate of the Union Pacific R. Co., a corporation chartered by Congress and the whole of whose stock was owned by individuals, but which Congress assisted by donations and loans, over which it reserved and exercised special rights, and which, among other


  ― 553 ―
things, was bound at all times to transmit despatches and transport mails and munitions of war for the government whenever required. The Court expressly distinguished this case from McCulloch v. Maryland, supra, on the ground that the tax here involved was not a tax upon the operations of the company, but only a tax upon the property of the company, which did not interfere with the efficiency of the governmental agency.

Decisions similar in principle to that of McCulloch v. Maryland have been given in Canada, under the Constitution of the Dominion, notwithstanding the fact that it differs from that of the United States in assigning one area of legislative power exclusively to Federal authority, and another area exclusively to the Provinces. In Leprohon v. City of Ottawa (1877-8), 40 Upper Canada Rep. 478, the Ontario Court of Appeal gave a decision somewhat similar to that of Dobbins v. Erie Company, overruling the judgment of a majority of the Court of Queen's Bench, and confirming the judgment of Moss, J., at the trial, holding unanimously that a provincial legislature cannot impose a tax upon the official income of an officer of the Dominion government. All the judges who supported the view of the Court of Appeal based their reasoning upon the principle affirmed in McCulloch v. Maryland. This case was followed in 1881 in exparte Owen, 20 N. Bruns. (4 Pugs. and Burb.) p. 487, in which the Supreme Court of New Brunswick held that the income of a Federal officer in the Customs, who resided in the city of St. Johns, was not subject to provincial taxation. In Cotè v. Watson, 1877, 3 Quebec L.R. 157, it was held that the Quebec License Act, 1870, was ultra vires, in so far as it sought to impose a tax on the proceeds of sale of an insolvent's effects, when made under the Dominion Insolvent Act of 1869, 32 and 33 Vic. c. 16 (the said tax being in the form of a penalty recoverable against the Dominion assignee in insolvency for selling the goods of the insolvent by auction without a license). In Evans v. Hudon, 1877, 22 Lower Can. Jur. 268, it was decided that a provincial legislature has no power to declare liable to seizure the salaries of employees of the Federal Government. In 1884 it was held, in the case of Ackman v. Town of Moncton, 24 New Bruns. 103, that the provincial legislature could not empower a municipality to levy a tax on the salary of an employee of the Intercolonial railway, received by him from the Dominion government. In Regina v. Bowell (1896) 4 Brit. Columb. 498, Drake, J., held that the imposition of a poll tax upon an officer of the Dominion government—viz., a collector of customs for the port of Vancouver—was ultra vires. In Hillimore v. Colbourne, 1896, 32 Can. L.J. (N.S.) 201, the case of Leprohon v. City of Ottawa was distinguished by the Supreme Court of Nova Scotia. (Lefroy, Legislative Power in Canada, p. 677.)

The soundness of some of these decisions under the Canadian Constitution seems, according to the opinion of Mr. Lefroy (Legisl. Power in Canada, p. 677) to have been shaken by the judgment of the Privy Council in the appeal case of the Bank of Toronto v. Lambe, 12 App. Cas. 575, upholding the validity of an Act passed by the Quebec legislature, whereby a direct tax was imposed on the paid-up capital of every bank doing business in the Province. Against the tax it was argued that the provincial legislature might lay on taxes so heavy as to crush a bank out of existence, and so nullify the power of the Dominion Parliament to erect banks. The principle of McCulloch v. Maryland was relied on in support of the argument against the tax. In reviewing the authorities Lord Hobhouse said:—

“Their lordships have been invited to take a very wide range on this part of the case, and to apply to the construction of the Federation Act the principles laid down for the United States by Chief Justice Marshall. Every one would gladly accept the guidance of that great judge in a parallel case. But he was dealing with the Constitution of the United States. Under that constitution, as their lordships understand, each State may make laws for itself, uncontrolled by the federal power, and subject only to the limits placed by law on the range of subjects within its jurisdiction. In such a constitution, Chief Justice Marshall found one of those limits at the point at which the action of the State legislature came into conflict with the power vested in Congress. The appellant invokes that principle to support the conclusion that the Federation Act must be so construed as to allow no power to the provincial legislatures under section 92, which may by possibility, and if exercised in some extravagant way, interfere with


  ― 554 ―
the objects of the Dominion in exercising their powers under section 91. It is quite impossible to argue from the one case to the other. Their lordships have to construe the express words of an Act of Parliament which makes an elaborate distribution of the whole field of legislative authority between two legislative bodies, and at the same time provides for the federated Provinces a carefully balanced constitution, under which no one of the parts can pass laws for itself except under the control of the whole acting through the Governor-General. And the question they have to answer is whether the one body or the other has power to make a given law. If they find that on the due construction of the Act a legislative power falls within section 92, it would be quite wrong of them to deny its existence because by some possibility it may be abused, or may limit the range which otherwise would be open to the Dominion Parliament.' (12 App. Cas. 587.)

In the same direction was the decision of Weatherbe, J., in the Town of Windsor v. Commercial Bank of Windsor, 3 R. and G. (Nov. Scot.) 420, to the effect that “all property, except that of the Dominion or the Provinces, may be made equally liable to assessment for municipal purposes by provincial legislation.” In the case of a bank doing business in Windsor under the General Banking Act of the Dominion of Canada, which held, in addition to real and other personal property, notes of the Dominion of Canada, as a portion of its cash reserve required by the Dominion Act, it was decided that the assessors for the town of Windsor were right in assessing on the Dominion notes, they not being the property of the Dominion. It must be noticed that the decision of the Privy Council in the Bank of Toronto v. Lambe turned on the distinction between the American and Canadian Constitutions; the validity of the reasoning in the case of McCulloch v. Maryland was not impugned. The difference between the two Constitutions was thus referred to by Palmer, J., in Ackman v. Town of Moncton, 24 New Bruns. 103:—

“In the United States, the States themselves granted the Federal Government its power of legislation on the specific subjects, and consequently parted with it and all additional power to enable their grantees to legislate generally and effectually on those subjects, and they did not reserve out of such grant to themselves power to legislate on any specified subject exclusively; and, therefore, there is nothing to prevent the operation of such grant so as to include all that may be fairly necessary to enable the Federal Legislature to legislate fully and effectually with reference to all the subjects granted, and to that extent to operate as a prohibition of any legislation by the grantors that would operate to affect such subject; while with us the powers to both are given by one instrument, and all of them are made exclusive, and in construing such instrument there does not appear to be any more reason for restricting provincial legislatures from legislating on such subjects exclusively assigned to them, than the Dominion Parliament from legislating on subjects exclusively put under its control. This construction not only prevents the a fortiori deduction from the principle of the American cases, but makes the principle of them, so far as they affect the questions of conflict of powers between the Federal and State legislatures, entirely inapplicable to the construction of our Constitution.”

Further, the same learned judge said that in his opinion cases decided by the courts of the United States, under that Constitution, were generally of little value on questions of conflict of power between the Dominion Parliament and the provincial legislatures under the British North America Act. This arises from the fact that, by reason of their having certain specified subjects of legislation exclusively assigned to them, the provincial legislatures of Canada cannot be so restricted in their actions as the State legislatures under the American Constitution. (Lefroy, Leg. Pow. in Canada, p. 667.) The States of the Commonwealth occupy positions corresponding to those of the American Union, the mode of distribution of powers under the Constitution of the Commonwealth resembling the American rather than the Canadian model; consequently the American cases are more valuable as aids in the interpretation of the Constitution of the Commonwealth than they have been found in the case of the Dominion.

There is one obvious difference between cases such as McCulloch v. Maryland, Dobbins v. Erie County, and Leprohon v. City of Ottawa, in which attempts were made to tax institutions and persons coming within the definition of “Federal Agencies and Instrumentalities,” and cases such as Thomson v. Union Pacific R. Co., Union Pacific R. Co. v. Peniston, The Bank of Toronto v. Lambe, in which the bodies held to be


  ― 555 ―
taxable by the States and by the Provinces, although created by federal law, were clearly not agencies and instrumentalities employed in the execution and maintenance of federal authority.

EXAMPLES OF FEDERAL TAXING POWER.—In addition to the numerous cases of commercial and trading taxes cited in our review of sub-sec. i. (trade and commerce), the following may be added as illustrations of the general taxing power:—

“If we measure the power of taxation residing in a State, by the extent of sovereignty which the people of a single State possess and can confer on its government, we have an intelligible standard, applicable to every case to which the power may be applied. … We are relieved, as we ought to be, from clashing sovereignty; from interfering powers; from a repugnancy between a right in one government to pull down what there is an acknowledged right in another to build up; from the incompatibility of a right in one government to destroy what there is a right in another to preserve. We are not driven to the perplexing inquiry, so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power. The attempt to use it on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single State cannot give.” (Marshall, C.J., in McCulloch v. Maryland, 4 Wheat. pp. 429-30.)

The doctrine which exempts the instruments of the Federal government from State taxation, is founded on the implied necessity for the use of such instruments by the government. Legislation which does not impair the usefulness of such instruments to serve the government is not within the rule of exemption. (National Bank v. Kentucky, 9 Wall. 353. See Pomeroy, Const. Law, p. 253.)

The exemption of agencies of the Federal Government from taxation by the States is dependent, not upon the nature of the agents nor upon the mode of their constitution, nor upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it, or hinder the efficient exercise of their power. A tax upon their property merely, having no such necessary effect, and leaving them free to discharge the duties they have undertaken to perform, may be rightfully laid by the States; but a tax upon their operations, being a direct obstruction to the exercise of Federal powers, may not be. This doctrine was applied to the case of a tax by a State upon the real and personal property, as distinguished from its franchises, of the Union Pacific railway company—a corporation chartered by Congress for private gain, and all whose stock was owned by individuals, but which Congress assisted by donations and loans, and over which it reserved and exercised many special rights, and which amongst other things was bound at all times to transmit despatches and transport mails, troops, munitions of war, &c., for the government whenever so desired. (Railroad Co. v. Penistou, 18 Wall. 5. See Pomeroy, Const. Law, 253; Baker, Annot. Const. p. 172.)

“The principles to be deduced from the [American] cases appear to be, that the National government and the State governments are, as it were, distinct sovereignties; that the means and instrumentalities necessary for the carrying on of either government are not to be impaired by the other; that as the power to tax involves the power to impair, the exercise of such a power by the one government on the income of the officers of the other is inconsistent with independent sovereignty of the other; and that in such cases exemption from taxation, although not expressed in the national Constitution, exists by necessary implication.” (Harrison, C.J., in Leprohon v. City of Ottawa, 40 Upper Canada Rep. 478.)

“The Supreme Court, however, has declared that the general principles of the Constitution forbid Congress to tax the necessary governmental instrumentalities of the States, such as the salaries of officers and the revenue of municipal corporations, on the ground that such a power would enable the Congress to destroy the States, which nothing short of the amending power, the sovereignty, should be able to do in a Federal system of government. The United States courts determine, of course, in what these necessary instrumentalities, in any particular case, consist.” (Collector v. Day, 11 Wall. 113; cited Burgess, Political Sc. II. p. 151.)

A Federal law imposing a tax on the sale of lottery tickets is valid, although their sale is prohibited by State law. (License Tax Cases, 5 Wall 462; cited Baker, Annot Const. p. 16.)

A Federal excise tax, imposed on a license to manufacture and sell intoxicating liquors, is no bar to a prosecution under State laws prohibiting such manufacture and sale within the State. (License Tax Cases, 5 Wall. 462; Pervear v. Commonwealth, 5 Wall. 475. Id.)

A Federal law imposing a tax on State banks or banking associations held valid. (National Bank v. United States, 101 U.S. 1. Id.)




  ― 556 ―

A Federal tax on distilled spirits is not unconstitutional. It is in the nature of an excise, and the only limitation on the power of Congress in the imposition of taxes of this character is that they shall “be uniform throughout the United States.” (United States v. Singer, 15 Wall. 111; Same v. Van Buskirk, 15 Wall. 123. Id. p. 17.)

The Act imposing the succession tax is valid. It is neither a tax on land nor a capitation tax, although it is made a lien on the land to enforce its collection. Scholey v. Rew. 23 Wall. 331 Id.)

In the exercise of this power Congress may raise money in any way not forbidden by the Constitution, and as a means thereto it may tax employments. (United States v. Angell, 11 Fed. Rep. 34. Id.)

NO APPORTIONMENT OF TAXES.—The taxing power of Congress is seriously hampered by Art. I. sec. 3, of the Constitution, which provides that “direct taxes” shall be apportioned among the several States according to their respective numbers. In 1894, Congress passed an unapportioned income tax. The tax was imposed on the annual income of individuals exceeding 4000 dollars and the income of corporations of all amounts excepting mutual insurance companies and ecclesiastical bodies. At least four-fifths of the tax was payable by four States—New York, New Jersey, Pennsylvania, and Massachusetts. “In a number of the States whose representatives voted for the tax its incidence did not affect more than a very few individuals. The constitutionality of this proceeding, by the consent of the Attorney-General, who waived all questions of jurisdiction, was brought before the Supreme Court before the tax was payable. In their first decision the Court held unanimously that so much of the tax as applied to the income from municipal bonds was void, since those securities could not be taxed by the United States; and by a majority of four to two, that so much as applied to rents was also void, as a tax upon real estate, and consequently a direct tax which must be apportioned. They divided equally on the questions whether the invalidity of this part destroyed the rest; and whether the tax on the general income from personal property was also void as a direct tax. A re-argument was ordered, which Mr. Justice Jackson, whose illness had prevented his previous presence, left his death-bed to attend. He voted to sustain so much as did not apply to municipal bonds; but Mr. Justice Shires, who on the first decision had voted to sustain so much as did not apply to rents, changed his mind; and by a majority of five to four the whole income-tax was held to be void, as a direct tax which had not been apportioned.” (Pollock v. Farmers' Loan and Trust Co., 157 U.S. 429 and 158 U.S. 601. Foster's Comm. I. p. 421.)

Such a question as that raised in Pollock v. Farmers' Loan and Trust Co. could not be raised under the Constitution of the Commonwealth, in which there is no rule for the apportionment of direct taxes or of any taxes among the States. See, however, the rules against “Discriminations” and “Preferences,” supra.

51. (iii.) Bounties165 on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth:

HISTORICAL NOTE.—In the Commonwealth Bill of 1891, this provision was embodied in sub-clause 2, “customs, excise and bounties,” and in that form it was adopted at the Adelaide and Sydney sessions in 1897. (Conv. Deb., Syd., 1897, pp. 1065-8.) At the Melbourne session, before the first report, it was placed in a sub-clause by itself.

§ 165. “Bounties.”

The trade and commerce sub-section would probably have been sufficient to confer on the Federal Parliament power to grant bonuses, bounties, and subsidies on the production or the export of goods; that is to say, on the growth or manufacture of goods to be consumed within the Commonwealth, as well as on the growth or manufacture of goods to be exported from the Commonwealth. This sub-section has been inserted for


  ― 557 ―
the purpose of placing the bounty-granting power of the Parliament beyond doubt, and also for the purpose of associating with and grouping around the power several restrictions and directions. It may facilitate the study of this power to present a survey of the constitutional provisions relating to it.

First comes the requirement (sub-sec. 3) that such bounties shall be uniform throughout the Commonwealth. If they are not uniform the law on which they are founded is null and void. The rule as to uniformity means not merely that the bounty must be general throughout the Commonwealth, but also that there must be a uniform or equal bounty on each class of goods which is the object of the bounty. (Sturges v. Crowninshield, 4 Wheat. 122.) The Supreme Court of the United States has interpreted the word “uniform,” in similar association, to mean the same amount upon the same article wherever found. (Head Money Cases, 112 U.S. 580; Burgess, Political Sc. ii. 151.)

The next question to consider is, at what stage in the history of the Commonwealth does this bounty-regulating power come into operation? Sec. 86 provides that on the establishment of the Commonwealth the control of the payment of bounties shall pass to the Executive Government of the Commonwealth. Does this mean the control of the payment of bounties authorized by the Federal Parliament, or does it mean the control of the payment of bounties authorized under grants or agreements lawfully made by the governments of the States before 30th June, 1898?

This leads to the consideration of sec. 90. By the first paragraph of that section, the power of the Parliament to grant bounties on the production or export of goods becomes exclusive on the imposition of uniform duties of customs and excise. The preparation and adoption of such uniform duties will necessarily occupy a considerable time; by sec. 88 they must be imposed within two years of the establishment of the Commonwealth. By the second paragraph of sec. 90, it is enacted that, after the imposition of uniform duties, the bounty laws of the States shall cease to have effect. This is followed by a proviso—which requires careful examination—that certain grants or agreements made by States for bounties shall be preserved.

At the Adelaide sitting of the Convention, when the section relating to the cessation of State bounties, as drafted by the constitutional committee, was under discussion, attention was drawn to the fact that no provision was made for the protection of existing bounty arrangements. The State bounty laws, and contracts made thereunder, were to be absolutely swept away as soon as uniform duties were imposed. It was contended that where a colony had, prior to federation, entered into arrangements with the promoters of certain industries to grant bonuses and bounties for the assistance and development of those industries, such arrangements ought to be protected and preserved, even after the establishment of the Commonwealth; otherwise the sudden withdrawal of State aid from those who had invested capital, in the expectation of the continuance of that aid for a certain time, would be an unjust breach of faith on the part of the government, and would be ruinous to those who had entered upon productive enterprises on the strength of a public agreement. In illustration of the argument, it was mentioned that the government of South Australia had made contracts with stock-breeders in the Northern Territory, to pay them bonuses on the export of cattle. Those contracts had several years to run, and if federation were accomplished and uniform duties imposed before the expiration of the term, the government of South Australia would, under the clause as it then stood, be prevented from completing its contract. Victoria was under similar obligations, which her representatives were anxious should remain in full force and unimpaired by the Constitution.

An effort was made to show that the repeal of State laws offering bounties on the production or export of goods would not ipso facto invalidate any agreement made under such laws before their repeal. Legal authorities were cited, showing that where an enactment would prejudicially affect vested rights, or the legal character of past Acts,


  ― 558 ―
the presumption against a retrospective operation is strongest. Every statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past, must be presumed, out of respect to the legislature, to be intended not to have a retrospective operation. Thus the provision of the Statute of Frauds, that no action should be brought to charge any person on any agreement made in consideration of marriage, unless the agreement were in writing, was held not to apply to an agreement which had been made before the Act was passed. The Mortmain Act, in the same way, was held not to apply to a devise made before it was enacted. So it was held that the Act 8 and 9 Vic. c. 109, which made all wagers void, and enacted that no action should be brought for a wager, applied only to wagers made after the Act was passed. (Maxwell, Interpretation of Statutes, 3rd ed. 299.)

This assurance, however, did not satisfy the representatives of the colonies interested. Eventually an addendum was made to the proposition, which, after various modifications at subsequent stages, at last assumed the phraseology in which it is presented in clause 90 of the Constitution, viz., any grant of or agreement for any bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise.

Another branch of the bounty question is dealt with by sec. 91, in which a limited measure of bounty-granting power is reserved to the States. In the course of the general debate at Adelaide, it was said that there were a number of local industries, peculiar and special to particular States, and with which the Commonwealth Parliament would have no concern. Thus the Victorian Parliament had been in the habit of granting prospecting votes for the encouragement of gold mining. New South Wales might see the advisability of granting a similar assistance for the production of iron. It was urged as extremely desirable that the greatest possible facility, consistent with equality and freedom of inter-state trade, should be reserved to the States, in order to enable them to promote any policy for the development of their natural resources. It was first suggested by Mr. Trenwith, that the right to vote grants in aid of gold and other metal-mining should not be exclusively vested in the Federal Parliament, but that the States should have a concurrent power, and that as regards other local industries, not capable of full specification, and in which the Commonwealth as a whole was not concerned, bounties might be given by the States with the consent of the Federal Parliament. This would secure the object aimed at without detracting from the supreme control and supervision of the highest legislative authority. A section allowing the States to subsidize mining for gold, silver, or other metals, was readily agreed to. (Sec. 91.) It was only after a prolonged debate in Melbourne, and in response to the earnest appeal of the Premier of Victoria, supported by his colleagues, that an addition to the mining section, enabling a State, with the consent of both Houses of the Federal Parliament, to grant aids to or bounties on the production or export of goods was made. (Sec. 91.)

For further discussion of State and Federal powers with regard to bounties, see notes to secs. 86, 90, and 91.

51. (iv.) Borrowing money166 on the public credit of the Commonwealth:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to borrow money on the credit of the United States.” (Art. I. sec. vii. sub-s. 2.) The British North America Act, sec. 91, sub-s. (4), gives the Dominion Parliament power as to “The borrowing of money on the public credit,” whilst sec. 92, sub-s. (3), gives each Provincial Legislature power as to “The borrowing of money on the sole credit of the Province.” In the Commonwealth Bill of 1891 the sub-clause appeared in its present form. In Committee, the only debate was on the suggestion that there should be power


  ― 559 ―
to borrow in order to pay off the debts of the States. (Conv. Deb. Syd., 1891, pp. 679–83.) In the Convention of 1897–8 the sub-clause was adopted and agreed to without debate.

§ 166. “Borrowing Money.”

Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, the authority of Congress to define the quality and force of these notes as currency is as broad as the like power over metallic currency under the power to coin money and regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes as regards the national government or individuals, and this whether in time of war or peace. (Juilliard v. Greenman, 110 U.S. 421. Baker, Annot. Const. 19.)

A tax imposed by a State or under its authority on stock issued for loans made to the United States is unconstitutional. (Weston v. City of Charleston, 2 Pet. 449. Id. p. 17.)

The stock of the United States, constituting the whole or part of the capital stock of a State Bank, is not subject to State taxation. A tax on Federal stock is regarded as a tax upon the exercise of the borrowing powers conferred upon Congress. It is immaterial that the tax is on the aggregate property of the taxpayer, and the stock is not taxed by name. (Bank Tax Case, 2 Wall. 200.)

Securities of the United States are exempt from State taxation; and this exemption extends to the capital stock of a corporation if made up of such securities. (Provident Institution v. Massachusetts, 6 Wall. 611. Id. p. 17.)

United States notes are exempt from taxation by State or municipal authority. (Mitchell v. County Commissioners, 91 U.S. 206. Id. p. 18.)

A tax by a State upon the bonds of the United States is a tax upon the borrowing power of Congress, and is invalid. But the fact that a corporation has invested part of its capital in United States bonds does not prevent the State from taxing the corporate franchises or business of the corporation. (Home Insurance Co. v. New York, 134 U.S. 594. Id. p. 19.)

51. (v.) Postal167, telegraphic, telephonic, and other like services:

HISTORICAL NOTE.—The corresponding power in the Constitution of the United States is “to establish post-offices and post-roads;” in the British North America Act, “Postal service.” Earl Grey's Committee of the Privy Council in 1849 suggested “The conveyance of letters” as a federal subject (p. 85, supra). Wentworth's Constitutional Committee in 1853 specified “Postage between the said colonies;” and the draft Bill annexed to Wentworth's Memorial in 1857 specified “Intercolonial telegraphs and postage” (pp. 91–94, supra). In the Federal Council of Australasia Act, 1885, posts and telegraphs, curiously enough, were not mentioned.

In the Commonwealth Bill of 1891, “Postal and telegraphic services” were specified (sub-cl. 8). At the Adelaide session, 1897, the same words were adopted in the first draft. In Committee, Mr. Holder moved to add the words “without the boundaries of the Commonwealth,” on the ground that inland posts and telegraphs were matters of purely local concern. This was defeated by 30 votes to 5. On Mr. Wise's motion, the words “telephonic and other like services” were added. (Conv. Deb., Adel., pp. 767–75.)

At the Sydney session, a suggestion by the Legislative Assembly of South Australia (similar to a suggestion by the Legislative Assembly of Western Australia) to add the words “outside the limits of the Commonwealth” was negatived. (Conv. Deb., Syd., 1897, pp. 1068–9.)




  ― 560 ―

§ 167. “Postal.”

Postal, telegraphic and telephonic departments will not be transferred to the Federal Government at the establishment of the Commonwealth, but on a subsequent date, fixed and proclaimed by the Governor-General, acting on the advice of the Federal Administration. When these important departments are taken over by the Commonwealth, all the property of every kind of each State, used exclusively in connection with them, will become vested in the Commonwealth. The Commonwealth will also be able to acquire any property of each State used, but not exclusively used, in connection with those departments. The Commonwealth will compensate each State for the value of property passing to it under the Constitution, as well as for the value of property partially used in connection with transferred departments which the Federal Government may, in the exercise of its discretion, decide to acquire. The procedure for determining the amount of compensation is detailed in sec. 85. In taking over these valuable assets, the Commonwealth is bound to assume the obligations of each State in connection therewith, current at the date of transfer. (Sec. 85—iv.)

Under the power to establish post-offices and post-roads, the mail operations of the United States are regulated. Postmasters are appointed and their duties prescribed; mail contracts are made and carriers of mails regulated; provisions are made for the punishment of depredations on the mail. These powers are incident to the main power. (Sturtevants v. City of Alton, 3 McLean, 393. Baker, Annot. Const. p. 47.)

The powers conferred are not confined to the instrumentalities in use when the Constitution was adopted. Congress, in its exercise, should keep pace with the progress of the country and adapt the regulations to the development of time and circumstances. The powers were conferred for the government of business for all time and under all circumstances. To this end Congress may establish telegraph lines, and in this, is not limited in its operation to such military and post-roads as are on the public domain. (Pensacola Tel. Co. v. Western Union Tel. Co. 96 U.S. 1, id. p. 47.)

The postal power of the United States embraces the regulation of the entire postal system of the country, and enables Congress to designate what shall be carried in the mail and what excluded. A law excluding circulars of lotteries, &c., is a valid exercise of the power. But when any matter is excluded from the mails, Congress cannot forbid its transportation by other means, so as to interfere with the freedom of the press. (Ex parte Jackson, 96 U.S. 727, id. p. 47.)

“We may also class the power of Congress over the postal service with, but not under, the power to regulate commerce with foreign nations and among commonwealths. I say with, but not under, because this power extends to postal communication within a single commonwealth, as well as among the commonwealths and with foreign States, and because the Congress has interpreted its power in this respect as authorizing it not simply to regulate the postal business, but to authorize the administration to do the postal business, and to do it exclusively; i.e., Congress has claimed and exercised the power of establishing a governmental monopoly of the postal business overall governmental postal routes, and, since Congress may declare every route a governmental postal route, the monopoly is complete at the option of the Congress. The Court has ratified the interpretation which Congress has placed upon its power in this respect.” (Burgess Political Sc. II. p. 139–40.)

“Again, Congress must not so exaggerate the conception of mail matter as to claim the express business as a governmental monopoly. It cannot prohibit from carriage in other ways than through the United States mail anything which was not regarded as mail matter at the time of the formation of the constitution.” (Id. p. 140.)

“Whether, under the power to establish post offices and post roads, the legislature of the United States may make the telegraph a governmental monopoly cannot be regarded as entirely settled, although the Congressional Act of 1866, and the decision of the Supreme Court in the case of The Pensacola Telegraph Company v. The Western Union Telegraph Company, seem to indicate that both the Congress and the Court interpret the constitution as vesting this power in Congress.” (Id. 140–1.)




  ― 561 ―

51. (vi.) The naval and military defence168 of the Commonwealth and of the several States, and the control of the forces to execute and maintain169 the laws of the Commonwealth:

HISTORICAL NOTE.—The war powers of the United States (Art. I. sec. viii. sub-ss. 11–16) are those of a sovereign State, and include the power to declare war. The corresponding provision of the British North America Act is “Militia, Military and Naval Service and Defence” (sec. 91, sub-s. 7).

“Defence” was specified as a federal subject in the Bill attached to Wentworth's Memorial in 1857 (p. 94, supra). By the Federal Council of Australasia Act, 1885, the subject of “general defences” might be referred to the Federal Council. The opportunity for Sir Henry Parkes' action which led to the Sydney Convention of 1891 was Major-General Edwards' report on the necessity for federal defence. In the Commonwealth Bill of 1891 there were two sub-clauses dealing with the matter:—“(6) The military and naval defence of the Commonwealth and the several States, and the calling out of the forces to execute and maintain the laws of the Commonwealth, or of any State or part of the Commonwealth; (7) Munitions of war.” The latter sub-section was added in Committee, at Mr. Fitzgerald's suggestion. (Conv. Deb., Syd., 1891, pp. 683–4.)

At the Adelaide session, 1897, the sub-clause was worded:—“The military and naval defence of the Commonwealth and the several States, and the calling out of the forces to execute and maintain the laws of the Commonwealth.” A verbal transposition was made at the Sydney session; and at the Melbourne session, after the fourth report, “control” was substituted for “calling out.”

§ 168. “Naval and Military Defence.”

In 1858 the military expenditure incurred by the Imperial Government in the various colonies and dependencies of the Crown amounted to nearly £4,000,000 sterling. Towards that large sum the communities for whose defence and safety it was incurred contributed only £380,000. In few of those colonies or dependencies was there any militia established, or any local provision made for defence. In 1859 a Departmental Committee consisting of Sir T. Elliott of the Colonial Office, Mr. Hamilton of the Treasury, and Mr. Godley of the War Office, submitted a report to the Imperial Government on the question of the defence of the colonies, in which the injurious consequences of the old policy of encouraging the colonies to rely solely on the Mother country for protection were pointed out. Not only did it impose an unfair burden on the British taxpayer, but it also retarded the development of the spirit of self-reliance and self-defence in the colonies, and discouraged any effort to share in the responsibility of maintaining intact their free institutions and their national existence. The report led to an important reform, which was inaugurated shortly afterward.

On 4th March, 1862, Mr. Arthur Mills proposed in the House of Commons the following resolution, which was carried unanimously:—

“That this House (while fully recognising the claims of all portions of the British Empire to Imperial aid in their protection against perils arising from the consequences of Imperial policy) is of opinion that colonies exercising the rights of self-government ought to undertake the main responsibility of providing for their own internal order and security, and ought to assist in their own external defence.”

A fundamental change was brought about by the gradual withdrawal of the Imperial troops, previously scattered throughout every part of the Empire, and by the self-governing colonies undertaking the responsibility of their own military defence. (Todd's Parl. Gov. in Col., 1st ed. p. 295.)

In 1873 the Under-Secretary of State for the Colonies was in a position to inform Parliament that the military expenditure in connection with the colonies was only such


  ― 562 ―
as was necessary for Imperial purposes. The barracks, fortifications and landed property used for defence purposes, and the arms and munitions of war in actual use in each colony, were handed over to the local Government, subject only to the condition, that if at any future time troops should be sent to the colony at its request, or in the furtherance of colonial interests, suitable accommodation should be provided for them. (Id. p. 298.)

On the application of the Governments of New South Wales, Victoria, South Australia, and Queensland, the Imperial Government decided in 1876 to instruct Major-General Sir W. F. D. Jervois and Lieutenant-Colonel Scratchley to inspect the existing fortifications, ports, harbours, and coastal defences, of the various Australian colonies, and to advise the local Governments as to the engineering and other means required to place the naval and military defences of Australia in a state of efficiency. In accordance with the recommendations of those distinguished officers, provision was made by the Australian Legislatures for the purchase of war vessels, the erection of forts, and the improvement of harbour defences. (See p. 115, supra.)

At the Colonial Conference held in London in 1887 the representatives of the colonies expressed a desire that the Imperial Government should appoint a military officer of high standing to advise the Australian Governments as to the best method of organizing the local forces in order to secure their joint co-operation in time of need. Accordingly in 1889 Major-General Edwards, R.E., C.B., was sent to Australia to inspect and report upon the defences of the colonies. In his able and elaborate report he pointed out the imperfections of the existing system of defence, which was based on purely local administration with no provision for united action in time of emergency, and he submitted a plan for a uniform system of military organization to be brought into operation throughout Australia. He suggested that the troops of the various colonies might act in the field as a united force under one command whenever required, so that they might be in readiness to be removed to repel invasion at any given point. The following is a summary of General Edwards' proposals:—

  • (1.) Federation of the forces:
  • (2.) An officer of the rank of Lieutenant-General to be appointed to advise and inspect in time of peace and to command in time of war:
  • (3.) A uniform system of organization and armament, and a common defence Act:
  • (4.) Amalgamation of the permanent forces into a “fortress corps”:
  • (5.) A federal military college for the education of the officers:
  • (6.) The extension of the rifle clubs:
  • (7.) A uniform gauge for the railways:
  • (8.) A federal small-arm manufactory, gun wharf and ordnance store.

“In urging the necessity of a federal military college, the general pays a tribute to the Canadian royal military college. He says:—‘Nothing is more necessary for the efficiency of an army than the proper education of its officers, but at present no means exist in Australia to meet this important want. Canada was formerly in the same difficulty before she was federated, and it was only overcome by the establishment of the royal military college at Kingston. Having had personal experience of the officers educated there, I can testify to the excellence of their instruction. In addition to the primary object of the college, the course affords a thoroughly practical, scientific and sound training in all branches essential to a high and general education. The tendency of it has been to cause the students to feel a greater pride in their country, and to look at it from the broad standpoint of Canadians, whose aspirations are not circumscribed by the limits of a municipality. A college such as this would be eminently adapted for the education of the officers of the Australian forces.”’ (Todd, Par. Gov. in Col. 2nd ed pp. 399–401.)

The Australasian Naval Defence Act, 51 and 52 Vic. c. 32, assented to 20th Dec. 1887, was passed to give legal effect to the terms of a provisional agreement between the Imperial Government and the Governments of the Australasian colonies, subject to parliamentary ratification. (See p. 116, supra.) Under the terms of this compact, the


  ― 563 ―
Admiralty undertook to construct and equip a fleet of five fast cruisers, each of 2575 tons displacement and 7500 horse power, and two torpedo gunboats, on the most approved modern build, each 750 tons and 4500 horse power, for the protection of the floating trade in Australasian waters, and in order to secure the defence of certain ports and coaling stations. Of these vessels, three cruisers and one gunboat were to be kept continually in commission, the remainder to be held in reserve irrespective of the usual strength of Her Majesty's naval force employed at the Australian station. The Act stipulated that these sea-going ships should be furnished by the Imperial Government, the colonies paying 5 per cent. interest annually on the prime cost, such payment not to exceed £35,000 a year; the colonies in addition bearing the actual charges of their maintenance, including retired pay to officers and pensions to men, provided that the annual cost under this head should not exceed £91,000. The ships were to be under the sole control and orders of the naval commander-in-chief on the Australian station, but to be retained within the limits of that station, and only otherwise employed by consent of the colonial governments. The agreement was to become binding between the governments as soon as the colonial legislatures passed special appropriations for the fulfilment of its conditions. For the boundaries of the Australian station, as defined in the Act, see p. 116, supra.

The agreement was ratified in 1887 by similar Acts passed by the various Australian legislatures. It was made for a period of ten years at least, and it could only be terminated then or thereafter upon two years' notice. The ninth annual contribution of £126,000 for cost and maintenance of coastal defence was allotted among the various Australasian colonies, on the basis of population, as follows:—

                   
Colony.  Estimated Population on 31st December, 1898.  Amount of Allotment. 
£ 
Victoria ... ...  1,175,490  33,083 
New South Wales ...  1,346,240  37,886 
Queensland ... ...  498,533  14,030 
South Australia ...  367,934  10,355 
Western Australia ...  168,150  4,732 
Tasmania .. ...  177,341  4,990 
New Zealand... ...  743,463  20,924 
Total ... ...  4,477,151  £126,000 

The report of General Edwards, recommending a federation of the naval and military forces, was one of the strongest arguments ever submitted in favour of the political federation of the Australian colonies. Most of the leading statesmen of the day were of opinion that there could be no successful federation for naval and military purposes unless the forces were placed under one command; that there could not be one command except under one government, and one common system of taxation by a representative parliament. These views were expressed with unanswerable force and admirable precision by Sir Henry Parkes in moving the preliminary resolutions on which the Draft Bill of 1891 was founded. “I then come,” said the venerable President of the Convention, “to one to which I expect an almost unanimous agreement: That the military and naval defences of Australia shall be entrusted to federal forces, under one command. Whatever our views may be on other points, I think we shall all be agreed upon this: that for the defence of Australasia to be economical, to be efficient, to be equal to the emergency that may arise at any time, it must be of a federal character, and must be under one command. I am seeking to simplify my words as much as possible. I do not mean that the land forces and the naval forces shall be under one commander-in-chief; but that they should be under one kindred command—that the naval officer in command, equally with the military officer, shall be a federal officer, and


  ― 564 ―
amenable to the national government of Australasia. Now these are the conditions which appear to me to be essentially requisite that we should decide in one way or the other—that should be strictly defined by this Convention before we can proceed to construct a bill to confer a constitution.” (Conv. Deb., Syd., 1891, p. 25.)

Under the Constitution the Federal Parliament, like the American Congress, has power to raise and maintain an army and a navy; it is charged to take over from the States their naval and military departments, their forces, their fortifications and defence works and buildings, their ships of war, their war materials and armaments (secs. 69 and 85); it may acquire from the States or from private persons landed and other property necessary for naval and military purposes. (Sec. 51—xxxi.) In fact it has full and exclusive authority for the construction of defence works and for the recruitment, organization, and discipline of the whole of the naval and military forces of the Commonwealth; it can do everything in the development of its naval and military system which can be accomplished by legislation, except that it may not assume the functions of the commander-in-chief, which by sec. 68 are vested in the Governor-General as the Queen's representative. (Burgess II. 153–5.)

The States are forbidden to raise or maintain any naval or military forces without the consent of Parliament. (Sec. 114.) The American Courts have gone so far as to express the opinion that the States cannot obstruct or embarrass the power of Congress, in the creation of military forces, by prohibiting the people from keeping or bearing arms. (Presser v. Illinois, 116 U.S. 252.) This inhibition is derived from the power of Congress to construct the whole military organization of the nation. (Burgess II. 151.) The States of the Commonwealth are no doubt similarly inhibited. The military jurisdiction of Congress is subject to one limitation, viz., that army appropriation shall not, at any one time, provide for a longer period than two years. (Art. I., sec. 8, ss. 12.)

The Parliament of the Commonwealth is not so hampered in its appropriations. But the plenitude of its naval and military power is, apparently, subject to limitation in the purpose for which it must be used. It could not enter upon naval and military enterprises solely with a view to foreign conquest and aggression; its power is to be used for the defence of the Commonwealth and of the several States, and for the preservation of law and order within its limits. As to the exclusiveness of this power, see notes to sec. 114.

The control of the general government over this subject is plenary and exclusive. It determines how the armies shall be raised, whether by voluntary enlistment or forced draft, the age at which the soldier shall be received, the period of service, and the compensation to be allowed. It provides for the rules that shall govern the army, defines military offences, and prescribes punishment; and no State can interfere with the discharge of these national duties by habeas corpus or other proceedings. (Tarble's Case, 13 Wall. 397. Baker, Annot. Const. p. 52.)

The Constitution of the United States empowers Congress to “raise and support armies” and to “provide and maintain a navy.” Independently of the express clause in the Constitution, this must include the power to “make all laws which shall be necessary and proper for carrying into effect the foregoing powers.” (United States v. Bainbridge, 1 Mason, 71. Id.)

Congress has power to provide for the trial and punishment of military and naval offenders, in the manner practised by civilized nations. (Dynes v. Hoover, 20 How. 65. Id. p. 53.)

The power to maintain a navy authorizes the Federal government to buy or build ships of war, to equip them for war, and to despatch them to any part of the globe. (United States v. Rhodes, 1 Abb. [U.S.] 28. Id.)

A war ship of a friendly foreign nation, while within a port of the Union and demeaning itself in a friendly manner, is not within the ordinary jurisdiction of the federal courts. The Exchange v. McFaddon, 7 Cranch, 116. Id.)




  ― 565 ―

§ 169. “To Execute and Maintain the Laws.”

As to the duty of the Federal Government to protect every State against invasion, and, on the application of the Executive Government of the State, against domestic violence, see Notes to sec. 119 (§§ 466-7, infra). (See also Martin v. Mott, 12 Wheat. 19; Luther v. Borden, 7 How. 8. Baker. Annot. Const. p. 53.)

The power which may be conferred under these words is meant to be exercised when some sudden emergency renders it necessary, in order to maintain the public peace. (Luther v. Borden, 7 How. 8.)

An Act of Pennsylvania providing that the officers and men of the militia of that State neglecting or refusing to serve when called into service by the President shall be liable to penalties prescribed by Congress, and providing for trial of such delinquents by State court-martial, &c., is not repugnant to the Constitution of the United States. (Houston v. Moore, 5 Wheat. 1. Baker, Annot. Const. p. 53.)

51. (vii.) Lighthouses170, lightships, beacons, and buoys:

HISTORICAL NOTE.—Earl Grey's Committee of the Privy Council in 1849 suggested “The erection and maintenance of beacons and light-houses” (p. 85, supra); and Wentworth's Constitutional Committee in 1853, and his Memorial in 1857, specified “Beacons and light-houses on the coast.” Sec. 91 of the British North America Act specifies “Beacons, buoys, light-houses” (sub-s. 9.)

In the Commonwealth Bill of 1891 the sub-clause ran:—“Ocean beacons and buoys, and ocean light-houses and light-ships.” These words were adopted by the Adelaide session, 1897. At the Sydney session, a suggestion by the House of Assembly of Tasmania, to omit “ocean” whenever occurring, was supported by Mr. N. J. Brown, on the ground that it would be impossible to define what was, and what was not, an ocean light; that very often what was from one point of view a river beacon or light was, from another point of view, an ocean beacon or light. As against this it was contended that it was desirable to preserve the line of demarcation generally recognized between what should be Federal power and what should be State power; reserving to the Commonwealth control over external and coastal services of this kind, whilst matters capable of internal regulation, such as lights, beacons, and buoys situated in harbours and rivers should remain under the control of the States. This reasoning for the time prevailed, and the word “Ocean” was retained. (Conv. Deb., Syd., 1897, pp. 1067–71.) At the Melbourne session, before the first report, the word “Ocean” was omitted at the suggestion of the Drafting Committee, thus greatly enlarging the jurisdiction of the Federal Parliament, in accordance with the suggestion of the Tasmanian Assembly.

§ 170. “Lighthouses,” &c.

These works and services will be taken over from the States on a date or dates to be proclaimed by the Governor-General after the establishment of the Commonwealth (sec. 69).

Federal legislation under this sub-section will deal with the construction, equipment, conduct, and management of light-houses, light ships, light-sirens, beacons, buoys, and signals, for shipping throughout the Commonwealth, and over its adjacent seas. It will also provide for the imposition and collection of dues to be paid by the owners or masters of ships which pass the lights, signals, &c., and which derive benefits therefrom.

At the Australasian Maritime Conference, held at Hobart in 1894, at which all the colonies except Western Australia and New Zealand were represented, it was recommended “that the whole system of lighting the highway, coast, and harbour lights of Australasia be borne pro rata on the basis of the population;” and it was also resolved, “That in pursuance of the foregoing resolution, and after having carefully considered


  ― 566 ―
the questions relating to the light-house system of Australia, and further having ascertained that in many cases lights are most needed in the colonies possessing the smallest population, this Conference is of opinion that the future erection and maintenance of light houses should be conducted under a Federal system, whereby the cost would be proportionately borne by the colonies that may now or hereafter join such Federation upon a population basis.”

51. (viii.) Astronomical and meteorological171 observations:

HISTORICAL NOTE—These words were first inserted at the Adelaide session, 1897. In Committee Mr. Reid questioned the necessity of retaining them, but the sub-clause was agreed to. (Conv. Deb., Adel., pp. 775-6.)

§ 171. “Astronomical, &c.”

“It is very desirable that we should have uniformity throughout Australia with regard to these things. I am not so much wedded to the astronomical, but, in regard to the meteorological observations, it is most essential that there should be uniformity throughout Australia. On a former occasion I pointed out that one of our best observers, Mr. Wragge, was very anxious we should have these observations in Tasmania. There was no obligation on the part of the Tasmanian Government to establish these observations on Mount Wellington, but there is a general consensus of opinion among the best men that these observations would be invaluable to Australia. Why should the Government of Tasmania be called upon to meet an expenditure of this kind when it is admitted by the best men in Australia and elsewhere that these observations would be of more value to Australia than they could be to Tasmania, which happens to be the position from which they could be taken? If there is anything which ought to be the subject of a Commonwealth law, it is these observations, which will undoubtedly prove of great value to shipping and other interests of Australia.” (Sir J. Abbott, Conv. Deb., Adel., 1897, p 775-6.)

“With regard to the astronomical observations it is very important that they should be under Federal management. Take the case of the United Kingdom at the present time. There we have an observatory at Greenwich which I apprehend is the chief northern observatory of the empire. There is an observatory in Dublin, and another in Edinburgh, both admirably managed institutions, but we do not hear of them conflicting with the observatory at Greenwich, which maintains the paramount position in the United Kingdom. The same is the case with the Washington observatory of the United States. So also we should have an observatory in the Commonwealth which should rank before the other observatories. It commends itself to our intelligence that there should be a federal observatory, to take precedence over other observatories. I think there are obvious reasons that the meteorological observations should be placed under one general control, and I trust that the Convention will not object to the clause as it stands.” (Mr. C. H. Grant. Id. p. 776.)

51. (ix.) Quarantine172:

HISTORICAL NOTE.—“Quarantine and the establishment and maintenance of marine hospitals” is specified in sec. 91 of the British North America Act (sub-s. 16). “Quarantine” was one of the subjects which might be referred to the Federal Council of Australasia under the Act of 1885. It was included in the Commonwealth Bill of 1891, and in the Adelaide draft of 1897. At the Sydney session, Mr. R. E. O'Connor thought the sub-clause should be restricted to infection from outside, and moved to substitute “Public health in relation to infection in contagion from outside the Commonwealth.” This was negatived by 19 to 13 votes. (Conv. Deb. Syd., 1897, pp. 1071-3.)




  ― 567 ―

§ 172. “Quarantine.”

SCOPE.—Quarantine was originally the term of forty days, during which a ship arriving in port, and suspected of being infected with a malignant or contagious disease, was required to remain isolated and was forbidden all intercourse with the shore. Hence it came to mean restraint or inhibition of intercourse; also the place where the infected or prohibited vessels were stationed. With the expansion of sanitary science and legislation, quarantine has acquired a much wider signification than that which it first possessed. It is now comprehensive enough to cover any forced stoppage of travel, or of transit, or of communication, as well as compulsion to remain at a distance, or in a given place, without intercourse, on account of any malignant, contagious, or dangerous disease on land as well as by sea. (Webster's Internat. Dict.)

QUARANTINE IN THE UNITED STATES.—The Constitution of the United States of America does not expressly confer on Congress jurisdiction to deal with quarantine. Laws relating to quarantine may, although not so intended, operate as a regulation of trade and commerce. Congress, like the Federal Parliament, has the exclusive power to regulate inter-state and foreign commerce. Hence it follows, that inasmuch as quarantine regulation necessarily involves temporary interference with and restraint of the movements of commerce, and of those engaged in it, the power of the States to deal with quarantine, although not taken from them and handed over to Congress, is strictly speaking very limited. In practice, however, the States pass quarantine regulations until Congress shall have interposed by independent legislation over the subject, or shall have forbidden State laws in relation thereto. So far Congress has not passed laws inconsistent with State quarantine laws; on the contrary it has adopted some of the State laws bearing on the subject. (Morgan's Steamship Co. v. Louisiana, 118 US. 455.)

QUARANTINE UNDER THE COMMONWEALTH.—The Federal Parliament has received a clearer and fuller grant of power relating to quarantine than Congress. It is given to Congress by implication; it is conveyed to the Federal Parliament directly. Out of that express grant amplifications and developments may flow which could not have been evolved from an implication. The Federal Parliament may deal with quarantine without reference to the interests of trade and commerce, but as an independent question having regard to the sanitary condition and welfare of the Commonwealth as a whole. It will be able to provide for the isolation, segregation, remedial and preventive treatment of animals and plants and their diseases wherever found within the Commonwealth. It would probably be able, if deemed desirable, to grapple with such problems as the tick plague or a phylloxera pest, in stamping out which the whole of Australia is interested. Such a power would only be exercised in cases of universal interest and of far-reaching importance, and for the purpose of reinforcing and not superseding the ordinary sanitary laws, institutions and authorities in operation within the respective States.

CANADIAN CASES.—By the Canadian Constitution, sec. 91, sub-sec. 11, the Dominion Parliament has exclusive jurisdiction over quarantine and the establishment and maintenance of marine hospitals. In Ringfret v. Pope, 12 Quebec L. R. p. 303, it was held that the preservation of the public health within the Province was a matter of merely local or private nature which, by sec. 92, sub-sec. 16, is exclusively within the jurisdiction of the provincial legislature. Cross, J., dissented from this decision, so far as it concerned the establishment of a central board of health with a system of subordinate boards. He said:—“Although the provincial legislature might make and enforce police regulations directly, or by giving that power to be executed by the municipalities so as to promote health within their several jurisdictions, or deal with the subject in a sense that was purely local, the Dominion legislature could deal with it in a general sense, and take appropriate measures to prevent or mitigate an epidemic, endemic or contagious disease, with which the Dominion, or any part of it, was threatened.” In 1869 a Bill providing for vaccination was not proceeded with in the Dominion Parliament, as it was


  ― 568 ―
considered doubtful if it was within its jurisdiction. (Bourinot's Parliamentary Procedure and Practice, 2nd ed. p. 674, citing Com. Deb. 1869, p. 64; Sen. Deb. 1879, p. 47; Lefroy, p. 659.)

The Legislature of British Columbia passed an Act enabling the Corporation of Vancouver to make by-laws for regulating, with a view to preventing the spread of infectious disease, the entry and departure of ships at the port of Vancouver, and the landing of passengers and cargoes from ships or from railroad cars. In the case of the Canadian Pacific Navigation Co. v. The City of Vancouver, 2 Brit. Columb. 193, it was held that this was not an infringement of the Dominion power to regulate trade and commerce. But according to the report of Sir John Thompson, Minister of Justice of Canada, dated 28th January, 1889, respecting the Nova Scotia Acts of 1888, authorizing the Governor in Council to regulate “with a view of preventing the spread of infectious disease, the entry or departure of boats or vessels at the different ports or places in Nova Scotia,” and the report of the same Minister, dated 21st March, 1891, on the Manitoba Act respecting the diseases of animals, it would seem that, in the opinion of the federal authorities of Canada, such legislation is an invasion of the Dominion power over quarantine. “The British North America Act,” says Sir John Thompson, “gives exclusive legislative power to the Parliament of Canada in respect of quarantine, navigation and shipping. It would clearly not be competent for a provincial legislature to make an enactment relating to the arrival of vessels, vehicles, passengers or cargoes from places outside the province, but it may be that provincial control may be exercised in relation to transport from one port of the Province to another, subject, of course, to any regulation on the subject of quarantine by the federal authority.”

51. (x.) Fisheries173 in Australian waters beyond territorial limits174:

HISTORICAL NOTE.—Sec. 91 of the British North America Act empowers the Parliament of Canada to make laws as to “sea coast and inland fisheries” (sub-s. 12). “Fisheries in Australasian waters beyond territorial limits” was one of the independent legislative powers of the Federal Council, under the Act of 1885; and the sub-clause in its present form was inserted in the Commonwealth Bill of 1891. In the Adelaide draft of 1897, it was adopted, with the addition of the words “and in rivers which flow through or in two or more States.” In Committee these added words were omitted. (Conv. Deb., Adel., pp. 776-8.) At the Sydney session, Mr. Kingston suggested “Australasian” for Australian, and also the insertion of some definition of Australasian waters; but no amendment was moved. (Conv. Deb., Syd., 1897, pp. 1073-4.) At the Melbourne session, after the first report, Mr. Barton moved an amendment to make the sub-clause read “Sea fisheries in Australian waters.” Mr. Kingston and others, however, pointed out the necessity of express words, in order to give power outside territorial limits, and the amendment, by general consent, was negatived. (Conv. Deb., Melb., pp. 1855-74.)

§ 173. “Fisheries.”

A fishery, at common law, is a right incidental and annexed to the lordship or ownership of the soil over which the waters, the habitat of the fish, flow. On the sea coast, within three miles of the shore, and in the bays, arms, rivers, and creeks connected with the sea and within the tidal pulsation, fisheries are presumed to belong to the Crown, which can dispose of the right to private persons by license or lease. In non-tidal waters it is presumed that the fisheries belong to the persons who own the riparian lands over which the waters flow, or the land adjacent thereto. (Murphy v. Ryan, 1868, Ir. Rep. 2 C.L. 143.) At common law, therefore, the right of the public to fish


  ― 569 ―
under the supervision and protection of the Crown extends to all tidal waters within the territorial limits. (Pearce v. Scotcher, 1882, 9 Q.B.D. 162.) Private persons, however, may, by either an express or an implied grant from the Crown, acquire the exclusive right of fishery in the tidal waters. (Wilson v. Crossfield, 1885, 1 Times L.R. 601.)

Fishery laws may be defined as general laws for the regulation and conservation of the fishing trade; such as laws for the protection and preservation of fish; forbidding fish to be taken in an improper manner, as by objectionable appliances or noxious substances; prohibiting unnecessary waste and destruction of fish, and the taking, buying, or selling of fish in certain seasons; providing that fishermen, fishing boats, and ships shall be licensed and registered; and regulating the employment of labour in connection with such boats and ships.

It has been held in Canada that in order to determine the nature of laws which the Dominion Parliament may pass in relation to “sea coast and inland fisheries” it is necessary to look to the laws in relation to fisheries which the provincial legislatures were before, and at the time of federation, in the habit of enacting. (The Queen v. Robertson, 6 S.C.R. [Can.] pp. 52, 121.)

The right to regulate fisheries does not imply or convey a right to prejudice or invade private property. Thus it has been decided in Canada that the British North America Act, in assigning to the Parliament of Canada the right to legislate with respect to “sea coast and inland fisheries,” did not give authority to deal with matters of property and civil rights, such as the ownership of the beds of the rivers, or of the fisheries, or the right of individuals therein. (The Queen v. Robertson, 6 S.C.R. [Can.] 52, followed and confirmed by the same Court in Re Provincial Fisheries, 26 S.C.R. [Can.] 444.)

The Merchant Shipping Act, 1894, contains elaborate regulations relating to fishing boats and fishermen employed on the waters surrounding the British Islands. Among these may be mentioned sec. 399, in which special provisions are made for trawlers of 25 tons and upwards. The skipper of every trawler of that tonnage going to sea from a port in England or Ireland must make an agreement with his crew (not including sea-fishing boys) under a penalty of £5. This agreement must be in a form approved by the Board of Trade, dated at the time of its first signature, and signed first by the skipper; it must contain the nature and duration of the voyage or engagement, the number and description of the crew, the time for beginning work, the capacity in which each seaman serves, his remuneration, the scale of provisions, and regulations as to conduct on board, fines, allowance of provisions, and punishments for misconduct approved by the Board of Trade and adopted by the parties, who may add stipulations at their will, if not contrary to law, with regard to advance and allotment of wages. (Sec. 400.) Similar agreements may be made by the owner or registered managing owner instead of the skipper, in the same way as by the skipper.

§ 174 “Australian Waters Beyond Territorial Limits.”

The sub-section, as originally drawn by the Constitutional Committee of the Convention, contained words conferring jurisdiction over “fisheries in rivers which flow through or in two or more States.” The representatives of New South Wales objected to the power in that form, on the ground that it would enable the Parliament to interfere in matters of purely local concern, which could be more efficiently and economically supervised by the State authorities. The words objected to were struck out, and the States were accordingly allowed to retain the control of fisheries within their territorial limits, whilst the Federal Parliament was assigned jurisdiction over fisheries in Australian waters beyond the three-mile limit. This is a somewhat remarkable instance of the intended extra-territorial operation of some of the laws of the Commonwealth.

Weighty reasons were advanced in the Convention, both for and against the retention of the words “Australian waters beyond territorial limits.” In opposition to the words reference was made to the vagueness of the expression “Australian waters.”




  ― 570 ―

Mr. Kingston thought it important that some definition of the term “Australian waters” should be inserted. “I do not know,” he said, “if the hon. and learned member, Mr. Barton, is satisfied in his own mind as to what meaning would be attached to the term. I think that there was some provision in connection with the Federal Council by which, under an Imperial order, these waters were defined; and legislation was adopted by the colony of Western Australia and Queensland in the exercise of powers conferred on the Council in regard to those matters. The clause applies only to matters beyond territorial limits, which increases the difficulty.” (Conv. Deb., Syd., 1897, p. 1073.)

In the absence of a definition, it was said, complicated questions might arise in practice as to how far from the Australian coast “Australian waters” might be deemed to extend, and whether at a given time a fishing boat was within those waters. More important still was the innovating proposal to give the Federal Parliament power to legislate respecting fisheries beyond its territorial limits. Outside those limits the ocean was the highway of all nations, and no country could claim to exercise exclusive jurisdiction over the high seas. It was not conceivable that any law affecting fisheries outside the territorial limit would be legally operative. It was not sufficient to say that the Imperial Parliament would give the Commonwealth power to legislate in respect of matters occurring beyond those limits. The Imperial Parliament could not effectively grant the Commonwealth a power which, according to the law of nations, it did not possess. Suppose the Federal Parliament passed such a law, and the captain and crew of a foreign ship violated it, in contempt and defiance of the Commonwealth, would not the law in that case be made a laughing stock? Then, again, the power as it stood in the sub-section recognized two legislative authorities, with respect to fisheries, one within, and the other beyond the three-mile limit. This might lead to a clashing of State regulations with Federal regulations. The boundary line between State jurisdiction and Federal jurisdiction would be vague and not capable of easy and satisfactory delimitation. Persons engaged in the fishing trade might very often be unable to say whether they were liable to and bound to obey State laws or Federal laws. A vessel engaged in trawling should not be under one set of laws when fishing close to the coast, and under another set when compelled to go further out to sea in order to find fish. Rather than risk such doubt and possible conflict it might be advisable to omit the sub-section altogether and allow the fishing trade to be governed by the laws relating to trade and commerce, or by the laws relating to navigation and shipping, which were within the competence of the Federal Parliament. Such laws would enable the Federal authorities to issue fishing licenses and attach all necessary and proper conditions, and such a course would meet all the requirements of the case. (Mr. E. Barton, Conv. Deb., Melb., pp. 1857–8–9.)

The arguments in support of retaining the words admitted the difficulties pointed out, but claimed that there were powerful considerations which more than outweighed those difficulties. In the first place this was by no means a new and untried grant of power. By section 15 (c) of the Federal Council of Australasia Act (48 and 49 Vic. c. 60), power was given to that body to legislate in respect of “fisheries beyond territorial limits”—the identical words used in this sub-section; the only condition to the exercise of its jurisdiction being (1) that its laws should be enforced only in colonies which had adopted the Act and which were represented in the Council, and (2) that proposed laws relating to sec. 15 (c) should be reserved for the signification of Her Majesty's pleasure. This had not remained a dormant power, but had been exercised.

In January, 1888, the Federal Council passed an Act to regulate pearl-shell and beche-de-mer fisheries in Australasian waters, adjacent to the colony of Queensland. The preamble recited:

“Whereas, by certain Acts of the Parliament of the colony of Queensland, provision has been made for regulating the pearl-shell and beche-de-mer fisheries in the territorial waters of that colony; and whereas, by reason of the geographical position of many of


  ― 571 ―
the islands forming portion of that colony, vessels employed in such fisheries are, in the prosecution of their business, sometimes beyond the territorial jurisdiction of Queensland; and whereas it is expedient that the provisions of the said Acts should extend and apply to such vessels during all the time they are so employed, and that for that purpose the provisions of the said Act, so far as they are applicable to extra-territorial waters, should be extended to such waters by an Act of the Federal Council of Australasia.”

The Act contained provisions to regulate the pearl-shell and beche-de-mer fisheries in Australasian waters adjacent to the colony of Queensland. Such waters were defined as being within the following limits:—

“All waters within a line drawn from Sandy Cape northwards to the south-eastern limit of the Great Barrier Reef; thence following the line of the Great Barrier Reef to their north-eastern extremity near the latitude of 9½° south: thence in a north-westerly direction embracing East Anchor and Bramble Cay; thence from Bramble Cay in a line west by south (south 79° west true) embracing Warrior Reef, Saibai and Tuan Island; thence diverging in a north-westerly direction so as to embrace the group known as the Talbot islands; thence to and embracing the Deliverance island and on in a west by southern direction (true) to the meridian of 138° of east longitude; and thence by that meridian southerly to the shore of Queensland.”

This Act was reserved for the Royal assent, which was proclaimed on 19th July, 1888. In February, 1889, the Federal Council passed an Act to regulate the pearl-shell and beche-de-mer fisheries in Australasian waters adjacent to the colony of Western Australia. It contained provisions substantially similar to those of the Queensland Act. The extra-territorial waters, within which it was declared to be in force, were defined in the schedule as follows:

“A parallelogram of which the north-western corner is in longitude 112° 15' east and latitude 13° 30' south; of which the north-eastern corner is in longitude 129° east and latitude 30° 30'; and of which the south-west corner is in longitude 112° 52' east and latitude 35° 8' south; and of which the south-eastern corner is longitude 129° east and latitude 35° 8' south.”

Both the Queensland and West Australian Acts are remarkable for the stringency of their provisions relating to the employment of coloured labour, showing that “laws with respect to fisheries” are capable of comprehending regulations controlling the employment of labour used in connection with fisheries. These Acts are still in force, their operation being preserved by clause 7 of the Commonwealth Constitution Act. Thus, it was pointed out, extra-territorial laws relating to fisheries had been already sanctioned by the Imperial Government, and enforced by the Governments of the two colonies over a wide expanse of ocean, the boundaries of which were defined within parallels of latitude and degrees of longitude. The pearl-shell and beche-de-mer trade had been regulated; the fisheries had been protected; fees had been collected; labour had been supervised, and everything expected and desired had been obtained. Here, therefore, they had an illustration of the practicability of the grant of power contemplated. Having received such a grant in the Federal Council Act, it would not be wise for Australia to surrender it by omitting a similar enabling provision from the Constitution of the Commonwealth. The power should appear on the face of the Constitution; they ought not to trust any implication hidden away in other clauses.

The practical arguments were strengthened by broader and more patriotic considerations. Such spheres of influence and control as had been already granted by the Imperial Parliament to the Federal Council should be reserved for and transferred to the Commonwealth. The people of such a continent as Australia, unique in its isolation and configuration, should have the right of control over waters outside the ordinary territorial limits. We should begin our career as a Commonwealth by mapping out a sphere of influence, and of commercial trading operations, all round the continent, and for some considerable distance from the coast. Within that sphere the Commonwealth would represent and protect, not merely Australian interests, but Imperial interests. We were taking over general powers from the States and from the Federal Council, and those powers should be accepted undiminished, and maintained unimpaired, without abandon-punishing


  ― 572 ―
one jot or yielding one tittle of what had been acquired by the labours and triumphs of the pioneers of Australian progress. (See speeches of Mr. C. C. Kingston, Sir John Forrest, Mr. A. Deakin, and Mr. R. E. O'Connor. Conv. Deb., Melb., pp. 1861-3 and 1872.

51. (xi.) Census175 and statistics:

HISTORICAL NOTE.—Sec. 91 of the British North America Act specifies “The census and statistics.” (Subs. 6.) The sub-clause “Census and statistics” was in the Commonwealth Bill of 1891, and was adopted by the Convention of 1897-8 without debate.

§ 175. “Census.”

A census is the periodical numbering of the people of a country. Since the beginning of the nineteenth century a census has been taken of the inhabitants of Great Britain and Ireland every ten years, and the practice now extends throughout the English speaking portions of the Queen's dominions. The object of the census is to supply statistical information respecting number and conditions of the population, and respecting the resources and developments of the country. As the census is taken between the same hours of the same day of the same year, the necessity for uniform legislation in contiguous countries is apparent. For the purpose of a census the whole country is divided into districts, called enumerators' divisions, over which schedules are distributed requiring particulars as to name, sex, age, profession or occupation, marriage, relation to the head of the family, birthplace, and whether deaf, or dumb, or blind, or imbecile, or lunatic. When the schedules so filled up are collected, the details are verified and the results sent to the Registrar-General, who prepares a final abstract thereof, which is submitted to Parliament.

The Parliament of Canada has exclusive jurisdiction of census and statistics. The legislature of British Columbia passed an Act respecting the registration of births, deaths, and marriages in that Province. On 2nd January, 1879, the Minister of Justice of the Dominion called attention to the fact that the Act might be questioned as being connected with statistics.

The census and statistical departments of the States will be taken over by the Federal Government, as soon as enabling legislation is passed by the Federal Parliament.

51. (xii.) Currency176, coinage177, and legal tender178:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to coin money, regulate the value thereof, and of foreign coin;” and “to provide for the punishment of counterfeiting the securities and current coin of the United States.” (Art. I. sec. viii. sub-secs. 5–6.) Sec. 91 of the British North America Act specifies “currency and coinage” and “legal tender” (sub-secs. 14–20).

“Coinage” was specified as a federal subject in the Bill attached to Wentworth's Memorial in 1857. “Currency, coinage, and legal tender” were specified in the Commonwealth Bill of 1891, and the sub-clause was adopted by the Convention of 1897–8 without debate.

§ 176. “Currency.”

Currency in this connection means the acceptance, reception, passing or circulation from hand to hand, from person to person, of metallic money, or of government or bank notes as substitute for metallic money.




  ― 573 ―

The only gold coin now current in England is that coined during the present reign at the London Mint, or the Australian branch mints. Pre-Victorian gold was decried by proclamation in 1890. The designs current are those of 1838, 1870, 1887, and 1893. The Pre-Victorian gold has been called in in several colonies; in Australasia and in New Zealand in 1890; in the Cape and Fiji in 1893. All silver coin coined since 1816 is still current and legal tender. The designs now legally current are those of 1817 and 1893. Besides this general currency, in 1849 florins were made current coin. The design was altered in 1852, and double florins were made current under the proclamation of 1887. Until 1861 copper coins of the face value of ld., ½d., and ¼d. were coined as part of the currency. They were then superseded by bronze money of the same denominations, and the copper coinage was decried as to the United Kingdom in 1869, and as to all colonies in which they were current in 1876. The designs adopted in 1861 were superseded by a new design in 1895. (Encyc. of Laws of England, iii. p. 75.)

The Federal Legislature has power, by suitable legislation, to restrain the circulation, as money, of any notes not issued by its own authority. (Veazie Bank v. Fenno, 8, Wall. 533. Baker Annot. Const. p. 46.)

The Federal Legislature has power to provide by law for the punishment of the offence of counterfeiting notes of foreign banks, or for having in possession a plate from which such counterfeit notes may be printed. (United States v. Arjona, 120 U.S. 479. ld.)

This clause does not prevent a State from passing laws to punish the offence of circulating counterfeit coin of the Union. Counterfeiting and circulating counterfeit coin are offences essentially different in their character. The former is an offence against the government; the latter is a private wrong. (Fox v. Ohio, 5 How. 410. Id. p. 47.)

§ 177. “Coinage.”

Coinage is the act or process of converting metal into money for circulation. The coining and legitimation of money is one of the exclusive prerogatives of the Crown, but from the earliest times it has been regulated by Act of Parliament.

Sterling money (gold and silver money) of a given weight and fineness, seems to have been first established in 1351 by 25 Edw. III., st. 5, c. 13, but for a long time after that date the Crown exercised, or as Blackstone says (1 Com. 278), usurped, as part of its prerogative, the right to debase the coin. It was not until the time of Charles II. that the currency was put on a comparatively sound footing. The standard and value of English coin was extended to Scotland in 1706. Prior to 1870 the coinage and management of the mint were regulated by a series of enactments, wholly or partly repealed by and specified in the Coinage Act, 1870, 33 and 34 Vic. c. 10, on which the regulation of coin of the realm and the colonies now mainly depends. That Act fixes the standard of coins, prohibits the issue, except from the mint, of any piece of metal as token or coin, under a penalty of £20, recovered summarily; directs all contracts to be made in currency; regulates the purchase and coining of gold bullion ; and directs mint profits to be paid into the exchequer. The exercise of the prerogative of coinage is defined and controlled, but the powers are left very wide. The purity of the coinage and the conformity to standard is ascertained annually by the trial of the pyx, which is held under an Order in Council of 1871. At this trial a jury of six competent freemen of the Goldsmiths' Company examine coins of each minting, set apart for testing by the standard trial plates and standard weights, which are kept in the custody of the Board of Trade, and produced on notice for the occasion. The Chancellor of the Exchequer is master of the mint, which is managed and regulated by the Treasury, subject to the Act of 1870. (Encyc. of the Laws of England, iii. p. 74.)

The language of the American Constitution, by its proper signification, is limited to the facts or to the faculty in Congress of coining and stamping the standard of value upon what the government creates or shall adopt, and of punishing the offence of producing a false representation of what may have been so created or adopted. The imposture of passing a false coin creates, produces or alters nothing; it is an offence punishable by State law, since it leaves the legal coin as it was—affects its intrinsic value in no wise whatever. (Fox v. Ohio, 5 How. 410–413; compare with United States v. Marigold, 9 How. 560. Baker, Annot. Const. p. 47.)

Under this power, as well as under the power to regulate commerce, Congress has authority to enact laws providing for the punishment of persons who bring into the United States, with intent to pass the same, any false or counterfcit coin, and also to


  ― 574 ―
persons for passing, altering, publishing or selling any such false or counterfeit coin. (United States v. Marigold, 9 How. 560, id.)

The Mint opened in Sydney on 14th May, 1855, and that opened in Melbourne on 12th June, 1872, are Imperial Institutions, being branches of the Royal Mint. They were established, and are now administered, by the Imperial Government at the request of the Colonial Governments, which guarantee it against loss. The Queen's proclamation, pursuant to which these branches were opened, declared that the coin issued therefrom was to be a legal tender for payment within the United Kingdom. The Parliament of New South Wales and the Parliament of Victoria have made permanent provision, by special appropriations, for defraying the salaries, allowances, expenses, and contingencies connected with the branch mints in their respective colonies. The Victorian special appropriation is £20,000 per year; that of New South Wales is £15,000 per year. All fees, dues, and charges collected at the branch mints are accounted for and handed over by the deputy masters to the Treasurers of their respective colonies and paid into the consolidated revenue.

The West Australian Government has obtained the sanction of the Imperial Government for the establishment of a branch mint in Perth, of which the foundation stone was laid by Sir John Forrest on 23rd September, 1896. The building was completed and handed over to the Mint authorities in October, 1898, and the necessary machinery has since been erected. The expenditure involved up to the present has been about £30,000. The Parliament of Western Australia has appropriated the sum of £20,000 per year towards the maintenance of the Mint. On the authority of the Master of the Imperial Mint, it is stated that the new Mint will probably relieve the Melbourne Mint of a third of the deposits presented there. This will affect materially the profits of the Melbourne Mint, which have for some years past been of a most satisfactory character. The Perth Mint was opened for the reception of bullion on the 20th June, 1899.

The following statement of the capital value of the Sydney and Melbourne Mint properties, the annual interest payable thereon, the ordinary annual expenditure, the annual receipts, and the net cost per annum, has been compiled from returns presented to the Convention. (Votes and proceedings of Melbourne Session, p. 232; Victorian Federation Papers, 296.)

                           
SYDNEY MINT
CAPITAL.—Estimated present value land and building (rough approximation) ... ... ... ...  £70,000 
MAINTENANCE.—Annual interest on outlay ... ... ... ...  £3,000 
Annual subsidy ... ... ... ...  15,000 
Total ... ... ... ...  £18,000 
REVENUE, 1895–6, Fees, dues, charges, &c. ... ...  £15,119 
Net annual expenditure ... ... ... ...  £2,881 
MELBOURNE MINT
CAPITAL.—Estimated present value of land and building (rough approximation) ... ... ... ...  £70,000 
MAINTENANCE.—Annual interest on outlay ... ...  £3,395 
Annual subsidy ... ... ... ...  20,000 
Total ... ... ... ...  £23,395 
REVENUE, 1895–6, Fees, dues, charges, &c. ... ...  £21,194 
Net annual expenditure ... ... ... ...  £2,201 




  ― 575 ―

§ 178. “Legal Tender.”

DEFINITION.—Legal tender is the act of tending, in the performance of a contract, or in satisfaction of a claim, that which the law prescribes or permits, and at such time and place as the law prescribes or permits. (Webster's Internat Dict.) In the United Kingdom all coin current under proclamation, whether British, foreign, or colonial, is legal tender. British gold coin is legal tender for any amount, unless defaced or deficient in weight; British silver up to forty shillings, and British bronze up to a shilling. (Coinage Act, 1870 [33 and 34 Vic. c. 10] s. 4.) Bank of England notes are legal tender in England for all sums above £5, except by the Bank itself and its branches. (Bank of England Act, 1833 [3 and 4 Wm. IV. c. 98, s. 6].) The notes are treated as cash and not as securities for money, and they pass by mere delivery. (Miller v. Race [1758] 1 Burr. 452.) The notes of a county bank are good tender, if not objected to at the time of tender. (Polglass v. Oliver [1831] 2 Crompt. and Jarv. 15.) In Australasia and New Zealand, by an Order in Council of 1896, it is provided that the rules as to the amount for which British coin is legal tender are the same as in the United Kingdom. (Imperial Statutory Rules and Orders, 1896.)

COINAGE AND LEGAL TENDER.—By section 114 the States are forbidden to coin any money or to make anything but gold and silver coin a legal tender in payment of debts. The prohibition is similar to Art. I. sec. 10, subs. 1 of the United States Constitution. Hence it appears that under both Constitutions the creation and regulation of the monetary system is a power conferred on the Federal Parliament. It is a general power; the Parliament is not limited in the choice of metals to which it will give the quality of money. It may choose some other metal than gold and silver, and impress upon it a legal tender quality. But if a State endeavoured to compel a person to accept anything but gold or silver as a legal tender, the person aggrieved could appeal to the Courts of the Commonwealth for relief. (Burgess, Political Sci. II. p. 143.)

LEGAL TENDER IN THE UNITED STATES.—The Congress of the United States is expressly empowered to create and regulate the value of metal money. It has, however, been decided by the Supreme Court that, although the power to legislate concerning legal tender and paper money is not expressly conferred upon Congress, yet it has, by necessary intendment, such a power, and it can make anything a legal tender in payment of debt. (Juilliard v. Greenman, 110 U.S. 421.) The legal tender cases are very instructive, as illustrating the expansive and elastic capacity of a written constitution and the possibilities of its inherent and necessary powers. This subject will be referred to more fully in our note on “Paper Money,” infra. At the present stage abstracts of the ruling cases are given.

In the Constitution of the United States there is no express grant of power to Congress to declare what shall be a legal tender, but this power has been uniformly exercised and unquestioned. This universal recognition is tantamount to a direct constitutional declaration, and the power can now be considered settled. (Martin v. Hunter's Lessee, 1 Wheat. 304; Cohens v. Virginia, 6 Wheat. 421; Briscoe v. Bank of Kentucky, 11 Pet. 257; Anderson v. Dunn, 6 Wheat. 204. Baker, Annot. Const. p. 46.)

A Federal law making United States treasury notes legal tender is, when applied to contracts in existence prior thereto, unconstitutional. (Willard v. Tayloe, 8 Wall. 557; Hepburn v. Griswold, 8 Wall. 603; Broderick v. Magraw, 8 Wall. 639.) The decisions in the above cases are overruled, and the acts of Congress making United States treasury notes legal tender are held to be valid when applied to antecedent, as well as to subsequent contracts. (Legal Tender Cases [1871] 12 Wall. 457; Dooley v. Smith, 13 Wall. 604; Norwich Railroad v. Johnson, 15 Wall. 195; Juilliard v. Greenman, [1884] 110 U.S. 421. Baker, Annot. Const. p. 46.)

IMPERIAL CONTROL.—Australian governors are at present required by their instructions not to assent to any Bill affecting the currency of the colony, unless such bill contains a clause suspending its operation until the signification of the Queen's pleasure thereon, or unless there is urgent necessity requiring it to be brought into immediate operation. In either of these cases he is authorized to assent to the bill, and remit it


  ― 576 ―
to the Queen at the earliest opportunity (p. 399, supra). This paragraph was omitted from the Draft instructions under the Sign Manual and Signet to the Governor-General of Canada, dated 5th October, 1878, and in all probability it will not be found in the instructions to the Governor-General of the Commonwealth.

In 1851 a Canadian Act in relation to coinage was disallowed by the Queen in Council, on the grounds (1) that the Act proposed to confer upon the Governor-General the right of coining—a prerogative reserved by constitutional law to the sovereign; (2) that it purported to alter the current rates of certain foreign coins—a provision which, being enacted without the previous assent of Her Majesty in Council, was an interference with Imperial control over the value of currency money in circulation throughout the realm. By the British North America Act of 1867, the Imperial Parliament has specially empowered the Parliament of Canada to exercise “exclusive legislative authority” in relation to “currency and coinage.” The Acts passed in Canada upon the subject of the currency in 1868 and in 1871 expressly conserve the prerogative of the Crown in the matter of coinage, and authorize Her Majesty to fix by proclamation from time to time the rates at which coins in circulation in Canada, or struck off by order of Her Majesty for use in Canada, shall pass current. (Todd's Parl. Gov. in Col. 2nd ed. p. 176.)

“In 1866 a ministerial crisis occurred in Queensland. Owing to serious financial embarrassments in that colony, ministers had tendered to the governor (Sir G. F. Bowen) their advice that, in order to sustain the public credit, there should be an immediate issue of inconvertible paper currency, in the shape of legal tender notes, to an amount not exceeding £200,000. The governor demurred to this proposal, inasmuch as he was expressly forbidden, by the royal instructions—‘which are a part of the constitutional law of the colony’—to assent to any bill of this nature, unless upon urgent necessity, as aforesaid. He distinctly declared that in no event would he give the royal assent to any such bill. He suggested, however, another mode of meeting the financial difficulty—viz., by obtaining legislative sanction to the issue of treasury bills, coupled with the imposition of additional taxation; a course which had proved successful, under similar circumstances, in other colonies, and in the mother country.” (Todd's Parl. Gov. in Col. 2nd ed. p. 185.)

51. (xiii.) Banking179, other than State banking180; also State banking extending beyond the limits of the State concerned181, the incorporation of banks182, and the issue of paper money183:

HISTORICAL NOTE.—Sec. 91 of the British North America Act specifies “Banking, incorporation of banks, and the issue of paper money” (sub-s. 20). These words were adopted in the Commonwealth Bill of 1891. In committee, the question of State savings banks was raised, but no amendment was moved. (Conv. Deb., Syd., 1891, pp. 684–5.) At the Adelaide session, 1897, the same words were used. The question of State banks was again mentioned, but no amendment was moved. (Conv. Deb., Adel., pp. 778–9.) At the Sydney session, a suggestion by the Legislative Assembly of New South Wales and the Legislative Council of Tasmania, to insert after “banking” the words “excluding State banking not extending beyond the limits of the State concerned,” was agreed to (Conv. Deb., Syd., 1897, pp. 1074–5), and the sub-section was verbally amended.

§ 179. “Banking.”

Banking is the business of a bank or banker. A bank is an institution formed for the deposit, custody, investment, loan, exchange or issue of money, or for facilitating the transmission of money by drafts or bills of exchange; it is an establishment generally incorporated for the purpose of performing one or more of those functions. (Webster's Internat. Dict.) This definition covers every possible phase or combination of banking, viz., the deposit, custody, investment, loan, exchange, issue and transmission of money.


  ― 577 ―
It is wide enough to embrace every person, partnership or corporate body, under whatever name, carrying on business in money. Legislation relating to banking would, therefore, include laws regulating the inception, organization and conduct of such a business; the terms, conditions and securities for good faith under which it could be carried on; the powers, rights and privileges to be exercised and enjoyed by bankers; the obligations and responsibilities of bankers.

This sub-section presents another suitable opportunity for drawing attention to a subject elsewhere referred to (see “Legal Tender,” § 178, supra), viz., the vast area of implied powers which may exist within the four corners of a written Constitution such as this. In the Constitution of the United States no power is in express terms given to Congress to incorporate banks. Yet the genius of Alexander Hamilton discerned that such a power might be deduced by inference or implication, from a clause in the Constitution authorizing Congress to make all laws “necessary and proper for carrying into execution the foregoing powers.” (Art. i. sec. viii. sub-s. 18, U.S. Constitution, to which sec. 51—xxxvii. of this Constitution corresponds.) The power to charter a bank to facilitate the financial measures of the Federal Government was (argued Hamilton) subsidiary and incidental to the power to tax and to borrow. “Every power vested in a government is, in its nature, sovereign, and includes by force of the term a right to employ all the means requisite and fairly applicable to the attainment of the ends of such power, and which are not precluded by restrictions and exceptions specified in the Constitution.” (Hamilton's Works, Lodge's ed. vol. iii. p. 181.) Accordingly he urged upon Congress the importance of chartering a National Bank of the United States, as an aid and instrument of the Federal Government in its financial operations. The Bill passed Congress in 1791, and thus the first bank of the United States was established. (Von Holst, p. 126.)

The validity of the Act to create a national bank was tested in the Supreme Court of the United States in the great case of McCulloch v. Maryland, 4 Wheat. 316. By a liberal interpretation of the Constitution, the Court, under the presidency of Chief Justice Marshall, held that Congress had the power to incorporate the subscribers of the United States Bank, and that its notes and branches were exempt from State taxation.

“In 1879, ministers submitted a bill to the Imperial Parliament to deal with certain colonial banks which were in operation under royal charters. These charters had been granted before it had become customary to establish joint stock banks under a general law; and the banks were subject to the supervision and control of the Treasury and of other Imperial departments, in respect to divers matters. By this bill it was proposed to do away with this imperial responsibility, and to subject all banks holding royal charters to the laws of the particular colonies wherein they were situated. This would have the further effect of preventing any unfair advantages on such corporations in comparison with other banks established under colonial laws. The bill was dropped in 1879, but reintroduced in 1880, and referred to a select committee, which reported evidence taken thereon; but owing to the then pending dissolution of Parliament it was not pressed in that session. Nevertheless, the general principle of the measure was approved by the house; and the opinion of the Treasury was expressed that, in a self-governing colony, the action of the local legislature would override a royal charter, within the limits of the jurisdiction of that legislature.” (Todd's Parl. Gov. in Col. 2nd ed. p. 220.)

§ 180. “Other than State Banking.”

These words exclude from the jurisdiction of the Federal Parliament all laws relating to State banking. In the Sydney Convention (Debates, p. 1075) attention was called by Mr. Glynn to the vagueness of the phrase “State banking.” It was said that there are no real “State Banks” in any country in the world. There are great financial organizations such as the Bank of England, the Bank of France, the German Bank, and the Bank of the United States of America, over which the Government exercises certain control: which have certain exclusive privileges, including the conduct of government business, but which are not strictly speaking State Banks. A State Bank, properly so called, is an institution which is solely managed by the Government and the capital of


  ― 578 ―
which has been solely provided by the Government. The nearest known approach to a State Bank, within the above definition, is the Post Office Savings Bank, which is purely a State Institution. Such banks, and similar ones, which might be founded by the States, would under the above words be excepted from Federal control.

EXCEPTIONS TO GRANTS OF POWER.—The words, “other than State banking,” are equivalent to “except State banking;” they are words marking an exception to the general grant of power to legislate concerning banking. The Supreme Court of the United States, in construing the Constitution as to grants of powers to the United States, and the restrictions upon the States, has ever held that an exception of any particular case presupposes that those which are not excepted are embraced within the grant of power, and have laid it down as a general rule that, where no exception is made in terms, none will be made by mere implication or construction. (Rhode Island v. Massachusetts, 12 Pet. 657.) It is a rule of construction that the exception from a power marks its extent. (Gibbons v. Ogden, 9 Wheat. 191.) The fact that some powers are specified has been therefore held to import that those not specified were withheld, according to the old maxim, expressio unius exclusio alterius, which Lord Bacon concisely explains by saying, “as exception strengthens the force of a law in cases not excepted, so enumeration weakens it in cases not enumerated.”

§ 181. “State Banking Extending Beyond the Limits of the State Concerned.”

STATE BANKING.—Should a State establish a State Bank which extends its business operations beyond the limits of the State, such extra-state operations would be subject to Federal laws relating to banking.

§ 182. “Incorporation of Banks.”

By virtue of this power the Federal Parliament could establish banks by special Acts, a process known as Private Bills Legislation, or it could pass a general law dealing with the banking business, and authorizing the incorporation and registration of banking companies, subject to compliance with certain formalities and conditions. Compliance with those formalities and conditions would result in the creation of a banking corporation, as effective in its constitution as a corporation formed by a special legislative fiat. When a corporate body is established by a special Act, that Act is called its charter or deed of settlement; when it is established under a law of general application, its memorandum of association, lodged with the proper officer upon its registration, is its charter. The law usually determines the general powers, rights, privileges, liabilities, and responsibilities of corporations: within certain limits, however, many of these legal incidents may be regulated by contract.

An Act of Incorporation is an Act creating an artificial or fictitious person, the peculiarity of which is that it has a legal existence separate and distinct from the individual units of which it is composed. Its members may change, but the corporate entity remains; it has perpetual succession and it never dies, unless its dissolution or winding-up is brought about by operation of law.

In the Merchants' Bank of Canada v. Smith (1884), 8 Ont. App. 15, 8 S.C.R. (Can.) 512, it was held that a receipt given by a warehouseman was a valid receipt within the Dominion Act, 35 Vic. c. 5, s. 46, and that that Act was intra vires the Dominion Parliament under sub-secs. 2 and 15 of sec. 91, relating to the regulation of trade and commerce and banking. In Tennant v. Union Bank of Canada (1894), App. Cas. 31, it was decided that warehouse receipts, taken in security by a bank in the course of the business of banking, are matters coming with the class of subjects described in those sub-sections, and that the provisions of the Dominion Bank Act, Rev. Stat. (Can.) c. 120, secs. 45, 53 and 54, respecting such receipts, are intra vires.




  ― 579 ―

What an Act of incorporation does, “is to create a legal and artificial person with capacity to carry on certain kinds of business, which are defined, within a defined area, but it may nevertheless be subject, in carrying on that business, to the law of the locality wherein it does so.” In Re Grand Junction R. Co., 44 Upper Canada Reps. 317, Cameron, J., said: “Creating a corporation can hardly be said to be making a law;” and the same learned judge said, in Clegg v. Grand Trunk R. Co., 10 Ontario Reps. 714: “I wish to be free to consider whether a corporation created by the Dominion Parliament must not, outside of its corporate powers and functions, be regarded as a single entity which is, as far as the exercise of civil rights are concerned, not expressly provided for by the Act of incorporation, subject to the laws respecting such rights within the Province in which it may carry on its authorized business or exercise its corporate powers; and whether in this respect a corporation can have any greater or higher rights than a natural person.” But Mr. Lefroy contends that, although the Dominion Parliament can give to a corporation it is creating any powers and functions it likes, outside “provincial objects” within the meaning of sub-sec. 11 of sec. 92 of the British North America Act, it can only regulate its exercise of civil rights in respect to the classes of subjects enumerated in section 91. (Lefroy, Leg. Pow. in Canada, p. 626.)

§ 183. “The Issue of Paper Money.”

The Federal Parliament has power to legalize or prohibit the issue of paper money. In this respect it has received a grant of power conspicuously more liberal than that which was intended, by the framers of the American Constitution, to be conceded to Congress. At the time when that Constitution was framed general apprehension was felt throughout the States at the dangerous strength acquired by the movement in favour of paper money. During the War of Independence, the drain on the financial resources of the country was very great, and consequently distress was wide-spread and deep-seated. (Fiske, Critical Period of American History, p. 67.) In order to raise supplies the Congress of the Confederation established an inconvertible paper currency. In 1780 the continental paper currency had become so discredited that it utterly collapsed. In 1786, it is said, that as starving men dream of dainty banquets, so a craze for fictitious wealth, in the shape of paper money, ran like an epidemic through the country. (Critical Period of American History, p. 168.) “Several States sought to apply the paper money remedy for public distress; each making the attempt in its own way. In seven States, at least, the ‘rag-money party,’ as it was called, dominated the legislatures. North Carolina issued a large amount of paper. It was no sooner placed in circulation by the Government than the value of the paper dollar fell to seventy per cent. of its face value. In South Carolina, paper money was issued, but the planters and merchants refused to take it at its face value. In Georgia, paper money was made a legal tender, and refusal to accept it was declared an offence. In Pennsylvania a guarded attempt was made to issue money in the shape of bills of credit, which, however, were not made legal tender for the payment of private debts, but the value of these bills soon fell 12 per cent. below par. In New York a million dollars were issued in bills of credit, which were made a legal tender, but their value similarly declined. A ‘Rag-Money Bill’ was passed in New Jersey, but the merchants of New York and Philadelphia, who traded with New Jersey, refused to accept the money, and it became worthless. In Rhode Island the paper money agitation reached a white heat. Half a million dollars were issued in scrip to be loaned to the farmers on the security of a mortgage of their land. The merchants refused to take the paper dollars at their face value. An act was passed commanding everyone to take paper money, as equivalent for gold, under a penalty of 5000 dollars, and loss of the right of suffrage. The merchants thereupon shut up their shops. A terrible crisis followed. The unhappy little State was nicknamed ‘Rogues Island.’ The rag-money movement was happily defeated in Massachusetts. Shay's rebellion, in January, 1787, brought matters to a climax, and


  ― 580 ―
hastened the calling of a Convention to frame a national Constitution.” (Critical Period of American History, p. 177.)

Consequently, when the Federal Convention met in August, 1787, its members had a full knowledge of the dangers of a paper currency. When it was proposed to give the government of the Union power to borrow money and emit bills on the credit of the United States, Gouverneur Morris “recited the history of paper emissions and the perseverance of the legislative assemblies in repeating them, though well aware of all their distressing effects, and drew the inference that, were the national legislature formed, and a war to break out, this ruinous expedient, if not guarded against, would be again resorted to. He moved to strike out the power to emit bills on the credit of the United States.” If the government of the Union had credit, he said, it could borrow money without bills; if it had no credit such bills would be unjust and useless. Other members expressed a mortal dread and hatred of paper money, and urged the necessity of disarming the central government of such a power; they regarded that as a favourable moment to shut and bar the door against paper money for ever. James Wilson said “paper money could never succeed whilst its mischiefs were remembered, and so long as it could be resorted to it would discourage other resources.” John Langdon “would rather reject the whole plan of Union than give the power.” Accordingly, the authority to issue bills of credit that would be a legal tender was refused to the Federal Government by the votes of nine States against two. “Thus,” wrote Madison “the pretext for a paper currency, and particularly for making bills a legal tender, either for public or private debts, was cut off.” (Bancroft, Constit. Hist. ii. p. 134.)

“This is the interpretation of the clause, made at the time of its adoption alike by its authors and by its opponents, accepted by all the statesmen of that age, not open to dispute because too clear for argument, and never disputed so long as any one man who took part in framing the Constitution remained alive. History cannot name a man who has gained enduring honour by causing the issue of paper money.” (Bancroft, Constit. Hist. ii. pp. 134–5–6.)

“In the plan of government concerted between the members from Connecticut, especially Sherman and Ellsworth, there was this further article: ‘That the legislatures of the individual States ought not to possess a right to emit bills of credit for currency, or to make any tender laws for the payment or discharge of debts or contracts in any manner different from the agreement of the parties, or in any manner to obstruct or impede the recovery of debts, whereby the interests of foreigners or the citizens of any other State may be affected.’ The committee of detail had reported: ‘No State, without the consent of the legislature of the United States, shall emit bills of credit.’ With a nobler and safer trust in the power of truth and right over opinions, Sherman, scorning compromise, cried out: ‘This is the favourable crisis for crushing paper money,’ and, joining Wilson, they two proposed to make the prohibition absolute. Gorham feared that the absolute prohibition would rouse the most desperate opposition; but four northern States and four southern States, Maryland being divided, New Jersey absent, and Virginia alone in the negative, placed in the Constitution these unequivocal words: ‘No State shall emit bills of credit.’ The second part of the clause, ‘No State shall make anything but gold and silver coin a tender in payment of debts,’ was accepted without a dissentient State. So the adoption of the Constitution is to be the end for ever of paper money, whether issued by the several States or by the United States, if the Constitution shall be rightly interpreted and honestly obeyed.” (Id. pp. 136–7.)

Never were the founders of a plan of government more resolved to deprive a legislative body of a legislative power than were the framers of the Constitution of the United States of America, in their determination not to clothe Congress with authority to issue paper money. At the same time, they created a judicial tribunal to interpret and uphold that Constitution, and the time came when that tribunal decided, in solemn judgment, that the Constitution had de jure actually granted to Congress a power which its authors had openly denied it. On 25th February, 1862, during the financial strain of the civil war, Congress passed an Act making the United States treasury notes lawful money. It was sought to justify this measure on the ground that Congress had power to coin money; that it had the power to borrow money on the credit of the United States; that it had power to declare and carry on war, and that to issue treasury notes and make them legal tender was a necessary incident of the combined power to coin and


  ― 581 ―
borrow money and prosecute a war. The validity of this Act was tested in the Supreme Court, and a number of conflicting decisions were given thereon. In the case of Willard v. Tayloe, 1870, 8 Wall. 557, the Court, as then constituted, decided that the Act could not be constitutionally applied to contracts in existence prior thereto, and that a contract entered into before the Act must be paid in coin; in Hepburn v. Griswold, 1870, 8 Wall. 603, it was decided that making bills of credit a legal tender was inconsistent with the spirit of the Constitution, and in violation of it.

These decisions were afterwards revised and overruled by the Court, when differently constituted, which decided that the Act of Congress was valid. (Legal Tender Cases [1871], 12 Wall. 457.) It was there stated by the Court that the true rule of construction was to keep in view the object for which powers were granted. It was impossible to know what the non-enumerated powers are, and what is their nature and extent, without considering the purpose they were intended to subserve. These purposes were left to the discretion of Congress, subject only to the restrictions that they be not prohibited, and be necessary and proper for the carrying into execution the enumerated powers. It is not indispensable to the existence of any power, claimed for the Federal Government, that it can be found specified in words in the Constitution, or clearly and directly traceable to some one of the specified powers. Its existence may be deduced from more than one of the substantive powers expressly defined, or from them all combined. It is allowable to group together any number of them, and infer from them all that the power claimed has been conferred. (Baker, Annot. Const. p. 15.)

In time of peace (1878) an Act of Congress was passed authorizing the issue of treasury notes and making them a legal tender. The Act was sustained not on the ground that it was a war power, but on the ground that it was an inherent incident of the Federal authority, under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed. The authority of Congress to define the quality and force of these notes, as currency, was as broad as the like power over metallic currency under the power to coin money and regulate the value thereof. Under the two powers, taken together, Congress was authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or individuals, and this whether in time of war or peace. (Juilliard v. Greenman [1884], 110 U.S. 421. Baker, Annot. Const. pp. 15 and 19.)

Referring to these conflicting decisions of the Supreme Court on a constitutional question of great moment, Bryce says:—

“Two of its later acts are thought by some to have affected public confidence. One of these was the reversal, first in 1871, and again, upon broader but not inconsistent grounds, in 1884, of the decision given in 1870, which declared invalid the Act of Congress making government paper a legal tender for debts. The original decision of 1870 was rendered by a majority of five to three. The Court afterwards changed by the creation of an additional judgeship, and by the appointment of a new member to fill a vacancy which occurred after the settlement, though before the delivery, of the first decision. Then the question was brought up again in a new case between different parties, and decided in the opposite sense (i.e., in favour of the power of Congress to pass legal tender Acts) by a majority of five to four. Finally, in 1884, another suit having brought up a point practically the same, though under a later statute passed by Congress, the Court determined with only one dissentient voice that the power existed. This last decision excited some criticism, especially among the more conservative lawyers, because it seemed to remove restrictions hitherto supposed to exist on the authority of Congress, recognizing the right to establish a forced paper currency as an attribute of the sovereignty of the national government. But be the decision right or wrong, a point on which high authorities are still divided, the reversal by the highest court in the land of its own previous decision may have tended to unsettle men's reliance on the stability of the law; while the manner of the earlier reversal, following as it did on the creation of a new judgeship and the appointment of two justices, both known to be in favour of the view which the majority of the court had just disapproved, disclosed a weak point in the constitution of the tribunal which may some day prove fatal to its usefulness.” (Bryce, Amer. Com. vol. i. p. 263.)




  ― 582 ―

DEVELOPMENT OF IMPLIED POWERS.—“The three lines along which this development of the implied power of the Government has chiefly progressed,” says Bryce, “have been those marked out by the three express powers of taxing and borrowing money, of regulating commerce, and of carrying on war. Each has produced a progeny of subsidiary powers, some of which in their turn have been surrounded by an unexpected offspring. Thus from the taxing and borrowing powers there sprang the powers to charter a national bank and exempt its branches and its notes from taxation by a State (a serious restriction on State authority) to create a system of custom-houses and revenue cutters, to establish a tariff for the protection of native industry. Thus the regulation of commerce has been construed to include legislation regarding every kind of transportation of goods and passengers, whether from abroad or from one State to another, regarding navigation, maritime and internal pilotage, maritime contracts, &c., together with the control of all navigable waters, the construction of all public works helpful to commerce between States or with foreign countries, the power to prohibit immigration, and finally a power to establish a railway commission and control all interstate traffic. The war power proved itself even more elastic. The executive and the majority in Congress found themselves, during the War of Secession, obliged to stretch this power to cover many acts trenching on the ordinary rights of the States and of individuals, till there ensued something approaching a suspension of constitutional guarantees in favour of the Federal Government. The courts have occasionally gone even further afield, and have professed to deduce certain powers of the legislature from the sovereignty inherent in the National government. In its last decision on the legal tender question, a majority of the Supreme Court seems to have placed upon this ground, though with special reference to the section enabling Congress to borrow money, its affirmation of that competence of Congress to declare paper money a legal tender for debts, which the earlier decision of 1871 had referred to the war power. This position evoked a controversy of wide scope, for the question, what sovereignty involves, is evidently at least as much a question of political as legal science, and may be pushed to great lengths upon considerations with which law proper has little to do.” (Bryce, Amer. Com. I. pp. 371–2.)

51. (xiv.) Insurance184, other than State insurance185; also State insurance extending beyond the limits of the State concerned:

HISTORICAL NOTE.—This sub-section was first introduced in the Adelaide draft in the following form:—“Insurance, including State insurance extending beyond the limits of the State concerned.” In Committee, it was amended by omitting the words “including State insurance extending,” &c. Mr. Walker opposed the exception of State insurance. (Conv. Deb., Adel., pp. 779–82.)

At Sydney, a suggestion of the Legislative Council of New South Wales to insert “Assurance and” was negatived as unnecessary; and another suggestion by the same Chamber to omit the words “excluding State insurance,” &c., was also negatived. A drafting amendment was subsequently made. (Conv. Deb., Syd., 1897, pp. 1075–6.)

§ 184. “Insurance.”

Insurance is the act of insuring or assuring against loss or damage by a contingent event. A contract whereby for a stipulated consideration, called a premium, one party called the insurer undertakes to indemnify or guarantee another party called the insured against loss, is called fire, accident or marine insurance, as the case may be; a contract whereby the insurer guarantees the insured against the negligence or default of another is called indemnity insurance; a contract whereby the insurer undertakes to pay the


  ― 583 ―
representatives or nominees of the insured a certain sum of money, upon the death of the insured, is called life insurance; a contract containing a combination of life insurance with investment, as that if the insured die before a specified time the insurance money becomes due at once and is payable to the representatives or nominees of the insured, but if the insured survives that time it is payable to himself or at his direction—is called endowment insurance.

It has recently become usual to speak of “assurance” when the contingency “assured” against is one which must happen sooner or later—e.g., death; and to speak of “insurance” when the contingency “insured” against is one which may never happen—e.g., fire or shipwreck. The word “insurance,” however, is still used generally as including both insurance and assurance, and that is clearly its scope in this sub-section. (See Historical Note, supra.)

Under the Constitution of the United States, which gives no power to Congress to deal with insurance, it has been decided that the business of insurance is not commerce; and a corporation of one State doing insurance in another is not engaged in commerce among the States. (Liverpool Insurance Co. v. Massachusetts, 10 Wall. 566.) Issuing a policy of insurance is not a transaction of commerce, and so is not subject to congressional regulation. (Paul v. Virginia, 8 Wall. 168.) A law of a State which requires insurance companies of other States to file bond and security, &c., before issuing policies in such State, is not a regulation of commerce, and is constitutional. (Paul v. Virginia, 8 Wall. 168; Doyle v. Continental Insurance Co., 94 U.S. 535.)

The Federal control over insurance extends, in the same manner as the Federal control over banking, to any form of insurance throughout the Commonwealth, except insurance organized and carried on by the government of a State and confined to the limits of the State.

§ 185. “Other than State Insurance.”

These are words of exception, reserving to a State the control over insurance business organized and conducted-by the government of the State. (See rule for construing exceptions, supra, § 180, “Other than State Banking.”)

OVERLAPPING POWERS.—The extent to which the law relating to insurance may, for a time, be considered as a divisible power, partly exercised by the Federal Parliament and partly exercised by the State legislatures, is illustrated by one of the leading Canadian cases. (Citizens' Insurance Co. v. Parsons, 7 App. Cas. 96. [1881].) As an insurance case, the Citizens' Insurance Co. v. Parsons is appropriately mentioned in connection with this sub-section, but it is a remarkably apt exemplification of the competing and overlapping operation of powers in a Federal Constitution, and of the manner in which one subject may be governed by two sets of laws. Thus a power to make laws with respect to insurance is apparently a wide power. But does it include the power to regulate the manner in which contracts relating to insurance must be made? Suppose the Federal Parliament should pass a Federal Insurance Act, providing for the incorporation of insurance companies and defining their legal rights, privileges, duties, and responsibilities: Could such a law remove insurance companies, and the subject of insurance, absolutely from the domain of State legislation? The case of the Citizens' Insurance Co. v. Parsons throws some light on this problem, though it is necessary to bear in mind the caution already given that the Canadian Constitution, with its two areas of exclusive powers, is unlike the Constitution of the Commonwealth.

In that case the question raised was as to the constitutionality of the Ontario Act, 39 Vic. c. 24, to secure uniform conditions in policies of fire insurance, and whether such an act was ultra vires as being in excess of provincial authority. This company was incorporated under an Act passed by the Dominion Parliament, which claimed jurisdiction to deal with insurance, not by virtue of a specific grant of power (as in the Constitution of the Commonwealth), but by virtue of its exclusive power to regulate


  ― 584 ―
trade and commerce and its residuary power to legislate for the peace, order, and good government of Canada in respect of all matters not exclusively assigned to the Provinces. A general insurance law, 38 Vic. c. 20, was passed by the Dominion Parliament, which, among other things, required all insurance companies, whether incorporated by foreign, Dominion, or provincial authority, to obtain licenses from the Minister of Finance as a condition of their carrying on business within the Dominion. Such licenses could only be granted upon compliance with the conditions of the Act. The legislature of Ontario passed the Act 39 Vic. c. 24, providing that certain conditions set forth in the schedule thereto should be deemed to be part of every policy of fire insurance, thereafter entered into in Ontario, with respect to any property therein; that such conditions should be printed on every policy with the heading “statutory conditions;” that if a company or insurer desired to vary such conditions, or to omit any of them, or to add new conditions, these variations should be added in conspicuous type. This Act was passed by the legislature of Ontario under the exclusive power of the Provinces to pass laws in relation to “property and civil rights in the Province.” (British North America Act, sec. 92, subs. 13.)

The Act was impeached by the Citizens' Insurance Co. as an excess of legislative power, and as an encroachment on the jurisdiction assigned to the Dominion Parliament. The Privy Council upheld the Act on the ground that it related to property and civil rights within tho Province. In delivering the judgment of the Board, Sir Montague E. Smith said that “property and civil rights” were sufficiently large to embrace, in their fair and ordinary meaning, rights arising from contracts, and such rights were not included in any of the enumerated classes of subjects exclusively assigned to the Parliament of the Dominion by sec. 91 of the British North America Act. In looking at section 91, it would be found not only that there is no class including, generally, contracts and the rights arising from them, but that one class of contracts is mentioned, namely, “bills of exchange and promissory notes” (sub-sec. 18) which it would have been unnecessary to specify, if authority over all contracts and the rights arising from them had belonged to the Dominion Parliament.

The difference between the Canadian Constitution and that of the Commonwealth in respect to insurance is:—(1) That the Parliament of the Dominion is not specifically assigned jurisdiction in reference to that subject; its jurisdiction is based on its general and residuary power; whereas the Parliament of the Commonwealth is explicitly empowered to make laws in respect to insurance; (2) that the Provinces of Canada are assigned exclusive authority to make laws with respect to “property and civil rights,” whereas the States of the Commonwealth are given no such exclusive power, their authority over “property and civil rights” being part of their general and residuary power. By virtue of the power reserved to the State Parliaments, under sec. 107 of this Constitution, they would be able to pass laws determining the manner in which contracts should be made and the conditions and incidents presumed to be annexed thereto, in the absence of express agreement to the contrary. And such laws would be binding on companies incorporated by Federal law, until they became inconsistent with the law of the Commonwealth. Whether the Federal Parliament could pass laws determining the manner in which Federal corporations should enter into contracts is a question for judicial determination when the case arises.

51. (xv.) Weights and measures186:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to fix the standard of weights and measures.” (Art. I. sec. 8, sub-s. 5.) “Weights and measures” are specified in the British North America Act (sec. 91, sub-s. 17). Earl Grey's Committee in 1849 proposed to give the General Assembly legislative power as to the regulation of weights and measures (p. 85, supra). This subject was also included in Wentworth's Memorial in 1857 (p. 94, supra) in the Federal Council of Australasia


  ― 585 ―
Act, 1885 (p. 112, supra), and in the Commonwealth Bill of 1891. It appeared in the Adelaide draft of 1897, and was adopted without debate.

§ 186. “Weights and Measures.”

The power to fix the standard of weights and measures is necessarily a branch of the power to regulate trade and commerce; and it could, no doubt, have been exercised by the Federal Parliament even if this sub-section did not appear in the Constitution. It is not an exclusive power vested in the Federal Parliament, as against the States. The Federal Parliament is under no immediate obligation to occupy the ground capable of being covered by legislation of this description. Until it does so the States will continue to regulate the local systems of weights and measures; and their laws will not be superseded until the Federal Parliament passes a uniform system applicable to the whole of the Commonwealth. The States have already adopted common standards of weights and measures, and consequently Federal legislation may not be necessary, until the time is ripe for the adoption of a new and general reform, such as the metric system, which in America has been rendered lawful but not obligatory. “I think,” says Burgess, “that is an unfortunate beginning. It may introduce great confusion where we now have substantial uniformity. Under existing conditions, it is certainly better either to do nothing at all, or to make some system obligatory as well as lawful.” (Burgess, Political Sc. II. p. 141.)

51. (xvi.) Bills of exchange187 and promissory notes:

HISTORICAL NOTE.—This sub-section was adopted from the British North America Act (sec. 91, sub-s. 18), and the Federal Council of Australasia Act, 1885. It appeared in the Drafts of 1891 and 1897, and was adopted by both Conventions without debate.

§ 187. “Bills of Exchange.”

Bills of exchange and promissory notes are a species of mercantile currency and derived from the customs of trading communities and regulated and protected by law. They are otherwise known as “negotiable instruments” which when drawn according to legal forms, signed by the parties intended to be bound, and duly stamped as required by revenue laws, are regarded as incontestable acknowledgments of debts, fixing a precise time for payment and passing from hand to hand in a manner somewhat similar to bank notes.

Negotiable instruments, such as bills of exchange and promissory notes, come under a branch of the law of contracts. It is worth noticing that, strictly speaking, this is the only branch of the law of contracts (with the possible exception of “insurance,” see Note, § 185, supra) which is specifically enumerated in the list of powers conferred on the Federal Parliament. It is true that “marriage” is found in sub-sec. 21, but marriage is something more than a contract; it is a legal status involving an aggregation of rights and duties determined by law. This assignment of one or two isolated classes of contracts to Federal jurisdiction may, when read in conjunction with the maxim expressio unius exclusio alterius, lead to important consequences in the interpretation of the Constitution, when the question at issue is whether a State law relating to contracts is to prevail in regulating a subject assigned to the Federal Parliament, such as banking, insurance, and corporations. This question was discussed in the Citizens' Insurance Co v. Parsons, 7 App. Cas. 96. In the course of the judgment in that case, sustaining the Ontario law of fire insurance contracts, the Privy Council laid stress on the fact that among the subjects assigned to the Dominion Parliament there was no class including, generally, contracts and the rights arising from them, but that one class of contracts was enumerated, namely, “bills of exchange and promissory


  ― 586 ―
notes.” which it would have been unnecessary to specify, if authority over all contracts and the rights arising from them had belonged to the Dominion Parliament. (Note, § 185, supra.)

51 (xvii.) Bankruptcy and insolvency188:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to establish uniform laws on the subject of bankruptcies throughout the United States.” (Art. I. sec. 8, sub-s. 4.) “Bankruptcy and insolvency” are enumerated in the British North America Act, sec. 91, sub-s. 21. This sub-section was included in the draft Commonwealth Bill of 1891, and afterwards in the Adelaide draft of 1897. At Sydney, a suggestion by both Houses of the New South Wales Parliament, to add “and lunacy,” was negatived. (Conv. Deb., Syd., pp. 1076–7; and see Historical Note to sub-s. 28.)

§ 188. “Bankruptcy and Insolvency.”

“Nothing,” says Sir Henry Maine, “strikes the scholar and jurist more than this severity of ancient systems of law towards the debtor, and the extravagant powers which they lodge in the creditor.” It brought many early States to the brink of ruin. In early Athens enslavement for debt was a fundamental law. Such was the sanctity of contract in the estimation of Roman law that during the history of the Republic there was no mercy for the insolvent debtor. It was not until the time of Julius Cæsar that a debtor became entitled to his discharge on formally giving up everything to his creditors— cessio bonorum. This cessio bonorum marks the commencement of the true principle of bankruptcy. (Ancient Law, p. 321; Poste's Gaius, p. 347.)

“The early Teutonic codes exhibit the same Draconian severity as those of Rome and Greece. The insolvent debtor falls under the power of his creditor, and is subject to personal fetters and chastisement; and later on, among the Germans, the witepeow might often be seen working out by his labours a debt that was due to his master. It is not a little remarkable, as Sir Frederick Pollock and Professor Maitland observe, apropos of the above (History of English Law), that our common law knew no process whereby a man could pledge his body or liberty for payment of a debt; neither at common law was the body of the debtor liable to execution for debt, except in the case of the king's debtor. It is interesting to observe how imprisonment for debt came about. No right of arrest on a judgment in debt is given by the express words of any Statute, but the law gave in certain cases a right to arrest a delinquent or defaulter for the purpose of securing his appearance at trial, where, for instance, he was flying the realm; and it came to be held, by some strange mediæval logic, that wherever the law gave this right of arrest on mesne process, a capias ad satisfaciendum would lie upon the judgment itself (1795, 3 Salk. 286). Thus began the long and dreary annals of bailiffs, sponging-houses, the Marshalsea and the Fleet.” (Encyc. Laws of Eng. vol. i. pp. 483–4.)

The historical distinction between bankruptcy and insolvency is, that insolvency laws were intended for the benefit and relief of ordinary private debtors, poor and distressed, but honest; whilst bankruptcy laws were those specially designed and passed for the protection of creditors against insolvent traders and particularly against fraudulent traders. The embryo of English bankruptcy legislation is to be found in the Statute 34 and 35 Henry VIII. c. 4, “against such as do make bankrupt.” This Act recited that:

“Divers and sundry persons, craftily obtaining into their hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay or restore to any their creditors their debts and duties, but at their own wills and pleasures consume the substance obtained by credit of other men for their own pleasure and delicate living, against all reason, equity, and good conscience.”

GENERAL SCOPE.—Bankruptcy and insolvency legislation is a most comprehensive subject. Generally stated, it embraces a large part of the law regulating the relations of debtor and creditor, before and during insolvency; the acts or defaults of a debtor


  ― 587 ―
which render him amenable to what Wharton in his work on Private International Law describes as “National execution against the assets of an insolvent debtor;” the organization of insolvency and bankruptcy courts and proceedings in connection therewith; the investigation of the business dealings and transactions of an insolvent; the pursuit and recovery of assets fraudulently disposed of in order to defeat creditors; the rescission of voluntary conveyances and other transactions amounting to fraudulent preferences; the effect of legal executions at the suit of judgment creditors; what is protected from and what liable to such executions; the seizure of an insolvent's assets for the benefit of his creditors generally; the distribution of his assets among his creditors; the release, partial or conditional or absolute, of an honest but unfortunate debtor; the punishment of a dishonest debtor. Bankruptcy and insolvency law may also include compositions, compromises, arrangements, and assignments for the benefit of creditors, as alternatives to compulsory insolvency. The winding up of corporations unable to pay their debts is an important branch of insolvency jurisdiction. An insolvency law would also include all ancillary provisions necessary to prevent it from being defeated.

A CONCURRENT STATE AND FEDERAL POWER.—The bankruptcy and insolvency jurisdiction is not an exclusive power of the Federal Parliament, like that conferred on the Parliament of Canada; it is a concurrent power. Until the Federal Parliament has passed laws inconsistent with State laws bearing on the question, State laws will remain in full force and effect; and until the Federal Parliament has occupied the whole area capable of being covered by the subject, the States may continue to pass other bankruptcy and insolvency laws, and may enforce them as long as they do not conflict with Federal laws (sec. 107–109). The cases decided under the Constitution of the United States are valuable as illustrating the operation of concurrent laws; those under the Canadian Constitution are only useful as decisions showing what insolvency and bankruptcy legislation is capable of including, and as showing what are merely matters of local and private interests.

AMERICAN CASES.—Under the Constitution of the United States a State legislature may enact a valid law on the subject of bankruptcy if there is no act of Congress at the time in force establishing a uniform system of bankruptcy with which such law conflicts. (Sturges v. Crowninshield, 4 Wheat. 122. Baker, Annot. Const. p. 44.)

This power does not exclude the right of a State to legislate on the same subject, except when the power is actually exercised by the Federal legislature, and the State laws conflict therewith. (Ogden v. Saunders, 12 Wheat. 213. Id. p. 45.)

An insolvent debtor who has received a certificate of discharge from imprisonment, under a State insolvency law, is not thereby entitled to be discharged under an execution against his person at suit of the federal government. (United States v. Wilson, 8 Wheat. 253. Id.)

Insolvency laws of one State cannot discharge the contracts of citizens of another State, even where, by the terms of the contract, it is to be performed in the State enacting the insolvency law. (Baldwin v. Bank of Newbury, 1 Wall. 234. Id.)

A State insolvency law is valid, although enacted while a national bankruptcy law is in force; and takes effect upon the repeal of the latter. (Tua v. Carriere, 117 U.S. 201. Id.)

State bankruptcy laws have no extra-territorial effect and cannot operate upon non-residents. (Baldwin v. Hale, 1 Wall, 223. Id.)

A person in custody under a ca. sa., issued by the authority of a court of the United States, cannot legally be released by a State officer acting under a State insolvency law. (Duncan v. Darst, 1 How. 301. Id.)

A discharge from bankruptcy under a State law is no bar in the courts of the United States or of another State to non-resident creditors. (Gilman v. Lockwood, 4 Wall. 409. Id.)

The power of Congress to enact bankruptcy laws is not limited to the enactment of such laws as existed in England at and prior to the adoption of the Constitution. (Re Klein, 1 How. 277. Id.)

Federal laws may relieve against debts contracted prior to the enactment of such laws. (Re Klein, 1 How. 277; Carpenter v. Pennsylvania, 17 How. 456. Id.)




  ― 588 ―

CANADIAN CASES.—The legislature of Quebec passed an act for the relief of a benefit and benevolent society, named L'Union St. Jacques de Montreal; imposed a forced commutation of their existing rights upon two widows who were annuitants of the society, under its rules, reserving to them the rights so impaired in the future possible event of the improvement in the affairs of the society. In an action which came before the Privy Council, on appeal, this law was attacked on the ground that it dealt with insolvency. The Privy Council held that this was clearly a local and private matter within the competence of the provincial legislature, in the absence of federal legislation dealing with insolvency in a manner applicable to the circumstances. (L'Union St. Jacques de Montreal v. Belisle, L.R. 6 P.C. 31.)

“Alluding to the hypothesis of a law having been previously passed by the Dominion Parliament, to the effect that any Association of that particular kind, throughout the Dominion, on certain specified conditions, assumed to be exactly those which appeared upon the face of the statute in question, should thereupon ipso facto fall under the legal administration in bankruptcy or insolvency, the Privy Council said they were by no means prepared to say that if any such law as that had been passed by the Dominion legislature it would have been within the competency of the provincial legislature afterwards to take a particular Association out of the scope of a general law of that kind, so competently passed by the authority which had power to deal with bankruptcy and insolvency.” (L'Union St. Jacques v. Belisle, L.R. 6 P.C. pp. 36–7; Lefroy, Legisl. Power in Can. p. 684.)

In the case of Cushing v. Dupuy it was argued that the Canadian Insolvency Act, 1875, interfered with property and civil rights and was therefore ultra vires. In answer to the objection the Privy Council (per Sir Montagu E. Smith) said—

“It would be impossible to advance a step in the construction of a scheme for the administration of insolvent estates without interfering with and modifying some of the ordinary rights of property and other civil rights, nor without providing some mode of special procedure for the vesting, realization and distribution of the estate, and the settlement of the liabilities of the insolvent. Procedure must necessarily form an essential part of any law dealing with insolvency. It is therefore to be presumed, indeed it is a necessary implication, that the Imperial statute, in assigning to the Dominion Parliament the subjects of bankruptcy and insolvency, intended to confer on it legislative power to interfere with property, civil rights, and procedure within the provinces, so far as a general law relating to these subjects might affect them.” (5 App. Cas. 415.)

In the Assignment for Creditors' Act, passed by the Legislature of Ontario (Rev. Stat., 1887, c. 124, sec. 9) it was provided that an assignment for the general benefit of creditors under that Act should take precedence of all judgments and executions not completely executed by payment, subject to any lien of an execution creditor for his costs. The validity of this Act was called into question in the case of the Attorney-General of Ontario v. the Attorney-General of Canada, on the ground that it encroached on the Federal power in respect of insolvency. In the judgment of the Privy Council it was said—

“It is not necessary, in their Lordships' opinion, nor would it be expedient, to attempt to define what is covered by the words ‘bankruptcy’ and ‘insolvency’ in sec. 91 of the British North America Act. But it will be seen that it is a feature common to all the systems of bankruptcy and insolvency to which reference has been made, that the enactments are designed to secure that in the case of an insolvent person his assets shall be rateably distributed amongst his creditors, whether he is willing that they shall be so distributed or not. Although provision may be made for a voluntary assignment as an alternative, it is only as an alternative. In reply to a question put by their Lordships, the learned counsel for the respondent were unable to point to any scheme of bankruptcy or insolvency legislation which did not involve some power of compulsion by process of law to secure to the creditors the distribution amongst them of the insolvent debtor's estate. In their Lordships' opinion, these considerations must be borne in mind when interpreting the words ‘bankruptcy’ and ‘insolvency’ in the British North America Act. It appears to their Lordships that such provisions as are found in the enactment in question, relating as they do to assignments purely voluntary, do not infringe on the exclusive power conferred upon the Dominion Parliament. They would observe that a system of bankruptcy legislation may frequently require various ancillary provisions for the purpose of preventing the scheme of the Act from being defeated. It may be necessary for


  ― 589 ―
this purpose to deal with the effect of executions and other matters which would otherwise be within the legislative competence of the provincial legislature. Their Lordships do not doubt that it would be open to the Dominion Parliament to deal with such matters as part of a bankruptcy law, and the provincial legislature would doubtless be then precluded from interfering with this legislation, inasmuch as such interference would affect the bankruptcy law of the Dominion Parliament. But it does not follow that such subjects as might properly be treated as ancillary to such a law, and therefore within the powers of the Dominion Parliament, are excluded from the legislative authority of the provincial legislature when there is no bankruptcy or insolvency legislation of the Dominion Parliament in existence.” (Per Lord Herschell, 1894, App. Cas. p. 200.)

In conformity with the dicta of the Privy Council in the above case, the Supreme Court of Nova Scotia, in Kinney v. Dudman, 2 Russ. and Chess. 19, held that sec. 59 of the Dominion Insolvent Act of 1869, 32 and 33 Vic. c. 16, was within the competence of the Dominion Parliament, though it provided that no lien upon the property of an insolvent should be created for a judgment debt by the issue of an execution, or by levying thereunder, if before the payment over to the plaintiff of the moneys levied the estate of the debtor had been assigned or placed in liquidation; thus overriding existing provincial legislation which gave to a creditor a lien on his debtor's property by the levy of his execution on it.

In McLeod v. McGuirk, 15 N. Bruns. (2 Pugs.) 248 (1874), Ritchie, C.J., expressed a doubt whether section 81 of the Federal Insolvent Act of 1869, 32 and 33 Vic. c. 16, restricting landlord's preferential lien for rent to one year, was not ultra vires. Mr. Lefroy says that the decision of the Privy Council in Cushing v. Dupuy may be considered to have resolved the doubt in favour of the Dominion Parliament; and to have shown that the view of Wetmore, J., in McLeod's case, that if the Act had attempted to take away the landlord's right of distress it would have been ultra vires, was erroneous. So the decision of Wetmore, J., in McLeod v. Wright, 17 N. Bruns. (1 Pugs. and Burb.) 68 (1877), that sec. 89 of the Insolvent Act of 1869—which declared null and void all sales, transfers, &c., by any person in contemplation of insolvency by way of security to any creditor, whereby the latter obtains an unjust preference—was ultra vires, seems to have been equally erroneous. (Lefroy, Leg. Pow. p. 439.)

The Dominion Parliament passed an Act, 42 Vic. c. 48, intituled “An Act to provide for the liquidation of the affairs of building societies in the Province of Quebec.” It recited that “whereas a large number of persons of limited means have invested their earnings in building societies in the Province of Quebec, and on account of the long period of depression such persons are exposed to lose their earnings for want of means to continue the payment of their contributions, and it is expedient to come to their relief by providing a speedy and inexpensive mode of liquidating the affairs of such societies in the said Province.” It was enacted that liquidation might be resolved upon by a general meeting, after notice; and made other necessary provisions for the liquidation of such societies, whether insolvent or not. In giving judgment, Dorion, C.J., said:—“This Act is not in the nature of an insolvent law, for it is intended to apply to all building societies, whether insolvent or not. It is, therefore, essentially an Act affecting civil rights… The case of L'Union St. Jacques de Montreal v. Belisle is in point.” (McClanaghan v. St. Ann's Mutual Building Society [1880] 24 Lower Can. Jur. 162.) It was held by Robertson, J., in re Iron Clay Brick Manufacturing Co., 19 Ont. Rep. at pp. 119–20, that the Ontario Joint Stock Companies Winding-up Act, 1887, c. 183, had no application in a case where a winding-up was sought by a creditor on the grounds that the company was insolvent, the provincial legislature having no jurisdiction in matters of insolvency. (Lefroy, Leg. Pow. p. 458.)

In re Killam, 14 Can. L.J. (N.S.) 242, Savary, J., in reference to the Nova Scotia Act for the relief of insolvent debtors, which provided for discharge from prison of a debtor on assignment of his property in trust to pay his debts, said:—“So long as the party seeking the benefit of that chapter has not become insolvent under the Dominion statute, all the proceedings under it are valid and effectual, for they only relate to property and civil rights; but as soon as the Dominion statute on insolvency is invoked


  ― 590 ―
that chapter has no more force as to him or his case, and the relief it contemplates can only be obtained under the Dominion statute. He is then in bankruptcy or insolvency, within the meaning of the British North America Act, and the Insolvent Act of Canada, therefore, attaches with exclusive authority upon his person and the property. When and where that chapter conflicts or operates inconsistently with the Dominion Insolvent Act of 1869 or 1875, it is superseded, and must be treated as repealed by the concluding clause of section 154 of the former Act or section 149 of the latter. In any instance where it does not so conflict, and its operation does not become inconsistent with either of those Acts, there is nothing to hinder its provisions being carried out, and quoad that case it is an Act intra vires, unrepealed, and by the Dominion Parliament unrepealable.” (14 Can. L.J., N.S., p. 242. Lefroy, Leg. Power, 531.)

In Quirt v. The Queen, 19 S.C.R. (Can.) 517, the Supreme Court of Canada held that an Act of the Dominion, 33 Vic. c. 40, reciting the insolvency of the Bank of Upper Canada, and providing for its winding up, and for a fair and equitable adjustment and settlement of the claims of all creditors, was intra vires. Strong, C.J., considered that the Privy Council had, in L'Union St. Jacques de Montreal v. Belisle, held “that a special statute, providing for the winding up of an incorporated company, would be bankruptcy or insolvency legislation.” Patterson, J.A., said:—“The words, ‘bankruptcy and insolvency’ in that article, no doubt, point primarily to the enactment of a general bankrupt or insolvent law, as was well explained by Lord Selborne in delivering the judgment of the Judicial Committee in L'Union St. Jacques de Montreal v. Belisle, but, as I think is conceded by the same judgment, a special Act for the winding up of some particular company which was insolvent and the distribution of its assets would not be beyond the competency of the Dominion Parliament… It is easy to imagine cases arising in connection with bankruptcy proceedings under a general law where special legislation would be required, such, for instance, as the necessity for curing some irregularity so as to validate or remove doubts as to titles taken under the proceedings. There must be power to do this in one legislature or the other, and I take it to be obvious that the power would be in the Dominion Legislature alone. Such legislation would be like that now under consideration, special legislation addressed to an individual case, but it would not on that account be ultra vires.” (Lefroy, Leg. Pow. p. 569.)

In the Primary Court (17 Ont. Rep. 618), Street, J., said:—“The right to pass a general law of the kind must also involve the power to pass a special law to meet a particular case; the local legislature having no power to deal with insolvency legislation at all are debarred from passing either a general or special Act, and the right must therefore exist in the other legislature.” In the Ontario Court of Appeal, Hagarty, C.J., and Osler, J.A., agreed that the Act was intra vires. Maclennan, J.A., said that “the power of legislation over bankruptcy or insolvency, which was intended to be conferred on the Dominion Parliament, was the same as had been exercised by the Imperial Parliament and by the provincial legislatures before confederation, namely, the passing of laws more or less general in their application, with proper courts and procedure and machinery for the carrying them into effect, and not Acts declaring a particular person or firm or corporation bankrupt or insolvent, or putting their affairs into a course of liquidation.” Legislative power of the latter kind was “intended to be given to the legislatures of the provinces, as matters of property and civil rights, and matters of a merely local and private nature.” (17 Ont. App. 452. Lefroy, Leg. Pow. p. 570.)

In his work on the Law of the Canadian Constitution Mr. Clement says:—“The judgment of the Supreme Court in Quirt v. The Queen must be taken as conclusive upon all Canadian Courts, that the power of the Dominion Parliament under the various sub-sections of section 91, does extend to private Bill legislation so long as the subject-matter legislated upon can be fairly said to fall within any of those sub-sections” (p. 355). “Whether the Act in question, in Quirt v. The Queen, was properly regarded as within the category of bankruptcy and insolvency legislation,” Mr. Lefroy says, “seems somewhat doubtful, since the decision of the Privy Council in the Attorney-General of


  ― 591 ―
Ontario v. the Attorney-General of Canada (1894), App. Cas. 189. (See per Burton, J.A., S.C., 20 Ont. App. at pp. 496–8.) Perhaps, however, such view may still be upheld on the ground that the Act amounted to a bankruptcy proceeding by Parliament itself in invitum against the insolvent institution. (And see per Street, J., in Regina v. County of Wellington, 17 Ont. Rep. p. 618.) In the Court of Appeal in that case (17 Ont. App. 428), Hagarty, C.J.O., placed the Act in question rather under the Dominion power over banking and the incorporation of banks, saying:—‘It perhaps may be objected that such special legislation may be faulty. I hardly see this, where the special legislation is in reference to settling the affairs of an institution wholly the creation of Parliament, and wholly outside the creative powers of the provinces.”’ (Lefroy, Leg. Pow. p. 371. As to Dominion Bankruptcy and Insolvency Acts applying to one or more provinces only see Hagarty, C.J.O., in Clarkson v. the Ontario Bank (15 Ont. App. 178. Lefroy, Leg. Pow. p. 573).

In Allen v. Hanson, 16 Queb. L.R. 85, the Court of Queen's Bench in Quebec held that the Dominion Act 47 Vic. c. 39, providing that the Dominion Winding-Up Act should apply to incorporated trading companies “doing business in Canada, no matter where incorporated,” was intra vires, and confirmed an order granted upon the petition of the liquidator, under a liquidation previously instituted under the Imperial Act, 1862, in Scotland, and as ancillary to that principal winding up. Dorion, C.J., delivering the judgment of the majority of the Court, said (p. 84–5):—“It is evident that the Dominion Parliament never intended to regulate, suspend or dissolve, by the Winding-Up Act, any corporation existing under British or foreign authority, but merely to regulate their property and restrain their action in this country, which it undoubtedly had a right to do so. The several legislative bodies in Canada can have no concern in what a foreign corporation might do elsewhere; they are only interested in protecting the rights of the creditors of such corporation upon their own property within this country, and more particularly the right of their own citizens and of resident creditors… The provisions of the Winding-Up Act of Canada regulate the proceedings of our Courts to enforce the rights of creditors and of shareholders in the property of such companies. As they only relate to procedure, their operation is confined to property found within the territorial limits of the jurisdiction of the Courts authorized to enforce them. For the same reason, within such limits their operation can neither be regulated nor restrained by any foreign legislation.” This decision was confirmed by the Supreme Court of Canada. Ritchie, C.J., said:—“All the Winding-Up Act, as I understand it, seeks to do in the case of foreign corporations is to protect and regulate the property in Canada, and protect the rights of creditors of such corporations upon their property in Canada.” (18 S.C.R. [Can.] p. 674. Lefroy, Leg. Pow. p. 629.)

In re Clarke and the Union Fire Insurance Company, 14 Ont. Rep. 618, Boyd, C., held that the Dominion Winding-Up Act, 45 Vic. c. 23, was intra vires of the Dominion Parliament, as being in the nature of an insolvency law; that it applied to all corporate bodies of the nature mentioned in it all over the Dominion, and that the company in question in that case, though incorporated under a provincial charter, was subject to its provisions; and he observed:—“The case in the Supreme Court of the Merchants' Bank v. Gillespie does not touch the status of the present company, which is a domestic corporation within the territorial limits of Canada, whereas the company there in question was, for the purpose of the Act, a foreign one domiciled in England.” (Lefroy, Leg. Pow. p. 631.)

In the Merchants' Bank of Halifax v. Gillespie, 10 S.C.R. (Can.) 312, the question raised was as to the validity of winding-up proceedings under the Dominion statute, 45 Vic. c. 23, as the sole and principal winding-up of a company incorporated under the English Act of 1862. The Supreme Court held that an order could not be made under that statute for the winding-up of the Steel Company of Canada, which was a joint stock company incorporated in England in 1874, under the Imperial Joint Stock Companies Act, never incorporated in Canada, but having its chief place of business in Nova Scotia,


  ― 592 ―
where it owned mines and works, while it owned no real estate elsewhere, but merely occupied an office in Great Britain. 10 (S.C.R. [Can.] 312. Lefroy, Leg. Pow. p. 629.)

The Merchants' Bank of Halifax v. Gillespie was distinguished in re Briton Medical Life Association, 12 Ont. Rep. 441, where it was held by Proudfoot, J., that the Dominion Acts, 31 Vic. c. 48 and 34 Vic. c. 9, requiring foreign insurance companies doing business in Canada to make a certain deposit with the Minister of Finance, were intra vires, and an order was there made, on petition, for the distribution of the deposit made by the English company in question among the Canadian policy-holders, notwithstanding that proceedings to wind up the company were pending before the English Courts. Proudfoot, J., observed, with reference to the Merchants' Bank of Halifax v. Gillespie, that in that case there was no question of a deposit, and what was sought was not the distribution of the deposit, but the general winding-up of the company (12 Ont. 447. Lefroy, Leg. Pow. p. 632.)

IMPERIAL BANKRUPTCY LAWS IN THE COLONIES.—The question, how far English Bankruptcy Statutes extend to the colonies, has been considered in a number of cases. A decision of Lord Mansfield (cited Webb's Imperial Law 64) goes to show that “the statutes of bankrupts do not extend to the colonies.” In Ellis v. McHenry, L.R. 6 C.P. 228, it was, however, decided that the English Bankruptcy Act of 1861 (24 and 25 Vic. c. 134), was of general application and binding within the colonies. In Callender Sykes and Co. v. Colonial Secretary of Lagos (1891), App. Ca. 460, it was held that the English Bankruptcy Act, 1869 (32 and 33 Vic. c. 71), applies to all the Queen's Dominions, and therefore that an adjudication under that Act operates to vest in the trustee in bankruptcy the bankrupt's title to real estate in Lagos, subject to the requirements of the law of Lagos as to the mode of transfer of real estate.

The English Bankruptcy Act of 1883 (46 and 47 Vic. c. 52, s. 118), provides that the English and Colonial Courts having jurisdiction in Bankruptcy and Insolvency shall severally act in aid of and be auxiliary to each other in matters of bankruptcy. In the case of Re Mann, 13 V.L.R. 590, Higinbotham, C.J., said: “The section of the English Act on which the application was made to our Court of Insolvency is a new section, and if I may be allowed to say so, I think it is a very wise and excellent section and one which should receive a liberal interpretation and should be cheerfully co-operated with and acted upon by the Courts to which it applies. It is an enabling section as well as an enjoining one, and applies to all British Courts having jurisdiction in bankruptcy or insolvency.” A Court which has no bankruptcy jurisdiction cannot act as auxiliary. (Callender Sykes and Co. v. Col. Sec. of Lagos, 1891, App. Ca. 460.)

COLONIAL BANKRUPTCY LAWS.—The inconvenience resulting from the absence of uniform laws relating to insolvency and bankruptcy, operative throughout the Australian communities, was illustrated in the case of the Union Bank v. Tuttle (1889), 15 V.L.R. 258. In that case the estate of the defendant had been sequestrated in New South Wales. Before such order of sequestration, creditors of the defendant had seized assets in Victoria under execution on judgments obtained in Victoria. By the law of New South Wales the order for sequestration had relation back to a period antecedent to the seizure by the creditors in Victoria. It was held that the retrospective operation of the order for sequestration in New South Wales did not divest the title of the execution creditors in Victoria. In giving judgment, Mr. Justice A'Beckett said: “The order of sequestration under the law of New South Wales had relation back to a period antecedent to the seizure by the Victorian creditors, and it has been argued that this Court, recognizing the operation of the sequestration in New South Wales, must do so to its full extent, giving it in Victoria the retrospective operation which it would have had in New South Wales, thus divesting the title of the execution creditors in Victoria. No authority has been cited which supports this contention. Story's Conflict of Laws, p. 412, and Geddes v. Mowat, 1 Glyn and J. 414, are against it. I hold that the judgment creditors' rights are not displaced by the sequestration of the debtors' estate in New


  ― 593 ―
South Wales subsequently to the seizure, and I bar the claim made on behalf of the estate of Tuttle, the judgment debtor. The property seized is admittedly the property of a bankrupt firm, of which Tuttle is a member, and I have not to decide anything as to how the debtor's interest in this property is to be sold. I merely decide that his official assignee in insolvency cannot stop the sale of his interest in the chattels seized.”

51. (xviii.) Copyrights189, patents of inventions190 and designs191, and trade marks192:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to promote the progress of science and useful arts, by securing, for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries.” (Art. I. sec. viii. sub-s. 9.) “Copyrights” are enumerated in sec. 91, sub-s. 23, of the British North America Act. “Patents of Invention and Discovery” and “Copyright” were among the subjects which might be referred to the Federal Council, under the Act of 1885. In the Bill of 1891 the sub-clause was worded “Copyrights and patents of inventions, designs, and trade marks.” At Adelaide it was introduced in the same form, and at Melbourne a verbal amendment was made before the first report.

§ 189. “Copyright.”

© Copyright is the right which an author or artist has to prevent the re-publication of his published literary or artistic productions, including books, designs, drawings, engravings, paintings, photographs, musical compositions, and dramatic pieces. It must be distinguished from the property which an author has in his unpublished works, which is sometimes loosely called “copyright.” At common law and independently of statute authors have property in their unpublished literary and artistic works. (Southey v. Sherwood, 2 Mer. 435.)

Whether, before the Copyright Acts, authors had at common law any exclusive right in their works after publication, is a question which has been the subject of much legal argument, but as to which authority has been and is still divided. In Millar v. Taylor (4 Burr. 2303) it was held by a majority that at common law an author and his assigns had a perpetual copyright in his published works, and that this right was unaffected by the statute 8 Anne, c. 21. In Donaldson v. Becket (4 Burr. 2408), Millar v. Taylor was overruled by the House of Lords, a majority being of opinion that, though the common law right existed, it had been taken away by the statute. The weight of modern opinion seems to be against the existence of the common law right, but the question is now one of merely historic interest, as copyright in published works is now wholly regulated by statute. (Jefferys v. Boosey, 4 H.L. Cas. 815; Read v. Conquest, 30 L.J. C.P. 209; Wheaton v. Peters, 8 Pet. [U.S.] 591; Copinger on Copyright, 3rd. ed. pp. 27–35.)

The first Act which directly recognized copyright in books after their publication was 8 Anne, c. 21, 1709, by which severe penalties were provided against infringers of copyright, such rights being secured for a period of fourteen years from registration; a term which was afterwards extended to twenty eight years. Copyright in prints and engravings was established in 1735 by the Act of 8 Geo. II. c. 13; since amended by the 15 and 16 Vic. c. 12. Copyrights in designs for manufactures was secured in 1787 by 27 Geo. III. c. 38, which has been amended by subsequent Acts. By the Act 5 and 6 Will. IV. c. 65 the right of printing and publishing lectures belongs to the lecturer, subject to compliance with certain conditions. (Caird v. Sime, 1887, 12 App. Cas. 326.)

By the Act 1 and 2 Vic. c. 59, passed in 1838, the copyright of works published in foreign countries is secured against infringement within the British Dominions, provided the law of those countries gives similar protection to the works of British authors. Before the statute the courts would not protect a copyright belonging to a foreigner.


  ― 594 ―
(Delondre v. Shaw, 2 Sim. 237.) This Act was repealed and amended by 7 and 8 Vic. c. 12, which was afterwards amended by 15 and 16 Vic. c. 12. The last Imperial Act relating to international copyright was 49 and 50 Vic. c. 33, passed in 1886, after the holding of the international conference at Berne, where the draft of a copyright convention was agreed to.

The Act 5 and 6 Vic. c. 45, passed in 1842, amended and consolidated the law of copyright in books, and is the law which now regulates literary property throughout the Empire to this extent, that a copyright registered in England is valid and may be enforced in the courts of every British possession. This is one of the few Imperial statutes passed during the present reign the operation of which extends to every part of the Queen's Dominions. By this Act copyright in literary works is defined as the sole and exclusive liberty of printing or otherwise multiplying copies of any subject; and it is declared to belong to the author and his assigns, and to endure for the whole term of his life and for seven years after his death, or, if that term of seven years expires before the end of forty-two years from first publication, then for such period of forty-two years. Persons pirating a copyright work are liable to a special action for damages and may be restrained by injunction. The protection of this Act also extends to musical compositions and dramatic pieces. Sec. 15 prohibits her Majesty's colonial subjects, whatever may be their local laws, from printing or publishing in the colonies without the consent of the proprietor any work of which there is a copyright in the United Kingdom. It also prohibits the importation into any British possession of any foreign reprint of works first printed and published in the United Kingdom and entitled to a copyright.

In Routledge v. Low (1868), L.R. 3 H.L. 100, it was held that, notwithstanding the fact that Canada had a Legislature entitled to pass laws concerning copyright, Canada was included in the general words of sec. 29 of the Imperial Copyright Act of 1842.

That Act was afterwards amended by 10 and 11 Vic. c. 95 (1847), which provided that in case the legislature of any British possession should pass an Act making due provision for securing or protecting the rights of British authors in such possession, and transmit the same to the Secretary of State, and in case Her Majesty should be of opinion that such Act was sufficient for the purpose of securing to British authors reasonable protection within such possession, it should be lawful for Her Majesty to express Her Royal approval of such Act, and thereupon, by Order in Council, to suspend, so long as the provisions of such Act should continue in force in such colony, the provisions of the 5 and 6 Vic. c. 45, against the importing, selling, or exposing for sale of foreign reprints of British copyright works.

The Royal assent was refused to the Canadian Copyright Bill of 1872 on the ground that it was repugnant to the provisions of the Imperial statute. In a despatch dated 15th June, 1874, addressed by Lord Carnarvon, Secretary of State for the Colonies, to the Governor-General of Canada, his lordship pointed out that the effect of the Canadian Constitution giving the Parliament of the Dominion power to legislate with respect to copyright was to enable it to deal with colonial copyright within the Dominion, and that it was not intended to interfere with the rights secured to authors by the Imperial Act or to override the provisions of that Act. “The Imperial Copyright Act, 5 and 6 Vic. c. 45,” wrote his lordship, “is, as you are aware, still in force in its integrity throughout British dominions, in so far as it prohibits the printing in any part of such dominions of a book in which there is a subsisting copyright under that Act without the assent of the owner of the copyright.”

Under the power conferred by the Imperial Act, 10 and 11 Vic. c. 95, the Dominion Parliament, in 1875, passed 31 Vic. c. 56 in order to secure to authors the reasonable protection contemplated by the Imperial Act. It provides that any author domiciled in Canada or any part of the British possessions, or being a citizen of a foreign State having an international copyright treaty with Great Britain, should be entitled to copyright in Canada for twenty-eight years, and renewal of it for fourteen years to himself, if he were still alive, and if not to his widow and children, but to no one else, who might be


  ― 595 ―
in possession of the copyright, for any work, literary, scientific, or artistic, printed and published or reprinted or republished in Canada, with the reservation that the exclusive privilege should cease in Canada at the same time that it expired for any work anywhere else.

The conditions precedent to securing the protection of this Canadian Act were (1) that such works should be recorded and copyrighted in Canada; (2) that such works should be printed and published, or reprinted or republished in Canada, or, in the case of works of art, that they should be produced or reproduced in Canada, whether they were so published or produced for the first time or contemporaneously with or subsequently to publication or production elsewhere: provided that in no case should the exclusive privilege in Canada continue after it had expired elsewhere; (3) that no immoral, or licentious, or irreligious, or treasonable, or seditious work should be the subject of such registration or copyright. By Clause 15 of the Act, works of which the copyright had been granted and were subsisting in the United Kingdom, and copyright of which was not secured or subsisting in Canada under any Canadian or Provincial Act, should, upon being printed and published or reprinted or republished in Canada, be entitled to copyright under the Act; but nothing in the Act should be held to prohibit the importation from the United Kingdom of copies of such works legally printed there.

One legal result of this Canadian measure was that, if the proprietor of an English copyright did not register and publish in Canada, foreign reprints could be imported into Canada upon payment of a royalty, to be appropriated for his benefit. The reason for this was that under the protection of the Imperial system, United States authors could secure copyright in Great Britain and her possessions by publishing in England, and thus secure the control of the Canadian market, whilst a Canadian author could not obtain such privileges in the United States.

Her Majesty was empowered to assent to this Bill, by the (Imperial) Canada Copyright Act, 38 and 39 Vic. c. 53, and an Order in Council was then promulgated suspending the provisions of 5 and 6 Vic. c. 45, so far as it prohibited the importation into Canada of foreign reprints of books first published in the United Kingdom and copyrighted there.

The effect of this combination of Canadian and Imperial legislation was considered in the Canadian case of Smiles v. Belford (1877), 1 Ont. App. 436, in which an injunction was applied for on behalf of the holder of an English copyright, under the Imperial Act, 5 and 6 Vic. c. 45, to restrain the defendants from publishing a reprint of the plantiff's work in Canada. The point was raised in this case, though afterwards abandoned by counsel before the Court of Appeal, that the Imperial Parliament, by sub-sec. 23 of section 91 of the British North America Act, had divested itself of all power respecting British copyright in Canada, and that the Canadian Copyright Act, 38 Vic. c. 88, had, by virtue of the Imperial Canada Copyright Act, 1875, 38 and 39 Vic. c. 53, superseded the Imperial Copyright Act of 1842, and required all authors desirous of obtaining copyright in Canada to print and publish and register under the new Act, which the plaintiffs had not done. The defendant further contended that the provisions of the Canadian Act must be complied with, in order to give copyright in Canada. Proudfoot, V.C., refused to sustain these views and granted the injunction asked for. He said: “There is nothing indicating any intention of the Imperial Parliament to abdicate its power of legislation on matters of this kind.” On appeal to the Ontario Court of Appeal, this decision was affirmed. Burton, J.A., entirely concurred in the view of Proudfoot, V.C. Referring to Routledge v. Low, in which it had been unsuccessfully contended that as Canada had a legislature of her own she was not included in the general words of section 29 of the Imperial Act, 5 and 6 Vic. c. 45, whereby that Act was extended to every part of the British dominion, he said: “What the British North America Act intended to effect was to place the right of dealing with colonial copyright within the Dominion under the exclusive control of the Parliament of Canada, as distinguished from the provincial legislatures, in the same way as it has transferred the power


  ― 596 ―
to deal with banking, bankruptcy, and insolvency, and other specified subjects, from the local legislatures, and place them under the exclusive jurisdiction and control of the Dominion. I entirely concur with the learned Vice-Chancellor in the opinion he has expressed, that under that Act no greater powers were conferred upon the Parliament of the Dominion to deal with this subject than had been previously enjoyed by the local Legislatures.” (1 Ont. App. 443, Wheeler, Conf. Can. pp. 92–3.)

The Canadian Copyright Act, 1889 (which contained a clause suspending its operation until proclamation by the Governor-General), made regulations operative in Canada which differed from those existing under Imperial legislation, and which were calculated to affect copyrights registered in England. The English law officers advised the Secretary of State for the Colonies that in their opinion “the then existing powers of colonial legislatures to pass local laws on the subject of copyright in books were probably limited to enactments for registration and for the imposition of penalties with a view to the more effectual prevention of piracy, and to enactments within sub-sec. 4 of sec. 8 of the International Copyright Act, 1886, with reference to works first produced in the colony.” With respect to the constitutionality of the Canadian Act, the law officers reported that the powers of legislation conferred on the Dominion Parliament by the British North America Act, 1867, did not authorize that Parliament to amend or repeal, so far as it related to Canada, an Imperial Act conferring privileges within Canada, and that, in their opinion, Her Majesty should disallow the Act. On 25th March, 1890, Lord Knutsford sent a despatch to Lord Stanley of Preston, the Governor-General of Canada, in which he expressed his regret that he was unable to authorize the Governor-General to issue a proclamation to bring the Act into force. (Lefroy, p. 231. Todd, Parl. Gov. in Col., 2nd ed. p. 182.)

COPYRIGHT IN THE UNITED STATES.—In the United States, under the power to secure to authors and inventors the exclusive right to their writings and discoveries, Congress has created the patent and copyright systems of the Union, and regulates and controls them exclusively.

“It can hardly be said that this power is exclusive to the Congress as against the States, in the sense that if the Congress had not occupied the ground the States might not do so. While the States cannot probably amend or supplement the patent and copyright laws of the United States, there is no reason for asserting that, in the absence of any patent and copyright legislation by Congress, the States may not pass laws to protect the inventions and writings of their own citizens, which will hold until displaced by the legislation of Congress upon the subject. Of course such protection would be very inadequate, as it would not reach beyond the boundaries of the particular State.” (Burgess, Political Sci. II. p. 144.)

Congress may provide for copyright of photographs as works of art or science, so far as they are representations of original intellectual conceptions of the author. (Burrow-Giles Lithographic Co. v. Sarony, III U.S. 53.)

§ 190. “Patents of Inventions.”

A patent is a legal privilege granted by the Crown to an individual, and conveying to him the sole right to make, use, or dispose of some invention of a new and useful mechanism, appliance, or process in science, art, or industry for a specified period of time. In England modern patent legislation began with the statute of 21 Jas. 1. c. 3. This Act declared void all previously enjoyed monopolies, grants, letters-patent, and licences for the sole buying, selling, or making of goods except in certain cases, and provided for the protection for a term of fourteen years of letters-patent and grants of privileges thereafter to be made to the true and first inventor of processes for the working or making of new manufactures within the realm, which others at the time of making such letters-patent and grants should not be using. Thus the elements of novelty and previous non-user by the public became the principal conditions precedent to the acquisition of such rights and privileges. The law was amended by Acts passed in the reigns of Queen Anne and William IV. By the Acts of 5 and 6 Will. IV. c. 83, 2 and 3


  ― 597 ―
Vic. c. 67, 15 and 16 Vic. c 83, amended and re-enacted by the Patent Act, 1883 (46 and 47 Vic. c. 57), the main provisions of the present patent laws were established. These laws defined the procedure to be complied with in order to acquire a patent, such as the formal application, the description and specification of the invention, the provisional protection, the investigation of the merits and originality of the invention, the decision of disputes, the duration of the patent, the protection and privileges of the patentee, and the penalties for the infringement of the right.

A patent granted by the Crown in England extends over the United Kingdom and the Isle of Man, and certain rights are, under the International Convention, obtainable in foreign countries. Under the Patents Act, 1883 (46 and 47 Vic. c. 57), sec. 103, as amended by sec. 6 of the Act of 1885 (48 and 49 Vic. c. 63), the Queen may make arrangements with foreign Governments for the mutual protection of inventions of their respective subjects and citizens. Any person who has applied, within any State with which arrangements have been made thereunder, for protection for any invention, will be entitled to a patent for his invention in the United Kingdom, provided he makes application within seven months after his foreign application. Such an applicant is not prejudiced in his right to a patent by publication within the realm during the seven months period. Sec. 104 makes similar provision for inventors who have first applied for protection in any British possession. A list of countries and colonies with which arrangements have been made is set out in Edmunds on Patents, 2nd ed. at p. 536; the text of the International Convention will be found in the same book. (See Ency. Laws of Eng. ix. p. 522.)

A patent granted by the Government of a British colony does not confer any legal right enforceable in other colonies. An inventor must take out a patent in each colony in which he desires to obtain protection against infringement. As soon, however, as the Parliament of the Commonwealth passes a general law relating to patents, a patent granted by its Government will be operative throughout the Commonwealth. One patent will then secure protection where several were previously required.

ENGLISH PATENT CASES.—The Act 21 Jac. 1, c. 3, did not create but controlled the power of the Crown in granting to the first inventors the privilege of the sole working and making of new manufactures. (Caldwell v. Van Vlissengen, 21 L.J. Ch. 97. Dig. Eng. Case Law, vol. x. p. 687.)

An invention must be both new and useful, and not confined to the knowledge of the party making it, to be the subject of a patent. (Hill v. Thompson, 2 Moore, 424. Dig. Eng. Ca. Law, vol. x. p. 689.)

It is not every useful discovery that can be made the subject of a patent, but the words “new manufacture” in 21 Jac. 1, c. 3, will comprehend not only a production, but the means of producing it. (Ralston v. Smith, 20 C.B. [N.S.] 28; 11 H.L. Cas. 223. Id.)

The discovery of a more skilful and efficient mode of working a process already known and in use is not the proper subject of a patent. (Patterson v. Gaslight Coke Co. 2 Ch. D. 812. Id.)

The discoverer of a new principle or new idea as regards any art or manufacture, who shows a mode of carrying it into practice, as by a machine, may patent the combination of principle and mode, although the idea or the machine would not alone be the proper subject of a patent. (Otto v. Linford, 46 L.T. 35 C.A. Dig. Eng. Ca. Law, vol. x. p. 690.)

AMERICAN PATENT CASES.—Whether Congress can by Act decide that a particular individual is the author or inventor of a certain writing or invention, so as to preclude judicial inquiry into such fact, quaere. (Evans v. Eaton, 3 Wheat. 454.) It is for Congress to say when, for what length of time, and under what circumstances a patent hall be granted. It has power to pass an Act which operates retrospectively to give a patent for an invention already in use. (Blanchard v. Sprague, 2 Story, 164; Baker, Annot. Const. p. 48.)

CANADIAN PATENT CASES.—In Tennant v. Union Bank of Canada, 1894, App. Cas. 31, it was held that laws made by the Dominion Parliament on subjects, such as banking and patents, are paramount, and it would be practically impossible for the Dominion Parliament to legislate upon either of these subjects without affecting the property and


  ― 598 ―
the civil rights of individuals in the provinces. In Smith v. Goldie, 9 S.C.R. (Can.) 46, it was held that a patent for a combination of known inventions, the combination being novel and useful, was valid. It was there also held that to be entitled to a patent in Canada, the patentee must be the first inventor in Canada or elsewhere. In the case of Re Bell Telephone Co. (7 Ont. 605) the question was raised whether section 28 of the Dominion Patent Act, 35 Vic. c. 26, was ultra vires, as creating a court of justice of civil jurisdiction, infringing sub-secs. 13 and 14, sec. 92, B.N.A. Act. (Wheeler, C.C. pp. 89–91.)

§ 191. “Designs.”

In manufacture, design implies the novel and attractive figures, plans, or outlines which the workman copies, either from his own drawings or from artistic sketches supplied, and imprints for the purpose of enrichment into the stuff, silk, and other materials which constitute the manufactured article. The first English Act relating to this subject was 27 Geo. III. c. 38, passed in 1787. This was followed subsequently by the Act 5 and 6 Vic. c. 100 (1842), amended by 21 and 22 Vic. c. 70 (1858). By the Act of 1842 all articles of manufacture, and substances on which designs are executed, are divided into thirteen classes; for some of which the copyright of the design was fixed at three years, for others nine months, and for the others twelve months.

The Patents Designs and Trade Marks Act of 1883 (46 and 47 Vic. c. 57), amended and consolidated the English statute law relating to designs. That Act has been slightly altered by the Patents Designs and Trade Marks Act of 1886 (49 and 50 Vic. c. 37), and 1888 (51 and 52 Vic. c. 50), and by the Designs Rules of 1890 and 1891. The Consolidated Act of 1883 defines the term design as any design applicable to any article of manufacture, or to any substance, artificial or natural, or partly artificial and partly natural, whether the design is applicable for the pattern, or for the shape or configuration, or for the ornament thereof, or for any two or more of such purposes, and by whatever means it is applicable, whether of printing, painting, embroidering, weaving, sewing, modelling, casting, embossing, engraving, staining, or any other means whatever, manual, mechanical or chemical, separate or combined, not being a design for a sculpture or other things within the protection of the Sculpture Copyright Act of the year 1814. According to this definition there are only a few special classes of designs within the protection of the Act, viz.: those applicable to the pattern, shape, or ornamentation of manufactured articles. (Per Lord Herschell in Hecla Foundry Co. v. Walker [1889] 14 App. Ca. 550; and per Lindley, L.J, in re Clarke's Design [1896] 2 Ch. at p. 43.)

§ 192. “Trade Marks.”

A trade mark is some name, symbol, or device, consisting in general of a picture, label, word or words, which is applied or attached to a trader's goods so as to distinguish them from the similar goods of other traders, and to identify them as his goods, in the business in which they are produced or put forward for sale. (Leather Cloth Co. v. American Leather Cloth Co., 11 H.L. Cas. 523; Richards v. Butcher, 1891, 2 Ch. at pp. 532 and 543, per Kay, J., and Lord Esher, M.R.)

“Any symbol may become a trade mark if it is capable of distinctive user in accordance with the definition, but only symbols which consist of or contain at least one of the essential particulars enumerated in the Acts, 1883, s. 64, as amended by 1888, s. 10, are capable of registration. The essence of a trade mark is that it distinguishes the owner's goods, and the essence of an infringement (where the essential particulars are not bodily appropriated) is that the use of the mark upon the defendant's goods is calculated to lead purchasers to buy them as being the plaintiff's goods. A trade mark must therefore be a distinctive symbol. A word or device which is common to the trade or is in general use, mere descriptive matter, or the name of the goods themselves, are the principal examples of marks which are not distinctive.” (Encyc. of the Laws of Eng., xii. p. 223.)




  ― 599 ―

Prior to trade mark legislation, property in a trade mark could only be acquired by actual user of the mark for such a length of time as to be evidence of appropriation of the badge distinguishing the owner's goods. Under the English Acts, registration can be procured of any trade mark, and registration is evidence of the proprietor's right to its exclusive use. A right to a trade mark can now be obtained by the registration of a new and unused mark, provided that the applicant has a real intention to use the mark upon the description of goods for which it is registered. (Hudson's Trade Marks, 1886, 32 Ch. D. 311.)

By the International Convention of 1883, the signatory Powers agreed to reciprocally admit to registration and protection trade marks registered in their several countries. This has not, so far, been fully carried out by English law. (Californian Fig Syrup Co.'s Trade Mark, 1888, 40 Ch. D. 620; Carter Medicine Co.'s Trade Mark, 1892, 3 Ch. 472.) But foreigners may register their trade marks in England, giving an address within the Kingdom for service on the same terms as English subjects. In the case of a signatory Power, if any of its subjects who has registered a mark at home, which is capable of registration in England, applies for a registration in England within four months of his application to register at home, he is entitled in priority to other applicants, and is not prejudiced by the use of the mark by others during the period. Germany is the only important non-signatory Power. Section 8 of the Act of 1888 is applicable to the principal Colonies. Under the Convention of Madrid, 1891, a trade mark may be registered as the result of a single application in the countries of the signatory Powers. Great Britain has not acceded to this Convention. (Encyc. of the Laws of Eng., xii. p. 234.)

51. (xix.) Naturalization194 and aliens193:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to establish a uniform rule of naturalization throughout the United States.” (Art. I. sec. viii. sub-sec. 4.) “Naturalization and aliens” is specified in sec. 91, sub-sec. 25, of the British North America Act. “Naturalization of aliens” was a subject which might be referred to the Federal Council under the Act of 1885. The sub-clause was introduced in its present form in 1891, and was adopted in 1897–8 without debate.

§ 193. “Aliens.”

In English law an alien may be variously defined as a person who owes allegiance to a foreign State, who is born out of the jurisdiction of the Queen, or who is not a British subject. The rule of the common law is that every person born out of the British Dominions is an alien, and that every person born within British Dominions is a British subject. This is known as the jus soli or the territorial test of nationality, which is contrasted with the jus sanguinis or the parentage test of nationality. There are several exceptions to the territorial rule; (1) legitimate children born out of the British Dominions, whose fathers, or grandfathers on their fathers' side, were natural-born subjects, not in the service of an enemy at the time of such children's birth, are entitled to the rights of natural-born subjects (Imperial Acts 4 Geo. II. c. 21, secs. 1, 2; 13 Geo. III. c. 21); (2) children born on board British ships on the high seas are natural-born subjects; (3) legitimate children of an alien enemy, born in a part of the British Dominions which at the time of their birth is in hostile occupation, are not British subjects. (See Calvin's case, 7 Coke Rep. 4; Westlake, Priv. Internat. Law, 3rd ed. p. 323. Dicey, Conflict of Laws, p. 176.)

Although aliens resident in a British country owe no local allegiance to the Crown, they are bound equally with British subjects to obey the laws of the country. Mr. Hall considers that an alien, “in return for the protection which he receives, and the opportunities of profit or pleasure which he enjoys, is liable to a certain extent, at any rate, in moments of emergency, to contribute by his personal service to the maintenance of order in the State from which he is deriving advantage, and under some circumstances


  ― 600 ―
it may be even permissible to require him to help in protecting it against external dangers.” (Hall's Foreign Jurisdiction, p. 171.) “There is no rule or principle of international law which prohibits the government of any country from requiring aliens, resident within its territories, to serve in the militia or police of the country, or to contribute to the support of such establishments.” (Id. p. 172.)

Under ancient as well as modern jurisprudence, aliens, resident in a country of which they were neither citizens nor subjects, were for a long time regarded with jealousy and under serious disabilities. In ancient Athens foreigners were not allowed to dispose of their property by will; at their death it was confiscated to the State. In early Rome foreigners were similarly disqualified, but under the Empire they were allowed to inherit and devise property by will. By the law of France, until the beginning of this century, the Government appropriated the property of foreigners dying in that country and leaving no heirs who were natives. In England, until enabling legislation during the present reign, aliens were subject to many disqualifications, some of which still remain. An alien could not, and still cannot, own a British ship. An alien could not own real estate within the realm, and hence it was held that a lease or an agreement for a lease of land to an alien artificer was void by 32 Henry VIII. c. 16, sec. 13. (Lapierre v. McIntosh, 8 L.J. Q.B. 112.) An alien woman married to an Englishman was not entitled to dower. (Wall's Case, 6 Moore P.C. 216.) A Court of Equity would enforce, for the benefit of the Crown, a trust of real estate created in favour of an alien. (Barrow v. Wadkin, 24 Beav. 1.) An alien friend had no legal right enforceable by action to enter British territory, and this disability still remains. (Musgrove v. Chung Toy [1891], App. Cas. 272.)

On the other hand, by the terms of the Copyright Act, 5 and 6 Vic. c. 45, an alien friend who, during his temporary residence in a British colony, publishes in the United Kingdom a book of which he is the author, is entitled to the benefit of the English Copyright. (Routledge v. Low, L.R. 3 H.L. 100.) So also, by the terms of the English law of Trade Marks, a foreign manufacturer has a remedy by suit in the United Kingdom for an injunction and account of profits against a manufacturer who has committed a fraud upon him by using his trade mark for the purpose of inducing the public to believe that the goods so marked are manufactured by the foreigner. (Collins Co. v. Brown, 3 Jur. [N.S.] 929.) An alien can similarly sue to restrain the fraudulent appropriation of his trade mark, although the goods to which such trade mark is affixed are not usually sold by him in the Kingdom. (Collins Co. v. Reeves, 4 Jur. [N.S.] 865.) An alien friend, though resident abroad, is entitled to sue in England for a libel published there concerning him. (Pisani v. Lawson, 6 Bing. N.C. 90.)

The Act 7 and 8 Vic. c. 66 (1844) first allowed aliens to take and hold every species of personal property—but not real property—as fully and effectually as if they were natural-born subjects, and enacted also that lands or buildings for the purpose of residence, or for the carrying on of any trade, business, or manufacture, might be taken and held by aliens for any term of years not exceeding twenty-one.

The Naturalization Act of 1870 (33 and 34 Vic. c. 14) greatly enlarged the privileges of aliens. Under that Act real and personal property of every description may be acquired, held, and disposed of by an alien, in the same manner in all respects as by a natural-born British subject; and a title to real and personal property of every description may be derived through an alien, in the same manner as if he were a natural-born British subject. No right is thereby conferred on an alien to hold real property situated out of the United Kingdom. The principal provisions of these Acts have been generally adopted in the colonies by local legislation passed in the exercise of power conferred by the Act 33 and 34 Vic. c. 14, sec. 16.




  ― 601 ―

§ 194. “Naturalization.”

Naturalization is the process, defined by law, by which an alien renounces his original allegiance and is converted into a subject or citizen, entitled to all the rights and privileges of natural-born subjects and citizens in the country in which he domiciled. Formerly the only mode of obtaining naturalization was by a special Act of Parliament passed for each individual seeking to be naturalized; but by the Act 7 and 8 Vict. c. 66, the British Parliament provided a general procedure by which approved aliens could acquire the status of natural-born subjects of the Queen. It was enacted that the Home Secretary might, if he thought fit, grant a certificate of naturalization to any alien applying for it, on receiving such evidence (with regard to his intention to remain in the country, his trade, &c.) as might seem necessary. This certificate conveyed to the alien all the rights and privileges of natural-born British subjects, except the right to become a member of Parliament or a Privy Councillor. This Act was amended and enlarged by the Naturalization Act, 1870, (33 and 34 Vic. c. 14), which declared that an alien resident in the United Kingdom for a term of not less than five years, or who has been in the service of the Crown for not less than five years and intends to reside in the Kingdom or to serve the British Crown, may apply to the Home Secretary for a certificate of naturalization, and on giving evidence of particulars may obtain it. Having obtained this certificate, he is, in the United Kingdom, entitled to all the political and other rights, powers and privileges, and subject to all the obligations of a natural-born British subject. When within the limits of the foreign State of which he was formerly a subject, he is not deemed a British subject, unless he has ceased to be a subject of that State. Section 16 of this Act conferred upon colonial legislatures the power of legislation in respect to the naturalization of aliens, and in the exercise of this power the English naturalization laws, with minor variations, have been generally adopted in the colonies. Letters of naturalization granted by the Government of a colony are, however, operative only within that colony.

“No question of naturalization arises in connection with the emigration of British subjects to British colonies. Settling therein makes no more change in this respect than a removal from York, Glasgow, Swansea, or Dublin, to London, and a new arrival has all the privileges of a fellow-subject. This is very important when compared with the position of a person who contemplates emigration from the United Kingdom to the United States. For example:—It is required that everyone from the British Islands who desires to become an American citizen shall take two oaths, one of intention and one of facts, the latter after five years' residence. The effect of these oaths is pointedly and specifically to renounce allegiance to the Queen, to give up one's British birthright, and, in the event of war, to become an enemy to the land of one's birth. In some of the States—the great State of New York, for instance—a British subject cannot hold real estate without taking such oaths, and cannot in any of the States exercise any of the political rights of American citizens without so doing.” (Canadian Official Hand-book, p. 7; Wheeler, C.C. p. 770.)

NATURALIZATION IN THE UNITED STATES.—“The power to establish a single statute of naturalization for the whole United States is, of course, an exclusive power of the Congress. The States could not do that even though the Congress should not regulate the subject at all. It is, indeed, conceivable that every State might pass exactly the same statute of naturalization, and that the courts of every State might give to the statutes of the respective States exactly the same interpretation, and an uniform rule be attained in this manner. It is not, however, at all likely that they would. Moreover, the State naturalization could not give the full rights and privileges of citizenship. It could only give such as pertain to the individual as a resident of the particular State. The purposes of naturalization, viz., to gain the full rights and privileges of citizenship, could not thus be attained.” (Burgess, Political Sci. II. p. 144.)

The American States individually have still a concurrent authority as to naturalization, but they cannot exercise it so as to contravene the rules established by Congress. The true reason for empowering Congress to establish a uniform rule was to guard against a too narrow—not against a too liberal—mode of granting rights of citizenship. A State cannot exclude citizens who have been adopted by the United States; but it can adopt citizens upon easier terms than those imposed by Congress. (Collet v. Collet, 2 Dall. 294. Baker, Annot. Const. p. 43.)




  ― 602 ―

“I am not aware of any instance in which the Courts have spoken of the grant of power to the general Government as excluding all State power over the subject, unless they were deciding a case where the power had been exercised by Congress and a State law came in conflict with it. In cases of this kind the power of Congress undoubtedly excludes and displaces that of the State, because whenever there is a collision between them the law of Congress is supreme; and it is in this sense only, in my judgment, that it has been spoken of as exclusive in the opinions of the court to which I have referred.” (Per Taney, C.J., License Cases, 5 How. 585.)

No State can make a foreigner a citizen of the United States. It may put a foreigner upon a footing with its own citizens as to all rights and privileges enjoyed by them within its dominion and under its laws. But that will not make him a citizen of the United States nor entitle him to sue in its courts, nor to any of the privileges and immunities of a citizen in another State. (Dred Scott v. Sandford, 19 How. 393. Baker, Annot. Const. p. 43.)

A State cannot make a subject of a foreign government a citizen of the United States. Citizenship and the right to vote are neither identical nor inseparable. (Lanz v. Randalls, 4 Dill. 425. Id.)

An alien who has been duly naturalized under the federal law becomes thereby a citizen of the United States, and is a citizen of any State of the Union in which he may reside. (Gassies v. Ballon, 6 Pet. 761. Id.)

Under the power to “prescribe a uniform rule of naturalization,” Congress has no power to regulate or prescribe the capacities of a naturalized citizen. A naturalized citizen is on the footing of a native citizen, except so far as the Constitution itself distinguishes him. (Osborn v. Bank of United States, 9 Wheat. 827.)

CANADIAN CASES ON ALIENS.—“The point decided in Low v. Routledge (1865, L.R. 1 Ch. 42), is that a colonial legislature cannot affect an alien's rights beyond the limits of the colony. There, the plaintiff, an alien, temporarily resident in Montreal, claimed to be entitled to copyright under the Imperial Copyright Act, 5–6 Vic. c. 45, in respect to a book she was publishing in England, and it was unsuccessfully contended that she could not be so entitled because by a Canadian statute an alien coming into Canada for the purpose of publishing a work, as the plaintiff had done, and publishing his book there, would not be entitled to copyright in the work so published, and because an alien coming into Canada could acquire only such rights as were given by the law of Canada. Sir G. J. Turner, L.J., however, delivering the judgment of the Court, says:— “This argument on the part of the defendants is, in truth, founded on a confusion between the rights of an alien as a subject of a colony, and his rights as a subject of the Crown. Every alien coming into a British Colony becomes temporarily a subject of the Crown—bound by, subject to, and entitled to the benefit of the laws which affect all British subjects. He has obligations and rights both within and beyond the colony into which he comes. As to his rights within the colony, he may well be bound by its laws; but as to his rights beyond the colony, he cannot be affected by these laws; for the laws of a colony cannot extend beyond its territorial limits.” (Lefroy, Leg. Pow. in Canada, p. 328.)

“This expression, ‘subject of the colony,’ is significant and important. In an article in 31 Can. L.J. 7, entitled ‘Can a Colonial legislature affix a criminal character to acts committed beyond its territorial limits?’ the writer says that ‘there is no such thing as a Canadian, Australian or Indian subject’; and in an international sense no doubt this is so; but the above dicta, and other authorities … show that in connection with the matters under discussion there is a sense in which it is proper to speak of a man as a subject of a particular colony, and that legal distinctions hinge upon his position as such.” (See the dictum of Boyd, C., in Regina v. Brierly, 14 Ont. Rep. 533; Lefroy, Leg. Pow. in Can., p. 329.)

The Dominion Parliament has exclusive jurisdiction over naturalization and aliens. The Ontario legislature passed an Act, 51 Vic. c. 70, providing that the railway company therein incorporated might become a party to promissory notes and bills of exchange, and how such notes and bills might be made, accepted, or endorsed so as to be binding on the company. Section 12 of the Act provided that aliens as well as British subjects, whether resident in the province or elsewhere, might be shareholders in the company, and that all such shareholders should be entitled to vote on their shares and be eligible as directors. The Canadian Minister of Justice objected to this section as infringing on the exclusive Dominion power to make laws in respect to aliens. In reply, Mr. Mowat, the Provincial Attorney-General, contended that this power was not intended to give and did not give the Dominion Parliament jurisdiction in respect to such matters as that in question, which he submitted related not to naturalization and aliens within the meaning


  ― 603 ―
of the British North America Act, but to property and civil rights. In support of this view he cited Todd's Parliamentary Government in the Colonies (2nd ed., p. 299).

A British Columbia Act of 1890, incorporating a certain company, forbade under severe penalties the employment of Chinese. The Canadian Minister of Justice objected to this provision, which he said “seems open to question on the ground that it is for the Parliament of Canada to legislate respecting aliens and therefore to prescribe their rights and disabilities.”

In 1890 the legislature of British Columbia passed the Coal Mines Regulation Act, sec. 4 of which provided that no boy under the age of 12 years, no woman or girl, and no Chinaman, should be employed underground in any mine to which the Act applied. The Union Colliery Company of British Columbia employed Chinamen in its mines in defiance of this prohibition. In 1898, Mr. Bryden, a shareholder, brought a suit against the Company in the Supreme Court of the Province, claiming an injunction restraining the Company from employing Chinamen. The Company pleaded that the Act, so far as it prohibited the employment of Chinamen, was void as being ultra vires of the legislature of the Province. Mr. Justice Drake upheld the validity of the Act and granted the injunction. The Full Court of the Province sustained his decision, holding that the Act came within the power of the Province to legislate concerning “property and civil rights.” The Company appealed to the Privy Council. In support of the appeal it was argued that the Parliament of Canada had, under the British North America Act, sec. 91 (25), exclusive authority to legislate concerning “naturalization and aliens.”

The Privy Council, per Lord Watson, held that the Provincial Act was ultra vires, and reversed the decision of the Provincial Courts. Every alien when naturalized in Canada became, ipso facto, a Canadian subject of the Queen, and his children were not aliens requiring to be naturalized, but natural-born Canadians. It could hardly have been intended to give the Dominion Parliament the exclusive right to legislate for the latter class of persons resident in Canada, but section 91 (25) might possibly be construed as conferring that power in the case of naturalized aliens after naturalization. The subject of “naturalization” seemed prima facie to include the power of enacting what should be the consequences of naturalization, or, in other words, what should be the rights and privileges pertaining to residents in Canada after they had been naturalized. It seemed clear that the expression “aliens” in that section referred to, and at least included, all aliens who had not yet been naturalized, and the words “no Chinaman” in the Provincial Act certainly included every adult Chinaman who had not been naturalized. The leading feature of the prohibition in the Provincial Act was that it could have no application except to Chinamen who were aliens or naturalized subjects, and that it established no rule or regulation, except that those aliens or naturalized subjects should not work in underground coal mines within the Province. Their Lordships saw no reason to doubt that, by virtue of section 91 (25), the Legislature of the Dominion was invested with exclusive authority in all matters which directly concerned the rights, privileges, and disabilities of the class of Chinamen who were resident in the Provinces of Canada. They were also of opinion that the whole pith and substance of sec. 4 of the Provincial Act, in so far as objected to by appellant company, consisted in establishing a statutory prohibition which affected aliens or naturalized subjects, and therefore trenched upon the exclusive authority of the Parliament of Canada. (Per Lord Watson, in The Union Colliery Company of British Columbia, Ltd., v. Bryden [1899], App. Ca. 580.)

Under the Constitution of the Commonwealth, sec. 51—xix., the Federal Parliament will be able to prohibit Chinamen, whether naturalized or not, from working in mines, or to permit them to work in mines. In the absence of Federal legislation State laws relating to such subjects would, under sec. 108, prevail.

ALIENS NATURALIZED BY COLONIAL LAWS.—“The continued inconveniences and disabilities to which German emigrants to Canada are exposed by reason of the partial benefits afforded to them by naturalization under the colonial law, which leaves them


  ― 604 ―
still liable to be claimed as German subjects when travelling abroad or on a return to their native country, induced the Canadian Privy Council to request the Governor-General to write to the Secretary of State for the Colonies and represent this grievance... Accordingly, on April 21, 1873, the Canadian House of Commons passed an address to the Queen, praying that, pursuant to the provisions of the Imperial Naturalization Act of 1870. Her Majesty would be pleased to negotiate naturalization treaties with the German and other foreign States, under which legally naturalized foreigners in Canada may no longer be subject to the disabilities of a divided allegiance, but, on formally renouncing their native allegiance, may become entitled to all the privileges of native-born British subjects. A despatch, in reply to this address, dated September 3, 1873, was transmitted by the Governor-General to the House of Commons, on May 6, 1874. It inclosed a memorandum from Her Majesty's Secretary of State for Foreign Affairs, which stated that the Imperial government were prepared to place aliens naturalized in any British colony, out of Europe, on the same footing, so far as passports and protection in foreign countries are concerned, as aliens naturalized in England under the Act of 1870. But it suggested that a compliance with the request for the negotiation of naturalization treaties would prove less advantageous to aliens naturalized in the colonies than the existing practice—inasmuch as no treaties could be negotiated, except upon the basis of a five years' residence in the colony of the alien who desired to be allowed to change his allegiance. The only way in which the objections urged could be satisfactorily overcome would be by an extension of Imperial naturalization to the colonies, the expediency of which is under the consideration of Her Majesty's government. .. And in March, 1881, the Canadian Commons were informed that negotiations had been entered into between the Imperial and the German governments, with a view, by treaty, to enable German settlers in Canada to obtain complete naturalization.” (Todd's Parl. Gov. in Col. 2nd ed. pp. 296–9.)

“Legislation with regard to aliens is entrusted to the Dominion Parliament. The Manitoba Assembly passed an Act dealing with the holding of land; and declared that the existing disqualifications against aliens debarred them from serving as jurors. The Minister of Justice, 21 February, 1874, following the ruling of the Chief Justice, under the English laws in force in Manitoba, recommended that the Act be sanctioned. (Prov. Leg. 1887.) If the Provinces attempt to effect the naturalization of a person who is a citizen of a foreign State, this would be objected to, as this is one of the subjects left exclusively to the Dominion Parliament, and Acts have been passed accordingly.” (Wheeler, C.C., p. 101.)

51. (xx.) Foreign corporations195, and trading196 or financial corporations197 formed198 within the limits of the Commonwealth199:

HISTORICAL NOTE.—“Status of corporations and joint stock companies in other colonies than that in which they have been constituted” was a subject which might be referred to the Federal Council under the Act of 1885.

In the Bill of 1891 the sub-clause was worded, “The status in the Commonwealth of foreign corporations, and of corporations formed in any State or part of the Commonwealth.” In Committee Mr. Munro and Mr. Bray suggested that there should be power to prescribe a uniform law for the incorporation of all trading corporations; but Sir Samuel Griffith thought it unnecessary. (Conv. Deb. Syd., 1891, pp. 685–6.)

At Adelaide the sub-clause was drawn as follows:—“Foreign corporations and trading corporations formed in any State or part of the Commonwealth.” In Committee the words “or financial” were added. (Conv. Deb., Adel., pp 793–4.) At Melbourne, after the fourth report, the words “within the limits of the Commonwealth” were substituted for the words “in any State or part of the Commonwealth.”

§ 195. “Foreign Corporations.”

A corporation has been already defined; Note, § 182, supra, “Incorporation of Banks.” A corporation, according to the law of England, cannot be created except by royal charter, letters-patent, or Act of Parliament. Once duly constituted it is an artificial person, having the incidents of unity and perpetuity, capable of suing and being sued, holding property, performing acts, and having a domicile. Its domicile is


  ― 605 ―
its principal place of business, where the administrative work of the corporation is carried on. (Dicey, Conflict of Laws, 154.)

Foreign corporations, chartered for lawful purposes, have the right to carry on business within the British Dominions, subject to the conditions and requirements of local laws; this has been recognized by the comity of nations, as well as by conventions concluded between Great Britain and other countries. By the Anglo-French and Anglo-Belgian treaties of 1862, and by the Anglo-Spanish treaty of 1883, companies formed in one of the joint contracting countries, in accordance with laws in force therein, are entitled to exercise “all their rights” in the dominions of the other. Similar conventions have been entered into by Great Britain with Germany, Italy, Greece, and other nations, mutually securing to commercial and industrial companies the exercise of their rights throughout the possessions of the high contracting parties.

“The right of foreign and colonial corporations to carry on business in England, without any authority to that effect from Parliament or Government, has now passed unquestioned for so long that it may be considered to be established; and it is a very exceptional instance of liberality.” (Westlake, Priv. Internat. Law, p. 337.)

The term “foreign,” in the phrase now under discussion, is wide enough to cover not only corporations established by the laws of independent foreign States, but also corporations established by the law of Great Britain and by the law of every self-governing community within the British Empire. In short, “foreign” includes every corporation established beyond the limits of the Commonwealth.

A foreign company carrying on business in any part of the British Dominions, through a branch office situated there, is liable to be sued locally in the same manner as a local corporation. Thus, an American company, incorporated by American law in the United States, had a place of business in England, where it, de facto, carried on business, although its manufactory, and also its principal place of business, where the meetings of its directors and shareholders were held, were in America. The plaintiff claimed a sum of money as being due from the corporation to him as the balance of commission on the sale of goods. He commenced an action against the corporation and its agent in England, including both in the writ, and served two copies upon the agent, one for himself and the other for the corporation. It was held that the court would not, upon the ground that a foreign corporation cannot be sued in England, prevent the plaintiff from proceeding in the action; and also that, as the corporation had a place of business in England and traded there, it must be treated as resident there, and that the service upon its agent was sufficient. (Newby v. Van Oppen, L.R. 7 Q.B. 293; and it was similarly held in Haggin v. Comptoir d'Escompte de Paris, 23 Q.B.D. 519.)

The right of British and colonial courts to order the winding-up of companies not domiciled within their respective jurisdictions has been considered in a number of cases which have arisen in the United Kingdom, India, Australia, and New Zealand. In a New Zealand case it was held that the Court of Chancery in England has jurisdiction under s. 199 of the Companies' Act, 1862 (25 and 26 Vic. c. 89), to wind up an unregistered joint-stock company, formed, and having its principal place of business in New Zealand, but having a branch office, agent, assets, and liabilities in England. The pendency of a foreign liquidation does not affect the jurisdiction of the court to make a winding-up order in respect of the company under such liquidation, although the court will, as a matter of international comity, have regard to the order of the foreign court. It being alleged that proceedings to wind up the company were pending in New Zealand, the Court, in order to secure the English assets until proceedings should be taken by the New Zealand liquidators to make them available for the English creditors pari passu with those in New Zealand, sanctioned the acceptance of an undertaking by the solicitor for the English agent of the company, that the English assets should remain in statu quo until the further order of the Court. (Re Commercial Bank of India, L.R. 6 Eq. 517; followed in Re Matheson Bros. Limited, 27 Ch. D. 225; Digest of English Case Law, 111, 1674.)




  ― 606 ―

A banking company carrying on business in South Australia had a branch London, but was not registered in England. The company had English creditors and assets in England. Two petitions were presented in England to wind up the company, which had stopped payment, and on the hearing of the petitions an order was made appointing a provisional liquidator, and the further hearing was ordered to stand over for a time. The powers of the provisional liquidator were limited to the taking possession of, collecting and protecting the assets of the company in England. When the petitions came on again to be heard it appeared that a petition to wind up the company had been meanwhile presented in Australia, and a provisional liquidator had been appointed there, but it was not proved that a winding-up order had been made. It was held that there was jurisdiction, at the time when the petitions were presented, to make an order to wind up the company, and that the jurisdiction could not be affected by subsequent proceedings in Australia. A winding-up order was accordingly made, the order appointing the provisional liquidator being continued, with the same restrictions on the powers, the judge expressing an opinion that the winding-up in that court would be ancillary to a winding-up in Australia, and that if the circumstances remained the same, the powers of the official liquidator, when appointed, ought to be restricted in the same way. (Re Commercial Bank of South Australia, 33 Ch. D. 174.)

In the case of the Merchants' Bank of Halifax v. Gillespie, 10 S.C.R. (Can.) 312, the question was as to the validity of proceedings under the Dominion statute for the sole and principal winding-up of a joint stock company incorporated in England in 1874, under the Imperial Joint Stock Companies' Act, and never incorporated in Canada, but with its chief place of business in Nova Scotia, where it owned and operated extensive iron mines and works, constituting almost its whole assets, while it owned no real estate, but occupied an office in Great Britain. (Lefroy, Leg. Pow. in Canada, p. 629.) The Supreme Court held that an order could not be made under the Dominion law for the winding-up of the Company. In the same case, Henry, J., said:—“If the provisions of a Dominion statute, as in this case, contravene an English statute regulating an English incorporated company, such provisions would be ultra vires … It is possible that a company chartered in the United States or other foreign country doing business here might be wound up under the Dominion Act, if such could be done without interfering with the terms of the constituting articles, but I see serious difficulties in the way, even in such a case.”

The extent to which federal control may be exercised over foreign corporations, including those formed under Imperial law, may be thus summarized from the English and Canadian cases. They will be liable to federal taxation; they may be required to give security for the performance of their contracts; their property and assets within the Commonwealth may be protected and regulated, so as to secure the rights of creditors, and particularly the rights of citizens and residents of the Commonwealth; they will not and cannot be wound up or dissolved under Federal law. But should they not be able to pay their debts, their assets may be seized and placed in the hands of a Federal liquidator, charged with the duty to carry on a local liquidation ancillary to any principal winding-up that may be instituted in the country of their domicile. (The Merchants' Bank of Halifax v. Gillespie, 10 S.C.R. [Can.] 312; Allen v. Hanson, 16 Quebec L.R. 79; Re Briton Medical Life Association, 12 Ont. Rep. 441.)

§ 196. “Trading . . Corporations.”

A trading corporation is one formed for the purpose of carrying on trade. To trade, as we have seen (Note, § 162, supra), means to buy and sell; to be engaged in the exchange, barter, traffic, bargain, or sale of goods, wares, and merchandize, or to carry on commerce as a business. The Federal Parliament may legislate concerning trading corporations formed within the limits of the Commonwealth. Such corporations may be both created and wound up under the provisions of Federal law; whilst foreign corporations cannot be either created or wound up by Federal law, though their business operations and property can be regulated and affected.




  ― 607 ―

§ 197. “Financial Corporations.”

Sub-section 13 enables the Parliament to make laws with respect to “Banking and the incorporation of Banks.” This sub-section is intended to give the Parliament power to legislate concerning all “financial institutions” formed within the limits of the Commonwealth. There are financial institutions which are not banks. Among these may be mentioned companies which receive deposits of money for investment and make advances on the security of land, such as land-mortgage companies and building societies. (Con. Deb., Adel., 1897, p. 793.)

§ 198. “Formed.”

In the expression “trading or financial corporations formed within the limits of the Commonwealth,” the words “formed within,” &c., apparently include corporations formed under the authority of State laws, whether before or after the establishment of the Commonwealth. “Formed” is certainly capable of meaning “formed under State laws.” It would have been unnecessary to declare that the Parliament should have power to make laws controlling corporations “formed” by its own authority. There is no express power vested in the Parliament to incorporate trading or financial companies (sec. 51—xiii.). Whether such companies could be created under the trade and commerce section is not clear. It would therefore seem that this provision refers to companies created under State laws. Such bodies, once launched, will come within the control of Federal legislation. Under this power it would probably be competent for Parliament to convert a corporation created by State authority into a Federal corporation; to enlarge the scope of its operations and business; to confer on a local corporation certain powers which would be beyond the jurisdiction of the States Governments to grant. (Todd's Parl. Gov. in Col., 2nd ed. 437.)

“In June, 1881, the Quebec Court of Queen's Bench, on an appeal from the decision of an inferior court, declared that the Dominion Parliament had exceeded its powers in the incorporation, by Act 43 Vic. c. 67, of the Bell Telephone Company. This company had been authorized to establish telephone lines in any part of Canada, to cross rivers, boundary lines, &c. But the company, in commencing a local business in Quebec, did so for purely local traffic, having no pretension to service of a dominion character. Their undertaking did not involve the connection of service with two or more Provinces, or the need even to cross navigable rivers; neither had Parliament declared the company to be ‘for the general advantage of Canada, or of two or more Provinces.’ In fact, the powers claimed to have been conferred were beyond the jurisdiction of the Dominion Parliament to grant, and should have been obtained in the particular instance from the Quebec legislature. The company were therefore adjudged to have been guilty of a nuisance, in erecting their poles in the city of Quebec without lawful authority. But in the same month (June, 1881), upon application to the Quebec legislature, then in session, an Act was passed ‘to confer certain powers on the Bell Telephone Company of Canada,’ which recognized this company, and gave it the necessary corporate powers for provincial work, saving only actions pending in the courts. Similar Acts were passed by the New Brunswick, the Nova Scotia, and the Ontario legislatures, in 1882. And in the same year, the Dominion Parliament amended their Act of incorporation, and furthermore declared the works in question to be ‘for the general advantage of Canada.”’ (Todd's Parl. Gov. in Col. 2nd ed. p. 534.)

§ 199. “Within the Limits of the Commonwealth.”

This is a notable expression, affirmative of the territoriality of the Commonwealth, and recognizing the principle that, as a general rule, the laws of a sovereign State or of a semi-sovereign community are intended to be operative and enforceable only within its territorial limits. The words, “formed within the limits of the Commonwealth,” are, apparently, words of description rather than words of limitation, seeing that even without any express restriction the laws of the Commonwealth could only operate within and throughout the Commonwealth. Only express words would justify any interpretation giving an extra-territorial effect. One instance of such express words is found in Clause V.,


  ― 608 ―
which enacts that the laws of the Commonwealth shall be “in force an all British ships” whose first port of clearance and whose port of destination are within the Commonwealth. Another instance is found in section 51—x., “Fisheries in Australian waters beyond territorial limits.”

51. (xxi.) Marriage200:

HISTORICAL NOTE.—“Marriage and divorce” is specified in the British North America Act, sec. 91, sub-sec. 26. “Recognition in other colonies of any marriage or divorce duly solemnized or decreed in any colony” was a subject which might be referred to the Federal Council under the Act of 1885. In the Bill of 1891, and also in the Adelaide draft of 1897, “Marriage and divorce” was one of the legislative powers.

At the Sydney session, a suggestion by the House of Assembly of Tasmania was submitted, to omit the sub-clause and substitute “The status, in other States of the Commonwealth, of persons married or divorced in any State.” Mr. Glynn said that there were strong objections in South Australia to the prospect of the grounds of divorce in that colony being extended as they had been in New South Wales and Victoria. The sense of the desirability of uniform laws of marriage and divorce prevailed, however, and the sub-clause was agreed to. (Conv. Deb., Syd., 1897, pp. 1077–82.) At the Melbourne session, before the first report, “Marriage” was placed in a separate sub-clause.

§ 200. “Marriage.”

Marriage is a relationship originating in contract, but it is something more than a contract. It is what is technically called a status, involving a complex bundle of rights, privileges, obligations, and responsibilities which are determined and annexed to it by law independent of contract. According to the law of England a marriage is a union between a man and a woman on the same basis as that on which the institution is recognized throughout Christendom, and its essence is that it is (1) a voluntary union, (2) for life, (3) of one man and one woman, (4) to the exclusion of all others. (Bethell v. Hildyard, 38 Ch. D. 220.)

Laws relating to this subject will therefore embrace (1) the establishment of the relation, including preliminary conditions, contractual capacity, banns, license, consent of parents or guardians, solemnization, evidence, and rules in restraint, (2) the consequences of the relation, including the status of the married parties, their mutual rights and obligations, the legitimacy of children and their civil rights. Quaere whether this power will enable the Parliament to legislate with respect to breach of promise of marriage; immoral agreements concerning marriage; and the separate property of married women. It could be argued that the first two matters belong to the general law of contracts, and the last one to the general law relating to civil rights; both of which classes of laws are reserved to the States. It might be said, however, that they impinge on the principal grant of power, “marriage,” and are conveyed by it.

In considering the validity of a marriage the requirements of two kinds of laws, not always coinciding in the same political community, have to be regarded; one is the law of the domicile—that is, the law of the country which the contracting parties look upon as their permanent home; the other is the law of the place in which the contract is made, or where the ceremony is performed. As regards the essential qualification and capacity to enter into the marriage relation, both the lex loci contractus and the lex domicilii must apparently be satisfied; the formal requisites, the mode of solemnization and the like, depend upon the lex loci contractus alone. (Westlake, Priv. Internat. Law, pp. 52–5.)

The policy of the Imperial Government, to secure uniformity of marriage laws among the Christian races of the Empire, is shown in the manner in which several


  ― 609 ―
colonial Acts to legalize marriage with deceased wife's sister have been discountenanced and disallowed. Such amending laws have been, however, at length sanctioned by the Crown in Ceylon, South Australia, Victoria, Tasmania, New South Wales, Queensland, Western Australia, New Zealand, Canada, and Barbadoes. In the countries in which the parties are domiciled the children of these marriages are legitimate by statute law, but in the United Kingdom, these marriages being still regarded as illegal, the offspring are liable to serious disabilities. By the law of England, “with regard to personal property the children of these marriages are regarded as legitimate; but with respect to realty, the status of legitimacy, which the law of the domicile gives them, is not recognized, on the ground that the established rule of law in deciding the title of real estate, lex loci rei sitœ, excludes such children.” (Hammick's Marriage Law of Eng. and Cols. p. 253.)

“In regard to such legislation the difficulty still remains, that the Imperial Parliament has not yet (1892) agreed to this alteration in the law of marriage. Consequently, such marriages continue to be illegal in England, and those who avail themselves of the liberty afforded by colonial enactments to contract these marriages expose their offspring to disastrous consequences, as regards both inheritance and legitimacy, in the mother country. Hitherto, the Imperial Government and Parliament have shown no disposition to alter the law in this respect, for the behoof of the colonies in question.” (Todd's Parl. Gov. in Col. 2nd ed. 198.)

The personal capacity of parties to enter into the contract of marriage depends upon their domicile; and where both parties had a foreign domicile, and, by the law of their domicile, their marriage was invalid by reason of consanguinity, a marriage which was contracted in England, and which would have been valid according to English law, was held invalid. (Sottomayor v. De Barros, 3 P.D. 1. Digest of English Case Law, vol. vii. p. 626.)

A foreign marriage, valid according to the law of the country where it is celebrated, is good everywhere; but this applies only to the form, and not to the essentials of the contract, which depend on the lex domicilii. Therefore, if a marriage abroad of English domiciled subjects is polygamous or incestuous, the law of England will not recognize it, and will follow in that respect its own rules as to incest and policy. (Brook v. Brook, 9 H.L. Cas. 193. Id.)

When an English woman marries a domiciled foreigner, the marriage is constituted according to the lex loci contractus; but she takes his domicile, and is subject to his law. (Harvey v. Farnie, 8 App. Cas. 43. Digest of English Case Law, vol. viii. p. 215.)

The rule, that the lex loci contractus of a marriage establishes its validity, requires this qualification—that where the law of a country forbids marriage under any particular circumstances, the prohibition follows the subjects of that country wherever they may go. Each nation has a right to define and prohibit incest. If a marriage, though good according to the law of the domicile, were nevertheless contrary to the religious or moral notions of other States, it would be impossible to contend that it ought to be adopted by them. If the comity of nations were always to prevail, a foreign marriage between uncle and niece, under papal dispensation, must be held valid, and the issue might claim to take a Scotch estate and Scotch honours, although, had the marriage been contracted in Scotland, the parties might have been capitally punished. (Fenton v. Livingstone, 3 Macq. H.L. 497. Id. 216.)

British subjects resident in a British settlement abroad are governed by the laws of England, and consequently, with respect to marriage, by the law of which existed there before the Marriage Act, viz., the canon law. (Lautour v. Teesdale, 2 Marsh, 243. Id. p. 217.)

51. (xxii.) Divorce201 and matrimonial causes202; and in relation thereto, parental rights203, and the custody and guardianship of infants204:

HISTORICAL NOTE.—For the history of the sub-section “marriage and divorce,” see Historical Note, sub-sec. xxi. At the Adelaide session, in 1897, a new sub-clause “Parental rights, and the custody and guardianship of infants” was added. It was thought, however, that, except incidentally to matrimonial suits, the control of children was not a federal matter, and accordingly at the Sydney session the sub-clause was


  ― 610 ―
attached to the preceding one, so as to read “Marriage and divorce, and in relation thereto, parental rights, and the custody and guardianship of infants.” (Conv. Deb., Syd., 1897, pp. 1082–5.) At the Melbourne session, before the first report, “Marriage” was placed in a separate sub-clause, and the words “and matrimonial causes” were added.

§ 201. “Divorce.”

Divorce is the termination and dissolution of the marriage relation, by process of law, for causes assigned. Among these causes are generally recognized such acts or omissions as are inconsistent and incompatible with, and in violation of, the marriage state, such as adultery, cruelty, and desertion; causes less generally recognized are the perpetration of crimes leading to imprisonment for a lengthened period; and persistence in habits that disqualify for the marriage state, such as habitual drunkenness and the neglect of matrimonial obligations. The object of this sub-section is to enable the Federal Parliament to abolish the varied and conflicting divorce laws which prevail in the States, and to establish uniformity in the causes for which divorce may be granted throughout the Commonwealth. This is considered advisable in order to avoid the great mistake made by the framers of the Constitution of the United States of America, who left the question to the States to deal with as they respectively thought proper. It has been well said, that if there is one defect in that Constitution more conspicuous than another it is its inability to provide a number of contiguous and autonomous communities with uniformity of legislation on subjects of such vital and national importance as marriage and divorce. At present persons who, according to the law of the State in which they reside, would have no right to a divorce, may become domiciled in another State by living there a certain time, and then, according to the laws of that State, may obtain a divorce for reasons which, in their own State, would have been insufficient. In some cases they may be divorced without a domicile. All these circumstances point to the conclusion that, unless we wish to repeat, in these communities, the condition of things which has obtained in America, it is necessary to provide for uniformity in the law of divorce. (Mr. R. E. O'Connor and Mr. I. A. Isaacs, Conv. Deb., Syd., p. 1080.)

By the old instructions to colonial Governors, still in use in the Australian colonies at the establishment of the Commonwealth, a Governor was required not to assent to any bill for the divorce of persons joined together in holy matrimony unless such bill contained a clause suspending its operation until the royal pleasure thereon was signified; otherwise they must be reserved. The royal assent to such reserved bills has been frequently refused. Thus a bill passed by the Parliament of New South Wales to enable a wife to obtain divorce on the sole ground of her husband's adultery, and one by Victoria authorizing a divorce for desertion for four years without reasonable cause, failed in the first instance to receive the royal assent, on the ground that they would occasion confusion throughout the Empire as to the status of persons so divorced, and of their offspring. Subsequently these bills received the royal assent and became law. (Todd's Parl. Gov. in Col. 2nd ed. 197–8.) The present instructions to the Governor-General of Canada do not contain the paragraph embodied in the old instructions above referred to, and in all probability it will not appear in the instructions to the Governor-General of the Commonwealth.

“I would ask hon. members to recollect the view we have taken about the condition of the English law with respect to marriage with a deceased wife's sister. I think every colony has petitioned the English Parliament on that subject. I know that when we were at home in 1887, we all agreed in making a particular request to the Imperial Government to bring in an Act to prevent the unpleasant and anomalous condition of the laws by which people, married in the colonies, when they reached England were not married. We only have to remember the attitude we took when we were unanimous amongst ourselves against the mother country, which has a different line of legislation, to understand that we ought to do that amongst ourselves which we wanted England to do towards us. What subject is more fitted for general legislation? In what subject


  ― 611 ―
do we want a universal law more than that dealing with the most sacred relations, that concern not merely the individuals who are parties to the contract, or whatever you please to call it, but also those who are to come afterwards? Anyone who seriously considers the social feelings of pain and grief, and worry and trouble, caused by a differentiation of the laws of the colonies, as between themselves, on this most vital subject, must agree that something ought to be done to prevent the anomaly.” (Sir John Downer, Conv. Deb., Syd., 1897, p. 1081.)

“A foreign tribunal has no authority, so far as consequences in England are concerned, to pronounce a decree of divorce à vinculo in the case of an English marriage between English subjects, unless such subjects are, at the time of such decree pronounced, bona fide domiciled in the country where that tribunal has jurisdiction, and the suit is prosecuted without collusion. (Shaw v. Gould, 37 L.J. Ch. 433. Dig. of Eng. Case Law, viii. p. 226.)

A wife's domicile is that of her husband, and her remedy for matrimonial wrongs must, as a general rule, be sought in the courts of that domicile; and, therefore, the wife of a man not domiciled in England cannot maintain a suit for restitution of conjugal rights if her husband has left the jurisdiction before the commencement of the proceedings. (Firebrace v. Firebrace, 47 L.J. Prob. 41. Id. p. 225.)

The word domicile has many meanings, according as it is used with reference to succession and other purposes. A person may have retained a foreign domicil for many purposes, and yet may be domiciled in England, so as to give jurisdiction to the court for divorce; but if he has never resided in England except temporarily, and is not there at the time of the commencement of the suit, he is not subject to its jurisdiction. (Yelverton v. Yelverton, 1 Sw. and Tr. 574. Id. p. 223.)

Great caution ought to be observed in allowing a petition for divorce to proceed in the English Divorce Court where there is ground for supposing that the parties are domiciled out of the jurisdiction. (Sinclair's Divorce Bill, 1897, App. Ca. 469. Dig. of Eng. Case Law, vol. vii. p. 730.)

When the domicile of the parties is English, the jurisdiction of the court is founded, though the marriage and adultery may have taken place abroad. (Ratcliff v. Ratcliff, 29 L.J. Mat. 171. Id.)

For the purposes of the jurisdiction of the Divorce Court, the British colonies, as well as Scotland and Ireland, are deemed to be foreign countries. (Firebrace v. Firebrace, 47 L.J. Prob. 41. Id. p. 733.)

§ 202. “Matrimonial Causes.”

The matters contemplated and covered by this grant of power are those subsidiary and consequential to marriage and divorce. They will naturally include judicial separation, restitution of conjugal rights, nullity of marriage, jactitation, damages against an adulterer, and probably maintenance of wives and children and marriage settlements.

§ 203. “Parental Rights.”

The Parliament has power to legislate respecting the rights of parents to their children, but only in relation to divorce and matrimonial causes. Outside and independent of the area covered by divorce and matrimonial causes, the power of the States to deal with parental rights remains unaltered. The power to determine the parental rights of divorced or separated persons with respect to children of the marriage, is a necessary corollary of the power to dissolve the union by divorce, or to suspend it by judicial separation; one is an essential incident and should be the sequence of the other. Without this conjunction of power the Parliament, whilst able to pass a uniform law of divorce and judicial separation, would be unable to pass a uniform law of parental rights to be enforced in such suits. It would be anomalous for a Federal law to dissolve or suspend a marriage, and for a State law to decide the destiny of the children of the marriage.

At common law a father is entitled to the custody of the child at its mother's breast, and the court, in making an order as to the custody, pendente lite, will not, unless some good cause is shown, take away this right. (Cartledge v. Cartledge, 31 L.J. Mat. 85. Dig. of Eng. Case Law, vol. vii. p. 789.)




  ― 612 ―

In making an interim order as to the custody of the children, the court will adhere to, or depart from, the common law rule, according to its discretion. (Spratt v. Spratt, 1 Sw. and Tr. 215. Id.)

A divorce and matrimonial court has jurisdiction by its order to regulate the custody of children until they attain the age of sixteen. (Mallinson v. Mallinson, 35 L.J. Mat. 84.) But the court has no jurisdiction to make any order as to the custody of children upwards of sixteen years of age. (Ryder v. Ryder, 30 L.J. Mat. 44. Id. p. 788.)

In exercising its discretion in the matter of access to children by their parents, pending suit, the court is mainly influenced by consideration for the interests of the children. (Philip v. Philip, 41 L.J. Prob. 89.)

§ 204. “Custody and Guardianship of Infants.”

The power of the Parliament to legislate concerning the custody and guardianship of infants is not a general one; it is limited to divorce and matrimonial causes. Apart from that jurisdiction the States retain their former authority in respect to these matters. (Conv. Deb., Adel., 1897, p. 1085.)

51. (xxiii.) Invalid and old-age pensions205:

HISTORICAL NOTE.—This sub-section was first proposed by Mr. Howe, at the end of the Sydney session in 1897, but was not then dealt with. (Conv. Deb., Syd., 1082, 1085–8.) At the Melbourne session, Mr. Howe proposed it again, when after a short debate it was carried by 26 votes to 4. (Conv. Deb., Melb., pp. 1991–6.)

§ 205. “Invalid and Old-age Pensions.”

In considering Mr. J. H. Howe's proposal to place this sub-section in the Constitution, the question debated was not the policy or practicability of giving governmental pensions to poor and aged persons, but whether such a power ought to be left to the States or added to the functions of a Federal Parliament. Those who doubted the wisdom of the proposal argued that it was a matter which stood in the same category as State Banking and State Insurance; that it was a branch of the charitable systems which existed in the States; that it could be best dealt with by each State apart from the Federal authority; that it might involve embarrassing financial issues; that it would tend to load the Constitution with a social problem of complexity and magnitude, which had better be reserved for the States. In reply to these arguments it was said that the Federal authority would occupy a superior vantage-ground which would enable it to deal effectively and comprehensively with the subject, which could not be done by the disunited efforts of the States. Such a law should be uniform so as to reach and regulate the rights and obligations of those who were migratory in their habits. “The people who would benefit most by this provision,” said Mr. Howe, “are a moving population. They are engaged in seeking work all over Australia, and are constantly going to those places which, for the time being, are more prosperous than other places. Our labouring classes will be a nomadic race for a considerable time to come. If the State took this matter in hand, and made payments compulsory, it could not follow a contributor to the fund from one State to another. The duty is one which can only be performed by the Federal authority. (Conv. Deb., Syd., 1897, p. 1086.)

“In these Colonies,” said the same hon. gentleman, “men are born in one State, spend their manhood and best days in another, and then return, broken down and unfortunate, to the land of their birth, which owes them nothing. Is it to be contended that under such circumstances the State of the unfortunate man's birth should be compelled to support him? Surely the support of the aged poor could be better accomplished by a Federated Australia. Wherever a man may roam within the boundaries of Federated


  ― 613 ―
Australia, he should know that in his old age he need never fear the pauper's lot. I would compel every able-bodied man, in the heyday of youth, when he has the means, to make a compulsory contribution towards a fund, out of which provision would be made for his old age. That is another reason why the Federal authority should take it instead of the State, because within the bounds of Federated Australia a law can be enacted compelling that individual, who is to receive the benefit, to contribute to the fund in which he is to participate in old age.” (Conv. Deb., Melb., 1898, p. 1992.)

If a precedent were required it could be found in the German Empire, which has adopted the system of providing invalid and old age pensions. “In Germany it is compulsory for those in fixed employment, and for employers, to contribute to a fund which is subsidized by the Government. Then when a man comes on the fund he does not come upon it as with us a man comes upon the charitable institutions of the country. He can hold up his head among his fellow men. This law prevents a man who has fulfilled all the obligations of citizen, husband, and father, from becoming a pauper in his declining days. … At the present time there are no fewer than 12,000,000 of people in Germany subject to this law, and Germany takes the pride of place in having been the first nation in Europe to adopt the system. … In Australia we have a country far removed by a vast expanse of water from every other part of the world. Our labourers will be Australian labourers. Labourers from other lands will not intermingle with them. We should try to prevent these men from becoming destitute in their declining years through no fault of their own. Every member of the Convention knows of cases where men, who, perhaps, once held high positions, have through force of circumstances had to become inmates of charitable institutions. The poor have to be kept by the State in any case, and I want the Commonwealth to say to those of its citizens who have attained a certain age, or who have been maimed for life by some accident, that they shall not want, and need not be a burden upon friends, who, perhaps, are not able to keep them, but that the Commonwealth shall provide the means from this fund to which they have contributed whereby they can live. I hope the Convention will agree to these words being inserted. I am sure that if they do so, the Federal Parliament will be able to formulate a scheme whereby my object can be achieved, and thereby crown itself with glory.” (Hon. J. H. Howe. Conv. Deb., Syd., 1897, p. 1086.)

The Convention after several unsuccessful appeals at last yielded to Mr. Howe's advocacy of the cause and granted the power to Parliament, making it a concurrent authority, which could be exercised by the States until it was acted upon by the Parliament. “And,” said Mr. Kingston, “there is no fear whatever that one would desire to exercise that power to the prejudice of the other. No doubt also the Federated authority will be armed with greater power for giving effect to anything it may desire, for the reasons which my hon. friend and colleague has pointed out.” (Conv. Deb., Syd., p. 1087.)

51. (xxiv.) The service206 and execution207 throughout the Commonwealth of the civil and criminal process208 and the judgments of the courts of the States:

FEDERAL COUNCIL OF AUSTRALASIA ACT, 1885.—Saving Her Majesty's prerogative, and subject to the provisions herein contained with respect to the operation of this Act, the Council shall have legislative authority in respect to the several matters following:—

  • (d) The service of civil process of the courts of any colony within Her Majesty's possessions in Australasia out of the jurisdiction of the colony in which it is issued:
  • (e) The enforcement of judgments of courts of law of any colony beyond the limits of the colony:
  • (f) The enforcement of criminal process beyond the limits of the colony in which it is issued, and the extradition of offenders (including deserters of wives and children, and deserters from the Imperial or Colonial naval or military forces).—Fed. Council of Aust. Act, 1885, sec. 15.



  ― 614 ―

HISTORICAL NOTE.—No provision corresponding to this sub-section is to be found in the Constitution of the United States of America, or in that of Canada. It first appeared in the Federal Council of Australasia Act, 1885, section 15, supra. In the Commonwealth Bill of 1891 the provision appeared in exactly the same form as that in which it now stands in this sub-section. (Conv. Deb., Syd., 1891, pp. 686–8.) At the Adelaide session it was inserted in its present form. At the Melbourne session a suggestion by the Legislative Council of New South Wales, to omit “throughout the Commonwealth,” was negatived. (Conv. Deb., Melb., p. 29.)

§ 206. “Service.”

The object of this sub-section is to provide a uniform law for the service of civil and criminal process, for the execution of civil and criminal process, and for the execution of the judgments of the courts of the States, throughout the Commonwealth. With reference to the service, beyond the limits of a colony, of civil process issued within a colony, the constitutionality of laws passed by Colonial legislatures authorizing this to be done has often been questioned. Service, of course, is generally recognized as the foundation of jurisdiction in civil cases. No man can be legally bound by a judgment given behind his back and without his having had an opportunity of being heard. (Per Erle, C.J., in re Brook, 33 L.J. C.P. 246.) Now, the Colonial Constitutions gave authority to the Colonial legislatures to make laws for the peace, order, and good government of their respective colonies. Those legislatures were not sovereign, like the British Parliament; their powers were strictly circumscribed and defined by their respective Constitutions, and it was contended that whilst they could legislate concerning the service of process within their territorial limits, they could not, in the absence of an express grant of power from the Imperial Parliament, give their courts jurisdiction over persons and property situated outside those limits. In several cases the Colonial courts have been asked not to shrink from the responsibility of declaring void Colonial legislative enactments which purported to apply to acts done by persons residing, and property located, outside the territorial limits. In most of these cases the courts have refused to disregard the mandates of the legislative departments.

In connection with Acts which authorize the initiation of civil proceedings against defendants absent from the law-making country, two questions have to be kept steadily in view and distinguished. (1) Are these statutes valid and binding on the courts within the territory of the lawmakers? (2) Will foreign courts recognize judgments obtained in civil proceedings so initiated? Several cases have been decided, from which it appears that the first question ought to be answered in the affirmative. (Lefroy, Leg. Pow. in Can. p. 330.)

In Banks v. Orrell (1878, 4 V.L.R. [L.] 219), the question was raised as to the validity of the service in New South Wales of a writ of the Supreme Court of Victoria. By the Common Law Procedure Act, 1865 (Vic.), sec. 90, it was declared that a writ of summons in any action might be served in any part of Victoria or within fifty miles of the frontier or border thereof. Counsel in support of the service (Mr. Geo. Higinbotham, afterwards Chief Justice), admitted arguendo that the legislature had usurped jurisdiction pro tanto outside its territory, but he contended that as the power was given, the court was bound to carry it out. The Supreme Court held that every Act of the legislature must be obeyed, whatever its meaning. In Regina v. Call ex parte Murphy (1881, 7 V.L.R. [L] 113), Chief Justice Stawell said:—“It has always appeared to me to be the duty of the court to assume that Parliament will not lightly attempt to exceed its territory.”

By the Judicature Act, 1883 (Vic.), sec. 90 of the Common Law Procedure Act was repealed, and provision, founded on sec. 18 of the (Imperial) Common Law Procedure Act, 1852, (15 and 16 Vic. c. 76), was made for the issue of a writ of summons “on any defendant being a British subject residing out of the jurisdiction of the Court in any


  ― 615 ―
place;” and on proof that there is a cause of action which arose within the jurisdiction, or in respect of the breach of a contract made within the jurisdiction or the breach within the jurisdiction of a contract wherever made, or in respect of property within the jurisdiction, and that the writ has been personally served on the defendant, or that reasonable efforts were made to effect service, and that it came to his knowledge, the judge may allow the plaintiff to proceed in the action. There is a similar law in New South Wales (Common Law Procedure Act, 1899, sec. 18).

It has been held that this procedure applies to individuals and not to corporations. (Connell v. Neill and Co., 7 W.N. [N.S.W.] 6; Lempriere v. New Pinnacle Group S.M. Co. No Liab., 21 A.L.T. 182 [Vic.].)

Another provision for the extra-territorial service of civil process, applicable to minor courts, has been made by several Australian Legislatures. By the Victorian Intercolonial Debts Act, 1887, re-enacted in the County Court Act, 1890, secs. 142–4, authority is given to serve County Court Summonses on defendants out of the jurisdiction, in Australian colonies, in which there are laws in force by which effect may be given, by the local courts of such colonies, to the judgments of the County Court of Victoria. On recovering judgment against an absent defendant, within any of the reciprocating provinces or colonies, the plaintiff is enabled to procure a certificate of judgment; this certificate is sent on to the clerk of the local court of the other colony in which the absent defendant is resident, and in which execution is then issued. Similar and reciprocal Acts were passed in South Australia (Intercolonial Debts Act, 1887), and in New South Wales (Intercolonial Debts Act, 1889).

The ineffectiveness of this kind of legislation, and the necessity of a federal law regulating service of process and execution of judgment, has been recently illustrated in a striking manner in the case of Elkan v. De La Juvenay, decided by the Full Court of Victoria on the 10th August, 1900.

In March of that year, Madame De la Juvenay, of Camberwell, near Melbourne, was served at her residence with a summons issued from the local court of South Australia, claiming £9 as the amount of two promissory notes. She was domiciled and resident in Victoria, and endorsed the promissory notes there, but they were payable in Adelaide. She did not appear to answer the summons, and judgment was entered up in Adelaide by default. It was transferred to the Victorian County Court, and on 8th May Madame De la Juvenay was served with a notice of the judgment. This was followed up next morning by a writ of execution. Under protest, she paid the money, and afterwards applied to have the judgment set aside. Mr. Justice A'Beckett, however, held that the Intercolonial Debts Act of 1887, now represented by sections 138 to 145 of the County Court Act of 1890, established a system of reciprocity between Victoria and any colony as to which a proclamation had been issued. An appeal was made on the ground that as the defendant was domiciled in Victoria, and had not submitted in any way to the South Australian jurisdiction, the judgment was not enforceable against her in Victoria, and was null by international law. The Full Court allowed the appeal. The Chief Justice (Sir John Madden) pointed out that it was a well understood proposition of international law that a subject of one State was not bound to obey the judgments of another State unless he chose to submit himself to its jurisdiction. The colonies were, for a purpose of this kind, as much apart as if they were foreign States. It was now contended, practically, that whenever a cause of action arose in South Australia against a Victorian, although the Victorian had never been in the other colony at all, the South Australian court had as much jurisdiction against him as if he had lived all his life there. This would be a striking change in the ordinary principles of law, and what had happened was wrong. The Act only applied to cases in which a resident of one colony had gone to another colony; not to cases in which the defendant had never submitted to the jurisdiction of the colony in which the plaintiff sued. In the view the court took, Madame De la Juvenay was a person not liable to be sued effectually in the circumstances. The judgment was set aside, and the money paid


  ― 616 ―
upon the unlawful execution was ordered to be handed back. (The Age, 11 August, 1900; 22 A.L.T. p. 34.)

The New Zealand Parliament passed an Act (New Zealand Code, 46 Vic. No. 29, Rule 53) authorizing the courts of that colony, in any action founded on a contract made or to be performed within the colony, to decide whether they will allow a plaintiff to issue a writ and proceed against an absent defendant without service of the writ. In Ashbury v. Ellis (1893), App. Cas. 339, the Privy Council held that this was a valid law, and that it was competent for the legislature of New Zealand, under the Constitution of that colony, to subject to its tribunals persons who were neither by themselves nor their agents present in the colony, in actions founded on any contract made or entered into or wholly or in part to be performed within the colony. Referring to the argument that a judgment so obtained could not be enforced beyond the limits of New Zealand, their lordships said that “when a judgment of any tribunal comes to be enforced in another country, its effect will be judged by the courts of that country with regard to all the circumstances of the case. For trying the validity of New Zealand laws, it is sufficient to say that the peace, order, and good government of New Zealand are promoted by the enforcement of the decrees of their own courts in New Zealand.”

In reference to the second of the above questions the answer may be gleaned from numerous cases decided in England. In Simpson v. Fogo, 32 L.J. Ch. 249, it was held that the same rules are applicable in the enforcement of colonial judgments as in the enforcement of foreign judgments. In Buchanan v. Rucker, 9 East 192, the facts were that a law of the island of Tobago, a British colony, enacted that if a defendant were absent from the island he might be summoned by nailing up a copy of the declaration at the Court-house door, and this should be deemed good service. Lord Ellenborough, C.J., held that on a fair construction of the Act this must be intended to apply to one who had been present and subject to the jurisdiction; and that if it had been meant to reach strangers to the jurisdiction, it would not have bound them. The principle affirmed was that an action is not maintainable on a colonial judgment, unless it appears that the defendant was regularly served with process, and had an opportunity of defending the suit, even although it appears to be the practice of that court not to give personal notice. The rule to be deduced from the cases is, that where the defendant against whom a judgment has been obtained in a colonial court, under such local Acts as we have been considering, authorizing service of process in absentem, is, or even has been, subject to the jurisdiction of the colony, such judgment will be recognized in the courts in England where otherwise it would not be. (Lefroy, Leg. Pow. in Can. p. 332.)

Under this sub-section of the Constitution a most important power is conferred on the Federal Parliament. It will enable that Parliament to provide procedure for the service, throughout the Commonwealth, of the civil process of the courts of the States, such as writs, summonses, notices of legal applications issued in and by the courts of the States. This includes the service of the civil process of the inferior as well as the superior courts of the States; so that it will be as competent to provide for the service in one State of a summons issued by a local court or a court of petty sessions in another State, as for the service of Supreme Court writs. Such a law would appropriately specify the mode of service, whether personal or substituted, to be observed. It could also define the persons, whether private individuals or public officers, who are qualified to effect service. Another essential would be proof of service, sufficient to satisfy the adjudicating tribunal and give it jurisdiction. (Bank of Australasia v. Nias, 16 Q.B. 717.)

§ 207. “Execution.”

Legal process includes not only the writ and summons to appear, but all the steps taken by the court in execution of its judgment; hence seizure, sale, and sequestration are, in the natural meaning of the words, comprehended in the term process. (Per Lynch, J., in re Delahoyd, 11 Ir. Ch. R. 407.) The power to legislate concerning


  ― 617 ―
“the execution throughout the Commonwealth of the civil process and judgments of the Courts of the States” clearly extends to all these matters.

This sub-section does something more than provide for the inter-state recognition of judgments; it means the inter-state execution of judgments. Under this power a law could be passed authorizing the enforcement, within one State, of a judgment recovered in a civil action in another State; so that a writ of execution issued by the Supreme Court of one State, or a warrant of distress issued by a court of petty sessions therein, could be enforced by seizure and sale, in another State, of the assets of a person against whom a judgment or order has been recorded. It might go so far as to authorize the sheriff and constables of each State to execute writs and warrants issued by the courts of the other States. (Conv. Deb., Adel., p. 1006.)

Without this sub-section a judgment recovered in one State would not carry with it into another State the efficacy of a judgment, affecting property or persons, which could be enforced by direct execution; to give it such force in another State it would have to be made a judgment there under local laws; which could only be executed in that State as its laws permitted. (Baker, Annot. Const. p. 152.)

§ 208. “Criminal Process.”

Process includes the doing of something in a criminal court or proceeding, as well as in a civil court or proceeding. A summons from a judicial officer to appear and answer a criminal charge is a process. A warrant issued by a judicial officer, directing the arrest of a person on a criminal charge, is a process.

The power conferred by this part of the sub-section will enable the Federal Parliament to deal with a class of cases which, it has been held, is not within the competence of the Colonial legislatures to regulate; viz., the transfer of persons charged with crime from one colony to another. This disability is founded on the territorial limitations to which the Colonial legislatures are restricted.

In 1855 the law officers of the Crown in England, on being asked to give their opinion with reference to a case arising in British Guiana, said—“We conceive that the Colonial legislature cannot legally exercise its jurisdiction beyond its territorial limits—three miles from the shore—or, at most, can only do this over persons domiciled in the colony who may offend against its ordinances even beyond those limits, but not over other persons.” (Forsyth, Constitutional Cases, p 24.)

In 1861 a Canadian Act was passed and assented to by the Governor which purported to give jurisdiction to Canadian magistrates, in respect of certain offences committed in New Brunswick by persons afterwards escaping to Canada. By order of the Queen in Council, 7th January, 1862, this Act was disallowed, as being in excess of the jurisdiction belonging to the Canadian Parliament, and only to be properly effected by Imperial legislation; or by an arrangement in the nature of an agreement of extradition between the two provinces, to be carried into effect by Acts of the two provincial legislatures. (Todd's Parl. Gov. in the Col. 2nd ed. p. 177.)

In Ray v. MacMackin (1875), 1 V.L.R. (L.) 274, it was decided that the power of extradition, from one part of the British dominions to another, was not inherent in the legislature of any colony, but required the sanction of the Imperial Parliament; that a Colonial legislature may authorize the exclusion from its territory of a person charged with having committed an offence in another colony, and it may order his punishment unless he leaves, but it cannot authorize the sending him in custody out of its territory into another colony. This was the case of a man arrested in New South Wales on a warrant issued by a magistrate in Victoria. The warrant was endorsed in New South Wales by a justice of that colony, who directed a constable to remove the accused in custody to Melbourne. The endorsement was made by the Sydney justice on the authority of a New South Wales Act (14 Vic. No. 43, s. 4). This section was passed before the separation of Victoria from that colony, and applied the provisions of Jarvis


  ― 618 ―
Act (11 and 12 Vic. c. 42) as to backing warrants. It was intended to authorize the backing of intercolonial warrants, making them operate in the same manner as was the case between England and Ireland. In an action afterwards brought in Victoria by the arrested man against the arresting constable, for false imprisonment in placing him in a vessel and in conveying him over the high seas from Sydney to Melbourne, it was held by the Supreme Court of Victoria that the Act was ultra vires and was no defence to the action. “It was distinctly enunciated that the superior Courts in England will regard Acts of Colonial Legislatures in the same way as they regard Acts of foreign countries legislating with respect to their inhabitants within the limits of their authority. Any attempt to exercise jurisdiction beyond the boundaries of their own territory, domestic or distant, by either one or the other, is treated as being beyond the powers of their legislatures. Whatever power or authority the Legislature of New South Wales has to frame laws to cause persons charged with the commission of misdemeanours in other countries, to be apprehended within that colony, and to be detained in prison there, it is a totally different thing to say that it can give a magistrate power to expel such persons from the colony, and send them across the seas to another part of the world.” (Per Barry, J., 1 V.L.R. (L) p. 280.)

In 1863 the New Zealand Legislature passed the Foreign Offenders Apprehension Act, which authorized the deportation of persons charged with indictable misdemeanours committed in other Australian colonies, and their surrender to the authorities of the colony where the offence was committed. Doubts were at the time entertained as to its validity, but it was not disallowed. In 1879 one Gleich, an absconding bankrupt from South Australia, was arrested in New Zealand, and it was proposed to deport him back to South Australia. He was brought before the Supreme Court of New Zealand, which decided that a colonial legislature had no power to authorize the conveyance on the high sea to another colony, and the detention outside its jurisdiction, of any person whatever; that such power could be only exercised either directly by the authority of an Imperial Act, or in the exercise of power expressly conferred on a colonial legislature, by an Imperial Act. (Todd, Parl. Gov. in Col. 2nd ed. p. 303.)

In the case of Regina v. Call, ex parte Murphy (1881), 7 V.L.R. (L.) 113, the Supreme Court of Victoria decided that the power given by section 63 of the Justices of the Peace Statute, 1865 (Vic.), to a justice in Victoria, to endorse a warrant for the apprehension of an offender, “whether such warrant has been issued in Victoria or elsewhere,” was not ultra vires, as it did not direct any act to be done beyond the territorial limits of Victoria. It was, further, the opinion of the court that on the production of a warrant issued in New South Wales, and proof of the handwriting of the justices issuing it, and that the person bringing it is one of the persons to whom it was originally addressed, it is the duty of the justices to whom it is produced to endorse it; but the last few lines of the form in the 13th schedule referred to in the margin of sec. 63 are not warranted by that section, and are incongruous. Such endorsement will then authorize the person holding the warrant to take the offender to the border of the colony, where the warrant itself will authorize him to complete the execution of it. Per Higinbotham, J.: “The endorsement would authorize the taking of the offender into New South Wales to the justice who issued the warrant.” (7 V.L.R. [L.] 113.)

Owing to the difficulties arising from the territorial limitations of the power of Colonial legislatures, it has been the practice of late years for fugitive offenders, escaping from one colony into another, to be arrested and returned under the provisions of Imperial Acts relating to the extradition of criminals.

IMPERIAL FUGITIVE OFFENDERS ACT.—By the Fugitive Offenders Act, 1843 (6 and 7 Vic. c. 34), provision was made for the apprehension in the United Kingdom, or in the Colonies, of persons charged with felony committed in a colony. By the Foreign Jurisdiction Act, 1878 (41 and 42 Vic. c. 67), this Act was extended to places to which the Foreign Jurisdiction Act, 1843, applied. After the decision of the Supreme Court of


  ― 619 ―
New Zealand in Gleich's case, holding that the New Zealand Foreign Offenders Apprehension Act, 1863, was ultra vires, the Governor of the colony in reporting the case to the Secretary of State for the Colonies expressed a hope that the Imperial Parliament would remedy the defect in the law, disclosed by that decision, by extending the procedure provided by the Fugitive Offenders Act, 1843. Shortly afterwards the Imperial Parliament passed the Fugitive Offenders Act, 1881 (44 and 45 Vic. c. 69), which formulated a uniform plan, facilitating the apprehension and trial of persons committing crimes in one part of the British dominions and escaping to another. This Act provides that a person, accused of having committed an offence in one part of the Empire, may, if found in another part, be apprehended and returned to the part from which he is a fugitive. A warrant issued in the part of the Empire from which the accused is a fugitive, and endorsed by the proper authority in the part of the Empire in which the accused is found, is sufficient authority for his arrest. A person found in one part of the British dominion and suspected of having committed an offence in another part, may also be arrested on a provisional warrant, signed by a magistrate in that part of the dominion in which he happens to be found. Upon his apprehension the accused must be brought before a magistrate, by whom he may be remanded pending the arrival of an endorsed warrant. After the expiration of fifteen days the Governor of the possession in which the arrest is made, or if the arrest is made in the United Kingdom, the Secretary of State, is authorized to issue a warrant ordering the fugitive to be returned to that part of the dominions from which he has escaped. The above provisions of the Act apply to all offences punishable, in the place where committed, by imprisonment with hard labour for a term of twelve months or more. By part II. of the Act a procedure of a simpler character is formulated and made applicable to groups of contiguous colonies, in which it may by Order in Council be declared in force. Under this part, the inter-colonial backing of warrants by magistrates, and the return of fugitives without the formality of a warrant signed by the Governor of a colony in which the fugitive is found, was legalized. This law was declared applicable to the Australian colonies by Order in Council, dated 23rd August, 1883.

The sub-section now under review will facilitate Federal legislation to enforce the service and execution throughout the Commonwealth of the criminal process issued by the courts of a State for the arrest of offenders within any State. It will enable the Parliament to formulate a simple procedure for effecting what now can only be done under the authority of the Imperial Fugitive Offenders Act, and to authorize the execution of magistrates' warrants for the apprehension of offenders in every part of the Commonwealth. This power is clearly restricted to inter-state extradition, or its equivalent. Inter-British and inter-national extradition will still be governed by Imperial legislation, although auxiliary laws may be passed by the Federal Parliament under 51—xix., “External Affairs,” facilitating the enforcement of the Imperial legislation. (See Notes, § 214, infra.)

INTER-STATE EXTRADITION IN AMERICA.—The part of this sub-section relating to inter-state arrest on criminal process provides a summary method of accomplishing inter-state extradition. The same object was aimed at by Art. IV. sec. ii. sub-sec. 2 of the Constitution of the United States of America, which enacts that “A person charged in any State with treason, felony, or other crime, who shall flee from justice and be found in another State, shall, on demand of the executive authority of the State from which he fled, be delivered up, to be removed to the State having jurisdiction of the crime.” The difference between the two procedures is, that under the Constitution of the Commonwealth, inter-state fugitives may be arrested and returned from one State to another without the intervention of the Executive Government of any State; the whole process may be a judicial one, superintended by the courts, and uncontrolled by the Executive in either State. In America the return of a fugitive offender from one State of the Union to another depends upon the will of the Executive Government of the State in which the offender is found.




  ― 620 ―

Some cases decided by the Supreme Court of the United States of America, under the above section, may be cited in illustration of its working and as showing what cases may be covered by the phrase “criminal process.” In Kentucky v. Dennison (24 How. 66), it was ruled that “the words of this article embrace every act forbidden and made punishable by a law of the State, whether treason, felony, or misdemeanour, and give the right to the State where any such crime is committed to demand the fugitive from the Executive of the State to which he has fled.” If a person is arrested in one State on an inter-state warrant, charged with having committed a crime in another State, it would appear that the State courts have power by writ of habeas corpus to inquire into the legality of the arrest. (Robb v. Connolly, 111 U.S. 624.) A person arrested upon a requisition warrant may have the legality of his arrest tested by the courts, and to this end the State courts have jurisdiction in habeas corpus. (Roberts v. Reilly, 116 U.S. 80.) It must appear that the crime with which the fugitive stands charged was committed within the State making the demand. This provision, by the obvious import of its terms, has no relation whatsoever to foreign nations, but is confined in its operation to the States of the Union. (Per Mr. Justice Barbour, in Holmes v. Jennison, 14 Pet. 587.)

51. (XXV.) The recognition209 throughout the Commonwealth of the laws, the public Acts and records, and the judicial proceedings of the States:

HISTORICAL NOTE.—This sub-section was introduced verbatim in the Bill of 1891 and was adopted by the Convention of 1897–8 without debate. (See Historical Note, p. 118.)

§ 209. “Recognition.”

As service and execution are the dominant features of the preceding sub-section, so “recognition” is the ruling principle of this one. It is founded on Art. IV. sec. 1 of the Constitution of the U.S. of America, which is as follows:—“Full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State. And the Congress may, by general laws, prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.” This sub-section is partly reproduced in a declaratory form in section 118 of the Constitution of the Commonwealth which reads:—“Full faith and credit shall be given, throughout the Commonwealth, to the laws, the public acts and records, and the judicial proceedings, of every State.”

Under this power the Parliament may legislate in order to give effect to sec. 118. The Supreme Court of the United States of America, in a series of decisions under a section of that Constitution corresponding to sec. 118 of ours, has decided that a judgment rendered in one State does not carry with it into another State the efficacy of a judgment affecting property or persons to be enforced by direct and immediate execution. In order to give it such force in another State it must be made a judgment there, and it can only be executed there as the laws of the States permit. The record of a judgment in one State, rendered after due notice, is conclusive evidence in the courts of another State, as well as in the courts of the United States, of the matter adjudged. A judgment so recorded differs from judgments recorded in a foreign country, in these respects (1) it is not re-examinable on its merits; (2) it is not impeachable for fraud in obtaining it, if rendered by a court having jurisdiction of the cause and the parties. This provision was not intended to confer any new powers upon the States, but simply to regulate the effect of their acknowledged jurisdiction over persons and things within their territory. It did not make the judgments of other States domestic judgments, to all intents and purposes, but only gave a general validity, faith and credit to their


  ― 621 ―
evidence. The above principles are deduced from cases cited in Baker, A.C., 152. “So I take it,” said Mr. Barton, “that the effect of this clause will be to cause the courts of the Commonwealth to take judicial notice of the laws, acts, and records of the States, without the necessity of requiring them to be proved by cumbrous evidence.” (Conv. Deb., Adel., p. 1005.)

This sub-section appeared in the Draft Bill of 1891. On the consideration of the sub-section by the Convention of 1891, Mr. (now Sir Richard) Baker asked whether it would include the recognition, in one State, of probate of a will issued in another. “There was,” he said, “a great deal of unnecessary expense and trouble in the registration of probates and letters of administration issued by one colony in another colony.” “I think,” said Sir Samuel Griffith, in reply, “that probate of a will must be regarded as coming under the heading of a judicial proceeding.”... “This is a clause to enable the Federal Parliament to make a law recognizing a judicial proceeding —that is, probate. But it recognizes the probate for what it purports to be; that is, the proof of the will and the committal of the administration of the property in that State to some person. The committal of the administration of the property in any State is a matter for that State. Another State will recognize the probate; but they do not necessarily commit the administration to the same person. They will recognize the will as far as the judicial proof of it extends and no further.” (Conv. Deb., Syd., 1891, p. 686–7.)

At the Adelaide session of the Convention of 1897, when the sub-section was discussed, Mr. Henry Dobson enquired “whether, under it, the courts of the other colonies would take cognizance of the appointment of a Receiver or Trustee of Lunacy or Curator of Intestate Estates; so that upon the registration of the document making the appointment, assets and lands in different colonies can be administered. I want to know whether under this section we can have some such machinery as that under the Probate Acts, where probate granted in one colony is sealed in another colony, whereby the will is practically proved in another colony, so that estates of an intestate or lunatic may be administered under the one authority. If a man dies intestate in one colony, would the administrator or curator be able to register his appointment in another colony and deal with the assets there?” In reply to these enquiries the American cases decided under the corresponding clause were cited by Mr. Barton. It was suggested that this sub-section alone merely meant to refer to the evidence necessary to secure the credit and recognition of laws, public acts, records, and judicial proceedings of the courts of the States, but that, read in conjunction with the preceding sub-section xxiv., referring to “service” and “execution,” it might mean something more than mere credit and recognition. It is submitted that under this sub-section provision might be made for the inter-state cognizance of such appointments as those of executor, administrator, curator of intestate estates, and trustee in lunacy, as these appointments are generally made by the courts, and hence come within the category of public acts, records, and judicial proceedings. If such legal representatives obtain a judgment or order in a court of competent jurisdiction, within the State to which the deceased person or the lunatic belonged, they could, aided by appropriate legislation under sub-sec. xxiv., issue process and enforce the same by sale of lands and chattels in another State. (Conv. Deb., Adel., 1897, p. 1005.)




  ― 622 ―

51. (xxvi.) The people of any race210, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws:

HISTORICAL NOTE.—In the Bill of 1891 the following sub-clause was comprised among the exclusive powers of the Federal Parliament:—“The affairs of people of any race with respect to whom it is deemed necessary to make special laws not applicable to the general community; but so that this power shall not extend to authorize legislation with respect to the affairs of the aboriginal native race in Australia and the Maori race in New Zealand.” (Conv. Deb., Syd., 1891, pp. 701–4.) At the Adelaide session the sub-clause was introduced and passed in substantially the same words. (Conv. Deb., Adel., pp. 830–1.)

At the Melbourne session, a debate occurred on the question whether this power ought to be exclusive, so that the State Parliament, in the absence of Federation, would be unable to make special laws in respect of alien races within their territory. Eventually the sub-clause was omitted, on the understanding that it would be placed among the concurrent powers of the Parliament. (Conv. Deb., Melb., pp. 227–56.) Accordingly before the first report the sub-clause was inserted in its present form.

§ 210. “The People of any Race.”

This sub-section does not refer to immigration; that is covered by sub-sec. xxvii. It enables the Parliament to deal with the people of any alien race after they have entered the Commonwealth; to localize them within defined areas, to restrict their migration, to confine them to certain occupations, or to give them special protection and secure their return after a certain period to the country whence they came.

In the Draft Bill of 1891, this sub-section appeared as the first of a group of three subjects, with reference to which the Parliament was assigned exclusive legislative power. It is now placed in the list of powers generally described as concurrent; that is to say, the States may occupy the ground until the Federal authority interferes and displaces them. The sub-section can only exclude the action of State legislation respecting “the people of any race,” when the Federal Parliament declares, by legislation, that such race is race “for whom it is deemed necessary to make special laws.” Before such legislation the State Parliaments will be free to pass laws concerning any part of their resident population, including the people of any particular race, coloured or otherwise, but as soon as the Federal Parliament by legislative intervention has shown that it has dealt with, or contemplates dealing with, the people of a particular race by special laws, the power to discriminate in respect of that race will thenceforth be exclusively vested in it and the State legislatures will be deprived of jurisdiction.

Under the fourteenth amendment of the Constitution of the United States it is enacted that:—

“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.”

An ordinance or by-law of the City and County of San Francisco vested in the supervisors the power to grant to or withhold from certain persons within certain limits licenses to conduct laundries. This power was exercised discriminatingly; laundry licenses were granted to Europeans and denied to Chinamen. In the case of Yick Wo v. Hopkins (118 U.S. 356), it was decided that these laws were unconstitutional and void. It was held that the fourteenth amendment is not confined to the protection of citizens. It is applicable alike to all “persons” within the territory, without regard to differences of race, colour, or nationality; and the “equal protection of the laws” is a pledge of


  ― 623 ―
the protection of equal laws. Though the law itself be fair on its face, and impartial in appearance, yet if it is applied and administered by public authority with an evil eye and an unequal hand, so as to practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the constitution. (Yick Wo v. Hopkins, 118 U.S. 356, citing Henderson v. Mayor of N.Y., 92 U.S. 259; Chy Lung v. Freeman, 92 U.S. 275; ex parte Virginia, 100 U.S. 339; Neal v. Delaware, 103 U.S. 370; Soon Hing v. Crowley, 113 U.S. 703. Baker, Annot. Const. 220.)

The decision in Yick Wo's case turned, of course, on the special inhibitions of the fourteenth amendment. There is no section in the Constitution of the Commonwealth containing similar inhibitions. On the contrary it would seem that by sub-sec. xxvi. the Federal Parliament will have power to pass special and discriminating laws relating to “the people of any race,” and that such laws could not be challenged on the ground of unconstitutionality, as was done in Yick Wo v. Hopkins.

51. (xxvii.) Immigration211 and emigration212:

HISTORICAL NOTE.—This sub-section was in the Bill of 1891. (Conv. Deb., Syd., 1891, p. 689.) It was adopted verbatim and without debate by the Convention of 1897–8.

§ 211. “Immigration.”

INTERNATIONAL ASPECT.—It is a recognised canon of international law and intercourse that every sovereign State has a paramount right to exclude from its borders all elements of foreign population which, for any reason, might retard its prosperity or be detrimental to the moral and physical health of its people. (Per Mr. Grover Cleveland, President of the United States of America; message to Congress re Chinese Exclusion Bill, 1st Oct., 1888.)

POLITICAL ASPECT.—Referring to the same subject from an ethnical and political point of view, Dr. Burgess says:—

“Let us suppose the case of a great colonial empire. Its life will depend, of course, upon the intensest nationality in that part of its territory which is the nucleus of the entire organization. It cannot suffer national conflicts to make this their battle ground. The reigning nationality is in perfect right, and pursues, from a scientific point of view, an unassailable policy, when it insists, with unflinching determination, upon ethnical homogeneity here. It should realize this, of course, through the peaceable means of influence and education, if possible. When, however, these shall have been exhausted in vain, then force is justifiable. A State is not only following a sound public policy, but one which is ethnically obligatory upon it, when it protects its nationality against the deleterious influences of foreign immigration. Every State has, of course, a duty to the world. It must contribute its just share to the civilization of the world. In order to discharge this duty, it must open itself, as freely as is consistent with the maintenance of its own existence and just interests, to commerce and intercourse, ingress and egress; but it is under no obligation to the world to go beyond these limits. It cannot be demanded of a State that it sacrifice itself to some higher good. It cannot fulfil its mission in that way. It represents itself the highest good. It is the highest entity. The world has as yet no organization into which a State may merge its existence. The world is as yet only an idea. It can give no passports which a State is bound to accept. The duty of a State to the world is a duty of which the State itself is the highest interpreter. The highest duty of a State is to preserve its own existence, its own healthful growth and development. So long as foreign immigration contributes to these, it is sound policy not only to permit, but to cultivate it. On the other hand, when the national language, customs, and institutions begin to be endangered by immigration, then the time has come for the State to close the gateways partly or wholly, as the case may require, and give itself time to educate the incomers into ethnical harmony with the fundamental principles of its own individual life. It is a most dangerous and reprehensible piece of demagogism to demand that a State shall suffer injury to its own national existence through an unlimited right of ingress; and it is an unendurable piece of deception, conscious or unconscious, when the claim is made from the standpoint of a superior humanity.” (Political Sci. I. pp. 42–3.)




  ― 624 ―

LEGAL POINT OF VIEW.—The legal aspect of the subject of political control over immigration was dealt with by the Privy Council in the celebrated case of Chun Teong Toy v. Musgrove (1891), App. Cas., 272, on appeal from the Supreme Court of Victoria, in which it was held that an alien has no legal right, enforceable by action, to enter British territory.

“Their Lordships would observe that the facts appearing on the record raise, quite apart from the statutes referred to, a grave question as to the plaintiff's right to maintain the action. He can only do so if he can establish that an alien has a legal right, enforceable by action, to enter British territory. No authority exists for the proposition that an alien has any such right. Circumstances may occur in which the refusal to permit an alien to land might be such an interference with international comity as would properly give rise to diplomatic remonstrance from the country of which he was a native, but it is quite another thing to assert that an alien excluded from any part of Her Majesty's dominions by the executive government there, can maintain an action in a British Court, and raise such questions as were argued before their Lordships on the present appeal—whether the proper officer for giving or refusing access to the country has been duly authorized by his own colonial government, whether the colonial government has received sufficient delegated authority from the Crown to exercise the authority which the Crown had a right to exercise through the colonial government if properly communicated to it, and whether the Crown has the right without Parliamentary authority to exclude an alien. Their Lordships cannot assent to the proposition that an alien refused permission to enter British territory can, in an action in a British Court, compel the decision of such matters as these, involving delicate and difficult constitutional questions affecting the respective rights of the Crown and Parliament, and the relations of this country to her self-governing colonies. When once it is admitted that there is no absolute and unqualified right of action on behalf of an alien refused admission to British territory, their Lordships are of opinion that it would be impossible upon the facts which the demurrer admits for an alien to maintain an action. Their Lordships, therefore, do not think it would be right on the present appeal to express any opinion upon the question which was elaborately discussed in the very learned judgments delivered in the Court below—viz., what rights the executive government of Victoria has, under the constitution conferred upon it, derived from the Crown. It involves important considerations and points of nicety which could only be properly discussed when the several interests concerned were represented, and which may never become of practical importance.” (1891, App. Cas. 282.)

For further discussion of the right of the Crown to exclude aliens, see an article on “Alien Legislation and the Prerogative of the Crown,” by T. C. Haycraft, Law Quarterly Review, 1894, p. 165; and an article in the Weekly Notes (N.S.W.), 26 Sept., 1891.

RESTRICTIVE IMMIGRATION LAWS.—In 1855 the Legislative Council of the newly erected colony of Victoria led the way in the passage of a number of laws intended to restrict Chinese immigration, which commenced in 1854, when the fame of the gold diggings of Victoria began to attract thousands of Chinamen to that colony. The Victorian Council passed a bill, which was assented to by the Governor, “to make provision for certain immigrants.” The substance of the law was that no ship should bring to a Victorian port more passengers, being Chinese immigrants, than in the proportion of one person to every ten tons of the tonnage of such ship, under a penalty of £10 for each passenger in excess of such proportion. On the arrival of a ship in any port of Victoria, with Chinese immigrants on board, the master was required to pay to the Collector of Customs a tax of £10 for every such immigrant. The money so collected was to be invested by the Government to form a fund for the relief, support, and maintenance of such immigrants. Provision was made for the registration of such immigrants, on their arrival in any district or place to which they proceeded. This and other immigration laws were consolidated in 1865.

Similar legislation was adopted in New South Wales in 1861. Her Majesty was not advised to disallow any of these Acts, although the Colonial Secretary remonstrated, and declared “that exceptional legislation, intended to exclude from and part of Her Majesty's dominions the subjects of a State at peace with Her Majesty, is highly objectionable in principle.” (Lord Carnarvon's Despatch to Governor Cairns, 27th March, 1877.) Those Acts were subsequently repealed, to the satisfaction, it is said, of


  ― 625 ―
Her Majesty's Government; but they were eventually succeeded by legislation of a more drastic character adopted in all the Australian Colonies, in order to repel the Chinese invasion.

In 1876 the Queensland Parliament passed a bill to amend the Gold Fields Act of 1874, so far as it related to Asiatic and African aliens, and to demand an increased license fee from such aliens, with a view to discouraging excessive immigration. Governor Cairns considered that this bill was one of an extraordinary nature, which might possibly involve a breach of national comity by restraining Chinese immigration into Queensland, and that as such it was contrary to the treaty of Tien-Tsin and the Convention of Pekin of 24th October, 1860. Accordingly he reserved the bill for the signification of Her Majesty's pleasure. The Queensland Ministry protested against the reservation, and in a minute to the Governor expressed the opinion that it was of the utmost importance that the authority of the Colonial legislatures to pass laws upon all subjects whatever which they might think necessary for the good government of the colony should be recognized and upheld, and that no other limit to that power should be admitted, than that which was imposed by the royal instructions to the Governor. They thought that to go beyond those instructions, or to allow the unusual character of proposed legislation, not forbidden by them, as a sufficient ground for not giving immediate effect to the wish of the legislature, would be of serious consequence to the independence and freedom of Parliament. (Todd's Parl. Gov. in Col. 2nd ed. p. 188)

In a despatch, dated 26th March, 1877, Earl Carnarvon expressed his approval of the Governor's conduct, and of the reasons which had actuated him. For these and other reasons, although he was most unwilling even to appear to infringe upon the privileges of self-government enjoyed by the inhabitants of Queensland—he had been unable to advise the Queen that this bill should receive the royal assent in its present shape.

During the session of 1877 the Queensland Legislature passed another Act to regulate the immigration of Chinese and to prevent them from becoming a charge on the colony. A poll tax of £10 was imposed on every Chinese immigrant, to be refunded to him if he left the colony within three years without having committed any criminal offence, and without having received charitable relief from any public institution. This Act was not disallowed. The Act of 1877, amended by another Act passed in 1878, was found insufficient to restrict the objectionable immigration. In 1884 the Act of 1877 was amended by reducing the number of Chinese passengers that might be brought into Queensland waters to one for every fifty tons of registered tonnage, by increasing the sum payable on arrival to £30, and by repealing the provision for the repayment of the poll-tax on departure within three years. “The effect of the law of 1884 has been that the number of Chinese arriving in Queensland by sea has been in each year somewhat less than the number of those departing. The easy means of transit by land between the various Australian colonies, however, renders it impossible to exercise any effective control over their migration across the borders of the colonies.” (Todd's Parl. Gov. in Col. 2nd ed. p. 191.)

In 1879 an Anti-Chinese Influx Bill, containing prohibitions and restrictions similar to those of the Queensland law then in force, was passed by the Legislative Assembly of New South Wales, but rejected by the Legislative Council. In 1881 a similar bill was re-introduced and passed by both Houses. In the same year the Parliament of Victoria again resorted to legislation in order to arrest the influx of Chinese. Vessels were not allowed to introduce into any Victorian port more than one Chinaman per 100 tons of tonnage, and a poll-tax of £10 was imposed on each immigrant on his landing. In April, 1888, a Chinaman, Chun Teeong Toy, arrived in the port of Melbourne on board the British ship Afghan. The Collector of Customs considered that the Afghan had brought a larger number of Chinese than was allowed by law; he refused to allow any of them to land, or to accept the poll-tax of £10 each. Chun Teeong Toy brought an action against the Collector in the Supreme Court of Victoria, which decided that the action of the


  ― 626 ―
Government in preventing the landing of Chinese prepared to pay the prescribed poll-tax was illegal. The Victorian Government appealed from this decision to the Privy Council, which reversed the judgment of the Victorian Court, and held (1) that the Collector of Customs was under no legal obligation to accept payment, whether tendered by the master on behalf of any such immigrants, or tendered by or for any individual immigrant; (2) that, apart from the Act, an alien has not a legal right, enforceable by action, to enter British territory. (Chun Teeong Toy v, Musgrove [1891], App. Cas. 272.)

An intercolonial Conference was held in June, 1888, at which the Governments of New South Wales, Victoria, South Australia, Queensland, Tasmania, and Western Australia were represented. The Chinese immigration question was considered, and the following resolutions were adopted as embodying the views of the majority of the colonies:—

  • (1.) That in the opinion of this Conference the further restriction of Chinese immigration is essential to the welfare of the people of Australasia.
  • (2.) That this Conference is of opinion that the desired restriction can best be secured through diplomatic action of the Imperial Government and by uniform Australasian legislation.
  • (3.) That this Conference resolves to consider a joint representation to the Imperial Government for the purpose of obtaining the desired diplomatic action.
  • (4.) That this Conference is of opinion that the desired Australasian legislation should contain the following provisions:—
    • (a) That it shall apply to all Chinese, with specified exceptions.
    • (b) That the restriction should be by limitation of the number of Chinese which any vessel may bring into any Australasian port, to one passenger to every 500 tons of the ship's burthen.
    • (c) That the passage of the Chinese from one colony to another, without the consent of the colony which they enter, be made a misdemeanour.

Some of the colonies at once adopted legislation in accordance with the resolutions arrived at. In Victoria an Act was passed providing that no vessel should enter any Victorian port having on board more than one Chinaman for every 500 tons of the tonnage of such vessel. Any Chinese who should enter Victoria by land, without first obtaining a permit in writing from some person to be appointed by the Governor in Council, was declared guilty of an offence against the Act, and made liable on conviction to a penalty of not less than £5 nor more than £20, and also, upon the warrant of the Commissioner of Trade and Customs, to be removed or deported to the colony from whence he came. (Chinese Immigration Restriction Act, 1888, sec. 9.)

In about 1895 danger began to be apprehended from the increasing immigration of Indians, Afghans, and other Asiatics, many of whom were British subjects. At an intercolonial Conference held at Sydney in March, 1896, at which all the Australian colonies except Western Australia were represented, it was unanimously resolved that the provisions of the Chinese Immigration Restriction Acts should be extended to all coloured races. During 1896, accordingly, Coloured Races Restriction Bills were passed in New South Wales, South Australia, and Tasmania, and an Asiatic Restriction Bill in New Zealand. These Bills were reserved for the signification of the Queen's pleasure, but did not receive Her Majesty's assent. The presence of the Australian Premiers at the Jubilee celebrations in London in 1897 afforded Mr. Chamberlain an opportunity of explaining the views of the Imperial Government as to this kind of legislation. He expressed entire sympathy with the determination of the Australian colonies to prevent the influx of people who were alien in civilization, in religion, and in customs, and who interfered with the legitimate rights of the existing labouring population. Such an


  ― 627 ―
influx must be prevented at all hazards; but he asked the Premiers to remember the traditions of the Empire, which make no distinctions of race or colour, and pointed out that the exclusion of all Her Majesty's Indian subjects, or even of all Asiatics, would be so offensive to those people that it would be most painful to Her Majesty to sanction it. He therefore urged them to base their prohibitive legislation, not upon race or colour, but upon the really objectionable characteristics of the immigrants legislated against; and he instanced, as a type of legislation which the Imperial Government would think satisfactory, the Immigration Restriction Act of 1897 recently passed in Natal—a measure which was being found adequate in that colony to meet the same evil.

The Natal Act defined six classes of “prohibited immigrants.” The first and most important class consisted of persons who, when asked to do so by an authorized officer, should fail to “write out and sign, in the characters of any language of Europe” an exemption application in the prescribed form. The other classes of “prohibited immigrants” were:—(2) Paupers, or persons likely to become a public charge; (3) idiots or insane persons; (4) persons suffering from a loathsome or contagious disease; (5) persons convicted within two years of a crime involving moral turpitude, and not being merely a political offence; (6) prostitutes, and persons living on the prostitution of others. Subject to certain exemptions and exceptions, the immigration of a “prohibited immigrant” was forbidden; any immigrant contravening the Act was made liable to removal from the colony, and upon conviction to be sentenced to six months' imprisonment; which imprisonment should cease for the deportation of the offender, or if he should find sureties for his departure within one month. Masters and owners of vessels illegally landing immigrants were made liable to heavy penalties.

Accordingly a Bill, almost identical with the Natal Act, was introduced in the Legislative Assembly of New South Wales. It was amended in the Council by the omission of all the classes of “prohibited immigrants” except the first—which was relied on as the real safeguard against the immigration of Asiatic and other coloured races. In this form it became law, as the Immigration Restriction Act, 1897. In Victoria a similar Bill was introduced, but failed to pass owing to disagreement between the two Houses. In Western Australia in 1897, in Tasmania in 1898, and in New Zealand in 1899, Immigration Restriction Acts, almost identical with the Natal Act, were passed.

IMMIGRATION IN CANADA.—In Canada, the Dominion and the Provinces have concurrent power to legislate concerning immigration, but any law of a Province with respect to that subject is void if it be repugnant to Dominion Legislation. In 1878 the Provincial legislatures of British Columbia passed an Act “to provide for the better collection of Provincial taxes from Chinese.” It required every Chinaman, above the age of 12 years, to take out a quarterly license, for which he had to pay ten dollars in advance. This license fee was to be in lieu of the ordinary taxation payable by the people generally for public purposes. Any Chinaman failing to take out the license was liable to a severe penalty. Nominally a tax Act, it was in reality, like the first anti-Chinese Act passed in Queensland, intended to restrict Chinese immigration. An action was commenced in the Supreme Court of British Columbia to test its validity. The judgment of the Court was delivered by Mr. Justice Gray, who held that the Act was beyond the power of the Provincial legislature; that it was at variance with the treaty obligations of Great Britain and China; that it related to a matter affecting trade and commerce, which belonged to the Dominion Parliament; and that therefore it was unconstitutional and void. This Act was afterwards disallowed by the Governor-General in Council, who considered it inadvisable to permit an Act which had been pronounced ultra rires to remain on the statute book. (Todd's Parl. Gov. in Col. 2nd ed. pp. 194 and 557.)

Undiscouraged by the failure of its first attempt to grapple with the Chinese problem, the legislature of British Columbia, in 1884, passed another Act regulating the Chinese


  ― 628 ―
population of the Province. In 1885 Wing Chong, a Chinaman, was convicted and fined before a magistrate for not having a license under the Act of 1884. He obtained a writ of certiorari for the removal of the case to the Supreme Court of British Columbia; and Crease, J., one of the Judges of that Court, quashed the conviction on the ground, inter alia, that the Act was ultra vires the legislature of the Province. It appears that there could be no appeal from this decision to the full Court; but on the ground of the great public importance of the question, special leave to appeal to the Privy Council was asked for and granted. The appeal, however, was not prosecuted. (Reg. v. Wing Chong, 1 Brit. Columb. Rep., Part ii., p. 150; Wheeler, C.C. 122.)

Yielding to the representations of the Provincial Government as to the necessity of central legislation, the Dominion Government at length appointed a royal commission to enquire and report on the question in all its bearings. As the result of this report the Parliament of the Dominion in 1885 passed an Act to restrict and regulate Chinese immigration into Canada, the principal features of which were:—(1) A poll tax of $50 on each Chinaman landing; (2) No vessel to carry more than one Chinaman to every 50 tons of its tonnage; (3) Every Chinaman wishing to leave Canada with the intention of returning, on giving notice of such intention at the port of departure and surrendering his certificate of entry or of residence, to receive, on payment of a fee of one dollar, a certificate of leave to depart and return. In 1891, there were about 109,127 Chinamen in Canada, of whom 8900 were located in British Columbia. (Todd. Id. p. 195.)

IMMIGRATION IN THE UNITED STATES OF AMERICA.—Congress has not been assigned express power to deal with immigration; nevertheless it has been held that the Government of the United States, through the action of its legislative department, can exclude aliens from its territory.

Jurisdiction over its own territory, to that extent, is an incident of every independent nation. It is a part of its independence, and one method whereby it is enabled to maintain its independence from control of another power. “The jurisdiction of the nation within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not imposed by itself. Any restriction upon it, deriving validity from an external source, would imply a diminution of its sovereignty to the extent of the restriction, and an investment of that sovereignty to the same extent in that power which could impose such restriction.” (Chief Justice Marshall in The Exchange v. McFaddon, 7 Cranch, 136, cited and approved in the Chinese Exclusion Case, 130 U.S. 604. Baker, Annot Const. p. 17.)

In the United States of America similar difficulties have been experienced in dealing with undesirable immigrants, such as Chinese, and there have been several conflicts between State laws and Federal laws with respect to that subject. In Ling Sing v. Washburn, 20 Calif. Rep 534, and in The People v. Raymond, 34 Calif. Rep. 492, legislation directed by the State of California against the Chinese was pronounced unconstitutional by the Supreme Court of that State. In the case of Baker v. The City of Portland (U.S.) L.T. 18 Oct., 1879, p. 403, the question arose as to the validity of an Act of the State legislature in prohibiting the employment of Chinese labourers on public works. The circuit court of the United States, in the Oregon district, pronounced the law unconstitutional on the ground that a treaty between the Federal Government and a foreign power was the supreme law of the land, which the courts were bound to enforce, and that an individual State could not so legislate as to interfere with the operation of a treaty or to limit the privileges guaranteed thereby. (Todd's Parl. Gov. in Col., 2nd ed. p. 196.)

In 1879 Congress passed an Act to discourage Chinese immigration, by restricting the number of Chinese which might be brought from China to the United States in a single voyage, to fifteen persons. The president, Mr. Rutherford B. Hayes, vetoed the bill, on the ground that it was repugnant to the terms of a treaty between the United States and China, and that the power of modifying treaties was not vested in Congress,


  ― 629 ―
but belonged to the Executive. In 1880 a new treaty was negotiated between the United States and China. By this treaty it was agreed that the United States Government should be allowed to regulate the admission of Chinese labourers at its discretion, but not to forbid it altogether. In March, 1888, a fourth treaty was entered into between the United States and China, which provided that thereafter no Chinese labourer should be entitled to enter the States. This, like other treaties, was subject to the ratification of the Senate. The Senate amended it by adding a proviso that Chinese labourers formerly resident in the United States should not be allowed to return thither whether they held certificates of former residence or not. The Chinese Government refused to accept this amended treaty. A bill was then brought into the House of Representatives containing a prohibition similar to that added to the treaty by the Senate. It was passed without a division, agreed to by the Senate, and ultimately assented to by the President on 1st October, 1888.

ASSISTED IMMIGRATION.—The Parliament will have power, not only to exclude undesirable aliens, but also to facilitate the introduction of industrious and respectable immigrants, likely to become workers, producers, and consumers within the Commonwealth. Assisted immigration, which at one time was the policy of most of the Australian colonies, has within the last few years been very sparingly resorted to.

§ 212. “Emigration.”

Emigration contemplated by this sub-section would probably mean the inspection, supervision, and registration of departures from the Commonwealth. It might also authorize legislative arrangements to be made for the return of foreign labourers to their respective countries, after the expiration of their respective terms of service.

51. (xxviii.) The influx of criminals213:

HISTORICAL NOTE.—At the “Convention” which met in Sydney in 1883, Sir Samuel Griffith's original resolution for the establishment of a Federal Council proposed to give that body power to make laws with respect to the “prevention of the influx of criminals.” (See p. 111, supra.) That power was accordingly given by the Federal Council of Australasia Act, 1885.

In the Bill of 1891 the sub-clause was passed in its present form; and it was adopted without debate by the Convention of 1897.

§ 213. “Influx of Criminals.”

EXCLUSION OF CRIMINALS.—This sub-section is intended to embrace the class of cases covered by 18 Vic. No. 3, an Act to prevent the “Influx of Criminals” into Victoria passed by the Legislative Council and assented to by the Lieutenant-Governor on 16th November, 1854. That Act came into force at the beginning of the rush to the goldfields, when swarms of convicts and ticket-of-leave-men from other settlements invaded the colony and became a nuisance and menace to its peace and welfare. Any person who had been found guilty of any capital or transportable felony, in the United Kingdom or in any British possession, and who came to Victoria after the passing of the Act, was made liable to be apprehended and taken before two justices. Such justices were authorized, on proof that such person came to Victoria contrary to the Act, to convict him for the offence of so doing, and at their discretion they could either take bail that he would leave the colony within seven days, or cause him to be conveyed in custody to the country from whence he came, or sentence him to hard labour on the roads or other public works of the colony for a period not exceeding three years. Persons harbouring or concealing such convicts, and masters of vessels bringing them to Victoria, were liable to punishment. This law was re-enacted by the Parliament of Victoria


  ― 630 ―
under the new Constitution in 22 Vic. No. 68. It now appears in the Victorian Crimes Act, 1890, ss. 370–385.

The scope and validity of this Act were considered by the Supreme Court of Victoria in the case of Ryall v. Kenealy (1869), 6 W.W. and A'B. (L) 193. John Kenealy had, in 1865, been convicted in Cork of treason felony, for which he was transported to Western Australia for ten years. In 1869 he received a free pardon from the Crown; he was discharged from custody, left Western Australia and proceeded to Victoria, arriving in the port of Melbourne 6th July, 1869. Immediately on his arrival he was arrested under the Influx of Criminals Act, convicted, and ordered to enter into recognizances to leave the colony within seven days. A case was stated for the opinion of the full court. Against the conviction it was argued (1) that the Act did not create an offence, (2) that the defendant was not prohibited from coming to Victoria, (3) that the Act only applied to convicts whose term of imprisonment had expired, (4) that the free pardon of the Crown exempted the defendant from the prohibition, and rest