― 282 ―

18. Chapter XVIII. The States.

IN an earlier chapter, it is remarked, that one of the difficulties, which beset political science and constitutional law, is the use of the same term in different senses. The fact of such use must be acknowledged; and Story, in his chapter on the Interpretation of the Constitution of the United States, warns us against men of ingenious and subtle minds “who seek for symmetry and harmony in language.” The term “State” in the Constitution of the United States is used in various senses. It “sometimes means the separate sections of territory occupied by the political society within each; sometimes the particular government established by those societies; sometimes those societies as organized into those particular governments; and, lastly, sometimes the people composing these political societies in their highest sovereign capacity.”note In like manner, the Commonwealth Constitution uses the term sometimes of territory (e.g. sections 80, 92, 125), sometimes of the political society, sometimes of the government of the political society or some appropriate organ thereof; and if it does not refer to the people of the political society “in their highest sovereign capacity,” it appears in some cases to describe the people of the society as an economic unit (e.g. sections 51 (2), 99). It happens more than once, that, in the

  ― 283 ―
same section, the term is used in different senses; and there is room for not a little doubt in some cases as to the meaning of the term—e.g. in section 99 “preference to any State,” and section 102 “preference or discrimination is undue or unreasonable or unjust to any State.” In general it may be noted, that, when the Constitution saves powers or grants powers or imposes positive duties, it specifically refers to the organ of State Government, which has hitherto exercised, or is intended to exercise, the power or perform the duty in question; and when it withdraws an accustomed power, or imposes a prohibition, it uses the term “State” as comprising all possible sources of action.note

As the State Commonwealth is a Federal Commonwealth, it is impossible to advance a step in the consideration of the Constitution without meeting the States. It is true of the Commonwealth as of the United States, that “the Constitution in all its provisions looks to an indestructible Union composed of indestructible States.”note

New Powers of the States.

(a) As Instruments of the Constitution.

The States appear in the Commonwealth in more than one capacity. First and foremost, of course, they are the local parts in the composite government of a federation. They are also the foundation upon which one House, and in a sense both Houses, of The Parliament are built. But they are also, in a special sense, the instruments of the Constitution in the formation of the central government. In the chapter on “The Parliament,” various powers and duties incident to constituting that body are imposed upon the Governor and the Legislature of the State; and in all sorts of matters, which must be the subject of some regulation, the laws of the States in their respective territories are applied to the subject matter, or the State Parliament is given power to make laws regarding them, “until The

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Parliament otherwise provides.”note In addition to the incidental and auxiliary powers and duties conferred upon the States, or the organs of the State government, by the Constitution, there are some substantive matters in which new powers or duties are conferred upon the States. We have seen under the head of the Legislative power the importance in certain cases of State initiative or concurrence, as a condition of the validity of certain Commonwealth laws. The Constitution also contains important provisions enabling the States to surrender their territory (sections 111, 125), to consent to an alteration of boundaries (section 123), or to the establishment of new States by separation of territory or union of States (124).

One matter affecting The Parliament is regarded as essentially of local concern, and is left to the regulation of the State Parliament altogether (section 9). Without the co-operation of the States Governments at the outset, the central government could not be set to work.

(b) As Delegates of the Commonwealth Government.

The Commonwealth laws bind the State Courts; and we have seen that the Constitution enables The Parliament to constitute the State Courts its instruments for the administration of justice. Whether, and to what extent, the Commonwealth Parliament may delegate legislative power to The Parliament of the States, is a question not free from doubt; it may not be of great practical importance, since comparatively few of the Commonwealth powers of legislation are exclusive. The Commonwealth Government is organized on the executive side, and is not dependent on the States; but the State Executive may, if the State Governments agree, be used as the instrument of the Commonwealth. In the United States, from the establishment of the Constitution, the federal government has been in the habit of

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using, with the consent of the States, their officers, institutions, and tribunals as its agents. That use has not been deemed a violation of any principle, or as in any manner derogating from the sovereign authority of the federal government, but as a matter of convenience and a great saving of expense.note The Constitution of the Commonwealth itself indicates one matter of executive government, in which the State is to be the auxiliary of the Commonwealth. By section 120 it is enacted, that “every State shall make provision for the detention in its prisons of persons accused or convicted of offences against the laws of the Commonwealth, and for the punishment of persons convicted of such offences, and The Parliament of the Commonwealth may make laws to give effect to this provision.”

The chapter of the Constitution on Finance and Trade deals with the rights and duties of the States considered as political entities, so far as their economic relation with each other and the Commonwealth are concerned. The chapter on the States deals with their respective relations of political power and governmental duty. In general, the Commonwealth Constitution, like that of the United States, treats the individual rather than the State as the subject upon whom the fundamental law is binding. In these two chapters, however, the “national” element recedes, and the “federal” note predominates.

The States Constitutions.

By section 106, “The Constitution of each State of the Commonwealth shall, subject to this Constitution, continue as at the establishment of the Commonwealth or as at the admission or establishment of the State, as the case may be, until altered in accordance with the Constitution of the State.” By section 107, “Every power of the Parliament of a Colony, which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in The Parliament of the Commonwealth or withdrawn from the

  ― 286 ―
Parliament of the State, continue as at the establishment of the Commonwealth or as at the admission or establishment of the State, as the case may be.” In speaking of “the Constitution of each State,” the section suggests that there is in each State a law or body of laws, defined and ascertainable, to which the term “Constitution” can be applied. This is, however, no more true of the States than it is of the United Kingdom. As has been seen in chapter i., the constitutional law of the Colonies, taking that term in its narrowest sense, is to be ascertained only by the consideration of a number of statutory provisions and prerogative instruments. In no respect does the Constitution of the Commonwealth differ more markedly from the Constitution of the Dominion of Canada, than in this—that, while in Canada the British North America Act, distributing as it did the powers of government between Dominion and Provinces, had to organize both, the Australian Constitution had not, as any part of its object, the framing of a government for the States. The principle of State autonomy has been carefully observed. In accordance with this principle, the Constitution omits clauses of the Bill of 1891, which required that there should be a Governor in each State, and proposed that the Parliament of each State might make such provision as it thought fit as to the manner of appointment of the Governor of the State, and for the tenure of his office and for his removal from office. The Constitution no doubt assumes the continuance of the States Governments in their present form, in that it refers to the “Governor,” the “Governor with the advice of the Executive Council” (section 15), “the Parliament,” the “Houses of the Parliament of the State sitting and voting together,” and “the more numerous House of the Parliament of the State.” So far as the Governor of a State is concerned, the Constitution provides by section 110, that “the provisions of this Constitution relating to the Governor of a State extend and apply to the chief executive officer or administrator of the government of the State.” For the rest, there is room

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for some doubt as to the consequences of an alteration of the State Constitutions. But whatever may be the inconvenience to the Commonwealth of the abolition of certain State machinery, it cannot affect the power of the State over its own institutions.

The State and the Crown.

The appointment of State Governors will for the present, and until altered by the Crown itself or by Imperial or State Statute, remain with the Crown. It may be determined to revert to the old custom, whereby the Governor-General was also Governor of each of the Colonies; but this is a matter which lies quite outside the Commonwealth Constitution. In the Colonies, the Crown was the supreme executive and legislative head, and, as has been seen, personified the colony. The same is true of the State. Even as to Canada, where there is much greater dependence of the Provinces of the Dominion, and where the Lieutenant-Governors are appointed by the Governor-General as an act of internal administration, it has been held by the Judicial Committee, that “the relation between the Crown and the provinces is the same as that which subsists between the Crown and Dominion in respect of such powers, executive and legislative, as are vested in them respectively.”note Accordingly, though the Governor-General is by the Constitution declared to be Her Majesty's representative in the Commonwealth, this must in no way be taken to deprive the State of those prerogatives of the Crown applicable to the matters which remain to the State.

Not only does the Crown remain a part of the State Government, but the State Government retains direct relations with the Imperial Government. One of the great objects to be attained by federation was, no doubt, that Australia should speak to the Home Government with a single voice. In pursuance of this policy, the Bill of 1891 contained a

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clause, by which all references and communications from a State Governor to the Queen, or from the Queen to a State Governor, were to be through the Governor-General. This clause was not adopted by the Convention of 1897-8. The object of unanimity in representation has been deemed to be sufficiently accomplished by the delegation to the Commonwealth Government of those matters, which appeared to be of common concern. Obviously, there remain many matters which affect directly the Home Government and a State Government, but only remotely or not at all the other States and the Commonwealth. This is notably the case in regard to the legislation of the States, which it must be remembered, in the absence of Commonwealth legislation, covers a field hardly less extensive than before federation. The Home Government therefore, on the establishment of the Commonwealth, repeated the old instructions to Colonial Governors.note (See e.g. Government Gazette (Victoria), Jan. 2, 1901).

The Governor of a State.

The loss of executive powers by the Governor of a Colony, on its becoming a State, will be sufficiently apparent by a consideration of the executive departments passing to the Commonwealth Government. But the transference of the departments of Naval and Military Defence (section 69), the provision in section 114 that “a State shall not, without the consent of The Parliament of the Commonwealth, raise or maintain any naval or military force,” and the vesting of the command-in-chief of the naval and military forces of the Commonwealth (section 68) and of the Crown in the Governor-General, deprive the Governor of one of his titles. The old Letters Patent and Commissions constituted and appointed respectively a “Governor and Commander-in-Chief in and over the Colony of … and its Dependencies.” New Letters Patent and Commissions were issued for the States on the establishment of the

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Commonwealth, and they constituted and appointed respectively a “Governor of the State of … and its Dependencies, in the Commonwealth of Australia.”note It is surmised that the Governor of a State is still Vice-Admiral.note For the rest, the prerogative instruments, affecting the office of Governor of a State, are substantially the same as those relating to the office of a Colonial Governor. The grant of the pardoning power to the State Governors recognizes the distinction between offences against State laws and offences against Commonwealth laws, and seeks to avoid all danger of conflict. The Letters Patent (clause ix.) provide, that when any crime or offence has been committed within the State against the laws of the State, or for which the offender may be tried therein, the Governor may pardon an informer who has been an accomplice or one of the offenders, and further may grant to any offender convicted in any Court of the State, or before any Judge or Magistrate of the State, within the State, a pardon, etc. It is clear, therefore, that, as to convicted offenders, the power extends only to convictions in the Courts of the State, and does not apply to convictions in Commonwealth Courts, or (semble) an Imperial Court like the Court of Vice-Admiralty. In construing the clause, it would appear that “within the State” governs “against the laws of the State” only, and that the expression “or for which the offender may be tried therein” refers to offences, which are recognizable by the Courts of the State though committed outside the State. If this were not so, and the words “within the State” applied to both classes of offences referred to, the Governor of a State would have power to pardon informers and persons convicted in State Courts for offences against Commonwealth laws; and there would thus be produced the very conflict of authority which ought to be avoided.

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The Parliaments of the States

In construing section 107, it must be remembered that, amongst the powers of a State Parliament, is the power of altering its constitution; and it is within the possibilities of political change, that the Parliaments may establish legislatures of limited powers, and may provide for the enactment of laws with the co-operation of the electors. There is some difference of opinion as to the extent of constitutional change, which may be effected by a colonial Parliament without resort to the Imperial Parliament, but it is safe to conclude, that those powers are neither extended nor restricted by section 107.

The section is an express declaration of the principle underlying the federal system of the Commonwealth—that the residuary power of legislation lies in the States, and that power over any matter is not withdrawn from the State Parliament merely because it is vested in the Commonwealth Parliament. The relation of laws, enacted by both in matters within the power of each, is dealt with by section 109, which has been already considered. What powers are withdrawn from the States, and what exclusively vested in the Commonwealth, have also been considered in reference to the powers of the Commonwealth Government, and to finance and trade. In a few cases, the Constitution itself returns a portion of the power which it has withdrawn. Thus, notwithstanding the provisions of sections 51, 90, and 92, a State may levy on goods passing into and out of the State charges for the execution of its inspection laws (section 112), and, by section 113, intoxicating liquids introduced into any State are, notwithstanding that they are subjects of inter-State commerce, subject to the laws of the States in the same way as liquids produced in the State.note

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Territorial Limitations on State Authority.

In the United States it is settled that, the legislative authority of every State must spend its force within the territorial limits of the State.note This doctrine finds practical application as a matter of constitutional law, in the rule, first, that State laws have no authority on the high seas beyond State lines, because that is the point of contact with other nations, and all international questions belong to the national government; and, secondly, that the State cannot provide for the punishment as crimes of acts committed beyond the State boundary, because such acts, if offences at all, must be offences against the State in whose limits they were committed. On the other hand, persons who have recourse to the tribunals of the State must take the law of the State as they find it; and though the courts of the States generally, in determining the application of law, defer to Private International Law, they do not do so as a matter of Constitutional Law, save in the limited class of cases under Art. iv., sections 1 and 2, and Private International Law is in general part of the laws of the State upon which State legislation may operate.

It has been seen already,note that the Parliaments of British Colonies are local and territorial legislatures, and that certain limitations of power are deduced therefrom. The most important of these limitations remain, and are neither greater nor less in the States of the Commonwealth than they were in the Colonies which preceded them.

Special Powers Under Imperial Acts.

Certain of these limitations, however, have been removed by Imperial Acts, and certain powers not incident to a mere local legislature have been conferred upon the Parliaments of the Colonies. Other Imperial Acts have conferred powers to vary the Imperial law, or to supplement

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it. Section 107 serves to make it clear, that the special powers of legislation in regard to these matters, conferred upon the Colonial Parliaments before the institution of the Commonwealth, remain to the States Parliaments. Some of them, however, fall within the exceptions of section 107—they are by the Constitution withdrawn from the States, or vested exclusively in the Commonwealth Parliament. By section vii. of the Act, the powers conferred upon the Colonial Parliaments by the Colonial Boundaries Act, 1895, are withdrawn, and the Commonwealth is to be taken to be a self-governing Colony for the purposes of that Act. Another power withdrawn is that over coinage (section 115). The special powers conferred by Imperial Acts in relation to defence, inland posts, customs, and a few other matters, belong solely to the Commonwealth Parliament, because the subjects themselves are declared to be within the exclusive power. With regard to any special powers, which may be conferred by the Imperial Parliament on Colonial legislatures in the future, there is room for some doubt as to the authorities which may exercise them in Australia. The Interpretation Act, 1889, section 18 (3), provides, that in all subsequent Acts, unless the contrary intention appears, “the expression ‘colony’ shall mean any part of Her Majesty's Dominions exclusive of the British Islands and of British India, and when parts of such dominions are under both a central and a local legislature, all parts under the central legislature shall for the purposes of this definition be deemed to be one colony.” By section 18 (7) “the expression ‘colonial legislature,’ and the expression ‘legislature,’ when used with reference to a British possession, shall respectively mean the authority other than the Imperial Parliament or Her Majesty in Council, competent to make laws for a British possession.” If the special power granted relates to a matter within the legislative power of the Commonwealth Parliament—as, for instance, if extended powers were granted to colonial legislatures to vary or suspend the operation of the Imperial Copyright

  ― 293 ―
Acts in that possession—it will be exerciseable by the Commonwealth Parliament exclusively. But if it relates to a subject not within the power of the Commonwealth Parliament, but in the residuary power of the States—as, for instance, if it gives power to colonial legislatures to make laws punishing crimes committed out of their territory—it is doubtful whether the State Parliament or the Commonwealth Parliament would take the power as the authority competent to make laws for the possession.

The Courts of the States, of course, continue to apply the doctrines of Private International Law in proper cases; but as part of their own law which the State Parliaments may alter. That the “rule of comity,” however, becomes a rule of Constitutional Law in one case, has been seen in dealing with the effect of section 118 under “Judicature.” The power of the State Parliament is also restrained by section 117, whereby

“A subject of the Queen resident in any State shall not be subject in any other State to any disability or discrimination, which would not be equally applicable to him if he were a subject of the Queen resident in such other State.”

It is a general characteristic of the Constitution that, as a rule, it does not impose any restraint upon government, except to further some federal purpose. Section 117 aims, not at the protection of individual right against government interference, but at the prevention of discrimination by one State against those who are sometimes referred to as the “subjects” of the other. The section aims at equality, and if the laws of a State refrain from disabling provisions and injurious distinctions affecting the subjects of other States, the section is fulfilled. It is, therefore, very different in character from those provisions of the Constitution of the United States, which forbid the States to pass any Act of Attainder, ex post facto law, or law impairing the obligation of contracts, and from the Thirteenth, Fourteenth, and Fifteenth Amendments to that Constitution, which, as protecting the States' own citizens, are essentially national, as distinguished from federal provisions.

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It must be compared with Art. iv., sec. 2, of the United States Constitution, whereby “the citizens of each State are entitled to all privileges and immunities of citizens in the several States”; and the sole purpose of that clause, as declared by the Supreme Court, is the sole purpose of section 117—“to declare to the several States that whatever those rights as you grant or establish them to your own citizens, or as you limit or qualify or impose restrictions on their exercise, the same, neither more nor less, shall be the measure of the rights of citizens of other states within your jurisdiction.”note

There is a difference in form between section 117 and the privileges and immunities clause in the United States Constitution. Section 117 does not purport to grant anything, but merely protects against deprivations and injurious distinctions, while the United States Constitution uses terms of grant, and “privileges and immunities” might certainly include, if they did not suggest, the enjoyment of every kind or advantage open to citizens. The American Courts have, however, put a much narrower construction on the clause, and the terms of section 117 not inaptly express, so far as any general terms can, the nature of the uses to which the American provision has been put. It has been held that the “privileges and immunities” clause only secures those fundamental advantages which belong of right to the citizens of all free governments, and these have been enumerated as implying “protection by the government, the enjoyment of life and liberty, with the right to acquire and possess property of every kind, and to pursue and obtain happiness and safety; subject, nevertheless, to such restraints as the government may justly prescribe for the general good of the whole.” These rights are more particularly instanced by a reference to “the right of a citizen of one State to pass through, or to reside in, any other State for purposes of trade, agriculture, professional pursuits or otherwise; to claim the benefit of the writ of habeas corpus; to institute and maintain actions of any kind in

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the courts of the States; to take, hold, and dispose of property either real or personal; and an exemption from higher taxes or impositions than are paid by the other citizens of the State,” “to which may be added the elective franchise as regulated and established by the laws or Constitution of the State in which it is to be exercised.”note An example of an obvious discrimination is to be found in an attempt by a State to give a preference to local creditors over creditors in other States.note

Distinctions based on “fundamental rights” are not very helpful in the solution of every-day problems in the application of law; and it is easier to see, that some limit will be put upon section 117, than to lay down any single principle on which it can be established. In the later decisions the United States Courts deprecate the attempt to state formally the limits of Art. iv., sec. 2, and are disposed to treat each case on its merits. In Corfield v. Coryell the Supreme Court refused to admit, that “the citizens of the several States are permitted to participate in all the rights, which belong exclusively to the citizens of any other particular State, merely on the ground that they are enjoyed by those citizens, much less that in regulating the use of the common property of the subjects of such State, the legislature is bound to extend to the citizens of all such other States the same advantages as are secured to its own citizens.” Accordingly, in 1876, the Court supported a law of Virginia limiting the enjoyment of the oyster fishery in that State to citizens of Virginia.note The same application of the doctrine in the Commonwealth would operate so as to enable a State to refuse a miner's right, or a right to select Crown land, to residents in another State, for in both cases the State is dealing with its property rights. The American doctrine seems to receive support from the decision of the Judicial Committee in Attorney General for the Dominion of Canada v. Provinces of Ontario, Quebec

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and Nova Scotia, a case which goes very far in the protection of the proprietary rights of the Provinces, in the adjustment of governmental powers.note

Other cases in the United States support different treatment of residents and non-residents, on the ground that there is some valid reason of justice or convenience for the discrimination, and that the distinction violates no sound principle. Thus the Supreme Court has supported a provision in a State Statute of Limitations, that the absence of the defendant from the State prevents time running against a creditor resident in, but not against a creditor resident out of, the State.note It has been held that the common requirement, that a plaintiff resident in another State shall give security for costs, is not ultra vires.note Again, the section does not annihilate the distinctions of persons known to Private International Law, rules of reason established by the Courts to do justice between the parties.note It does not enlarge the jurisdiction, which is ordinarily assumed on well settled principles; nor does it require the Courts to apply their local law to causes, which are properly governed by the law of some other State. Thus, a State is within its powers in limiting relief in divorce to cases where the parties are domiciled in the jurisdiction. Again, where the law of Louisiana established community of goods between persons married or having their matrimonial home in the State, it was held that the privileges and immunities section did not govern the rights of persons married and living in another State in regard to property in Louisiana.note Referring to cases of another class, it has been said that the “privilege of citizens is qualified and not absolute, for they cannot enjoy the right of suffrage or eligibility to office without such

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term of residence as shall be prescribed by the Constitution and Laws of the State into which they shall remove.”note

Taxation by the States.

The most obvious case, to which the section applies, is discrimination in taxation. Of the American provision, Judge Cooleynote says, it “will preclude any State from imposing on the property which citizens of other States may own, or the business which they may carry on within its limits, any higher burdens by way of taxation than are imposed upon the corresponding property or business of its own citizens.” Accordingly, a special tax on commercial travellers from other countries (such, for instance, as is imposed by New Zealand) would be bad so far as travellers from other States are concerned.note An absentee tax, or an increased rate of tax on non-residents, would also be bad; but this does not mean that non-residents are entitled to the most favourable treatment accorded to any class of residents. A “resident in a State” is an ambiguous term; but probably the residence intended is what has been called “habitual physical presence” in the State, neither domicile on the one hand nor mere temporary sojourn on the other.note A State may, as a matter of policy, divide its residents into classes, of which one may be treated on more favourable terms than another. Section 117 appears to be satisfied, if residents in other States are not treated more unfavourably than the less favoured class of residents in the State—they are not subject to a discrimination, which would not be equally applicable to them, if they were residents in the State and fell within the class affected.note

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The benefit of section 117 is secured only to British subjects resident in a State, terms which exclude companies from its scope. It is a personal advantage, and therefore discriminations other than against persons or classes of persons, if prohibited at all, are prohibited by other provisions of the Constitution.

It has been seen that, on the establishment of the Commonwealth, the States are subject to the restriction, that they may not tax the property of the Commonwealth; that perhaps this extends to the “instrumentalities of the Commonwealth”; and that, on the establishment of uniform duties of customs, they may no longer impose duties of customs or excise, nor put any tax upon inter-State trade, commerce, or intercourse. Further, discriminations, injuriously affecting British subjects resident in other States, are inoperative (section 117). Finally, it has been suggested, that the Commonwealth power to make laws with respect to “Taxation” may give very extensive powers of regulating taxation by the States.

In the United States, the doctrine that the laws of a State can have no extra-territorial operation has been applied to limit strictly, as a matter of constitutional law, the taxing power of the States. Thus, in M‘Culloch v. Maryland,note Marshall, C.J., said, “All subjects over which the sovereign power of a State extends are objects of taxation; but those over which it does not extend are on the soundest principles exempt from taxation.” “The subjects of taxation,” it is said, “are persons, property, and business, and any one of them may be taxed though the

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others are beyond the jurisdiction.”note Where the person is resident in a State (mere transient presence is not residence), it seems that he may be taxed in proportion to the value of his property, wherever situated; and upon the same principle, a company may not be taxed upon the whole amount of its capital stock, except by the State in which it is domiciled. Where taxation is based merely upon the presence of property, or the carrying on of business in the State, only the property there situated, or the business there done, can be taxed. Intangible property follows the person of the owner. Stock or shares in a company are taxed where the owner of the stock resides. Debts are taxable only in the State of the creditor, where alone they are “property.” Accordingly, bonds of a corporation, held by non-residents in the State, are not taxable, even though the corporation is chartered by or domiciled in the State, and the corporation may successfully resist an attempt to levy a tax in respect to them.note

No attempt has been made to limit the taxing power of the Colonial Parliaments upon similar principles. The limits of particular taxes have in many cases been expressly laid down by Parliament, and the only judicial question has been one of interpretation of the particular exercise of legislative discretion.note Where the limits have not been defined, the Courts have sought to discover and apply just principles to the incidence of the tax.

Save for the restrictions mentioned as arising out of the Constitution, the powers of taxation belonging to the State Parliaments are the same as those of the Parliaments of the Colonies. It is submitted, that the State Parliaments are not subject to the limitations which the American Courts

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have inferred from the territorial operation of laws, and that the taxing power is limited territorially only by the ability of the legislature to make its laws effective in its own territory. The question is one of considerable practical importance, especially in relation to companies. Several of the Colonies,note for example, have passed laws, similar to those which have been declared unconstitutional in America, requiring companies to pay a tax in respect of their debentures and preference shares held by persons resident out of the several colonies, and to deduct the amount from the interest or dividend of the creditor. If the American doctrine applies, such companies can successfully resist the claim of the Government, and the debenture holder may, in the Courts of the State itself, recover from the Company the full amount of the interest which it has contracted to pay him. If, on the other hand, such provisions are constitutional, the Company may, by proceedings in the Courts of the State, be compelled to comply with the Statute, and the authority of the Statute will be a complete answer to any proceedings in those Courts by the debenture holder against the Government; for there is no provision in the Australian Constitution prohibiting laws which impair the obligation of contracts. But it must be remembered, first, that a State Government is unable to resort to the Courts of any other State to enforce its revenue laws; and, secondly, that, if the contract between the Company and its debenture holder be not governed by the law of the State, the authority of the Statute will not protect the company in any other jurisdiction in which it may be suable by the creditor.note

The “Police Power” of the States.

In every work on the Constitution of the United States, we find reference to the “police power” of the States.

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In the Mayor of New York v. Miln note the Supreme Court described the powers “which relate to merely municipal legislation, or what may perhaps more properly be called internal police,” in the following terms: “We should say that every law came within this description which concerned the welfare of the whole people of a State or any individual within it; whether it related to their rights or their duties; whether it respected them as men or as citizens of the State; whether in their public or private relations; whether it related to the rights of persons or of property, of the whole people of a State or of any individual within it; and whose operation was within the territorial limits of the State, and upon the persons and things within its jurisdiction.” A later decision, having a closer relation to the modern idea of the functions of government, describes it as the power “to prescribe regulations to promote the health, peace, morals, education, and good order of the people and to legislate so as to increase the industries of the State, develop its resources, and add to its wealth and prosperity.”note

At its broadest, the police power is nothing other than the residuary power of government in the State, and, as such, is hardly capable of exact definition. But it has more restricted used, as where it is distinguished from the taxing power, or power over commerce; and the many attempts that have been made by the Courts to describe if not define it, vary according to the matter in hand and the practical distinction to be emphasised. It has in fact become the “dark continent” of American jurisprudence.note Sometimes it is used in discussions of the limits of the power of the States Legislatures, considered merely in relation to the distribution of power between legislative, executive, and judicial authorities.note Sometimes it is used

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in considering the power of the States Legislatures, as affected by the prohibitions and restrictions, either of the State Constitutions, or the Constitution of the United States.note The Constitutions contain certain guarantees against the interference of the States with private rights: it is held, that such restrictions are to be read consistently with the police power, and that the State is not deprived of its discretionary power to regulate good morals, promote health, and preserve order, though in so doing it may incidentally deteriorate property or diminish profits arising out of a contract. So, though Congress has made patent laws, the State may, as a matter of police, prohibit or regulate the sale of the patent article in the State.note Again, though the admission of subjects or citizens of other nations to American shores is a matter which can be regulated by Congress alone, it may be that a State can protect itself by appropriate legislation against paupers and convicted criminals from abroad.note

So far as concerns the Federal Constitution, the police power has been important mainly in relation to its conflict with the power of Congress over foreign and inter-State commerce. The Courts have declared the commerce power of Congress to be partly exclusive of, partly concurrent with, the power of the States. The exclusive power of Congress over foreign and inter-State commerce is mitigated by the doctrine, that, in the absence of legislation by Congress, the State may affect such commerce by their laws and police. Inspection laws, health laws, quarantine laws, the introduction of impure and adulterated foods or of diseased cattle, are the most conspicuous illustrations of laws of this class.note

As has been pointed out in chapter viii., a law may have more than one aspect. “All experience shows

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that the same measure or measures, scarcely distinguishable from each other, may flow from distinct powers, but that does not show that the powers themselves are identical.”note Public health is eminently a matter of police and for the States; foreign commerce belongs to Congress; and a quarantine law is a legitimate exercise of either power. If each authority has made a law upon the subject, and there is a collision between them, the law of Congress must prevail.note On the other hand, there has been a tendency on the part of Congress to enact laws, purporting to be in pursuance of its commerce power, but affecting matters, which have not become, or which have ceased to be, subjects of foreign or inter-State commerce. Such Acts, whether they affect the internal commerce of a State or deal with matters which are not the subjects of commerce at all, are an invasion of the exclusive powers of the State, and are ultra vires. It has been determined by a large number of cases, that the police power is an exclusive power in the States, and that there is no substantive police power in Congress. The powers of Congress are limited by enumeration, and the extent of the enumerated powers themselves must be defined by a regard to the fact, that the Constitution leaves with the States the general power to protect the lives, health, and property of the citizens, to preserve good order and the public morals. This doctrine has received its most striking and practical application in the restrictive interpretation, put by the Courts, on the prohibition imposed upon the States, and the powers conferred upon Congress, by the Fourteenth and Fifteenth Amendments of the Constitution adopted at the close of the Civil War.note

The frame of the Commonwealth Constitution is the Constitution of the United States; and it remains to

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consider how far the American discussions as to the nature and extent of police power affect the States in Australia. The powers of the States Parliaments in Australia are limited at fewer points than those of the States Legislatures in America; the “police power” is subject to fewer limitations. The questions that have arisen in the United States under the State Constitutions cannot at present arise, for the States Parliaments enjoy plenary powers unlimited by a distribution of powers among the legislative, executive, and judicial organs, or by express restriction. The States Parliaments indeed enjoy a position of independence unknown to the States Legislatures in the United States, or to the Provincial Parliaments in Canada. The powers of the former have been controlled by that jealousy and distrust of government, which has been a characteristic of American constitutional history. The power of the Provincial Parliaments in Canada is limited by the fact, that they have enumerated powers merely, and that the Dominion Executive exercises supervision over them. So far as the Commonwealth Constitution is concerned, the restriction upon State action, imposed by the U.S. Constitution in the interests of individual liberty, are, with one exception (sec. 117), absent. On the other hand, the Commonwealth Constitution leaves room for the conflict of the police power with commerce. The question in the Commonwealth will turn, not upon any “exclusive” power of the Commonwealth Parliament implied by the Courts, but upon the prohibitions of section 92. Some of the ambiguities of that section have been already referred to;note but it raises also questions similar to those which have arisen in America out of the exclusive power of Congress. In the United States, it has been held, that “in conferring upon Congress the regulation of commerce, it was never intended to cut off the States from legislating upon all subjects relating to the health, life, and safety of their citizens, though the legislation might indirectly affect the commerce of the country,note and the strictest interpretation of the police

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power has conceded, that a State may pass sanitary laws, may prevent persons or animals suffering under contagious or infectious diseases from entering the State, and for the purpose of self-protection may establish quarantine and reasonable inspection laws.note Further, “a State may prevent the introduction into the State of articles of trade, which, on account of their existing condition, would bring in and spread disease, pestilence, and death, such as rags or other substances infected with the germs of yellow fever, or the virus of smallpox, or cattle or meat or other provisions that are diseased or decayed, or otherwise from their condition or quality unfit for human use or consumption.”note It can hardly be doubted that the like powers are exerciseable by the States in the Commonwealth, and that a bonafide exercise of such powers is not an infringement of the freedom of trade, commerce, and intercourse under § 92. The case becomes more difficult, when we come to measures for the protection of the moral health of the community. The introduction of intoxicating liquids has given rise to constitutional difficulties both in the United States and Canada. In Leisy v. Hardin the Supreme Court of the United States held, that a statute of Iowa, prohibiting the transportation by a common carrier of intoxicating liquor from a point within any other State for delivery at a place within Iowa, was a restriction of Inter-State commerce, and therefore ultra vires, though in the opinion of the Court, as it might fairly be said that the provision in question had been adopted, “not expressly for the purpose of regulating commerce between its citizens and those of other States, but as subservient to the general design of protecting the morals and health of its people, and the peace and good order of the State, against the physical and moral evils arising from the unrestricted manufacture and sale within the State of intoxicating liquors.” In the Commonwealth

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Constitution, this particular matter is provided for favourably to the power of the State, by § 113, whereby “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 States as if such liquids had been produced in the State.” That the State may, as a precautionary measure against social evils, exclude convicts, harlots, paupers, idiots, and lunatics, is now generally admitted in the United States. But as the measure is one of self-defence, arising only from vital necessity for its exercise, it must not be carried beyond the scope of that necessity.note This necessity can hardly be said to exist in respect to the entrance of Asiatics or to the admission of illiterate persons, the cloak under which laws regulating the admission of aliens are commonly hidden. A Victorian law, prohibiting the admission of Chinese from New South Wales, unquestionably restricts freedom of intercourse among the States, which is prima facie contrary to section 92. It would seem that, though such a law is genuinely aimed at preserving the peace and good order and the moral health of the State, in such matters the Court must take “short views” of policy, and must hold it to be void by reason of its immediate purpose.note

While the domestic order of the States is a matter for the States themselves, they are, like the States in America, entitled to call on the Federal Government for protection against “domestic violence”; and against “invasion” the Federal Government is bound to protect them without any request (sec. 119). But it is not to be forgotten, that in the United States it has been laid down, that there is a “peace of the United States,”note which enables the Federal Government to take all steps which it may think fit, and which its courts may support, to protect the instruments and agencies of the Government,

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and to secure the due observance of its laws. In the Commonwealth, the terms, which grant its powers to the Parliament, enable it to make laws for the “peace, order, and good government of the Commonwealth” in respect to the matters committed to it, and it is safe to infer that it will have powers at least as extensive as those of the Federal Government in the United States. The functions of the Commonwealth Government are so far-reaching and its agencies and instrumentalities so many, that internal disorders on any large scale could hardly leave the peace, order, and good government of the Commonwealth unaffected in regard to them. In such a case the Commonwealth Government would intervene upon its own initiative.

Laws in Respect of Religion.

Section 116 contains a restriction upon the power of the Commonwealth, which is not very aptly placed in the chapter on “The States.” It provides that “The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.”

The last provision no doubt imposes a restraint on power, and the prohibition of laws “for establishing any religion” possibly prevents appropriations in aid of religious bodies. In 1899, an attempt was made, under a similar provision in the United States Constitution, to prevent the execution of an agreement with the Providence Hospital at Washington, a body incorporated by Act of Congress, whereby that body was to receive certain sums of money voted by Congress for providing an isolating building. It was contended that, as the institution was governed and maintained by Roman Catholics, this was aid to a sectarian institution and was a law respecting an establishment of religion. There was no suggestion that the benefits of the hospital were confined to any

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sect, and the Court held, that the fact that the hospital was controlled by a sect was immaterial in the case of a body which had been incorporated, so long as the management was in accordance with the constitution of the body. The grant, therefore, was held to be lawful.note In the Mormon case,note where the provisions against prohibition of the free exercise of any religion was relied on, the Court held that “a person's religious belief could not be accepted as a justification for his committing an overt act made criminal by the law of the land.” The words “or for imposing any religious observance” are new. The Convention was informed that, on the strength of a decision of the Supreme Court that the United States were a Christian people, Congress passed a law closing the Chicago Exhibition on Sunday, “simply on the ground that Sunday was a Christian day.” It was represented, that the words in the preamble of the Commonwealth Constitution, “humbly relying on the blessing of Almighty God,” might give some support to similar attempts in Australia, and accordingly words were inserted to meet the danger. The words may have unlooked-for effects. If “Sunday closing” is a “religious observance,” can the Commonwealth close the Custom House on Sunday, or refuse a clearance to vessels on Sundays, Good Friday, and Christmas Day?

Saving of State Laws.

Sec. 108. “Every law in force in a colony which has become or becomes a State, and relating to any matter within the powers of The Parliament of the Commonwealth, shall, subject to this Constitution, continue in force in the State, and until provision is made in that behalf by The Parliament of the Commonwealth, the Parliament of the State shall have such power of alteration and repeal in respect of any such law as the Parliament of the colony had until the colony became a State.”

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This section may be compared with the common provision in the Constitution Acts of the Colonies, saving existing laws until altered or repealed by the new legislature (e.g. Constitution Act of Victoria, 1855, section xl.).

The effect of the Constitution upon certain existing laws of the States has already been referred to in considering the powers of the State Parliament in regard to Taxation, and the provisions of section 117. The important words in section 108 are “subject to this Constitution,” and sections 114, 115, 117, and 118 make, or may make, certain existing laws of the State of no effect.

In general, State laws will remain in force after the establishment of the Commonwealth, even though they relate to matters which are within the exclusive power of the Commonwealth Parliament. The various services which are taken over by the Commonwealth, and which by section 52 are in the exclusive power of the Parliament, are taken over with the State laws thereon: otherwise, there could be no administration or control by the Commonwealth Executive, for some of them must, and all of them may, be transferred before the Commonwealth Parliament has had the opportunity to provide for them. But the power of the State Parliament to repeal or vary the laws saved is, like the saving of these laws, “subject to this Constitution.” It is submitted that, where the Constitution has declared that the Commonwealth Parliament shall have “exclusive power to make laws,” the State Parliament cannot alter or repeal the laws in force, though The Parliament of the Commonwealth has made “no provision in that behalf.” The power of the Parliament of the Colony, before such colony became a State, to alter or repeal such laws included the power to supplement them and to substitute others for them. If that power is preserved, what is the exclusive power of the Commonwealth Parliament?