a separate clause; see Hist. Note to sec. 92) that federal or State laws derogating from freedom of inter-state trade should be void. There was little objection raised to the prohibition of preferences by the Commonwealth, the debate being almost wholly on preferences by States. (Conv. Deb., Adel., pp. 1070-85.)

Melbourne Session, 1898.-At Melbourne, Mr. Barton proposed the clause in a sweeping form, providing that all Federal or State laws giving a preference to one State over another should be void. The debate again turned almost wholly on preferences by States. (See Hist. Note to sec. 102.) Finally Mr. Barton (Debates, pp. 1319, 1337) proposed the clause in its present form, forbidding the Commonwealth to give preferences. After various amendments dealing with State preferences had been dealt with, the clause was carried. (Conv. Deb., Melb., pp. 1250-1370, 1409-1506; supra, p. 199.)

$412. "The Commonwealth Shall Not."

This prohibition is directed not only against the Parliament of the Commonwealth, but against the Commonwealth itself-in which word is included every department of the public service of the Commonwealth.

A law which infringes this prohibition will be beyond the scope of the Constitution, and therefore unconstitutional and void. It may be assumed, however, that the courts, following the established rules of construction, will not hold any law to be void upon mere suspicion that it gives a preference, or where there is any doubt upon the matter.

§ 413. "By any Law or Regulation of Trade, Commerce, or Revenue.”

The corresponding words of the United States Constitution, are by any regulation of commerce or revenue.'

LAW OR REGULATION.- 66 Regulation" is a word which may be used in a general or a restricted sense. In its widest meaning it denotes any prescribed rule or order, and therefore includes every law; as, for instance, it does in the words of the United States Constitution quoted above. More particularly, it is often used to denote rules or regulations prescribed by the Executive under the authority of an Act of Parliament. Such rules, when within the scope of the authority given, have the force of law, and are in fact laws in every sense of the term. But the word “regulation” also includes purely administrative regulations, not made under the direct authority of an Act of Parliament, and not being laws in the proper sense of the term. The words' law or regulation,' taken together, are wide enough to include every rule or order prescribed by the Parliament or by any department of the Government of the Commonwealth.

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Regulation" does not necessarily involve restriction; a regulation may be

permissive.

"Regulation is not necessarily the imposition of a burden. The Federal statutes. for instance, authorize every railroad company in the United States, whose road is operated by steam, to carry passengers and property from State to State; to receive payment therefor, and to connect with roads of other States. This statute is a regulation of commerce made by Congress under the authority of the commerce clause, and yet is permissive only and imposes no burden." (Prentice and Egan, Commerce Clause, pp. 188-9.)

"To regulate commerce has often been defined as 'to prescribe the conditions under which commerce shall be conducted.' Such a definition as this clearly brings within its scope all regulation of instrumentalities as well as acts of commerce. It is not surprising, therefore, that this definition has been often qualified by the general statement that it is not everything that affects commerce that amounts to a regulation of it within the meaning of the Constitution." (Prentice and Egan, p. 189; Henderson v. Mayor of New York, 92 U.S. at p. 270; Munn . Illinois, 94 U.S. 135.)

Taxation of commerce is regulation of commerce-and indeed such taxation is often imposed with a view to regulation rather than with a view to revenue. (See Prentice and Egan, p. 198.)

TRADE, COMMERCE, OR REVENUE.--This section is a limitation upon two powers of the Commonwealth: the trade and commerce power, conferred by sec. 51-i., and the revenue power, contained chiefly in sec. 51—ii., but also incident to many other legislative powers of the Commonwealth. "Law or regulation of revenue" includes laws which deal with the raising of revenue from any source whatever-whether by taxation, by fines or pecuniary penalties, or by fees for licenses, fee for services, &c. The fact that, under sec. 54, bills appropriating such penalties or fees are not to be taken, for the purposes of that section, to "appropriate revenue or moneys," does not mean that penalties and fees are not revenue-and indeed rather implies the contrary.

As regards taxation, the prohibition against preferences adds little, if anything, to the provision in sec. 51-i., that taxation laws must not "discriminate between States or parts of States." But the use of the wider word " revenue" extends the prohibition to all revenues other than those arising out of taxation, and prevents any preference being given by the Commonwealth in respect of any revenue charges whatsoever; such as fees for postal, telegraphic, and telephonic services, or rates on railways of the Commonwealth.

This section, therefore, extends to all laws and regulations of trade, commerce, and revenue, the condition which is elsewhere imposed with regard to laws dealing with taxation-viz., that they shall not discriminate between States or parts of States. It is a limitation upon the power of Parliament to regulate trade, commerce, and revenue, and is intended to prevent discriminations in favour of one State against others. (Passenger Cases, 7 How. 283.)

The object of this prohibition is to prevent federal favoritism and partiality In commercial and other kindred regulations. As any law which gives a preference in contravention of this section will be unconstitutional, and therefore void, it becomes highly important to examine the meaning of the word.

A preference is a discrimination considered in relation to the person or State in whose favour such discrimination is. (See Note on "Preference or discrimination,” § 430, infra.) The prohibition here is absolute and without qualification. In the case of preferences by the States there is merely a power given to the Parliament to forbid such preferences as are undue and unreasonable, or unjust to any State; in the case of the Commonwealth, every preference whatever is forbidden by the Constitution itself, irrespective of injustice or unreasonableness.

A preference involves a departure from the standard of equality; but it is not always easy to determine what that standard is. Where, in any two cases that may be compared, there is exact similarity of all material circumstances, any departure from equality of treatment is easily detected. But exact similarity of circumstances seldom occurs; and in comparing dissimilar circumstances it must often be difficult to determine what constitutes inequality of treatment, i.e., a preference. Where the circumstances are dissimilar, a preference may arise either because the dissimilarity of treatment is excessive, or because the similarity of treatment is excessive. With regard to taxation, perhaps no serious difficulty is likely to arise; but with regard to charges for services, equal charges for different services may cause as great inequality as unequal charges for similar services. For instance if on a railway line there are three points, A, B, C, in that order, a rate for the long haul A C may be preferential by being lower than, or equal to, the rate for the short haul A B; or the rate for the short haul A B may be preferential by falling disproportionately short of the rate for the long haul A C. The Constitution prescribes no definite test of equality under dissimilar circumCost of service will presumably be a main element; but if it were the only

stances.

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element, it would lead to the illegality of "group rates on railways of the Commonwealth--i.e., equal rates from one point to all points within a group" or zone." It would also be inapplicable to postage rates, where equality of charges-even where the cost of service varies largely-is almost essential, and where any attempt to proportion the charge to the cost of service is both impracticable and undesirable. It is submitted that in deciding what is and what is not a preference the following principles should be applied :

(1.) The section should be construed in a broad and liberal manner, with especial reference to the evil which it is intended to prevent, viz., arbitrary discriminations between States or localities. The rule that no law of the Parliament will be held invalid unless it appears clearly to infringe the Constitution requires that only a plain and substantial preference should justify judicial interference.

(2.) In determining what constitutes equality of treatment, recognition should be given to the practical necessities of the case, and to all the sound administrative or business principles involved. The cost of service should be a main element, but should not exclude other considerations; such as the expediency of a zone system on railways, or the expediency of a uniform charge for postal and telegraphic services.

It seems, in short, that though the section contains no such words as "undue or unreasonable," but prohibits preferences in general, yet in order to arrive at a decision as to what is a preference, the question of what is due and reasonable is to a certain extent involved. If a difference of treatment is arbitrary, or if its purpose is to advantage or prejudice a locality, it is undue and unreasonable, and is accordingly a preference. If on the other hand the difference of treatment is the reasonable result of the dissimilarity of circumstances - or if it is based on recognized and reasonable principles of administration it is no preference. The intention and the effect must both be looked to in order to decide whether a preference exists; and in neither inquiry can reasonableness be ignored.

This does not mean that the words " undue or unreasonable" are to be read into the section. On the contrary, their absence would seem to materially increase its stringency. Reasonableness must be taken into consideration in ascertaining whether a preference exists; but a preference, though ascertained by that test to exist, need not necessarily be an unreasonable preference.

Preferences within the meaning of this section are not confined to fiscal regulations. "We can easily conceive that, if the spirit of sectionalism ever should take possession of Congress, the dominant section might devise many little petty annoyances for boats entering the harbours of the other section which would amount to an unjust preference of the ports of the former. The mere improvement of a particular harbour, the clearing of the navigation of a river which involves the altering of its channel (South Carolina v. Georgia, 93 U.S. 4), the erection of a bridge which obstructs navigation (Pennsylvania . Wheeling Bridge Co., 18 How. 421)-all these, while they may incidentally benefit one port more than another, are not preferences within the meaning of the prohibition. The people, in adopting the Constitution, intended to stop forever one State requiring exactions from the people of another for its own peculiar benefit; but they never intended to prevent the federal Government for the good of all the States from undertaking public works in a particular locality." (Lewis, Federal Power over Commerce, pp. 20-21.)

§ 415. "To one State or any Part thereof."

The corresponding words of the United States Constitution are "to the ports of one State over those of another." At the time when that Constitution was framed, navigation was the only means of carriage on a large scale, and the prohibition against preferences to ports seemed, to the Convention of 1787, to cover the whole field of necessary commercial regulation. Prentice and Egan (Commerce Clause, p. 306) suggest that--

"It is probable that the construction which will be given to the clause will be in accordance with this broad purpose. Freedom of transportation from conflicting,

discriminating, and burdensome restrictions was the purpose of the Constitution; and while the language employed was almost necessarily such as referred to the means of transportation then in existence and within the knowledge of the Convention, nevertheless the operation of the Constitution is not confined to the instrumentalities of commerce then known, but keeps pace with the progress of the country, and is adapted to new developments of time and circumstance. Within a hundred years the means of transportation has so changed that the commerce among the States conducted by land is more important than that conducted by water. Provisions of the Constitution which at first were applied only to navigation may therefore now be applied to railways, as in the case of the clause which forbids the States from laying any duty of tonnage; and the same view may also be taken of the preference clause."

In this section the scope thus contended for has been definitely expressed; and the words cover all commerce, whether by land or sea.

The preferences prohibited are preferences to localities. The other two kinds of preferences preferences to particular persons, or to particular classes of traffic (see Note, § 430, infra) are not mentioned. Of course, however, a preference to a locality consists of a preference to persons or goods in that locality; and accordingly it would seem that a preference to particular persons or classes of traffic-- even though no locality were expressly mentioned- might, if it specially favoured any State or part of a State against another State or part of a State, be within the section.

It is to be noticed also that a preference, to come within this section, must not only be a preference to one locality over another, but must be a preference to a locality in one State over a locality in another State. Discriminations between parts of the same State are not provided against by this section. The purpose is to safeguard the interests of the States as against one another, by prohibiting inter-state preferences. The section is 'evidence of the intention of the framers of the Constitution to protect the freedom of commerce from the selfish interference of a State, through its influence in the National Government." (Lewis, Federal Power over Commerce, p. 20.)

Nor abridge right to use water.

100. The Commonwealth shall note, by any law or regulation of trade or commerce, abridge the right of a State or of the residents therein418 to the reasonable use419 of the waters of rivers 420 for conservation or irrigation421.

HISTORICAL NOTE.-The only mention of rivers in the Bill of 1891 was in the clause enumerating the legislative powers of the Federal Parliament, which contained a subclause "River navigation with respect to the common purposes of two or more States or parts of the Commonwealth." (Conv. Deb., Syd., 1891, pp. 689-92; see p. 138, supra.)

Adelaide Session, 1897.—The sub-clause as proposed by the Constitutional Committee, and embodied in the first draft at Adelaide, empowered the Federal Parliament to legislate as to "The control and regulation of navigable streams and their tributaries within the Commonwealth and the use of the waters thereof." The debate is summarized at pp. 174-6, supra. The clause was ultimately cut down to "The control and regulation of the navigation of the River Murray, and the use of the waters thereof, from where it first forms the boundary between Victoria and New South Wales to the sea." (Conv. Deb., Adel., pp. 794-829.)

Melbourne Session, 1898.-Both Houses of the South Australian Parliament had proposed to extend the clause--the Assembly to all the tributaries of the Murray, and the Council to the rivers Darling, Murrumbidgee, and Lachlan. The result of the first debate (see pp. 194-6, supra) was that after a number of amendments had been proposed and rejected, the sub-clause was struck out altogether (Debates, p. 480), and all proposals

made in substitution for it were defeated; the question of river control being thus left, as in the United States, to the operation of the "trade and commerce Deb., Melb., pp. 31-150, 376-642.)

power. (Conv.

On the second recommittal (see pp. 196-7, supra) Mr. Glynn moved an addition to the "trade and commerce" sub-clause, defining "navigable rivers" on the broad basis of American decisions; but the question was eventually postponed until after the settlement of the navigation power. The New South Wales representatives feared that the paramountcy of the federal navigation power might injure State rights of water conservation and irrigation; and Mr. Carruthers proposed to add to the "Navigation and Shipping" sub-clause a proviso that the use of the river waters for navigation should be subordinate to conservation in the States. This was eventually withdrawn in favour of Mr. Reid's amendment to the effect that the navigation power should not "abridge the rights of a State or its citizens to the use of the waters of rivers for conservation and irrigation." Sir John Downer's amendment to add "reasonable" before use" was carried, and the sub-clause as amended was agreed to. (Conv. Deb., Melb., pp. 1947-90.)

After the fourth Report, it was amended to stand as a separate clause.

§ 416.

"The Commonwealth shall Not."

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(See Note on the same words in the preceding section, § 412, supra) This section is a further limitation of the trade and commerce power. The necessity for the provision arose out of the twofold importance of the rivers-as highways of inter-state commerce, and as channels and reservoirs for the water which is essential for the development of the land. In the event of any conflict between these two purposes, the power of the Federal Parliament to regulate navigation would have prevailed absolutely against any claims by the States to the use of the water, and the object of this section is to limit the paramountey of the navigation power so far as it may interfere with "the reasonable use of the waters for State purposes.

The river systems of Australia bear a very close analogy, in many respects, to those of the arid portion of the United States, in which the rainfall is not sufficient for the production of the crops, and which covers about two-fifths of the whole area of the United States.

"Here the paramount interest is not navigation of the streams, but the cultivation of the soil by means of irrigation. Even if, by the expenditure of vast sums of money in straightening and deepening the channels, the uncertain and irregular streams of this arid region could be rendered to a limited extent navigable, no important public purpose would be subserved by it. Ample facilities for transportation, adequate to all the requirements of commerce, are furnished by the railroads, with which these comparatively insignificant streams could not compete. But, on the other hand, the use of the waters of all these streams for irrigation is a matter of the highest necessity to the people inhabiting this region, and if such use were denied them, it would injuriously affect their business and prosperity to an extent that would be an immeasurable public calamity." (United States v. Rio Grande Dan and Irrigation Co., New Mexico, 51 Pac. Rep. 674; cited Prentice and Egan, pp. 116-7.)

In these arid regions difficulties arose not only between the States, but between higher and lower riparian owners in the same State. The riparian common law of England, which required every riparian owner to permit the flow of the water undiminished in quantity and unimpaired in quality, had grown up under totally different conditions, and was found inapplicable to the circumstances of the arid regions.

Notwithstanding the unquestioned rule of the common law in reference to the right of a lower riparian proprietor to insist upon the continuous flow of the stream as it was, and although there have been in all the western States an adoption or recognition of the common law, it was early developed in their history that the mining industry in certain States, the reclamation of arid lands in others, compelled a departure from the common law rule, and justified an appropriation of flowing waters both for mining purposes and for the reclamation of arid lands, and there has come to be recognized in those States, by custom and by State legislation, a different rule--a rule which permits,