with the consent a clause giving the Federal Parliament power The fixing of Railway Rates and the regulation of river traffic Railway Rates were two of the Legislative powers of the Federal Parliament on which the Convention had much difficulty in coming to a final decision. The regulation of river traffic was a subject so entirely conditioned by the peculiar characteristics of the Australian river system that its final settlement has little more than merely local interest. The fixing of Railway Rates, on the other hand, though also greatly influenced by local considerations, has a wider bearing in view of the certainty that the same problem must face any country whose several States may endeavour to form a system of Union. The work of the Convention on this point must, therefore, be considered in some detail. In the Commonwealth Bill of 1891 a clause was inserted empowering the Federal Parliament to annul any State Law or regulation "having the effect of derogating from freedom of trade or commerce between different parts of the Commonwealth." When the Bill was under discussion the question was raised whether this clause would extend to the prevention of preferential railway rates, but all amendments designed to make the clause clearly applicable to such cases were negatived. In the draft Bill submitted to the Adelaide session of the Convention of 1897, however, there were provisions expressly designed to prevent preferential railway rates. Thus it was laid down that any State Law derogating from the freedom of inter-State trade should ipso facto be null and void, whilst the Federal Parliament was empowered to create an inter-State Commission, whose powers as to railway matters were to be limited to the control of rates and regulations "preferential in effect and made and used for the purposes of drawing traffic to that railway from the railway of a neighbouring State." It was during the debate at the Adelaide session that the practical application of such a power vested in the inter-State Commission was clearly defined. Messrs. Quick and Garran ("Annotated Constitution of the Australian Commonwealth," p. 179) describe the situation as follows: "The problem was a most difficult one, involving important commercial and political interests. Under the provincial system, each Colony had re-inforced its barrier of customs-houses by a war of railway rates and railway policies. This was especially the case between New South Wales and Victoria. Each Colony had built its railway lines and arranged its rates with a view to concentrating as much trade as possible in its own capital. New South Wales, having an immensely larger area than Victoria, had tried to gather into Sydney all the trade of that area, and had built octopus' railways into the south-western or 'Riverina' district-taking care not to extend them quite to the Victorian border, lest some of the trade might flow the wrong way. A large area of New South Wales, however, is nearer to Melbourne than to Sydney; and Victoria ran numerous lines to the border in order to tap the trade of these outlying districts of New South Wales. Then began a system of frankly competitive rates, Victoria offering special reductions-in some cases amounting to 66 per cent.-to goods coming from across the border, while New South Wales endeavoured to retain the trade by prohibitive rates for produce travelling towards Melbourne, and by extremely tapering long-distance rates for produce travelling to Sydney. This cutthroat competition between the two railway systems was, moreover, complicated by the competition of both with river-steamers trading to South Australia. As regards the 'long-haul' rates in New South Wales, there was also the difficulty that tapering rates for long distances are required by the soundest principles of railway management; and it seemed impossible to ascertain the precise point at which it could be said that a differential rate became preferential and non-Federal in character, or the precise degree of tapering which was necessary for the development of territory, and in the interests of producer and carrier alike. The only obvious test-that of the direct profitableness or unprofitableness of the rate to the carrier—was inapplicable because the carrier, being the Government, had public and political interests which might justify it in running the railways at a loss for the public benefit." It was in the light of this delicate situation as between New South Wales and Victoria, with South Australia holding a watching brief in the interest of her river traffic, that the Adelaide session had to deal with the control of railway rates. The question, however, proved too difficult to be settled during that session, and the Bill went to the Legislatures containing a clause establishing an Inter-State Commission charged with the duty of seeing that no State laws should derogate from the principle of inter-Colonial freedom of trade, without any limitation of its powers [as in the draft Bill] to railway rates and regulations only in so far as they were "preferential in effect, and made and used for the purpose of drawing traffic " from the railway of one State to that of another State. In the Legislatures this establishment of the Inter-State Commission passed almost unquestioned, although the House of Assembly of New South Wales struck it out of the Bill. But at the Melbourne session the question of railway rates was thoroughly re-considered; its importance, and the real necessity for a satisfactory solution of its difficulties, being very clearly recognised. At first, though there was substantial agreement on the point of Federal prohibition of unduly high rates on the railway of any State, there was equally a tendency towards absolute disagreement as to the permissibility of very low rates framed with a view to the attraction of trade. At one time, indeed, a clause prohibiting both preferential rates and rates framed in order to attract trade was actually adopted by the Convention. But the hostility of the representatives of New South Wales to any prohibition of such low rates was uncompromising. They saw that such a prohibition would make waste iron of their railways built to a great distance from Sydney with the purpose of drawing trade to that town, and they asserted again the theoretic and practical legitimacy of tapering rates. In the end the prospect of their unreconciled hostility to any part of the Bill prevailed upon the Convention to allow all the amendments which had already been passed to be withdrawn, and the discussion began again, but with the advantage of definite knowledge as to the vital points of difference. At last a settlement was reached. Preferential rates were forbidden; but rates necessary for development" were safe-guarded, and as to what amounted to such a necessity the Inter-State Commission was empowered to decide upon that point. To further satisfy the representatives of New South Wales, the Convention agreed to a clause proposed by Mr. Reid requiring that due consideration should be given by the Inter-State Commission to the financial responsibility incurred in connection with the construction and working expenses of State Railways. Thus while the several States retained control of their railways, that control was subject to the scrutiny of the Inter-State Commission, whose duty it was to see that the Federal principle of inter-colonial equality of trade was not violated by the State management, except in so far as the necessities of State development and of economical management justified some derogation from the literal interpretation of that principle. Such was the work of the convention of 1897-1898 in devising a settlement of the most salient difficulties of Federal union. The next step, under the enabling Acts of New South Wales, Victoria, South Australia and Tasmania [Western Australia waited on the action of these four Colonies] was to submit the draft Constitution to a popular referendum. In New South Wales-owing to a vote of the Legislature between the Sydney and Melbourne sessions of the Convention-the requisite affirmative majority for the adoption of the Constitution, which had been fixed at 50,000 by the enabling Act, had been raised to 80,000. In Victoria it was 50,000; in Tasmania, 6,000; whilst South Australia required no minimum majority in favour of the Bill. The story of the Referendum of 1898 is soon told. In New South Wales, Victoria and Tasmania the vote took place on the 3rd June; in South Australia on the 4th June. Victoria approved the Constitution by a majority of 78,421; South Australia by a majority of 18,480; Tasmania by a majority of 9,081. But in New South Wales the forces of opposition had their stronghold. Just as the Legislature of that Colony had distinguished itself by the ferocity of its amendments to the The First 1898. Mr. Reid and Bill drafted by the Adelaide session of the Convention; so on referendum the whole weight of a convinced repugnance to the compromises that had been agreed to by the Convention was thrown against the Constitution. Mr. G. H. Reid, the Prime Minister, though he announced that he personally would vote for the Bill, declared that he must abstain from any recommendation to the electors one way or the other. The opposition concentrated on the old lines which had entailed the ultimate rejection of the Commonwealth Bill of 1891. Equal representation in the Senate was again denounced; the uniform Federal tariff was represented as treachery to the free trade policy of the Colony. It was asserted that Victoria had dictated her views to the Convention and that she could insist on the possession of the Federal capital. To these old objections were added denunciations of the Inter-State Commission, the Deadlock Clause, and the Braddon Clause Led by Mr. Barton, the Federalist party in the Colony fought strenuously for the adoption of the Constitution. But though they carried the day, the majority of 5,367 fell far below the requisite 80,000. The Federalists in New South Wales, however, did not regard this failure to obtain the requisite majority as conclusive. They had two reasons for their view. In the first place a general election was imminent in the Colony, and it was their belief that, with the question of the adoption of the Constitution made an issue at that election, the movement in favour of adoption would gain more adherents. In the second place, Mr. Reid himself immediately after the referendum had communicated with the other Premiers inviting them to a Conference with a view to amending the Constitution in such a way as to make it more acceptable to the people of New South Wales. Though this invitation was refused, the Federalists considered that it showed that Mr. Reid was impressed by the strength of the Federalist movement in the Colony. The general election came on in July, 1898, and though Mr. Reid personally defeated Mr. Barton, his majority in Parliament was reduced to four, the result being that, whereas the old Legislature had been bitterly opposed to Federation, the new one was committed to the main principles of the Constitution, subject to certain amendments in detail. Immediately on the meeting of Parliament, these amendments were formulated in certain resolutions introduced by Mr. Reid. They included the abolition of the three-fifths majority of a joint sitting of the two Houses; the deletion of the "Braddon Clause"; a guarantee that the Federal capital should be within the boundaries of New South Wales; and minor alterations in the settlement of the questions of State boundaries, river traffic, the amendment of money bills and appeals to the Privy Council. To these resolutions two additions were made during the debate in the House of Assembly, the first making detailed proposals for the amendment of the Constitutional provisions as to alterations in the Constitution, and the second stipulating that the representation of each State in the Senate should be raised from six to eight. With these additions the resolutions passed the House of Assembly. The Legislative Council also passed them, though with substantial modifications. The position at the end of 1898 was therefore this :-That Vic- Conference of toria, South Australia and Tasmania had approved of the Constitu- Premiers, 1899. tion drawn up by the Convention of 1897 to 1898; that Queensland, Western Australia and New Zealand stood aloof; and that New South Wales, having refused to approve the Bill, had defined the conditions on which her approval might yet be granted. Under these circumstances, a conference of the Premiers of the six Colonies (for Queensland also sent her Prime Minister) met at Melbourne on the 29th January, 1899, to consider the suggested amendments of New South Wales. The recommendations of this Conference were of great importance, inasmuch as they marked the completion of the work of drafting the Constitution Bill. On the questions of rivers, money bills, judicial appeals and number of senators, the members of the Conference refused to make any alteration in the Constitution. They agreed, however, that the Federal capital should be in the territory of New South Wales, provided that the site was not to be within 100 miles of Sydney and that the Federal Parliament should sit at Melbourne until it met at the site decided on for the capital. They provided that no alteration in the boundaries of any State could be made without the consent of a majority of the votes cast upon the question of the alteration in the State affected. They added to the provisions of the Bill as to alteration of the Constitution a clause enabling a proposed law making such an alteration, if it twice passed either House of the Federal Legislature, but was refused by the other House, to be submitted to a national referendum. They failed to find any satisfactory substitute for the Braddon Clause, but they limited its operation to "a period of ten years after the establishment of the Commonwealth, and thereafter until the Parliament otherwise provides," and added a new clause empowering the Parliament, during the same period, to grant financial assistance to any State. They acquiesced in the demand of New South Wales for the abolition of the three-fifths majority at the joint sitting and replaced it by "an absolute majority of the total number of the members of both Houses." Lastly, they introduced a new clause for the benefit of Queensland, which provided that if she joined the Commonwealth as an original State, her Parliament might, pending Federal legislation, divide the State into electorates for the purposes of Senate elections. It was now necessary to pass an "Enabling Act" in each Colony The Second providing for a further reference of the amended Constitution to Referendum, the people. In New South Wales this Act provided for a Refer- 1899. endum, to be decided by a simple majority, and allowed a vote upon the referendum to a person qualified for registration, even if he was not actually registered. It was at first materially altered by the Legislative Council, which was at that time much below |