by that sum. No payment had at the time of the action been made or, save as aforesaid, authorized, nor had any obligation been incurred to make any payment out of the said sum of £250,000 so appropriated as aforesaid to the said Harbour and Coastal Defence (Naval) Account. The question for the opinion of the Court was whether the said sum of £160,000 could be lawfully deducted from the balance payable to the State of New South Wales. The Chief Justice (Sir SAMUEL GRIFFITH) :-" I agree that the word surplus in section 94 must be interpreted with reference to section 89, and that the surplus is the same thing as the aggregate amount of the balances which are required to be returned monthly to the States-no more and no less. The word ' expenditure' does not necessarily mean disbursements actually made, although that is its meaning in some contexts. But, when it is used in a direction as to the mode of making up accounts for the purpose of striking a balance, it may have a wider meaning. The real question for determination is, in my opinion: What is the meaning of the words balance' and 'surplus as used in sections 89 and 94. In a transaction between principal and agent, if the agent were required to pay over monthly to his principal all moneys collected for him after deducting disbursements made on the principal's behalf, I agree that the agent could only bring into account actual disbursements made by him in the course of the month. But, just as in the construction of a specification for a patent it is necessary to ascertain the subject matter and the sense in which the words used would be understood by persons conversant with it, so it is in the construction of a federal Constitution which regulates the relations between the Federal Government and the Governments of the States. These are by no means the same as those of principal and agent. Used in this connection, the word surplus itself connotes some period of time over which the transactions which are to result in a surplus extend. The word is one commonly used in relation to public finance, and always as connoting such a period- often called the financial year.' This must be so from the nature of the case, since the operations of government are continuous and extend over long periods. The revenue is not collected, nor are disbursements made, in equal amounts from day to day, or from month to month. Thus it must happen that in one month the receipts largely exceed the disbursements, while in another the disbursements exceed the are to receipts. The word surplus,' used in such a connection, must therefore be read in a sense which recognizes this condition and gives effect to it. And, since the divisible surplus under section 89 is made up of the aggregate of the balances payable month by month to the States, it follows that the balances themselves must be so calculated that the aggregate shall not exceed the amount of the surplus itself. It follows that, until the time has arrived at which the actual surplus is known, the calculation can only be approximate. For these reasons it is impossible to hold that the balances are to be finally struck as of the last day of every month. The plaintiffs rested their whole case upon this contention, which is, in my judgment, untenable. It follows that, if a sum of money is lawfuly appropriated out of the Consolidated Revenue for a specific purpose. that sum cannot be regarded as forming part of a surplus until the expenditure of it is no longer lawful or no longer thought necessary by the Government" 7 C.L.R., at pp. 189-191. Mr. Justice O'CONNOR Said :-"It is no doubt the right of the States under section 94 to have returned to them every month all revenue of the Commonwealth which remains after providing for Commonwealth expenditure. But the Commonwealth is entitled in accordance with well-recognized methods of public finance to accumulate revenue to be paid out later in the execution of some Commonwealth power. When moneys are duly appropriated out of the Consolidated Revenue and allotted for such special purpose they may be treated in the ascertainment of surplus revenue as Commonwealth expenditure. But if the moneys are for any reason not expended and go back into the Consolidated Revenue they must again be brought into the account between the Commonwealth and the States, and the debit readjusted. I am, therefore, of opinion that the Commonwealth is entitled under the powers conferred by the Constitution to charge against the States as Commonwealth expenditure the amounts paid out of the Consolidated Revenue under special appropriation into the two funds mentioned in the special case": id., p. 199. Mr. Justice ISAACS said: "If the Surplus Revenue Act 1908 is valid the sum of £160,000 claimed by the State of New South Wales has been lawfully deducted by the Commonwealth. That Act cannot in any view of the effect of section 94 of the Constitution be invalid unless it purports to authorize the Commonwealth to deduct that which is surplus revenue' within the meaning of section 94. To determine that point we must go back to section 81 of the Constitution, which I take to be the governing provision upon the question" id., p. 200. So long as any purpose of an appropriation remains unfilled but still existent and awaiting performance, it appears to me a hopeless contention that money which stands appropriated' for that purpose, and therefore unavailable for any other Commonwealth purpose, is yet money which not only may, but in such circumstances as the present, must, be diverted from the Commonwealth altogether and paid over irrevocably to the States. Such money cannot, as it seems to me, be regarded as surplus revenue.' Surplus revenue means free revenue, that is, not marked out by Parliament as required by the Commonwealth for carrying out purposes lawfully resolved upon ": 7 C.L.R., at pp. 199-200. 66 Mr. Justice HIGGINS said :-" In this action the State of New South Wales claims, in effect, that the several States are entitled to receive month by month, from the Commonwealth the whole of the revenue collected by the Commonwealth that has not been actually expended by the Commonwealth-that has not been applied in actual payment by the Commonwealth. If this claim is right, the Commonwealth Parliament has no power to provide out of its revenue in fat months for expenditure which it forsees in the near future-say for naval defence, or for financial assistance to a State (under section 96 of the Constitution); and the power of the Commonwealth Treasurer in making financial arrangements must be grievously crippled. But if such is the meaning of the Constitution, it is our duty to give effect to it": 7 C.L.R., at p. 203. Customs duties of Western Australia. 95. Notwithstanding anything in this Constitution, the Parliament 165 of the State of Western Australia, if that State be an Original State, may, during the first five years after the imposition of uniform duties of customs, impose duties of customs on goods passing into that State and not originally imported from beyond the limits of the Commonwealth; and such duties shall be collected by the Commonwealth. But any duty so imposed on any goods shall not exceed during the first of such years the duty charge able on the goods under the law of Western Australia in force at the imposition of uniform duties, and shall not exceed during the second, third, fourth, and fifth of such years respectively, four-fifths, three-fifths, twofifths, and one-fifth of such latter duty, and all duties imposed under this section shall cease at the expiration of the fifth year after the imposition of uniform duties. If at any time during the five years the duty on any goods under this section is higher than the duty imposed by the Commonwealth on the importation of the like goods, then such higher duty shall be collected on the goods when imported into Western Australia from beyond the limits of the Commonwealth. § 165. "PARLIAMENT OF WESTERN AUSTRALIA MAY IMPOSE DUTIES." LEGISLATION. CUSTOMS ACT 1901, Section 169. If the Parliament of the State of Western Australia in exercise of the power conferred by the Constitution imposes duties of customs on goods passing into that State, then, whilst such duties are so imposed drawback may be allowed in the State in which import duty has been paid in respect of any such goods as if exported. In pursuance of the powers conferred by section 95 of the Constitution, the Parliament of Western Australia passed the following Acts : Title. Year and Number. An Act to impose certain customs duties subject to the provisions of the Commonwealth of Australia Constitution Act. An Act to impose certain customs duties in accordance with the provisions of the Commonwealth of Australia Constitution Act. Inter-State Trade. 64 Vict. No. 14. 1 Edw. VII. No. 3. The power of the Legislature of Western Australia under section 95 of the Constitution to tax goods by way of customs duties was, while it lasted, as unfettered, so far as regards the description of goods to be taxed, as it was before the establishment of the Commonwealth; but the duties, as prescribed by that Legislature did not attach, by virtue of the Western Australia Tariff Act, to goods which are imported from beyond the limits of the Commonwealth. The imposition of duties on foreign goods was within the exclusive authority of the Parliament of the Commonwealth. The third paragraph of section 95 of the Constitution was to be read as a governing enactment qualifying the construction of every Federal Tariff. Its effect was that if the rates imposed by the Western Australian Tariff on any goods of Australian origin were higher than the rates prescribed by the Federal Tariff upon the importation of like goods, that Tariff is to be read in Western Australia as if the higher rate were prescribed by it. The taxation of foreign goods was therefore the Act of Parliament of the Commonwealth, and not of the Parliament of Western Australia The expression" like goods "in section 95 is merely a term of comparison; it includes such goods of non-Australian origin as are of the same description as the goods mentioned in the Western Australian Tariff, and is not limited to goods of a class which is presently of Australian origin: Murray & Co. v. Collector of Customs, (1903) 1 C.L.R., at p. 25. Financial assistance to States. 96. During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance 166 to any State on such terms and conditions as the Parliament thinks fit. § 166. "FINANCIAL ASSISTANCE TO THE STATES." LEGISLATION. SURPLUS REVENUE ACT 1910, Section 5. THE TASMANIAN GRANT ACT 1912. Western Australia. Under the provisions of the Surplus Revenue Act 1910, section 5, provision was made that during the period of ten years beginning 1st July 1910, the Commonwealth should pay to the State of Wes tern Australia, by monthly instalments, an annual sum which in |