and void. The States have exclusive control over their external trade and commerce which includes external shipping and navigation. The valid and invalid parts of the Act being interwoven and inseparable the whole Act was declared void: Owners of the S.S. Kalibia v. Wilson, (1910) 11 C.L.R., 689.

It is consistent with moderation to say, that of all the judicial decisions in the interpretation of the Constitution the two which caused most surprise and perturbation were one pronounced by the Privy Council, and the other by the High Court. In the case of The Colonial Sugar Refining Co. Ltd., (1914) 17 C.L.R., p. 644, the Privy Council, over-ruling the High Court, held that the Commonwealth Royal Commission Act was ultra vires as dealing with the right of general inquiry reserved to the States, thus reducing to legal wreckage a carefully developed piece of machinery legislation, the loss of which has greatly inconvenienced the Government of the Commonwealth. The law advisers of the Commonwealth are greatly perplexed in their efforts to discover the grounds of the Privy Council's decision, and above all how to replace the lost Act which nearly everybody in Australia thought so fairly within the incidental power of Federal legislation.

The other decision which caused equal dismay was that of the High Court in the case of New South Wales v. The Commonwealth, (1915) 20 C.L.R., p. 55, confirmed and followed in Duncan v. The State of Queensland, (1916) 22 C.L.R., p. 557, in which it was held that State laws such as the New South Wales Wheat Acquisition Act and the Queensland Meat for Imperial Uses Act could legally authorize the acquisition of, or control by the States of private property in such a way as to indirectly interfere with the rule of inter-state free trade conferred by the Constitution, section 92.

Hence it would look as if the reserved powers of the States to nationalise, or even to hold in custodia legis, private property could, if exercised to its fullest extent, destroy the principle of inter-state freedom of trade which forms one of the basic reasons and advantages of Federal union. Such legislation, if persisted in by the States, will undoubtedly endanger the present system of Federal Government in Australia. The Acts referred to, however, may prove to have been the result of desperate efforts made by the States to deal with internal trade and commerce during extraordinary conditions arising from the war, and do not represent the normal policy of the States in time of peace.

(5) THE RULE IN D'EMDEN v. PEDDER.

Means and Instrumentalities of Government.

The rule of construction formulated with precision and lucidity by the Chief Justice (Sir SAMUEL GRIFFITH), as the mouth-piece of the High Court, in D' Emden v. Pedder, (1903) 1 C.L.R., 91, was that, when a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control or interfere with the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative.

In the Wollaston Case, (1902) 28 V.L.R., 357, decided before the constitution of the High Court, the Full Court of Victoria refused to recognize the doctrine of implied prohibition and its view was afterwards sustained by the Privy Council in Webb v. Outrim, (1907) A.C., 81. On the other hand the High Court following the decisions of the Supreme Court of America in McCulloch v. Maryland, (1819) 4 Wheat., 316. Collector v. Day, (1870) 11 Wall., 113, and the Canadian case of Leprohon v. The City of Ottawa, (1877) 2 Ont. Ann. Rep., 522, held in D'Emden v. Pedder, (1903) 1 C.L.R., 91; Deakin v. Webb, 1 C.L.R., 558 and Baxter v. The Commissioner of Taxation of New South Wales, 4 C.L.R., 1087, that the doctrine of implied prohibition applied to exempt Federal instruments and the salaries of Federal officers from State taxation.

The rule in D' Emden v. Pedder is founded on the principles laid down by the Supreme Court of the United States in the great case of McCulloch v. Maryland, (1819) 4 Wheat., 316. The propositions affirmed by MARSHALL, C.J. in that case were first, that the grant of enumerated powers to the United States impliedly carries with it the grant of all proper means not expressly forbidden, to effectuate those powers; and next, that conversely, as such a grant of these powers and means would be entirely illusory unless their full and free exercise were intended, there arises a necessary implication that no State even to the least extent, can derogate from the grant by usurping the powers or, by obstructing the means of carrying them into execution.

The means, agencies and instrumentalities employed by the Federal Government to carry into operation the powers granted to it are necessarily and for the sake of self-preservation exempt from

taxation and interference in any substantial shape or form by the States. So also those means, agencies and instrumentalities necessary for or depending upon the reserved powers of the States should, for like reasons, be equally exempt from Federal taxation and interference. Their unimpaired existence is as essential in one case as

in the other.

No Express Prohibition.

Yet there is no section in the Constitution which expressly prohibits the Federal Government from taxing the means and instrumentalities of the States nor is there anything prohibiting the States from taxing the means and instrumentalities of the Commonwealth. In both cases the immunity rests upon necessary implication and it is upheld by the great law of self-preservation seeing that any government whose agencies employed in conducting its operation are subject to the control of another and distinct government can exist only at the mercy of that other Government.

The Doctrine of Implied Prohibition and Necessary Implication.

There are several sections in the Constitution of the Commonwealth such as 114, 115, 116 and 117 which contain expressed limitations of the legislative powers of the Commonwealth and of the States. Although these sections are not framed in identical language they deal with the same matters as those dealt with by corresponding sections in the Constitution of the United States, hence both Constitutions contain express limitations and prohibitions, but it does not follow that such express limitations and prohibitions are exhaustive, or that they exclude the possibility of prohibitions and limitations arising from necessary implications.

The rule of construction known as the doctrine of implied prohibitions may be put this way. The States possess the reserved powers, and consequently control over internal trade. Therefore there is inhering in all the powers granted to the Commonwealth Parliament an implied prohibition against interference with the internal affairs of the States unless it is removed by express words or necessary implication.

This was the interpretation laid down and peculiarily illustrated in the case of the United States v. Dewitt, (1869) 9 Wall., p. 43, in which Chief Justice CHASE said "Congress has power to regulate commerce with foreign nations and among the several States and

with the Indian tribes; the Constitution expressly declares so. But this express power to regulate commerce among the States has always been understood as limited by its terms, and as a virtual denial of any power to interfere with the internal trade and business of the separate States; except, indeed, as a necessary and proper means for carrying into execution some other power expressly granted or vested."

In opposition to the Dewitt doctrine, the Canadian case of The Grand Trunk Railway v. The Attorney-General of Canada, (1907) App. Cas., 65, has been cited. The question for decision in that case was whether a Dominion Statute, which prohibited railway companies created by the Dominion Parliament from contracting out of a liability to pay damages for personal injuries to their servants, was within the competence of that Parliament. The validity of this provision was attacked on the ground that it was in substance an interference with "property and civil rights," matters reserved to the provincial legislatures under section 92 of the Constitution. It was not disputed that the power to make laws relating to through railways was entrusted to the Dominion. Under section.91 the question for determination was thus stated by Lord DUNEDIN, who delivered the judgment of the Board, (1907) A.C., 65, at p. 67:-" The point therefore, comes to be within a very narrow compass. The respondent maintains that this is truly railway legislation. The appellants maintain that, under the guise of railway legislation, it is truly legislation as to civil rights." After referring to the occasional overlapping of the field of Dominion and provincial legislation, he proceeded to say:-" Accordingly, the true question in the present case does not seem to turn upon the question whether this law deals with a civil right-which may be conceded—but whether this law is truly ancillary to railway legislation" (1907) A.C., 65, at p. 68.

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These two cases seem quite irreconcilable. The true method of deciding such questions under our constitution is where a Federal law purports to invade the field of domestic trade, commerce and industry reserved to the States, to ask the questions (1) what is the principal grant of Federal power? (2) Is the law challenged within the principal grant or is it truly ancillary to the principal grant? Any legislation outside one or the other of these two exclusive sources of Federal authority is prohibited; hence in the Federated Amalgamated Government Railway and Tramway Employees' Case, (1906) 4 C.L.R., 488, it

was held that there was an implied prohibition against Federal interference with labour questions in State railways. In The King v. Barger, (1908) 6 C.L.R., 41, it was held that there was an implied prohibition against Federal interference with labour conditions generally reserved to the States. In the Union Label Case, 6 C.L.R., 469, it was held that there was an implied prohibition against Federal interference with the domestic commerce and industrial matters reserved to the States. In Huddart Parker & Co. Ltd. v. Moorehead, (1908) 8 C.L.R., 350, it was decided that there was an implied prohibition against Federal interference with questions of contracts made by corporations carrying on business within a State.

State Government Railways.

In the Federated Amalgamated Government Railway and Tramway Employees' Case, 4 C.L.R., 538, it was contended that the doctrine of immunity did not apply to State Government railways which were not means and instrumentalities of Government within the rule of exemption.

State Government Liquor Trade.

In support of this contention the case of South Carolina v. United States, 199 U.S., 437, was cited. There the Supreme Court of the United States, by a majority of five to four held that the State of South Carolina, which had made the liquor trade a State monopoly, could not invoke the doctrine so as to claim exemption from excise duties upon the liquor of which it made use. The argument in support of the application of that decision to the Railway Case was that the doctrine was limited to means and instrumentalities of a governmental character, and that the business of a common carrier is not a part of any of the recognized branches or functions of government. Dealing with this argument the Chief Justice (Sir S. GRIFFITH) said:" Whether the majority judgment in South Carolina v. United States would or would not commend itself to this Court in a similar case, we are of opinion that it has no application to the present case. We apprehend, however, that the execution or administration of the laws of the State is, in the strictest sense, a governmental function, and that no rule can be formulated, because there is no authority competent to formulate it, which shall prescribe what functions the State shall undertake in the supposed exercise of its duty to promote the well-being of its people. There is high authority, both ancient and modern, for holding that the