Note. In the United States the Courts have gone very far towards holding that the ordinary distinction between mandatory and directory provisions does not apply to Constitutions, and that as these high and solemn instruments do not condescend to procedure, all their enactments must be treated as mandatory. (See Cooley's Constitutional Limitations, p. 93.) I think, however, that the decision of the Judicial Committee in Powell v. the Apollo Candle Coy.1 sufficiently indicates that in this, as in other matters touching the exercise of legislative power, the English and American Courts are travelling on different roads.

110 A.C., p. 282.

CHAPTER XI.

FINANCE AND TRADE.

ALTHOUGH this is the title of chapter iv. of the Constitution, important provisions on the subject are to be found. in several other parts of the instrument. In chapter i., part v., sec. 51, under "Powers of the Parliament," the first matters mentioned in respect to which the Parliament has power to make laws are:

"1. Trade and commerce with other countries and among the States" a power which by section 98 is declared to extend to making laws with respect to "navigation and shipping, and to railways the property of any State."

"2. Taxation, but so as not to discriminate between States or parts of States."

"3. Bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth."

"4. Borrowing money on the public credit of the Commonwealth."

The departments of customs and excise are among the State departments of public service transferred to the Executive Government of the Commonwealth, and are therefore dealt with in chapter ii.-"The Executive Government." They are also brought within the exclusive power of the Parliament, which, by section 52, covers "matters relating to any department of the public. service, the control of which is by this Constitution trans

ferred to the Executive Government of the Commonwealth."

Finally, certain sections of chapter v.-the States-also relate to finance and trade, viz., sections 112 and 113.

A. FINANCE.

Taxation.-Sec. 51. "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to

"ii. Taxation, but so as not to discriminate between States or parts of States."

The power which lies at the root of all government is thus conferred in the most unqualified terms. It is a substantive power, and not a mere incident to the accomplishment of the other purposes of the Commonwealth Government. In the second place, the terms employed extend far beyond those used in the Constitution of the United States, where Congress has power merely "to lay taxes, duties, imposts, and excises to pay the debts and provide for the common defence and general welfare of the United States"; or in the British North America Act, 1867, where the government of particular powers-the Provincial Legislature-has power to make laws with respect to "Direct Taxation within the Province in order to the raising of a revenue for Provincial purposes." A power to make laws for the peace, order, and good government of the Commonwealth with respect to "Taxation" is prima facie more than a power to raise money by taxation, and to prescribe the matter, manner, measure, and time thereof; it is capable of embracing the whole subject of taxation, by whatever authority, throughout the Commonwealth. While the States would retain the power of regulating and imposing taxation as heretofore, their laws thereon would be subject to the paramount laws of the Commonwealth Parliament. To such an extensive construction of the power over taxation, it may, no doubt, be objected that it is a Federal Commonwealth which has

been established; that "the power to tax is a power to destroy"; that under it the Commonwealth Parliament would have power to deprive the States of the means of carrying on their government by forbidding every conceivable mode of taxation; and that it is a cardinal doctrine of construction applied both to the Constitution of the United States and the Constitution of Canada that the extent of particular powers conveyed must be measured by the nature of the union. A notable instance of restricted construction put upon extensive words is to be found in the Slaughter-House Cases,1 interpreting the Fourteenth Amendment of the Constitution of the United States, whereby no State shall make or enforce any law which shall abridge the privileges and immunities of citizens of the United States. The Supreme Court treated as irresistible the argument that a construction must be false which would involve so great a departure from the structure and spirit of American institutions as to fetter and control the States Governments by subjecting them to the control of Congress in the exercise of powers of the most ordinary and fundamental character, radically changing, in fact, the whole theory of the relation of State and Federal Governments to each other, and of both those Governments to the people. In the Slaughter-House Cases, however, the question was as to the effect of an Amendment which, had the extended meaning contended for been given to it, would have changed the relations of nearly a century by introducing Congressional and judicial control over functions which the States Legislatures had exercised independently; and the arguments of the Court would have had little or no application if the provision had been an original provision in the Constitution, so that the question would have been-What was the nature of the federal union established? The organization of the Dominion of Canada shows that the control of the federal executive over all legislative acts of the province is not inconsistent with a federal union.

1 (1873) 16 Wallace, 36.

Some controlling power over taxation would be entirely within the scope and spirit of the Union. At present the State laws of taxation may be and in some cases are based upon different principles, so that property may be liable to a double taxation which is generally recognized as inequitable. Income tax and death duties may be collected upon a different basis-one State may levy the tax upon a basis of domicil, another upon the situation of property. It would be well within the spirit of federalism that such a clash of principles should be prevented by a central authority. Further, the decision of the Privy Council in Bank of Toronto v. Lambe1 shows that the existence of a controlling power in the central authority leaves a larger sphere of action to the local authority than could in the absence of that control be safely allowed.

The argument of Marshall, C.J., in M'Culloch v. Maryland, that the "power to tax is a power to destroy," is to some extent met by the observation of the Privy Council in the Bank of Toronto v. Lambe,3 that the liability to abuse is not a sufficient reason for deciding that a power does not exist. The argument from inconvenience is one which, in any case, must be cautiously applied, and in this case it tells both ways, for in the absence of control the State can, by imposing taxation on objects taxed by the Commonwealth, embarrass the calculations of a Commonwealth Treasurer and impede the collection of federal revenue.

"Taxation" is adopted as being the most comprehensive word for describing all the various means of raising a revenue. "In the broadest sense an exercise of the taxing power occurs whenever a compulsory contribution of wealth is taken from a person, private or corporate, under the authority of the public powers" (Public Finance, by Carl Plehn, p. 77). The practice of enumerating more particularly the modes of revenue (as in the United States Constitution "taxes, duties, imposts, and excises") is one which a very slight acquaintance with English history condemns.

112 A.C. 575.

24 Wheaton, 316.

312 A.C. 575.