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 is it 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 are to extend. The word is one commonly used in relation to public finance, and always as connoting such a periodoften 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 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." Per GRIFFITHS C.J. in New South Wales v. The Commonwealth, (1908) 7 C.L.R., 179.

"The strongest argument in favour of the plaintiffs is in the word balance' in section 89-the Commonwealth (after crediting to each State its share of the revenues, and debiting its share of the expenditure) is to pay to each State month by month the balance' (if any) in favour of the State. But this phraseology is quite consistent with the view of the word 'expenditure' which I have indicated. The States must ultimately get all moneys not actually paid by the Commonwealth; but before ascertaining the monthly balance payable to each State, the past and coming expenditure of the Commonwealth has to be taken into account and the decision

L. P.

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Per

of Parliament that money will be required for expenditure is not a decision which the judicial department should review." HIGGINS, J. 7 C.L.R., 205.

Exclusive power over customs, excise, and bounties.

90. On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive 159.

On the imposition of uniform duties of customs all laws of the several States imposing duties of customs or of excise, or offering bounties on the production or export of goods, shall cease to have effect, but any grant of or agreement for any such bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise.

$159. "CUSTOMS AND EXCISE

Exclusive Power.

"Section 90 of the Constitution has made the power of the Federal Parliament exclusive as to customs and excise duties on and after a certain date, and after that date the laws of the several States on the subject cease to have effect'; so that there was no need of section 92 for the mere purpose of ending State customs duties. The word 'absolutely free,' I take to mean that not only State customs duties were to cease (section 90), but all State prohibitions of imports from other States-and there were such prohibitions (for instance, of grapes-long after the danger of phylloxera had ceased)." Per HIGGINS, J. in Duncan v. Queensland, (1916) 22 C.L.R., at p. 636.

Duties of Excise distinguished from Licence Fees.

In 1904 E. C. Bartley was charged before a Police Magistrate, under section 75 of the Liquor Act 1898 (N.S.W.), by Sergeant Peterswald, a district licensing inspector, that "on the 25th December, 1903, at Cootamundra, in the licensing district of Cootamundra,`

he "did carry on the trade or business of a brewer without holding a proper licence under the Liquor Act 1898 (No. 18) (N.S.W.).” He admitted that he did not hold a licence under the State Liquor Act, but contended that that Act, so far as it imposed licence fees upon brewers, was no longer in force, by virtue of section 90 of the Constitution, and that, as he held a licence under the Commonwealth Beer Excise Act (No. 7 of 1901), he was entitled to carry on the trade and business of a brewer in any part of the Commonwealth. The magistrate upheld the respondent's contention and dismissed the information, on the ground that the State licence fee was a duty of excise within the meaning of section 90 of the Constitution, and was therefore ultra vires of the State Legislature. The informant (inspector) appealed to the Supreme Court of New South Wales, and the appeal was dismissed. He then appealed to the High Court, which upheld the appeal, on the ground that brewers' licence fees are not duties of excise within the meaning of the Constitution, section 90.

The Chief Justice (Sir SAMUEL GRIFFITH), in delivering the judgment of the Court said:"No doubt, in England in modern times there is a tendency to use the word 'excise' as including all kinds of inland revenue taxation which come under the control of the Commissioners for Inland Revenue. But it also appears that by a Statute, 23 & 24 Vict. c. 27, it was expressly declared that the licence fees specified in the Act, which included, amongst others, publicans' licences, should be deemed to be duties of excise for the purposes of that Act, and from that time onward we find the term has been used in England to include all these different classes of imposts. That argument seems to have prevailed in the Supreme Court, which held that, as the licence fee clearly came within the meaning of the term 'excise duty,' as used in England, it must, therefore, be taken that it was a duty of excise within the meaning of section 90, which conferred on the Commonwealth Parliament exclusive power to impose duties of customs and excise. Of course, the consequences of such a decision are very serious, for, if it is correct, the power to impose licence fees on publicans, for instance, has passed to the Commonwealth, as well as a large number of other fees, which, up to this time, have been thought to be within the power of the State to impose.

In construing a Constitution like this it is necessary to have regard to its general provisions as well as to particular sections,

and to ascertain from its whole purview whether the power to deal with such matters was intended to be withdrawn from the States, and conferred upon the Commonwealth. The Constitution contains no provisions for enabling the Commonwealth Parliament to interfere with the private or internal affairs of the States, or to restrict the power of the State to regulate the carrying on of any businesses or trades within their boundaries, or even, if they think fit to prohibit them altogether. That is a very important matter to be borne in mind in considering whether this particular provision ought to be construed so as to interfere with the States' powers in that respect. If the majority of the Supreme Court were right, the Constitution will have given to the Commonwealth, and withdrawn from the States, the power to regulate their internal affairs in connection with nearly all trades and businesses carried on in the States. Such a construction is altogether contrary to the spirit of the Constitution, and will not be accepted by this Court unless the plain words of the provisions compel us to do so. Now the term ' duties of excise' does not appear to have been used in the larger sense in any of the legislative instruments cited before us except in certain English Statutes. The word excise' is, however, often used in America with that signification. What, then, does the term

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duties of excise' mean in the Constitution in the collocation in which we find it? On this point there is an interesting passage in the Annotated Constitution of the Australian Commonwealth, by Messrs. Quick and Garran. It is interesting as giving an historical account of the origin and use of the term. The passage which is at p. 837, is as follows:- His Honor cited the passage and continued:- That is, as far as we know, a correct historical statement of the use and growth of the term in England. With respect to the Australian use of the term, we are entitled to take notice of the sense in which it has been understood and used in the legislation of the various States. We know that in some of them there were in existence for many years' duties of excise,' properly so called, imposed upon beer, spirits and tobacco. There were other charges which were never spoken of as excise duties, such as fees for publicans' licences, and for various other businesses, such as slaughterman's, auctioneers', and so forth, but these were not commonly understood in Australia as included under the head of excise duties. Bearing in mind that the Constitution was framed in Australia by Australians, and for the use of the Australian people, and that the word ' excise' had a distinct meaning in the popular mind, and that there were in

the States many laws in force dealing with the subject, and that when used in the Constitution it is used in connection with the words on goods produced or manufactured in the States,' the conclusion is almost inevitable that, whenever it is used, it is intended to mean a duty analogous to customs duty imposed upon goods either in relation to quantity or value when produced or manufactured, and not in the sense of a direct tax or personal tax. Reading the Constitution alone, that seems to be the proper construction to be put upon the term. That being so, the judgment of the Supreme Court, if it is to be supported at all, must be supported on some other ground than this."

In this instance the subject-matter is one which the Legislature of New South Wales has power to regulate, that is to say, the carrying on of any business-in the exercise of the police power of the State. It is not disputed that it can regulate the manufacture of an article, though it has no power to impose a tax upon the thing itself. From that point of view we look at the Statute in question to see whether it was passed for the purpose of regulating or controlling the manufacture of this particular article, beer. The Act provides in substance that a person who proposes to carry on the business of manufacturing beer must give the name and place where he intends to carry it on, and pay a licence fee. Whether there is also a Federal excise duty upon the manufactured beer is quite immaterial. Further, the licence not only empowers the licensee to manufacture beer, but entails the liability to have the premises entered by an inspector for the purpose of taking samples of the beer made there in order to ascertain whether there is any adulteration or not. The provision, therefore, is one of several conditions imposed upon the manufacturer for regulating the trade, which is one of the primary functions of a State Legislature."

The case of Bank of Toronto v. Lambe, 12 App. Cas., 582, is an authority for saying that, prima facie, a licence fee of this sort is not a tax on the goods themselves. Rejecting, then, the larger view as to the meaning of the term ' duties of excise,' which found favour with the majority of the Supreme Court, and regarding the term as it is used in the Constitution, where it is limited to taxes imposed upon goods in process of manufacture, we find nothing in the State Act to show that this licence fee was other than a direct tax upon the manufacturer: Peterswald v. Bartley, (1904) 1 C.L.R., 497