on the Federal power and enables the Federal Parliament to pass laws to take over from the States all their public debts both those contracted before as well as those contracted after the establishment of the Commonwealth.

No attempt has been made to use the power conferred by this section of the Constitution. The public debts of the States have under Federation gone on increasing at an accellerated speed.

Public Debts of the States before Federation.

The public debts of the several Australian Colonies in the year 1900 (taking the figures as given in Coghlan's Statistics of the Seven Colonies) were as follows:

Public Debts of the States 30th June 1918.

The following return prepared for this work by the Commonwealth Treasury, shows the public debts of the States on 30th June 1918

(a) Amount which may apparently be taken over by the Commonwealth being-Stock inscribed under the Victorian Municipalities Loans Extension Act £1,035,582 Certificates given to the Victorian Trust Fund Trustees. (These may

..

be exchanged for Government Bonds, which could be sold) Tasmanian debentures issued under Hydro-Electric Loan and Works Act, to be liquidated by half-yearly instalments of principal and interest over a period of 31 years. Interest to be at the rate of 4 per cent. per annum Tasmanian debentures to be issued to the Commonwealth Bank of Australia to replace matured stock issued in substitution for stock formerly standing in the name of Trustees, State Savings Bank, to be liquidated by half-yearly instalments of principal and interest at the rate of £705 per half-year up to 31st July 1927, and £25,479/1/5, in reduction of principal, on 1st January 1928

590,634

146,548

28,200

£1,800,964

(b) Includes £7,517,000 raised in 1917-18 towards redemption of loan of £12,648,478 maturing in 1918-1919.

CHAPTER V.-THE STATES.

Saving of Constitution.

106. The Constitution176 of each State of the Commonwealth shall, subject to this Constitution, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be, until altered in accordance with the Constitution of the State.

§ 176. "

CONSTITUTION OF EACH STATE.”

State Constitutional Powers.

In the Federal Constitution itself we find section 106 declaring that the State Constitutions are to be subject to the Federal Constitution. State powers are to give way to the requirements of the supreme instrument of Government. If the State powers are repugnant to the Constitution then they pro tanto cease to exist. If there still exists a State power of legislation it may be exerted but, with the consequence expressed in section 109, that wherever it is found to be inconsistent with the laws of the Commonwealth it is pro tanto invalid. The power of legislation controlling the Crown lands of the States remains vested in the States, but the Federal Parliament can tax Crown leaseholds held by private persons to the extent of their interests in such terms. There is a clear distinction between the proprietory rights of an individual and the property of a State. Per ISAACS, J. in the Attorney-General for the Commonwealth v. The Attorney-General for Queensland, (1915) 20 C.L.R., at pp. 172-175.

The Queensland Constitution provided (see Order in Council of 6th June 1859, clause 15, and Act 18 & 19 Vict. c. 54, Schedule I., section 38), that the commissions of the Judges of the Supreme Court should continue and remain in full force during good behaviour.

In 1867 this provision was repealed, and was re-enacted by section 15 of the Constitution Act of 1867 (Qd.). The Queensland Industrial Arbitration Act, section 6, purported to authorize an appointment of a Judge of the Court of Industrial Arbitration to be a Judge of the Supreme Court so long only as he retained the office of a Judge of the Court of Industrial Arbitration. The Governor-inCouncil by a commission, which recited the power conferred by the Industrial Arbitration Act of 1916, purported to appoint the appellant, Thomas Wm. McCawley, Esq., who had previously been appointed President of the Industrial Arbitration Court, to be a Judge of the Supreme Court of Queensland, " to have, hold, exercise and enjoy the said office during good behaviour." It was held by a majority in the High Court that the commission purported to appoint the appellant to be a Judge of the Supreme Court during good behaviour so long only as he retained the office of President of the Court of Industrial Arbitration. Held, further, that the commission was unauthorized by law, and that the appointment was, therefore, wholly invalid.: Mc Cawley v. The King, (1918) 26 C.L.R., p. 9.

Saving of power of State Parliaments.

107. Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be.

§ 177. "EVERY POWER OF THE PARLIAMENT OF A COLONY CONTINUE.'

SHALL

99

Powers of State Parliaments.

In the case of Deakin v. Webb, (1904) 1 C.L.R., 585, it was held by the High Court that the salaries of a Minister of the Crown for the Commonwealth and of a member of the Commonwealth Parlia ment, so far as they are earned in Victoria, are not liable to assessment under the Income Tax Acts of Victoria.

In support of the power of the State to tax the incomes of Federal Ministers, members and officers, it was contended that

section 107 of the Constitution is equivalent to an express re-enactment of the provisions of the State Constitutions, and operates expressly to confer upon the States de novo all the powers of legislation which they had, as States, not forming part of the Commonwealth, except those specially mentioned in the Constitution as withdrawn.

The Chief Justice (Sir SAMUEL GRIFFITH) said :- "Section 107 of the Constitution does not purport to confer any new powers. What, then, were the existing powers of taxation possessed by the States? They included unlimited powers of taxation of all property within the limits of the States, and of all persons who came within the State by its permission. Such a power is an attribute of sovereignty, and extends to all persons to whom the sovereignty itself extends quoad hoc. But could such a power have been applied to a person who came within the State, not by the State's permission, but under the direction of a paramount sovereign power, and merely for the purpose of performing duties assigned to him by that paramount power? For instance, an Admiral of the British Fleet stationed in State waters for the whole or part of a year. In practice, we know that such a power has never been asserted with respect to Governors or Admirals or officers of the Imperial Fleet, and it has not been necessary to inquire into the legal foundation for the admitted exemption. We can find nothing in section 107, or any other provisions of the Constitution, to suggest the existence of such a power. We think that the power, so far as its exercise would interfere with Federal agencies, is a power withdrawn from the States by the Constitution within the meaning of section 107" 1 C.L. R., at p. 617.

Trade and Commerce reserved to States.

The whole of the trade and commerce which begins and ends entirely within the confines of a State is excluded from Federal control. That class of trade and commerce is reserved to the States respectively by section 107 of the Constitution, for it has not been "exclusively," or at all," vested in the Parliament of the Commonwealth," nor has it been " withdrawn from the Parliament of the State." Per BARTON, J. in Huddart Parker & Co., Proprietary Ltd. v. Moorhead, (1909) 8 C.L.R., 361.

Domestic Affairs of a State.

The constitution and regulation of trading corporations are not matters within the area of Federal power, any more than the