• I am asked to advise whether the Constitution permits the Commonwealth to nationalise interstate commercial aviation. Such a policy would require the establishment of a Commonwealth instrumentality, with an exclusive right to carry on the transport of persons and goods interstate. In my opinion the Constitution does authorise the carrying out of such a policy.

2. The express power of the Commonwealth to make laws with respect to trade and commerce among the States (section 51(1)) authorises the Commonwealth to set up an instrumentality of its own to carry on any operations in the course of interstate trade. Since the decision of the Supreme Court of the United States in McCulloch v. Maryland⁽¹⁾ in 1819, this proposition seems to be plain beyond any possible doubt.
3. It follows that the Parliament also has power to acquire (on just terms, of course) any existing air transport undertaking, or any other property, for the purpose of establishing the Commonwealth instrumentality referred to in paragraph 2 above: see section 51(xxxi).
4. Whether the Commonwealth can validly exclude all private agencies from interstate commercial aviation must depend on whether a law for that purpose would infringe the declaration in section 92 of the Constitution, that interstate trade shall be absolutely free. In the present state of the authorities, the answer to this question cannot be regarded as wholly free from doubt. In my opinion, however, section 92, as now interpreted by the Privy Council and by the High Court, does not prevent the Commonwealth from monopolising any particular means of interstate transport. See in particular the judgment of Evatt J. in The King v. Vizzard (1933) 50 C.L.R. 30, esp. pp. 81–2, 93–4 which was expressly approved by the Privy Council in James v. Commonwealth. The interest protected is the right of the vendor of goods to market them without impediment in another State, not the right of a person to carry on or use any transport agency he chooses. The Privy Council has expressly recognised the Commonwealth’s power to ‘canalise’ the course of trade within prescribed agencies; James v. Commonwealth (1936) 55 C.L.R. 1, 54–5.
5. If the Commonwealth were so to restrict the permissible agencies of interstate trade as to prohibit or impede the flow of goods interstate, the position would be different. As long, however, as the Commonwealth provided reasonable facilities for the movement of persons and goods interstate by air, this question would not arise. The procedure in the present matter would, no doubt, be to enact a law along the lines of the Road Transport Regulation Acts of the States, forbidding any person other than the Commonwealth instrumentality to operate aircraft in the course of interstate trade without a licence, and directing the licensing authority to have regard, in deciding whether or not to grant a licence, to the adequacy of the facilities otherwise available. In 1937, the present Chief Justice of the High Court (Sir John Latham) expressly stated that, without infringing section 92, the Commonwealth can make a law along the general lines of the Transport Regulation Acts of the States; see Riverina Transport Pty Ltd v. Victoria 57 C.L.R. 327, 353.

[Vol. 36, p. 213]

(1) 17 US 316 (1819).