I refer to your memorandum dated 7th January, 1946, forwarding for consideration a plan for the post-war organization of the potato industry. The plan appears to comprise four principal matters, as follows:

1. Control of production of potatoes (including licensing of growers and allocation of acreage);
2. Marketing of potatoes;
3. Maintenance of quality of potatoes;
4. Fixing of prices of potatoes.

The Commonwealth has no constitutional power with respect to (a).

As to (b), the Commonwealth has power to legislate with respect to trade and commerce (i) with other countries; and (ii) among the States. I assume that there is little or no overseas trade in potatoes. So far as trade in potatoes among the States is concerned, the powers of the Commonwealth are subject to several qualifications, the most important of which arises from the constitutional requirement that trade and commerce among the States shall be absolutely free. It will be seen, therefore, that the Commonwealth’s powers with respect to (b) are decidedly limited and are probably of little value for the present purpose.

The Commonwealth has no constitutional power with respect to (c).

As to (d), the Commonwealth is at present fixing prices in pursuance of regulations made under the defence power. This exercise of the defence power cannot be prolonged indefinitely and unless, therefore, power to fix prices is conferred on the Commonwealth by constitutional amendment or by reference from the States, sooner or later the present control of prices will cease. I note that the plan includes the setting up of a Federal Controlling Committee and that State authorities are to operate in accordance with the policy of the Federal Controlling Committee. The Commonwealth has no constitutional power to require a State authority so to operate.

Additional proposed functions of the Federal Committee are –

1. to maintain equitable production as between States and to maintain a proper balance of distribution; and
2. to publicize the importance of the potato.

As to (a), the Commonwealth would not appear to have constitutional authority to confer this function on the Committee.

As to (b), the power of the Commonwealth to appropriate moneys for a purpose not falling within the scope of the Commonwealth’s legislative powers is in doubt. The Commonwealth has, of course, power under section 96 to grant financial assistance to the States or to any State.

In conclusion, I desire to say that I have dealt with this matter purely on the basis of the Commonwealth’s constitutional powers. It is not within my functions to advise as to the constitutional powers of the States.

[Vol. 37, p. 22]