1. In these appeals⁽²⁾ from convictions for breaches of section 15B of the Australian Industries Preservation Acts 1906-1907, for refusing to answer questions as to the al-leged existence of contracts or combinations in restraint of trade (section 4 among the States, and 5 within the Commonwealth) and attempts to monopolize trade (section 7) among the States and (section 8) within the Commonwealth, the High Court, on 7 June-
1. upheld the conviction against Appleton, the manager, who was charged under sections 4 and 7 (the interstate sections), and by consequence upheld these sec-tions and section 15B; and
2. declared the conviction of the company under sections 5 and 8 bad, on the ground that the sections, dealing with trade and commerce within the States as well as between the States, were ultra vires.

In effect, the Court held that section 51,sub-section (xx), of the Constitution- 'Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth'-does not give power to Parliament to make laws for the creation, or in relation to the operations, of corporations (though it may as to their capacity to enter into contracts); that, except for the purposes of express powers, such as trade and commerce with other countries or among the States, that power is reserved to the States. Sections 5 (1) (a) and 8 (1) of the Act are not directed to the capacity of cor-porations to contract, which is assumed, but to their behaviour while acting within that capacity in relation to trade and commerce, both State and interstate; and so far as they deal with the domestic trade of the States, are not incidental or ancillary to the ex-ecution of section 51 (xx) of the Constitution, which prohibits the invasion of the State sphere.

'In my judgment', says Griffith C.J., 'the words of pi. (xx) are not clear and un-equivocal, but are open to two constructions, and, applying the principles which I have stated, I think that they ought not to be construed as authorizing the Commonwealth to invade the field of State law as to domestic trade, the carrying on of which is within the capacity of trading and financial corporations formed under the laws of the State. In other words, I think that pi. (xx) empowers the Commonwealth to prohibit a trading or financial corporation formed within the Commonwealth from entering into any field of operation, but does not empower the Commonwealth to control the operations of a corporation which lawfully enters upon a field of operation, the control of which is ex-clusively reserved to the States'.

2. The power to create corporations is, therefore, limited to purposes incidental or an-cillary to the express powers; in this case to the trade and commerce power conferred by section 51 (i). As the power to control the operations of corporations in relation to purely State trade, not being delegated to the Commonwealth, is vested exclusively in the States, the Commonwealth (except by denying to corporations the capacity to enter into contracts of the class in question) cannot deal with more than a few of the cases of alleged contracts in restraint of, or combinations to monopolize, trade or com-merce within the Commonwealth, to the detriment of the public. Persons expressly, and corporations (being included within the definition of persons) under the Acts In-terpretation Act 1901, may be controlled under sections 4 and 7 of the Australian In-dustries Preservation Acts 1906-1907, in relation to trade or commerce with other countries or among the States; but for the above and other reasons, such control is in-adequate to compass the evils aimed at by the Act, and of which evidence exists.
3. It may, therefore, be well to consider the desirability of obtaining, by reference by the State Parliaments under section 51 (xxxvii), or preferably by an amendment of the Constitution, greater or full power to control the contracts and acts of persons (in-cluding corporations) within the purport of the Australian Industries Preservation Acts 1906-1907.

The method of amendment (section 128) which enables the people to speak both through their national representatives and directly at the poll on a referendum, is evi-dently more in keeping with the spirit of the Constitution than that of parliamentary reference (section 51 (xxxvii)), which applies to matters affecting the interests rather of two or more States than of the whole Commonwealth.

4. No redistribution, however limited, of power should, of course, be sought except on clear evidence of its necessity. A reasonable degree of stability in machinery as well as policy is conducive to sound government. Change for its own sake, or on the lines of mere abstract principles or assumptions of perfectibility, is as little likely to be salutary as that narrow conservatism which, from mere bent of mind, opposes every proposal for reform. When the apportionment of powers is being considered, there is no prima facie presumption in favour of either the Commonwealth or the States; both alike being parts of the Federal system, the distribution among them of governmental agencies must have regard chiefly to considerations of self-sufficiency and effective use. The suc-cess of a federation depends on the nice relation and co-ordination of the parts; on the preservation or development of local, as well as national, centres of interest, discussion, and opinion. While remembering that a strong central Government is required to cope with many modern conditions, and may, therefore, be for some proposals at least rela-tively good, we must not forget that centralization does not always assure the perfect working of the democratic principle; that directness and proximity stimulate electoral interest and strengthen administrative control; and that uniform regulation of all the affairs of a continent may be inexpedient if not mischievous. Indeed, the rule that, when the grant is doubtful and not clearly necessary, the construction must respect the fact that the balance of powers is with the States, may raise some presumption against the adoption of mere constitutional experiments. 'When the advantages of the pos-session, and of the project, are on a par', says Burke, 'there is no motive for a change'.
5. Admitting, then, the force of such (not necessarily conclusive) considerations, which are directed to the susceptibilities of the State Parliaments so far as they, rather than the people whom they in some relations represent and without whose fiat no alter-ation can take place, are entitled to a reassurance, the question of a grant of power for the purposes mentioned should be considered from the point of view of the public good, for which-not for the prestige of public men-all organs of government exist. The fact that the external relations, and the character and complexity of the social and commercial life and activities, of the nation are ever changing, may from time to time call for greater sympathy and co-operation between the States and Commonwealth, if not the adjustment in some respects of their constitutional relations. Whatever is done must, of course, be done after full deliberation and by legitimate methods, and not attempted by forced and futile inferences from the text of constitutions which, in the issue, the judiciary protects against violation.
6. A question that sooner or later may have to be reconsidered, in the light of judicial decisions and the new conditions, is the apportionment of the commerce and (possibly after greater experience of its working) of the industrial power. The decision in [Hud-dart, Parker & Co. Proprietary Ltd v. Moorehead and Appleton v. Moorehead] defines, on lines never seriously challenged in the United States of America, where the involved problems are more pressing, the scope of the commerce power in relation to combinations and monopolies. 'It is now no longer possible', says Professor Woodrow Wilson in a recent article on 'The States and the Federal Government', 'to frame any simple or comprehensive definition of "commerce". Above all, it is difficult to dis-tinguish the "commerce" which is confined within the boundaries of a single State, and subject to its domestic regulation from that which passes from State to State and lies within the jurisdiction of Congress'. He is against arbitrary extension of the federal power, being of opinion that the success of the American Federation is largely due to the spontaneity and variety, the independent and irrepressible life, of its component communites, which have preserved the people from the paralysis which sooner or later falls on those who look to the central government to patronize and nurture them. 'It would be fatal', he says, 'to our political vitality really to strip the States of their powers and transfer them to the Federal Government'. But the facts have to be faced. The div-ision of a particular power may lead to indefiniteness as to sphere, harassing litigation that establishes no guiding principle, duplication and clashing of machinery, continual strain on the relations between commercial organizations and the State, and between capital and labour. This very question, 'The Constitutional Difficulties of Trust Legis-lation', is being discussed in the United States. Writing, in November 1905 in the Annals of the American Academy of Political and Social Science, Warren Bigelow, of the New York Bar, says:

The difficulty to be overcome in trying to solve the trust problem by means of federal incorporation does not lie in the vastness of the undertaking (that is a detail of the execu-tive function), but rather in the conflict between state and nation-in the infringement on state rights which it seems to involve.

Several vital and intimately connected questions arise: (a) Was the right to create a corporation reserved to the states by reason of the fact that it was not granted to the United States? (b) May not both the United States and the several states enjoy the right? (c) Would it be possible for the United States to control or destroy the corporations created by the states or to prevent their engaging in interstate business?

He appears to be of opinion that Congress can provide that no corporation shall conduct an interstate business unless organized under federal law, but that the decision in the Dartmouth College Case{i) 4 Wheat. 518 (which cannot be applied to the Com-monwealth of Australia), might prevent the inclusion of existing corporations in such a law, and that it may be desirable to amend the Constitution to make the powers of Con-gress clear. Another writer in the same issue of the Annals says the futility of State control has become so apparent that, much against their wishes, the people are com-pelled to turn for protection to the Federal Government. He suggests that the power of Congress to control and regulate the agencies engaged in interstate trade should be exercised by the passing of a Federal Incorporation Act, under which no corporation should be permitted to engage in interstate or foreign commerce until chartered by the Bureau of Corporations, which should afterwards control its creations. The Bureau should have full powers of examination of the affairs of each corporation, which should annually make and file with the Department a statement on oath setting forth, under penalties, among other things-

1. That it is not a party to any contract or agreement for the purpose of, or which operates as, a restraint of trade or commerce, or which results in giving to either cor-poration a monopoly of trade in any article of common use or utility, or which results in any business or commercial advantage over other corporations or persons engaged in like trade, business, or commerce, by virtue of such agreement or contract. That it is not a party to any pooling plan, agreement, or contract, with any other corporation for any purpose which, when carried into effect, would create a monopoly of the trade or business in which such corporation or corporations is engaged, or in any degree lessen or destroy competition between corporations or between corporations and natural per-sons engaged in business, trade, or commerce of a similar character.
2. That no part of the capital stock of the corporation is owned, controlled, or voted by any other corporation, or by the officers of any other corporation.
3. That the corporation does not have or receive any rebate, deduction, discrimi-nation, drawback, preference, or advantage in rates or transportation or anything in-cident to such transportation from any common carrier-railroad, pipeline, water car-riers, or other transportation company-by which its products are or may be transported, which give to it any advantage or profit directly or indirectly as against any other person or corporation who ships or desires to ship products of a similar character over such transportation lines under like conditions; or if any such have been received or given, then such corporation shall state when, from whom, on what account, and in what manner it was received, making a detailed exposition of the entire transaction.
4. If a corporation is a railroad or transportation company, or a common carrier of any kind, that during the past year it has not granted to any person or persons, cor-poration, or company any special rates, discriminations, advantages, or preferences whatsoever, neither has it received any such.
7. It will be seen from these references that in the United States of America, where combinations and monopolies are more numerous and extensive in their operations, the ineffectiveness of divided power is felt, and greater federal control is advocated by men who have no desire to unnecessarily narrow the sphere of the States. That the power of Congress is as great in respect of interstate, as it is admitted to be in respect of external, trade, has been questioned; but there can be no reasonable doubt that the power of the Commonwealth Parliament under section 51 (i) of the Constitution extends to the pre-vention of any interferences with the absolute freedom of trade and commerce between the States provided for by section 92.

The point is not the plenary character of the Federal power within its acknowl-edged sphere, but whether, in the interests of the public, that power should extend to legislation in respect of contracts or operations in restraint of trade, whether interstate and external or intrastate, of corporations, or corporations and persons.

8. Among the considerations that affect opinion in the matter are the difficulties of di-vided, and the advantages of Federal, control, and the magnitude of the evils to be dealt with. As to these, a few remarks may be made.

No State Acts in the matter exist, or, if passed, could effectively meet the necessi-ties of the case. It is clear that all Acts, Commonwealth and State, while covering op-erations of persons or companies in different fields of jurisdiction, should be similar in purport or terms. Otherwise, the lawfulness of operations would depend on locality, and similar facts might be made the basis of different charges, under the State and the Commonwealth Acts respectively. This would mean the application, to the same Acts, of conflicting views or standards of policy or morals, different rules as to proof, on the same evidence conviction under one jurisdiction and acquittal under another, and, in States without any legislation in the matter, freedom for the operations of the offend-ing persons or companies except so far as controlled by common law.


As regards administration, the difficulties in securing uniformity, so desirable in the case of States presenting similar conditions, would be great. It is clear that, to the extent to which concert in the enforcement of the Acts of the States and the Common-wealth was not attained, the attempts to prevent or suppress the evils would be ineffective.

9. On the other hand, if the Parliament of the Commonwealth possessed power to legislate in respect of combinations or monopolies in restraint of trade, State as well as interstate and external, the law and administration would be uniform throughout the Commonwealth. One proceeding, instead of several, would suffice; and the judgment of the Court would apply to* all, not, as at present, only to the interstate, operations of the defendants. The scope of the operations of the most powerful interests is so wide, and touches at so many points those parts and relations of the industrial power which are admittedly Federal, that it seems a clear case for one comprehensive and effective power.
10. The object of the Australian Industries Preservation Acts 1906-1907, as appears from its title, is not only to prevent and suppress restraints and monopolies of trade and commerce with other countries or among the States to the detriment of the public, but to prevent Australian industries 'the preservation of which is advantageous to the Commonwealth, having due regard to the interests of producers, workers, and con-sumers', from being destroyed or injured by the unfair competition of persons or cor-porations engaged in such trade, and the consuming public being burdened through artificially increased prices.

The Federal power which, except so far as it may deny or limit capacity, is now declared to be limited to interstate and external trade and commerce, is, therefore, directed against evils that chiefly affect the industries, and consumers, of the States. Federal policy in the matter must necessarily be based upon State necessities, though, for the purposes of jurisdiction, upon those of more than one State. Indeed, commerce, of whatever kind, is a manifestation of State industrial activity; so that though the power or means may be extended or varied, the end remains the same.

The majority-in fact 29 or 30 out of 33-of the cases that have been considered by this Department are, according to the judgment [in Huddart, Parker & Co. Pro-prietary Ltd v. Moorehead and Appletpn v. Moorehead], within the jurisdiction of the States only; but the most important are interstate; and none (affecting more than one State) can be completely dealt with without the co-operation of the States or an amendment of the Constitution in the direction suggested. Besides, operations within the jurisdiction of one State (such as those of a purely manufacturing corporation, or in respect of domestic trade) may affect the industrial activity of all; the equality of op-portunity, material development, and consequent improvement in social conditions throughout Australia, which are, or should be, the final ends of uniform legislation, may not be realized to the desired extent owing to the play of activities within the State to which the Commonwealth power does not extend. In some cases, the same combi-nation monopolizes practically the whole of the State trade, and restrains, if it does not monopolize, the interstate trade, in respect of particular commodities or services.

11. As proceedings are contemplated in cases in which there seems to be evidence to support and justify them, it is inexpedient to refer more than generally to the extent of the evils. But the facts suggest that it is only a question of time for the following extract from the preface to Snyder's work on the American Anti-Trust Laws, to become ap-plicable to Australia:

The vital importance of this legislation is apparent. It operates upon the industrial world and affects the commerce of the country and the thrift and prosperity of the nation. Shall commerce be absorbed and controlled by particular combinations who exclude all others from participation therein? The controversies which have arisen under the Federal stat-utes on the subject, clearly demonstrated that such absorption is possible. The faithful en-forcement of the Acts of Congress seem to suggest the only remedy to secure active, healthy competition, and afford to every man equality of opportunity.

12. It may be that the wider question of the reciprocal operation or overlapping of the industrial powers of the States and of the Commonwealth respectively will sooner or later have to be considered in the light of the recent judgment of the High Court in the Federated Saw Mill, Timber Yard, and General Woodworkers Employees Case.(A) Though the actual division of the powers may be made clearer by judicial interpretation, the ideal apportionment is found in some matters to exist on paper only; the same ends may be attained through different means-the same subject-matter may at once be dealt with by the Federal and State powers, to the consequent confusion in practice of their theoretically distinct fields. To say that a federal system is based upon a perfect co-ordination of parts, upon lines of demarcation so clear that conflict is impossible and the true scope of one power cannot be restricted by the incidental operation of another, is to assume an approximation to perfection that is not in all cases realized in the working of Constitutions. Two powers, distinct in name and assumed objects, may in construction and exercise come to clash-a fact which may become apparent in the application of the principles declared in the case of the Federated Saw Millers and Woodworkers organization. According to the press report of the opinion of the Judges, the Commonwealth Court of Conciliation and Arbitration has jurisdiction to adjust all submitted industrial disputes in which the disputants on both sides are interested, not merely sympathetically, but in the sense they would be in litigation, which requires that there must be some community of interest among the parties on each side; in which one of the disputants is a body of men, in more than one State, acting collectively; and the difference between the claimants and respondents is real, substantial, has an element of persistency, and is likely, if not adjusted, to endanger the industrial peace of the Commonwealth. The question of the existence of such a dispute, of which there is any evidence, is one of fact for the Court of Conciliation and Arbitration, which by its award may (in the opinion of the majority of the Justices of the High Court) supersede or vary the awards of State Industrial Tribunals, and industrial agreements whether registered or not, and may supplement the determinations of State Wages Boards within the limits of the maximum and minimum rates which such determinations prescribe.
13. Assuming that the provisions of the common rule (Act⁽⁵⁾, section 38 (f)) are not ultra vires, it may, in the event, be found that the adjustment of industrial matters (Act, section 4) over a considerable part of the fields of jurisdiction may be effected through the Court of Conciliation and Arbitration. The substitution by the States of determinations (with low maxima and high minima) for awards in the case of State industrial authorities, for other reasons improbable, would do little, if anything, to diminish the scope of the Federal award; as, in the case of any matter of interstate moment, it is really for one of the parties to decide the authority to which in the first instance an appeal should be made. If one Federal instrumentality suffice for the objects in view, it may, in the interests of simplicity, economy, administrative uniformity, and even of industrial peace, be undesirable to have several. The industrial development of a community must not be impeded by the weight of the regulative machinery. No State has more than one industrial authority to deal with the same matters; the power to prescribe the conditions of employment is vested in either a Court of Arbitration or a Board, but not in both. It would be at least anomalous if that part of the industrial power, in effect if not in intent, vested in the Commonwealth were exercised over a great part of the same field by two unrelated authorities, the Court of Conciliation and Arbitration and the Inter-State Commission, each, it may be said, in some respects, overlaying the industrial power of the States.
14. The powers of adjudication and administration which may be vested in an Inter-State Commission under section 101 are limited to those that Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of the Constitution relating to trade and commerce, and of all laws made thereunder. These include such powers of inquiry in relation to monopolies as are vested in the Comptroller-General of Customs under the Australian Industries Preservation Acts 1906-1907, but do not extend to the modification, on appeal by a State industrial tribunal, of wages or conditions of employment in one State which are alleged to be unfairly competitive with those of another. The power to deal with such rates or conditions through the Inter-State Commission is, therefore, to be sought through reference by the Parliaments of the States under section 51 (xxxvii), or through an amendment under section 128 of the Constitution. The Commission, when invested with all the powers which it is proposed to confer upon it, will discharge both administrative and quasi-judicial duties. Its powers and functions would include:
1. Those necessary for the execution and maintenance of the provisions of the Constitution relating to trade and commerce, and all laws made thereunder (Constitution, section 101).
2. In particular and addition, many of those exercised by the Board of Trade of the United Kingdom, which administers most of the chief Acts dealing with industrial matters; collects and publishes information and statistics relating to domestic and foreign trade, to labour, wages, conditions of employment; acts as, or appoints, a Board of Conciliation or Arbitration in labour disputes; and deals with other matters of vital interest to working men. Such functions, as the Prime Minister mentioned on 23 June 1909, in his statement of the business which Ministers were about to submit to Parliament, would extend to a general oversight of production and exchange; the supply of information in respect to markets and openings for trade abroad, and for the improvement and extension of Australian industries within the Commonwealth; the study through an associated Federal Labour Bureau of unemployment and schemes for insurance against it; observation of the working of the Tariff in relation to the investment of capital and the remuneration of labour, and any inconsistencies or anomalies in incidence; and the co-ordination and extension through an associated Agricultural Bureau of the work of the State Agricultural Departments.
3. The modification or removal, on appeal, of unfairly competitive rates or conditions of employment.
15. The scope of the Inter-State Commission will, therefore, be wider, though the volume of business may at first be less, than that of its American prototype, which is composed of men 'who have earned the confidence of the public', and is described as one of the most useful instrumentalities, as an adjunct of government, to secure to the commercial world the beneficial enjoyment of the Acts of Congress upon the subject of interstate commerce. In the American Commonwealth, with its 45 States and population of some 80 millions, several Departments are required for duties that in Australia, for the present, may be efficiently discharged by one. Indeed, eventually experience may show that the Commission would be the best body for, not only the purposes mentioned in paragraph 14, but for the most, if not all, of the matters now cognisable by the Commonwealth Court of Conciliation and Arbitration. To exercise through one body of experts, whose duties were confined to industrial and similar matters, all the Federal industrial powers, would be conducive to simplicity, economy, effectiveness, and uniformity. The jurisdiction of the Commission in respect of conditions of employment must not clash with that of the Court, nor interfere with the original jurisdiction of the State industrial bodies on which, as authorities of first instance in all cases, and probably of last instance in most, the work of adjustment or adjudication will mainly devolve.⁽⁶⁾

[Mr Glynn then submitted suggestions for constitutional amendments and legislation pursuant thereto. ]

(1) Date in Parliamentary Paper (see endnote (6) ) incomplete.

(2) Huddart, Parker & Co. Proprietary Lid. v. Moorehead and Appleton v. Moorehead 8 C.L.R. 330.

(3) Trustees o f Dartmouth College v. Woodward.

(4) Federated Saw Mill &c. Employees o f Australasia v. James Moore & Son Proprietary Ltd 8 C.L.R.465.

(5) Commonwealth Conciliation and Arbitration Act 1904.

(6) This opinion is not in the Opinion Books, but was published in Commonwealth of Australia, Pari Papers 1910, Vol. Ill, p. 3.