The Secretary to the Treasury forwards the following letter from the Governor of the Commonwealth Bank for advice:

Under date 23 May 1917, the Solicitor-General for the Commonwealth advised that in his opinion the Governor of the Commonwealth Bank need not take out a licence before entering into the business of gold-buying, and in accordance with that opinion we have been carrying on the business of gold-buying in Victoria and Western Australia without taking out a gold dealer's licence from the State.

I now enclose herewith copy of letter from the Under Secretary for Mines, embodying an opinion by the Solicitor-General for Western Australia to the effect that, though the Bank may not be subject to the State laws in regard to obtaining a gold dealer's licence, it would be unlawful for any person to deal with the Bank unless that person were himself a licensed gold dealer.

I shall be glad if you will submit the matter afresh to the Commonwealth Solicitor-General, and advise me his views of the position set out by the Solicitor-General for Western Australia.

The opinion of 23 May 1917⁽¹⁾ was based on the ground that the Commonwealth having empowered the Bank to deal in specie, bullion, gold-dust, etc., the Bank was under no liability to obtain a licence from the State before exercising its powers; otherwise the State could, by refusing a licence, prevent the carrying out of powers within the legislative competence of the Commonwealth.

In my opinion, if the Commonwealth Bank can buy gold without a licence, it is immaterial whether the person from whom the Bank buys the gold has or has not a licence, for any sale to the Bank would be a transaction to which the State law did not apply, and the powers of the State do not extend to imposing restrictions of this nature upon the transaction (D'Emden v. Pedder 1 C.L.R. 91).

[Vol. 16, p. 237]

(1)Opinion No. 795.