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that the powers under the Act were at present exercisable exclusively by the State authorities; his judgment appears to rest not on the wrongful co-operation of the Commonwealth Governor-General and State magistrate, but on the incapacity of the Governor-General to exercise any power under the Act which, when it came into operation in the Colony, vested the power once and for all in the State Governor. This leaves open the question whether the Governor-General would not be the proper person to exercise the powers of the Extradition Act in cases where that Act is applied to Australia after the formation of the Commonwealth. It must be remembered that this Act is one which is not put into general operation by Order in Council, but is successively applied in respect to such foreign States as from time to time make extradition treaties with the Crown. If any date is to be taken as fixing the application of the interpretation section of the Act of 1870, it would seem reasonable and convenient to take the date at which the Act came into operation-viz., August 9th, 1870-and not the various dates of its several applications.

State and Commonwealth Jurisdiction.-In two cases the Courts have held that the Constitution differs from the American Constitution, on which it is generally modelled, in important points. In the United States it has been held that places over which Congress has the sole legislative power are in all other respects exclusively under the federal authority, and are for all purposes of government to be treated as outside of the State to which they belonged. Therefore, if a crime be committed in such a place it is justiciable only by the Federal Courts (U.S. v. Cornell, 2 Mason 91; Fort Leavenworth Railroad Company v. Lowe, 114 U.S. 525; Houston v. Moore, 5 Wheaton 1).

The Commonwealth Constitution provides ( 52 [1]) that the Parliament of the Commonwealth shall have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to all places acquired for public purposes. On March 1st, 1901, the Postal Department of New South Wales was transferred to the Commonwealth, and thereupon all property used exclusively in connection with the department became vested in the Commonwealth (§ 85 [1]). The Armidale post office was accordingly vested in the Commonwealth when one Bamford was charged with having stolen therefrom certain moneys. Bamford was presented for trial at the State Assizes at Armidale, and pleaded guilty; but the Solicitor-General drew the attention of the Court to the American decisions, and the question of jurisdiction was reserved. Stephen J. was of opinion that there was no substantial difference in this matter between the American and Australian Constitutions, and held that the Post Office was no longer within the territory of New South Wales or subject to its legislation or its Courts. The majority of the Court, however (Owen J. and G. B. Simpson J.), while approving of the reasoning of the United States cases, thought that the Commonwealth Constitution was to be distinguished. S. 108 of the Constitution expressly saved State

laws relating to matters within the power of the Commonwealth, and provided that they should remain in force until altered by the Commonwealth Parliament; and amongst the State laws so preserved were those which created the offence with which the prisoner was charged, and gave jurisdiction to the State tribunals. The Court was evidently impressed with the argument ab inconvenienti, and the mischief which would arise from the recognition of what, until the Commonwealth Parliament should establish Courts of federal jurisdiction, would be "little Alsatias" throughout the Commonwealth (Rex v. Bamford, 1901, New South Wales, 1 State Reports 337).

The other case is Wollaston v. Rex, determined in 1902 by the Supreme Court of Victoria. It raised the question whether the Victoria Income Tax Act, 1895, imposing a tax on all income derived from personal exertion, applied to the salaries of civil servants in the employment of the Commonwealth Government. In the United States, the doctrine of the Supreme Court in M'Culloch v. State of Maryland, 4 Wheaton 316, that a State may not impede the Federal Government by imposing any tax upon its instrumentalities, has been applied so as to prevent the Federal or State Governments from levying any tax upon the official salaries of servants of the other. This application has been followed in Canada; and, in the case referred to, it was sought to establish the same doctrine in Australia. The Supreme Court of Victoria, however, considered that a tax falling upon a federal officer in common with other inhabitants of the State, and measured by the amount of his income, including of course his official salary, was not an interference wtth federal instrumentalities, and without disapproving of the general principles laid down in the United States, they declined to follow them in their application to these

cases.

From both of these cases-determined by the Supreme Courts of different States-it is clear that the Australian Courts are not going to pay, as by some it was supposed they would pay, an implicit obedience to American cases; and in Rex v. Bamford we find G. B. Simpson J. citing with approval the remarks of Lord Halsbury, L.C., in Re Missouri Steamship Company (L.R. 42 Ch. Div. at p. 330), in regard to the citation of American decisions. Both in the terms of the Commonwealth Constitution and the existence of the Imperial relations, there is abundant reason why we should pause before accepting American cases as final in matters of Australian constitutional law.

THE MOST-FAVOURED-NATION ARTICLE.

[Contributed by WALLWYN P. B. SHEPHEARD, ESQ.]

THE subject of the most-favoured-nation article has already been fully treated in a previous number of the Society's journal.1 But as a Parliamentary paper intituled "The Correspondence with the Russian Government respecting the Interpretation of the Most-Favoured-Nation Clause in connection with the Countervailing Duties on Bounty-Fed Sugar" (Commercial No. 1, 1903) was presented in February last to both Houses of Parliament, it may be proper to recur to the question.

The Anglo-Russian Correspondence. The existing dispute between His Majesty's Government and that of Russia originated with the Indian Tariff Act (1894) Amendment Act, published in the Gazette of India Extraordinary of March 21st, 1899, whereby Russian sugar was subjected on importation into India to a countervailing duty, consequent upon the Council of India deeming that the Russian system of sugar legislation produced a bounty on exportation. Such bounty was denied, as a fact, by the Russian Government, but it is unnecessary to discuss this question of fact, inasmuch as that Government alleges that the imposition without previous negotiation of differential or countervailing duties in the case of countries which enjoyed most-favoured-nation treatment constituted an infringement of that clause in existing treaties, even when those countries granted bounties on exportation to their products. To that view-contained in the despatch of M. Lessar of June 12th, 1899-Lord Salisbury replied in a despatch of July 15th, 1899, that

the great extension and development which had taken place in the system of bounties and other analogous expedients constituted a grave menace to British industry and enterprise. Her Majesty's Government were, therefore, not disposed to admit that any Government had the unrestricted right by such means to override the clear intention of the most-favoured-nation clause, which was, that goods should enjoy equality of treatment, but not preferential advantages as compared with goods of the most-favoured nation.

When an artificial preference of such a character was produced by the direct legislative act of a foreign Government which was a party to a most-favourednation stipulation, Her Majesty's Government considered that it should be open to

See "The Most-Favoured-Nation Article" (contributed by Wallwyn P. B. Shepheard, Esq.) in the Journal of Comparative Legislation for December, 1901.

the other contracting party, if such action should seem expedient, to redress the balance of trade which had thus been artificially disturbed. The remedy in such a case lay in the hands of the Government granting the bounty, or by its legislative act producing the artificial stimulus, the discontinuance of which would cause the counteracting measures to be withdrawn.

No variation of the Indian Tariff Act in respect of Russian sugar resulted from this protest of the Russian Government. The dispute, however, was renewed in connection with the International Convention1 relative to bounties on sugar, which was concluded on March 5th, 1902, at the International Conference held at Brussels by the following Sovereign Powers: Great Britain, Germany, Austria-Hungary, Belgium, Spain, the French Republic, Italy, the Netherlands, and Sweden and Norway.

In a despatch of July 8th, 1902, His Excellency M. de Stael communicated to the British Government a memorandum prepared by the Russian Finance Minister, which, after discussing the Russian sugar legislation as to the disputed fact of the existence of any bounty, stated that—

according to the Convention concluded by the representatives of the abovementioned Powers, the contracting parties undertook to levy special duties on sugar the produce of countries which granted a bounty on the production or the exportation of sugar (Art. IV.), and to apply a lower tariff to sugar coming from countries which took part in the Convention. In order to avoid any complication with friendly Powers, the Russian Government considered it necessary to make a clear statement of its point of view on this subject before the measures adopted by the above-mentioned Conference came into force.

Russia had concluded Treaties of Commerce with all the Powers which had taken part in the Brussels Conference, in virtue of which treaties Russian products could not be taxed at any other nor at a higher rate than the products of the most-favoured countries. In these treaties this principle of most-favoured-nation treatment was not subject to any limit or any condition. The Russian Government would, consequently, consider the application of a higher tariff to Russian sugar as a violation of the treaties, even if the exportation of sugar were favoured in Russia by bounties, which, as a matter of fact, was not the case.

To put into force the measures adopted by the Brussels Conference against Russia would be a violation of the treaties, even if the treaties contained a clause dealing with the establishment of bounties on exportation.

Lord Lansdowne replied on July 30th, 1902, on the question of interpretation by stating that

should the Convention be ratified, and should the International Commission find that bounties resulted from the Russian system, His Majesty's Government would have no option but to apply the penal clause to Russian sugars, a course which, as previously stated, they would consider in no wise inconsistent with the stipulations of the Treaty of Commerce between Great Britain and Russia of January 12th, 1859.

1 Treaty Series No. 7 (1903): International Convention relative to Bounties on Sugar, signed at Brussels March 5th, 1902. (Ratifications deposited at Brussels June 18th, 1902-February 1st, 1903.)

Thereupon the Russian Government, in a memorandum by Baron Graevenitz of September 24th, 1902, discussed the whole question at great length, specifically alleging in respect of the existing Treaty of Commerce with Russia that it

was evident that neither bounties on exportation nor duties on exportation gave, in any case, to the other party the right to impose additional duties any more than they could compel it to grant any sort of bounty. Each country was free either to grant bounties to the products which it exported, or to subject them to export duties. These were merely methods, like many others, which enabled Governments to facilitate their national products being brought to international markets or to retain them in their own country.

The right to the treatment of the most-favoured nation provided for by the treaty in favour of the two contracting parties did not fetter the liberty of either of them with regard to the domestic legislation which they might consider it useful to adopt with a view to develop or encourage national industry. Whatever might be the domestic legislation of the exporting country, the goods of one of the contracting parties could not, as long as the treaty remained in force, be subjected in the territory of the other to the payment of higher duties than those levied on similar goods of another Power. Were it otherwise, the right to most-favourednation treatment would be a means of interfering in the domestic legislation of a foreign Power.

Lord Lansdowne on November 20th, 1902, continued the discussion by stating that

it was necessary first to point out that there was no intention of placing Russian sugar in the British market in a less favourable position than other sugars, for if the exportation of such sugars be stimulated by the legislative action of the countries whence they were derived, they also would receive treatment corresponding to that accorded to the Russian product, which could equally escape such treatment on the withdrawal of the encouragement it now enjoyed. The matter was, therefore, in the hands rather of the Russian than of the British Government.

The correspondence on this important point, so far as it has been officially published, was closed by a note verbale of Baron Graevenitz of January 14th, 1903, wherein he stated that

the wide divergence of views which was revealed by the correspondence hitherto exchanged between the two Governments precluded, it would seem, any chance of a compromise-all the more so as the British Government had declined the offer made by the Imperial Government to submit the matter to arbitration.

Finally the British Government had declared that the penal clause would only be applied to Russian sugar "in the case of the International Commission finding that bounties did result from the Russian system." The question, therefore, must still be considered an open one for the moment, and any further exchange of views should be suspended until the decision of the above-mentioned Commission.

The Present Aspect of the Question.-In the article already referred to

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