CHALLENGE TO BANK ACT

Press, Volume LXXXIV, Issue 25427, 25 February 1948, Page 7

CHALLENGE TO BANK ACT

CASE FOR STATE OF ’ VICTORIA INVASION OF RIGHTS ALLEGED (Rec. 11 p.m.) MELBOURNE, Feb. 24. The Commonwealth Banking Act of 1947 was an invasion of State rights, said Mr E. H. Hudson, K.C., appearing for the State of Victoria in the challenge to the validity of the act before the High Court. Much of his argument turned on the meaning uf the word “’banking,” as used in paragraph 13, section 51, of the Constitution. Mr Hudson submitted that the paragraph itself showed that “banking” as a word was intended by the framers of the Constitution to have a rather limited meaning. He said that the very wording of the paragraph—for example, the phrase, “extending beyond the limits of the state concerned'' — suggested that the prohibition of state banking as such had not been envisaged by those who drew up the Constitution. The effect of the paragraph was to empower Parliament to make laws regulating banking transactions, but no more.

Mr Hudson said that the Banking Act of last year was inconsistent with the terms of paragraph 13, which indicated that state banking was not to be a subject of Commonwealth legislation. The., Federal Parliament had invaded the’sphere of state rights by passing legislation which affected and prejudiced the independence ana autonomy of state banks under the provisions of the act. State banks could ultimately be destroyed.