STANLEY BRUCE'S GREAT INDUSTRIAL RELATIONSBLUNDER
The Howard government and its conservative backers are preparingwith considerable fanfare for an assault on the trade unions through so-calledreform of the industrial relations system after Howard gets control of the Senateon June 31.
This raises the issue of how the reactionary proposals of theLiberals can be defeated, as the labour movement faces these attacks in a ratherdefensive situation.
People who think there will be a massive groundswell of immediateindustrial rebellion against these proposals are deluding themselves. The labourmovement at the moment is rather battered and dispirited.
The traditional socialist slogans of mobilization are still necessaryand appropriate, but it's extremely important to conduct a rapid educational programin the labour movement about the dangers of the conservative industrial proposalsand about historical precedents.
A campaign for a militant industrial response has to be combinedwith exploring all the legal possibilities for defeating the Liberal offensive.Rhetoric about industrial mobilisation, on its own, won't get very far.
It's also necessary to construct the broadest united front, includingthe bureaucracies in the labour movement, whose interests are threatened to someextent, and state Labor governments, whose traditional prerogatives are threatened.
The Liberals have a tall order before them, legally. They'retalking about using aspects of corporations law to grab control of state industrialsystems, forcing most industrial matters into the federal sphere and then abolishingmost of the functions of the state systems.
Legally, that is a high-risk strategy. Even the current conservative-dominatedHigh Court is likely to reject such proposals if they're strenuously opposed bythe states.
A big danger in this situation is left talk by sections of theunion bureaucracy and state Labor governments about handing over the state systemsto the federal government on traditional Labor centralist grounds.
Such moves should be strenuously resisted. The striking thingabout the Liberals' proposals is that they are an extraordinary rerun of the policiesof the Bruce-Page conservative government in 1926 and 1928-29, which were defeatedfirstly in a referendum in 1926 and finally by the electoral defeat of the Bruce-Pagegovernment in 1929.
In some ways the social circumstances of the late 1920s were similarto now. The labour movement was in a relatively defensive situation and the economywas in a relative boom.
The political situation in the labour movement was quite similartoo, with Matt Charlton, the federal parliamentary leader, supporting the transferof industrial powers to the federal sphere, rather like Gough Whitlam did morerecently.
The major difference is that in the late 1920s there was quitea bit of conflict on the conservative side about the proposals, with the turbulentfigure of Billy Hughes opposing Bruce every inch of the way. There doesn't seemto be the same scale of dissent on the conservative side in current conditions.
The most recent example of successful industrial resistance toconservative attack is the struggle of the Maritime Union a few years ago. Thatwas a classic agitation combining industrial militancy, community mobilisation andthe intelligent exploitation of every legal mechanism, which largely contributedto achieving the desired outcome: the preservation of the MUA.
In Jack Lang's useful memoir, The Great Bust, which was largelyghost-written by Norm Macauley, there is a useful account of the Bruce-Page government'sfailed attempt to do what the Howard government is hoping to do. The two relevantchapters are available below to assist the beginnings of a discussion, which willhave to take place pretty fast if the next few months are to be used to preparefor mobilisation.
Imagine a referendum in which every political leader in the Commonwealthwas rejected in his own sphere of influence. That was what happened in Australiaon September 4th, 1926. No one escaped the axe. It was a referendum to hand overindustrial powers to the Commonwealth, and to provide limited powers over trustsand combines. Prime Minister Bruce sponsored the proposal. He was not only defeatedthroughout Australia but in his own state of Victoria as well. The federal leaderof the Labor opposition, Matt Charlton, supported Bruce. He also had his advicerejected throughout the Commonwealth and couldn't even carry his own electorateof Hunter.
As Premier of New South Wales I advocated a no vote. But thisstate voted yes. T.R. Bavin, who was leader of the Nationalist opposition, alsoadvocated a no vote, but his state electorate of Gordon gave an emphatic yes vote.Mick Bruxner, Dave Drummond, Frank Chaffey and other prominent members of the stateopposition, were against increased federal powers and met the same fate.
E.G. Theodore was premier of Queensland, and also was on theno side, only to have his state vote yes. Scullin, Latham, W.M. Hughes, FrankBrennan and Dr Maloney were all on the losing side.
If anyone wants to study the referendum device to prove justhow unpredictable public opinion can be, and how difficult it is to carry a referendum,this vote provides a classic study. I have opposed every referendum since the firstconscription referendum. Although the Labor platform provided for unification, Iwas always a federalist. I believed that the sovereign states had very real functions.The Commonwealth was always trying to filch them.
The state of New South Wales was always in the vanguard of socialreform. We were many steps ahead of the other states. Many of the referenda wereinspired by the hope of taking over control of our affairs, in order to deprivethe people of this state of hard-won gains. That was precisely why Bruce introducedhis referendum proposals in June 1926.
My government had passed a 44-Hour Week Act, which provided fora working day of eight hours, and a 51/2 day week. Instead of leaving the questionto the courts, we had introduced it by legislation. The Tories were hostile. Theysaid we were ruining the state. Industries would transfer to other states. We alsointroduced compulsory workers' compensation, a new factories act, the widows' pensionand had motherhood endowment ready for Parliament. The Tories were in a panic.
Bruce had just swept the country in his law-and-order electionand believed that he had a mandate to deal with the trade unions. The Crimes Acthad been the first step only. He wanted to introduce compulsory ballots for tradeunions. He also wanted power to bolster up the Crimes Act. There were still gravedoubts as to whether it was constitutional.
In the 44-Hour Act, we inserted a provision that it applied toall workers within the state, whether they worked under federal or state awards.The employers, through the Clyde Engineering Company, Lever Bros and Metters, tookthe case to the High Court. It is known in the law books as the Cowburn and AmalgamatedEngineers' Union case. By four to two the High Court ruled that federal awardsprevailed over all state awards, as did federal laws over state where the Commonwealthhas jurisdiction.
Chief Justice Sir Adrian Knox, Sir Isaac Isaacs, and JusticesRich and Starke upheld the federal power. Messrs Justices Higgins and Powers, bothwell versed in industrial law, had the opposite viewpoint.
After studying the judgment, the Bruce-Page Cabinet decidedthey could stymie the 44-hour week right away if they could obtain full power overindustrial matters for the Commonwealth. Only New South Wales and Queensland hadthe 44-hour week.
They appointed a Commonwealth Arbitration Court of three judges– Chief Justice Lukin, and Justices Dethridge and Beeby. They were given appointmentsfor life at £2500 a year. The next move was to get the question of hours andwages transferred to their court.
Bruce and his Attorney-General, J.G. Latham, decided that thetime was opportune for a referendum to increase Commonwealth powers. One of theirproblems was that a Nationalist Party conference in 1923 had voted in favor oflimiting Commonwealth powers and transferring them back to the states. But thatdidn't worry Bruce. He had just obtained a fresh mandate. Most of the states hadreturned Labor governments. In a speech to a select gathering at the Hotel Australia,presided over by Sir Owen Cox, Bruce, shortly after he had become Prime Minister,had suggested what was really needed in this country was a «dictatorship ofsix of the best brains of the land».
Bruce knew that the Federal Labor Party had always favored unification.Fisher had put a referendum to the people in 1911 and 1913, which had suggestedalterations to the constitution giving the federal government absolute power overall industrial problems, trusts and monopolies and other items in the Labor platform.They had been rejected on both occasions, with New South Wales leading the opposition.Hughes tried again in 1919 with proposals covering trade and commerce, as well asarbitration, together with power to nationalise monopolies. Again the Australianpeople had turned their thumbs down and nowhere more emphatically than in this state.
Bruce's trump card was to invite Charlton and the federal LaborParty to confer with him on proposals which they could jointly submit to the people.The Federal Caucus referred the suggestion to the state branches of the ALP.Three states were in favor of collaboration while three were against. Again NewSouth Wales opposed the suggestion. Charlton then decided that he would go ahead.
Bruce's chief proposition was that the constitution should bealtered in such a way as to hand over all power dealing with the regulation ofthe terms and conditions of employment, and the rights and duties of employers andemployees in all industrial matters to authorities to be established by the Commonwealth.That meant giving absolute power to the Commonwealth Arbitration Court.
There was a second clause, intended as a sop to the Federal LaborParty, to grant control over trusts and combinations operating «in restraintof trade». Charlton and his party didn't realise that the clause could be usedagainst trade unions as well as against powerful trusts. Then as a separate questionthere was a proposal to give the Commonwealth power «to protect the interestsof the public in case of actual or probable interruption of an essential service».
The federal caucus, after many comings and goings between thetwo parties, finally agreed to support Bruce in an appeal to the people. In Sydney,I immediately denounced it as an attempt to deprive the people of the 44-hour week.I pointed out that the states would jettison all rights to enact factory laws.Conciliation and arbitration courts would no longer be state affairs. Workers'compensation, early closing, motherhood endowment, would be solely federal matters.The Commonwealth could kill the state laws. «The whole social and industriallife of the Australian people will be at the mercy of three legal gentlemen, whowill be superior to all laws, federal or dtate. Mr Bruce's proposals are fraughtwith tremendous danger to the peace, order and good government of the Commonwealth,»I told the Labor Party. The ALP executive backed my stand.
In Melbourne, Bruce and Charlton collaborated to the limit.The only criticism came from within the government parties. A West Australian memberof the Country Party, Mr Gregory, called it an unholy alliance. WA Watt, a formertreasurer and deputy prime minister, said that it would split all parties. He hadgrave doubts. He described the rival groups as two well-bred dogs watching thebone held in the Prime Minister's hand. He was suspicious of giving judges toomuch power. «Even if they were angels from Heaven, I should hesitate to reposein these three judges of the Arbitration Court the enormous powers contained inthis measure,» said Watt.
Hughes was also against giving the power to the judges. He saidit should remain with Parliament. That was the original proposal of 1911. But itdidn't satisfy Bruce. He wanted Lukin, Dethridge and Beeby to have the power, andnot Parliament. However, Hughes finally agreed that half a loaf was better thannone and agreed to support the Bill. Mr Rodgers, a former Nationalist minister oftrade and customs from Victoria, openly attacked the Bill. He said he preferredto leave industrial matters to the wages boards as they had then in Victoria. Hesaid the Labor Party could appoint its own judges to bring in a 30-hour week and£10 a week wage.
The Bill to refer the proposal to a referendum was carried by56 votes to two – the dissenters being Messrs Gregory and Rodgers. Watt and Hughessupported the Bill. A number of Labor members, including Frank Anstey, Percy Colemanand Billy Mahony, didn't vote.
The fight then moved into the electorates. A council of federalunions was formed in Melbourne to urge a yes vote. The committee had unlimitedmoney to spend and millions of pamphlets were distributed with arguments by MattCharlton and Scullin in favor of the Bruce proposals.
The counter came when Albert Willis called an All-AustralianCongress of Trades Unions in Sydney and invited Charlton to attend. It was thefirst meeting of the ACTU.
Charlton put up a passionate defence of his stand. He was toldthat he had been guilty of an act of treachery against the working class. The minerswere particularly bitter, and they controlled his selection. Charlton said thatthe proposal was the same as Labor supported in 1911 and said that Bruce had seenthe light. «For God's sake don't let your opinions bring disruption to theLabor movement,» he pleaded. He said every member of the Labor Party wasfree to vote as he liked.
By 144 votes to 10, Charlton was rejected by the congress. Itwas a humiliating defeat. In Melbourne, Maurice Blackburn was one of the few tocome out in opposition. On the other side of the political fence there was growingconfusion. The Nationalists in this state wanted it. They wanted to kill the44-hour week. The manufacturers, retailers and wholesale houses all backed Brucewith cash.
But Thomas R. Bavin, state leader of the Nationalist Party, wasagainst it. «You will never get industrial peace through a Court.» Hepointed out that they would be giving the power to the next federal Labor government.He had the foresight to see what such powers could lead to in the future.«The federal proposals would vest the whole power over the fortunes of Australiain a body of professional politicians sitting at Canberra who would be far removedfrom contact with the electors,» he told the Constitutional Association.«An enormous administrative machinery, such as had never been attempted inthe world before, would be created to administer the affairs, of a large continent.»
Bavin and I had disagreed on practically every issue in politics.We were bitter opponents. But for once we thought alike. The Nationalists supportingno formed a Federal Union with R. Clive Teece, KC. as its president. Bavin ledthe campaign in NSW for the Nationalist no side, while I led the Labor side.
In Victoria, Bruce had more trouble with his own backers. TheVictorian manufacturers were afraid it would bring the 44-hour to that state. Someof the Nationalist papers openly opposed Bruce for the first time. Sir Arthur Robinson,a powerful industrial figure, led the no campaign for the federal union in thatstate. He said he was opposed to giving more power to politicians who always wantedmore power. «These politicians will be meeting miles from anywhere surroundedby thousands of public servants and they will get a distorted reflex of public opinion,»he said prophetically. «Politicians cannot get a reflex of public opinionwhen they are out of touch with the public. The atmosphere of Canberra will bethat of officialdom, the atmosphere of the tax gatherer, and not of the taxpayer.»
Sir Walter Massy Greene agreed with that viewpoint. «It isas easy to find icicles at the equator as to get the federal Parliament to agreeto limit Commonwealth powers,» he said. Among those to join the Federal Unioncampaign with the big money battalions in Victoria was a well-known barrister withpolitical aspirations, R.G. Menzies. He was also on the no side. It was all very,very confusing to the average elector.
I campaigned throughout the state denouncing any plan to givepower to a legal oligarchy. There were huge audiences everywhere. In Goulburnthere were two attractions: Toti Dal Monte, the opera singer, and our meeting.We attracted the bigger house, but Toti got the money. In Bathurst, the mover ofthe motion congratulating me was a former engine-driver who been victimised inthe 1917 strike, J.B. Chifley. He pledged his loyalty and was supported by GusKelly. Chifley still had to seek political honors. On the Sunday there was a vastmeeting of 75,000 in the Domain, all with hands upraised for a no vote. Some ofthe federal Labor politicians had switched sides, leaving Charlton isolated. Ourfinal advertisement was directed against control of Australia by the «ThreeMen.» They were judges Lukin, Dethridge and Beeby, who would become economicdictators of Australia as visualised by Bruce.
Bruce himself left Australia two days before the poll to go toan Imperial conference. We appointed state government scrutineers at every pollingplace. Before leaving, Bruce ordered the PMG to grant him an additional broadcast,although it was against the previous order of the PMG that sides should have equaltime.
Then the numbers went up. We were all beaten. There were twoproposals. Both were defeated by some 400,000 votes in all. The majority againstthem for no in Victoria was just on 250,000, in South Australia 120,000, West Australia70,000 and Tasmania 10,000. There was a yes majority of 33,000 in New South Wales,and 16,000 in Queensland, on the principal proposal. The majorities for no weresmaller on the question to give the Commonwealth powers to deal with industrialemergencies.
The actual figures in NSW on the principal question were: Yes 566,973 No 533,284
The chief lesson was that even though Parliament was practically unanimous, thepeople still prefer to do their own thinking. It was certainly a topsy-turvy referendum.Bruce's blunder
When a government realises that it is losing its grip on thepolitical situation it invariably commences to go from one blunder to another. Itpanics. It loses its perspective. It listens to too many advisers. Then in a momentof despair it is likely to take a desperate risk.
That was what happened to the Bruce-Page government. The 1928election had rattled it badly. It was being sniped from its own cross benches. Itsmost effective critics were those on its side of the House. W.M. Hughes, Mann,George Maxwell, K.C., P.G. Stewart, all contributed to the disintegration process.
Then S.M. Bruce played right into their hands. He committedthe blunder of blunders. He gave no preliminary warning. He didn't consult hisparty. Even his ministers were in the dark until he had gone too far. It was adecision very much like that reached by Chifley in 1949 in connection with controlof banking.
Bruce's fatal mistake was to try to abolish Federal arbitration.It was a complete volte face. At every election he had campaigned for «lawand order”. He was the great apostle of arbitration. He believed in arming the industrialcourts with greater powers. He believed in penalties for those refusing to obeythe awards of the courts. He wanted stronger ties between the courts and the parties.
In 1926 Bruce had tried to obtain supreme power over all tradeunions by holding a referendum to give the Commonwealth complete control of arbitration.His real concern at that time was to upset my Government in New South Wales. Hewanted to destroy our 44-hour week. He also wanted to sidestep child endowment.He also wanted to upset the state basic wage. But the people had rejected hisproposals.
Then the Bavin Government came to power in New South Wales in1927. The Nationalist Consultative Council believed that Bavin could do what Brucehad failed to do. They still wanted to get rid of the 44-hour week, which I hadenacted by legislation.
Bavin promised that he would do it. He promised to get rid ofthe Industrial Commission. In particular, he promised to get rid of Mr. JusticeFiddington, who was a thorn in his flesh. His first suggestion was that he abolishthe court altogether. He would rely on a kind of collective bargaining. There wereto be committees of employers and employees. But they were to be drawn from panelsapproved by the Government. When Bavin realised that his plan was not practicable,he compromised by appointing two additional judges to the Industrial Commission– Mr Justice Street and Mr Justice Cantor. They could, if necessary, outvote thechairman of the commission, Mr Justice Piddington.
But Bavin could not go through with his complete plan whilethe unions could still go to the federal courts. It would be no use abolishingthe 44-hour week for state awards if a frederal judge could still give a 44-hourweek. Bruce's first reaction to the pressure of big business was to suggest tothe premiers that they should hand over all their industrial powers to the Commonwealth.He proposed an alteration of the constitution by consent. It was to be anotherLoan Council formula. But Phil Collier, from Western Australia, shied clear. Hedidn't trust Bruce. Queensland objected. Even Victoria had doubts. So Bruce hadto retreat again.
Then the big four told Bruce that the costs of production mustbe reduced. That meant that either wages had to be reduced or the working weeklengthened. It could mean both. There was also a very important recommendationreading:
»A change in the method prevalent in Australia of dealingwith industrial disputes appears to us to be essential, and we hold that there shouldbe a minimum of judicial and governmental interference in them, except in so faras matters affecting the health and safety of the persons engaged in industry maybe concerned."
Bluntly, that meant the return to the law of the jungle. Arbitrationhad protected the workers against sweating, against starvation wages and excessivehours. Now they wanted to go back to those vicious practices. Bruce was only toowilling to listen to the big four.
Bruce also resented the hostility aroused over his withdrawalof the summons against John Brown. Hughes told him to his face that it meant theloss of thousands of Nationalist votes at the next elections. The big fines inflictedon the timber workers, the waterside workers and E.J. Holloway had only hardenedopinion against the government. Bruce didn't like criticism, especially when itcame from powerful newspapers like the Melbourne Herald and Age. Theywere much too close to home.
Then, without warning, came the bolt from the blue. Bruce senta long telegram to the premiers offering to vacate the field of arbitration altogetherwith the exception of the maritime industry.
At the same time he sent an urgent wire to members of the Governmentparties informing them of his decision. Most of them were appalled. From platformsall over the Commonwealth they had preached law and order. They had defended arbitration.They had alleged that the Communists wanted to destroy arbitration. Now their leaderwas doing precisely that himself.
Bruce, who had wanted absolute power over arbitration, now wantednone. He had no mandate. No one knew the reasons behind the move. His own partyorganisation was stunned. It was a complete reversal of form.
The Commonwealth had been in the arbitration business for justfive years. The first Commonwealth Arbitration Act was passed in 1904. C. Kingston had drafted it and crusaded throughout the country explaining ow it would bring peaceand justice to industry. He had been backed up in the early stages by his PrimeMinister, Sir Edmund Barton, and later by his successor, Alfred Deakin. It wasDeakin who described it as the «new era in industrial relations». ThenMr. Justice Higgins had laid down the foundations of the New Province in Law andOrder, as he described his court later.
For a quarter of a century every federal government had beentrying to obtain more, and not less, powers over industrial matters. Now Brucewas trying to destroy it with one savage blow.
All the federal awards were to go into the discard. State awardswere to prevail. The state governments were to have absolute power to define conditionsgoverning hours and wages. But still no one knew what had moved the usually cautiousPrime Minister to such a revolutionary state of mind. His own followers were asnonplussed as the unions. The engineers and the railwaymen had spent thousands ofpounds in preparing and arguing cases in the Federal Court. Now they were to bedenied an award. But why?
One explanation was that the attorney-general, Sir John Latham,had been so upset over the withdrawal of the John Brown prosecution that he hadinsisted that there must be no halfway remedy. If the government was going to retreatbefore John Brown, then it could not afford to stay in the field. It couldn't haveone kind of justice for the wealthy mine owner and another for a striking unionist.If that was the reason it at least did Latham considerable credit for consistency,even though the proposed remedy was a death-dealing purgative.
The timetable of events was most interesting. The vote on theJohn Brown censure motion was taken at 7.30am on Thursday, August 22, 1929. At3.30pm that afternoon, Bruce rose in the House and produced his bombshell. He gavenotice of his intention to bring in a Bill, called the Maritime Industries Bill,which would deal with industrial matters in relation to trade and commerce. Theodore,who was leading the Labor Party in Scullin's absence, wanted to know something aboutthe proposal. But Bruce told him that he would have to wait until the second readingstage.
Dr Page then presented his Budget. It contained a couple of shocks.But the treasurer was full of abounding optimism about the future.
Next day Mr Bruce produced his Maritime Industries Bill. Thereason for the title was that the maritime and waterside workers were to be theonly unions left with Commonwealth awards. They were to come under the trade andcommerce powers of the constitution. The Conciliation and Arbitration Act was tobe repealed. Existing federal awards were to remain in force only until June1930. After that time they would come under state awards.
The arbitration judges were not to lose their jobs. They wereto become judges of the Maritime Industries Court. They would look after the seamen,the marine stewards and the wharfies only. But they would not make the award inthe first instance.
Instead there were to be committees representing both sides withan independent chairman, who could be a judge. But the unions were not free tonominate their own representatives. The government would do that out of a panelsubmitted. The chief judge would make the recommendations. There was to be no evidencein open court. The entire proceedings were to be in-camera without calling evidence.
There was also provision that the tribunals had to take into accountthe economic effect of their awards on the national economy. The Maritime Courtwould have the right of reviewing decisions reached by the committees. It wouldautomatically review every decision, whether there was an appeal or not. The newformula satisfied the shipowners. They didn't want to have their profits made public.They didn't want their affairs probed.
For the rest, all the awards were to be torn up and tossed inthe wastepaper basket. Why was Bruce taking such revolutionary action?
His theme was that Australia was already in a grave financialand economic plight. It was the first time the Prime Minister talked depression.To cure the depression he had one magic formula: get rid of arbitration. He offeredit as his contribution to the economic crisis. His reason was naive: «Thepassing of this legislation will free industry from many of the embarrassmentsfrom which it has suffered in the past.»
By industry, Bruce meant big business. He meant Flinders Street,the shipping combine, the coal vend, industrialists and the graziers. How werethey being embarrassed? By the shorter working week and award wages.
Bruce left the nation under no misapprehension. His policy wasgoing to suit the John Browns. Of course, he clothed it in his usual self-righteousunction, that the Bill was not being brought forward in a party spirit. It was simplyfor the benefit of the nation and the empire. Later he was to regret his statementthat it was non-party. Some of his own followers took him literally.
Then he proceeded to outline the plight of the nation. Publicfinance was in a bad way. Both the Commonwealth and the states had deficits. Bavinhad one of more than a million, while Page had one of almost five millions. Prosperitywas rocking badly. Loan money was difficult to obtain abroad. Public expenditurehad to be reduced. But he still didn't believe that he could abolish old age pensionsor reduce them. So taxation had to be increased. But he was afraid that increasedtaxes might increase the cost of production.
Wool and wheat were the only two products which could be soldat a profit abroad. Even there there had been a heavy decline in prices. Secondaryindustries were being threatened by imports from abroad beingsold lower than localprices. But Bruce said that he could not agree with any increase in tariffs.
Then Bruce produced his magic elixir. The costs of productionmust be reduced. So they must get rid of duplication of awards and tribunals. Hissolution was a kind of collective bargaining. But because of large-scale unemployment,that placed the employer in the box seat when it came to the bargaining. So thegovernment had decided to vacate the field of arbitration. Bruce wanted round-tableconferences. Then the workers would realise that their claims for higher wages,shorter hours and better conditions would only lead to more unemployment. He wassuddenly all in favor of the American system of collective bargaining instead ofhaving industrial courts.
In particular, Mr. Bruce thought the workers should accept thepiecework system and payment by results. They would then earn enough to keep theirfamilies. Of course, there would need to be safeguards.
«At present Australian industries are passing through a seriouseconomic crisis. Tens of thousands of our workmen are unemployed. It is essential,therefore, that we should all recognise the urgency of improving the relationsbetween employers and employees,» he said.
He also wanted equality in competition between the states.«Has any more fatal blow been struck at equality in interstate competitionthan the 44-hour week and child endowment legislation of the last Labor governmentNew South Wales,» asked Bruce, again trotting me out as his King Charles'head. But he still had no idea of the political hurricane building up. He was notleft long in suspense.
Of course, Bruce knew that he had enemies. The enemies withinhis party were more dangerous than any on the Labor side. Chief of them was theirrepressible William Morris Hughes, who had founded the Nationalist Party. Therewere times when he believed that he had founded the Labor Party. That, of course,was historical licence. But there was no doubt about him being expelled from theLabor Party. There was also no doubt that he founded the Nationalist Party afterthe conscription break. He even hand-picked his own executive.
But his break with Bruce was now irretrievable. He was out toget his revenge for what he believed was the double-cross perpetrated by Bruce in1923. He had waited patiently for almost seven years. Now it seemed as if mightget his opportunity. But Bruce got in the first blow. He expelled Hughes fromthe Nationalist Party. With him went E.A. Mann, a caustic critic of the government,who was Nationalist member for Perth.
The Labor member for East Sydney, Jack West, raised the matterin House when he asked whether Hughes and Mann were to be barred from certain roomsand, if so, for how long. Bruce tartly replied that if he wanted know whether itwas true that Hughes and Mann would not in future be invited to attend meetingsof government supporters, the answer was in the affirmative. In short, they hadbeen expelled from the Parliamentary Nationalist Party.
Riley Senior then asked Bruce whether the Nationalist Party hadblown out its brains. Bruce said the suggestion was completely unwarranted. FrankBrennan followed by directing the attention of the Speaker to the fact thatP.G. Stewart, Country member for Wimmera, had withdrawn his allegiance to the government,that the member for Wannon, A.S. Rodgers, had retreated to a private room in thebasement of Parliament House, and now Mann would need a room, while even W.M. Hugheshad been turned out of his own house. He wanted to know what steps the Speaker intendedto take to accommodate all the segments of the government that were breaking off.Latham suggested they could all find refuge in the Labor Opposition rooms.
Bruce still had the numbers if he could hold the rest of hisparty together. His proposal was not getting the newspaper support he had anticipated.
Theodore, in the absence of Scullin, led the attack for the Laboropposition. He said at the caprice of one man, and without warning, the Bill hadbeen flung on to the table of the House. One man was about to undo the work ofgenerations. It was a wrecker's policy. He recalled all Bruce's speeches in favorof arbitration. How he would never give it up. How Latham had defended it.
Bruce had appointed a royal commission to inquire into the constitution.It had not yet finished its work. Yet the government was going ahead without waitingfor the report.
Theodore said Bruce was the prophet of doom. Whenever an anti-Laborleader wanted to take away reforms, or reduce wages, he invariably tried to justifyhimself with doleful prophecies. Even Sir Robert Gibson, chairman of the CommonwealthBank, had said things were not as bad as they were being represented. The stockexchange was still buoyant. To Theodore that was most important. Bruce was imaginingthe difficulties. The stock exchange quotations were at their highest level in20 years. The banks were making record profits. So how could there be a depression?
The attorney-general, Mr Latham, tried hard to defend the proposition.As usual, he was academic. Latham argued from a legalistic brief. He had no timefor political rhetoric. He tried to rely on logic. But he was arguing against hisown previous convictions. He tried to rationalise the problem. He went back overthe dry legal tomes dealing with the development of industrial law in Australia:the Harvester judgment, the engineers' case. They were all given full treatment.He was on the defensive. He referred to the strikes of the marine stewards, ledby Bob Heffron, the engineers, the waterside workers and the timber workers.
But he made no mention of the lockout of the miners. He saidthe unions had campaigned against arbitration. Senator Arthur Rae had written abook, The Curse of Arbitration. The ARU had rejected arbitration. Yet, atother times, the government was attacking those against arbitration as red-raggersand extremists.
Then Latham gave the show away. He referred to the action ofmy government in passing the 44-Hour Week in 1926. He said that if the timber workershad been deregistered in the Federal Court they would have obtained a 44-hour weekunder a state award. The government was clearing the way for Mr Bavin to bring ina 48-hour week again in New South Wales.
At that time there were only 88 federal awards in force in NSWas against 455 state awards. Once the state government had sole control of industrialmatters, Mr Bavin could impose whatever industrial conditions were wanted by theNationalist Consultative Council.
Latham rejected a suggestion by Curtin that the men could electtheir own representatives to the Industrial Boards for the maritime industries.Frank Brennan said the proposal was begotten out of a craven spirit by cynicism.Bruce had given the impression that he knew little or nothing about the subject,while Latham had given the impression that he knew all about it but wanted to keepit dark.
They had appointed their own judges at bigger and better salaries,with bigger pensions and tenure for life. Now there was to be a dismal processionof self-confessed failures going back on their tracks.
Labor members like Norman Makin, J.B. Chifley, George Martensand Ted Riley Sen, who had practised in the industrial courts as advocates, trottedout all the achievements of arbitration. They were more legal than the lawyers.They cited the Commonwealth Law Report. They talked about common rule, and gaveforth with lengthy extracts from various judgments. It was almost as if they werebeing deprived of their professional status.
Bruce's chief defender from New South Wales was Archdale Parkhill,who had been Hughes' chief propagandist when the Nationalist Party was first formed.He later went into the federal Parliament as member for Warringah. He said thatwhen he was speaking on one street corner in Mosman, Theodore had been on anothersupporting the AWU candidate. Parkhill said that Theodore had said: «Mr Langmust be disciplined ruthlessly, with the gloves off.» An interjector had retorted,«Your number is up for Dalley,» and Theodore had replied, «Therewill be no shrinking on my part.» Yet, said Parkhill, a few months laterTheodore was licking Lang's hand. Parkhill didn't like me. In that respect I wassecond only to Jock Garden in his hate list.
Then E.A. Mann, Nationalist member for Perth, entered the listsagainst Bruce. He started off delightfully by recalling Greek customs:
«A quaint local custom of one of the old Greek states wasthat anyone desiring to bring into the state a new law should appear before an assemblyof the citizens to propound that law with a halter round his neck, so that shouldthe law not meet with the approval of the assembly, or not be considered necessaryfor the requirements of the state, the halter might properly be used to stranglehim.»
W.M. Hughes: «Oh, that those days might come back again!»
Mann replied they had. If the House rejected the Bruce Bill,the government would be politically executed.
In his budget Page had opened with a note of cheerfulness, withwhat was the triumph of hope over experience. Next day the Prime Minister had reversedthe picture. Yet Bruce had described people who had issued similar warnings asJeremiahs and croaking pessimists. Now he was saying, «We are in a bad way.We can't carry on.» Now he said the only way was to reduce the cost of production.By that he meant reducing wages. Mann said the government was helping the Communists,who also attacked arbitration.
Bert Lazzarini quoted an interview given by Bavin to the SydneyMorning Herald, which indicated that he also proposed to scrap the existingsystem of arbitration. He proposed to follow the Bruce model.
Then another prominent member of the Government side took thefloor against the measure. He was G.A. Maxwell, K.C., member for the blue-ribbonNationalist seat of Fawkner in Victoria. He said that Bruce had said that the Billshould be considered on non-party lines. He proposed to accept the invitation.He refused to be branded a rebel or a traitor. He proposed to exercise his ownjudgment on a matter of grave national importance. The government had no mandate.It was against the Nationalist Party program. The party had not been consulted.He refused to be bound by the Prime Minister's whim. His electors had returnedhim believing he supported arbitration. The first he knew of the volte face wasthe receipt of the Prime Minister's urgent telegram. He had reserved his opinionuntil he had heard the Prime Minister's defence. Having heard, he was satisfiedthat he had not made out a case. Instead of providing one supreme authority in industrialmatters, the government was creating six –the state tribunals.
Maxwell was a brilliant lawyer. He dissected the measure. He exposedthe weaknesses of the government's arguments. He described it as the negation ofevery principle for which the Prime Minister was supposed to stand. In particular,he stripped Latham's case of all its supports. He even had a dig at the moral andspiritual aspects of the matter. With regret, but without misgiving, he proposedto vote against the measure.
On Thursday, September 5, the debate was resumed in a sittingthat was to last until 12.30pm on the following Saturday. For two days and nightsthe Bill was torn to shreds.
W.M. Hughes took up the attack. He said that it was without parallelin Commonwealth legislation. For 25 years they had advanced towards their goal.Every party had wanted more power. Now the Bruce government had sounded the trumpetfor a general and shameful retreat. The temple of industrial arbitration was tobe torn down. Not one stone was to be left standing. Bruce's speech was full ofsophisms, irrelevancies and platitudes. Latham had made a pretence of logic buthad followed his leader. After being in recess for six months, the government nowsaid they had to day and night to get the bill through. Delay would be fatal. Hadsome at financial cataclysm occurred?
Bruce had accepted a portfolio in his ministry knowing that arbitrationwas part of its policy. When Bruce became Prime Minister he took the policy withhim. He had gone to the people for a mandate to enforce the industrial law. Hehad obtained his mandate. Now he said that compulsory arbitration was wrong, penaltieswere barbarous and all courts and tribunals must go. Yesterday he was the protagonistof penalties. Today he preaches the gospel brotherly love. The parties are to turnthe other cheek, penalties are to be kept away. The system is as it was 10 yearsago. It is the Prime Minister who has changed. He says he believes in a high standardof living, but the cost of production must come down. So he proposes to abolishthe courts that have been the guardians of the economic and industrial welfare ofthe people and the only barrier between them and chaos.
«What would happen if the parties didn't agree?» askedHughes. The framers of the constitution had placed arbitration in the constitutionjust after the greatest industrial conflagration the country had ever seen, andwhile its embers were still warm. Those men had seen the «print of the nails,»they had thrust their fingers into the wound. He was reminded of the limerick:
There was a young lady of Riga
Who went for a ride on the tiger
They came back from the ride
With the lady inside
And a smile on the face of the tiger
That would be the position of the workers. If the price of meatcame down would not the graziers suffer? If the price of bread was reduced, wouldnot the farmers get less for their wheat? Mercilessly Hughes stripped Bruce downto his very spats. Bruce was a dilettante, said Hughes. He had made one attemptto amend the constitution but had walked out leaving the job to Latham. He hadbeen recreant to his trust. He had betrayed the people. He had insulted their intelligence.He had affronted their sense of decency. «He is the creature of a day. Whathe does today, another can undo tomorrow.» The Bill was an attempt to savehis face so that he would not be eternally confronted with the ghost of the hideousblunder he had made when he had withdrawn the prosecution of John Brown.
Frank Anstey quickly tangled with his old adversary, Dr Page.He said that the treasurer had lifted the debate to the lofty eminence of the sewer.«Far better it is to be ignorant than to be cultured, educated, talented andto sell one's talents for the first mess of pottage that offers,» said Anstey,attacking Hughes' former colleagues in the ministry who had betrayed him for Bruce.
P.G. Stewart was another to declare himself against his formerleader. He said while the mines were still closed, the women were starving, JohnBrown still could be seen at Randwick with his field glasses slung over his shoulder.
Hughes: «John Brown's body lies a-moulderin' is the gravebut his soul goes marching on.»
Stewart said members of the government had referred to trade unionsas «basher gangs», «a seething mass of maggots», «runningsores», and «fangless snakes.» He would leave them with such nauseousexpressions. He would oppose the Bill.
Bruce, in reply, showed how deeply he had been nettled by Hughes.He referred to his «sinister suggestions, poisonous and offensive charges».At one stage in Bruce's reply, Hughes interjected «Hear, hear.» The Speakercalled him to order. Hughes naively wanted to know how he had offended. He wastold that it was the tone in which he had uttered it that was offensive. Billyrepeated «Hear, hear.» Bruce admitted it was contrary to his party'splatform with Hughes interjecting. «L'etat, c'est moi.» Bruce againrepeated that the depression was not temporary and was due to a fundamental defect.
The second reading passed by 34 to 30 with W.M. Hughes, E.A.Mann, G.A. Maxwell and P.G. Stewart voting with the opposition.
But the fight was not yet over. When the Parliament adjournedon Saturday afternoon, it still had no idea of the events ahead.
At the weekend members returned to their homes believing thatthe crisis was just about over. But Bruce was still very worried. He fully realisedthat the fight was entering the critical round.
Although arbitration was the issue before Parliament, outsidethere was raging a new political tornado. In the Parliament it was kept severelyin the background. But in every city and in every bush town the people were experiencingthe full impact of the best organised political pressure campaign in the historyof the Commonwealth.
The movie interests had declared war on the Bruce government.The talkie age had just arrived. Like their own product the movie people had switchedfrom the old silents to full-blast talkies on the political front. But the badmen were not the villains of the Hollywood sets. They were in Canberra.
Stanley Melbourne Bruce and Dr. Earle Page were being depictedas trying to foreclose on the mortgage of the old movie homestead. They weretrying to rob the poor widows and orphans of the movie moguls. They were the vampiressucking the blood out of the innocent film distributors' bodies. It all arose outof a very small mention in Dr Page's Budget speech. After explaining that therewas a heavy Commonwealth deficit, he announced that the Government had decidedto increase taxes. Income tax was to be increased by £10 millions. In additionit was proposed to levy an Amusements Tax.
Page proposed a tax of 5 per cent., or 1/- in the pound, onthe total receipts for admissions to all entertainments. «This tax will bea levy upon a national luxury, which, it is considered should make a special contributionin the present circumstances.» In those days it was still possible to obtainadmission to a film theatre for a shilling. To suggest that those indulging themselvesto that extent were plunging into wanton extravagance was hardly good politics.
Page said the government expected to raise £600,000 fromthe tax. He pointed out that attendances at amusements had risen from 78 millionsin 1922 to 126 millions in 1928. What he overlooked was that they mostly had votes.To make matters worse, the government announced an extra duty of a penny per footon all foreign cinema films imported into Australia. The film interests immediatelygot busy. They abandoned political neutrality. They decided to go after Bruce andPage. The campaign was organised by the Motion Picture Distributors' Association.Its president was Sir Victor Wilson. He had been minister for markets and migrationin the Bruce-Page government from 1923-26. He had been close to Bruce. Now he wasthe general in charge of the forces uniting to defeat him.
Petitions against the Amusement Tax were signed in every theatrein the Commonwealth. Members were bombarded with telegrams. Employees were toldtheatres would have to close. Builders were informed there would be no new theatresbuilt. Shareholders in film companies were told that they` would lose their dividendsbecause the industry could not stand the strain. The member for Angas, Mr Parsons,read to the House a telegram he had received:
Your persistent silence suggests that you deliberately ignorevested interests whose life and livelihood is at stake. Unless intimation receivedyour return immediately, our representative leaves by plane to demand you take action.
Jepson, Secretary, United Amusement Interests.
The movie strategists realised that they could not defeat the Amusements Tax inthe House. But the Maritime Industries Bill to abolish the Federal ArbitrationCourt provided them with their best chance. If they could defeat Bruce on that,then they believed they were in the clear.
All the weekend there were feverish discussions. Every memberwas lobbied. The Labor Party realised that it was getting unexpected allies. Itdidn't hesitate to give the necessary pledges not to go ahead with the AmusementsTax. The idea of having all the resources of the movie people to call upon appealedgreatly to Theodore.
In order to upset the government it was necessary to get threemore votes, in addition to those who had voted against the government on the secondreading.
Hughes was carrying the keg of dynamite. He had the time fuseall ready. Nothing gave him more satisfaction than this chance to get even withhis two greatest enemies. He knew that Mann, and P.G. Stewart would do anythingto assist him. They hated as much as he hated.
George Maxwell K.C. had already indicated that he was againstthe Prime Minister on grounds of principle, because it was a volte face on partypolicy. W.J. McWilliams, the Nationalist member for Franklin, had also indicatedthat he was against the bill being rushed through, and saw in it some kind ofthreat to Tasmania.
That made up two votes. Another was necessary. Where was it comingfrom? That was the big question canvassed over the weekend. There were all kindsof wild rumors. Bruce said that if there was any delay in implementing the proposal,he would go to the country.
Hughes threw down the challenge as soon as the House resumedconsideration of the Bill in committee on the Tuesday. He moved an amendment thatit should not be proclaimed until it had been submitted to the people either ata referendum or a general election.
Again he thrashed Bruce with violating his own platform. He saidBruce had concealed his intention from the people. He had promised that they wouldsoon round Cape Desolation and proceed into the Bay of Plenty. Instead he had putthe helm hard over and reversed course saying: «Unless you stand behind mein this, you will walk the plank. Unless you tear up your election pledges, I willexcommunicate you.»
Hughes accepted the election offer. «It will be the end ofthe government and honorable members who support it,» predicted Hughes«The verdict will make it impossible for any political thimble-rigger furtherto cloud the issue… Let us go before the people and fight this battle once andfor all.» Bruce took up the challenge. He denied that he had invited his followersto «walk the plank». Many of them had voted against government measures.But Hughes and Mann had impugned the honesty and decency of the government onthe John Brown issue. That was why they had been expelled. That was why they had«walked the plank».
Bruce rejected the idea of another referendum. It was not constitutionallypossible. He said that if Hughes' amendment were carried the government would goto the people. He was confident that he would again win. Bruce's announcement causeda tumultuous scene. There were cheers and counter cheers from both sides. Memberswere rocked by the shock.
J.H. Scullin, who had returned from a sick bed for the climax,said the government was somersaulting on its own policy. It was trying to loadthe court against the workers. He said the Prime Minister reminded him of a regimentalsergeant-major marching his recruits around a drill hall. «The Prime Ministersays, `Quick march!' They march. The Prime Minister says, `Halt, right about face,quick march.' They march back. They are the political awkward squad.»
The idea that a politician was not bound by the platform onwhich he was elected was outrageous. The government had betrayed its trust tothe people.
The member for New England, Mr. V.C. Thompson, who had openlyattacked the government's proposal in his paper, The Tamworth Northern DailyLeader backed out. He was not in favor of a dissolution. He said that the issueswould be twisted and distorted. They would have to wrestle with the prejudice oftens of thousands whose minds were being poisoned by pernicious American propaganda.He differed with his leader. He was still in favor of federal arbitration. But areferendum would be defeated.
«Can the opposition in this House speak for Mr. Lang?»asked Thompson. Scullin retorted, «Can the government speak for the big businessand oil interests?» Thompson said that what Lang decided would go with theLabor Party in New South Wales. So he would vote against the Hughes amendment.
Then came the most dramatic moment of all. A new figure came intothe spotlight. He alone held the destiny of the government in his hands. It wasthe immaculate figure of Walter Marks, Sydney solicitor and member for the conservativeblue-ribbon seat of Wentworth. He had served in the Royal Naval Forces in the FirstWorld War and was Parliamentary Under Secretary for External Affairs from 1921to 1923. Then Bruce dumped him.
Representing the elite of Vaucluse and Rose Bay, he had expectedto be invited to join the Cabinet on the death of Pratten. Instead Bruce selectedone of his most vocal critics –H.S. Gullett. To make matters worse, he gave himthe portfolio that Marks wanted most, trade and customs. It was Gullett who tookover film censorship. That was Marks' particular hobby. For two years Marks hadpresided over a Royal Commission, which had inquired into the film industry. Hehad travelled abroad. In Hollywood he had been feted by the stars. He met GloriaSwanson, Clara Bow and Joan Crawford. There was even a suggestion that he mightbe invited to leave his footprints in concrete. On his return he spoke for hoursabout his thrilling experiences. He was full of plans. But Bruce put his reportinto a pigeon-hole. Marks was very upset about the withdrawal of the John Brownprosecution. He knew the Baron. Some of his clients had money invested in his mines.The Baron had even bought him a bottle of beer at Randwick. But still Marks thoughtthe law should have taken its course.
When Marks rose, the House was tense and expectant. Marks fullyappreciated that the cameras and lights were on him. Veteran gallery men saidthat the hushed silence was almost shattering. The fate of the government was inthe balance and Marks knew it. The Herald next day said: «The housewas literally breathless with excitement. As Mr Marks unfolded his reasons it wouldhave been possible to hear a pin drop. Mr Bruce alone, of all his colleagues, remainedunperturbed. He was magnificent.»
Mr Marks said that he had promised his electors to vote forthe second reading. That was his only pledge. He recalled that he had appeared inthe first arbitration case before Mr Justice O'Connor on behalf of the employees,with Hughes. He proposed to vote for the amendment. He would not be a party torepealing 15 Acts by a single vote. Even the graziers were opposed to abolitionof the court.
It was the first time that he had ever recorded a vote againstthe government. He objected to Mr Bruce taking everything into his own hands. Hehad failed to consult his party. The Prime Minister had also failed to consultthem on the John Brown case. But his chief grievance was that Bruce had not consultedhim personally on the Amusements Tax. After all, he was the great authority onthat subject.
«If any man knew the position of the industry, I did, andI should have been very pleased to give the government the benefit of all the informationI had gained, but I was not consulted concerning the proposed increase in the taxon amusements,» declared Marks.
So Walter Marks, faced with the choice between Mr Bruce as PrimeMinister and his loyalty to the movie interests, decided in favor of Hollywood.
«I told the Prime Minister he would have to go one way, andI would go another,» he said. He would not follow him in the proposal to imposethe Amusements Tax, so he proposed to register his protest by voting for the Hughes'amendment. «The present position cannot continue. Let the people give theirverdict. There is one plank of the Nationalist Party in which I have always believed–that is liberty of thought, speech and action.»
He then disclosed that he had been bombarded by telegrams frombranches of the Nationalist Party in Wentworth, although he had only told thePrime Minister. The telegrams had all been lodged within minutes of one another.The branches had not met. So who had lodged the telegrams? He knew that the Nationalistswould oppose him, but his conscience compelled him to vote for the amendment.
That settled it. The gallant sailor had torpedoed the Government.The vote was quickly taken. The House was in Committee with J.G. Bayley in thechair. Sir Littleton Groom, the Speaker, did not record a vote. He regarded himselfas an impartial umpire above party strife. Bayley's vote was lost to the governmentunless there was a dead heat.
Hughes, Mann, Stewart, McWilliams and Marks all remained intheir seats while the rest of the government side crossed to vote against the motion.Hughes was once more back with his former Labor associates. He sat next to Theodore.Marks was in most unusual company, sitting next to Frank Brennan. The Hughes amendmentwas carried. Ayes 35 Noes 34 Majority 1
The Bruce government was defeated. Bruce was still supremelyconfident that the situation was well in hand. He had little idea of the furthershocks in store for him.