The causes, and course, of the Depression are complex, but are so inter-related to the political events of the period that it is necessary to have some command of them if we are to understand the political maelstrom that now caught up David Drummond. The changes in Australia's economic structure that we have discussed before continued throughout the twenties; reflecting this, in 1925-26 manufacturing employment exceeded rural for the first time. Industrialisation was associated with, and assisted by, heavy expenditure on public works such as railways, electricity, roads and sewerage. The pattern of industrialisation and public works led to further growth in the metropolitan cities. Between 1921 and 1933 the population of the Australian capital cities rose by 32.9 per cent. Metropolitan population growth became self-generating, for the need to house rising city populations added thousands more jobs in building and construction.
Economic change was reflected in political change. Just as country interests had organised to try and protect their position, so manufacturing interests also organised. Through bodies such as the Australian Industries Protection League (established in 1919) they forged links with the Nationalist and Labor parties, pressing for higher tariffs and preaching the message that made in Australia was good for Australia. The manufacturers' drive for higher tariffs was fuelled by their continued vulnerability to import competition. During the twenties productivity within Australian manufacturing grew slowly if at all, so that local manufacturers found their costs rising at a time when import prices were falling. Manufacturers were able to force a series of tariff increases, but import competition continued to increase. Industry responded by trying to control or even cut wages, which in turn led to continuing industrial trouble.
Although some rural interests did support protection, the Country Party had begun as a low tariff party. However, it quickly realized that it could do little in the face of combined Nationalist/Labor support for tariffs. Page therefore advised primary producers to 'get into the vicious circle themselves by seeking Government support for their activities'. This advice may have been sound politically, but it was a crucial defeat, for tariff protection was a major cause of the shift from country to city that the Party was trying to stop. As the decade passed, rising tariff levels, associated with relative stagnation in rural incomes, led to a resurgence of anti-tariff feeling in country areas. David Drummond shared this feeling, for in May 1927 he wrote to Page suggesting that continuation of high tariffs must lead to disaster via over-capitalisation of secondary industry associated with destruction of primary industry.
Despite growing public recognition of the longer term economic problems and choices facing Australia, few realised just how vulnerable the Australian economy had become by 1929 to any international downturn. Import competition within the domestic market was increasing. Government public works programs had been funded by heavy overseas borrowings - fifty-two million pounds in 1928 alone - which meant that a rising proportion of export income had to be used to pay interest and dividends to overseas investors; by 1927-28 such payments had reached 28 per cent of export income. However, the great bulk of that income still came from a very limited range of primary products. This mix was a recipe for balance of payments disaster: should overseas borrowing stop, or export prices fall sharply, then the balance of payments was likely to plunge quickly into deficit. External vulnerability was associated with internal weakness. Manufacturing employment depended on domestic incomes which depended on rural incomes and on building and construction. Rural incomes in turn depended on overseas prices, while building and construction depended on overseas funded public works programs.
In 1929 the worst possible combination of events happened. Export prices fell, while overseas borrowings stopped as a consequence of the effective closure of the London capital market to Australia. The balance of payments plunged into a deficit that threatened to exhaust the country's overseas reserves and led the Federal Government into a desperate search for international solvency. Within the domestic economy rural incomes fell while public works programs ground to a halt. Unemployment rose and rose again: the percentage of trade union members unemployed rose from 9.3 per cent at the start of 1929 to 13.1 per cent by the end of the year and then to 23.4 per cent by the end of 1930. Australia's economic problems would have been intractable in any case, but the country was then particularly ill-equipped to deal with them. The sources of professional advice were still very limited, the available economic statistics were so inadequate that it was extremely difficult to discover what was happening within the economy, while the Federal Government had little economic expertise. In these circumstances it is not surprising that governments were slow to appreciate the real extent of the problem. As late as July 1929 the Commonwealth Bank's half-yearly report, while recognising that business activity was below normal, could summarise conditions as 'continued stability.'
The New South Wales Government was the first to react to the growing economic troubles, for New South Wales proved to be particularly vulnerable. As a major industrial state, it was already affected by growing import competition, while the growth in its metropolitan population, and hence the numbers in building, construction and public services, had been particularly marked; between 1921 and 1933 Sydney contributed some 28 per cent of Australia's total population growth. The State's funding methods added to its vulnerability. All states used London overdraft finance to fund public works expenditure while raising long-term loans. However, New South Wales' dependence on overdraft finance was greater than that of other states. This saved interest payments, but meant that the State's financial position would quickly become critical should the collapse in the London market for long term funds continue for any length of time. In March and April 1929, the State's London overdraft rose to three to four million pounds, but at that stage the Government was not worried, as the closure of the London market was expected to be only temporary. By June the State was in a financial vice which tightened as the year proceeded: not only could New South Wales not raise long-term loans, but the State's bankers were resisting any further increase in overdraft levels. Equally importantly, the State now faced declining income tax collections, rising losses on railway and transport services, and rising welfare costs. By early 1930, the expected State deficit for 1929-30 had risen to over three million pounds.
The Government was not unsympathetic to the growing unemployment problem. What 'matters most to any Government or community', the State Treasurer B.S.B. Stevens told the Assembly in December 1929, 'is the provision of continuous and useful employment for its employable citizens.' Unfortunately, the Government had no idea how to put these words into practice; its only solution was retrenchment associated with cost-cutting. The Australian national income had declined by seventy to eighty million pounds over the previous year, and Australia's standard of living must be reduced accordingly, Bavin told the Assembly in April 1930.
The Bavin-Buttenshaw Government therefore introduced a number of measures intended to reduce spending and cut costs. The Industrial Arbitration (Eight Hours) Act restored the 48 hour week to industry, while the Public Service (Salaries Reduction) Act reduced public service salaries by 8 per cent, exempting married persons whose annual income was below three hundred pounds and those who came within the jurisdiction of the Forty-Eight Hours Act. These measures supplemented earlier and less important cost-reduction measures, the abolition of rural awards in December 1929, the reversion to a 48 hour week on the railways and the reduction of parliamentary salaries in March 1930. In addition, there were a number of other measures intended to reduce Government spending: child endowment was abolished for the first child, many railway employees were dismissed, and recruitment to the public service was stopped. Inevitably too, public works spending ground to a halt: among the victims were the North's long-awaited Guyra-Dorrigo railway and David Drummond's school building program.
The Government's measures pushed New South Wales further into depression, as declines in housing, public works expenditure and manufacturing fed on each other. By the first quarter of 1931, over 29 per cent of New South Wales trade unionists were unemployed, more than twice the proportion in the state with the lowest level (Queensland) and only exceeded by South Australia (30.6 per cent). The areas that had benefited from the previous growth pattern now paid a price, for unemployment was highest in Sydney and in the coal mining and industrial areas dependent upon it.
Deepening depression brought with it a growing welfare problem, which overwhelmed the efforts of voluntary relief agencies. This led the State Government in June 1930 to introduce a series of relief measures to try to ease distress. The Prevention and Relief of Unemployment Act set up an Unemployment Relief Council to distribute work amongst those out of employment, to absorb such people into public or private employment, and to study trade and industrial conditions with a view to increasing efficiency and productivity. The same Act levied a tax of threepence in the pound on net income in order to provide funds for unemployment relief. These measures were supported by the Government Relief Administration Act which sought to regulate and coordinate charitable and benevolent activities.
Drummond would later reject the basic thrust of his Government's policies. In his view, 'no one really understood the nature of the crisis ... all the accepted orthodox dicta of Finance, Banking & Economies were brought into action & sent us deeper into depression.' In similar vein, he was to describe the 48 hour week decision as a 'cardinal blunder' which simply increased the ranks of the unemployed. Nevertheless, at the time he accepted the necessity for the Government's policies and did his best to defend them. 'Australia was passing through a time perhaps unparalleled since 1890', he told an Albury audience in June 1930. 'Unless the Government took steps to restore confidence in the people who were our creditors overseas, put the house in order and balance the ledger, it would certainly be unpleasant for the people of N.S.W.'
There was no joy in Drummond's words. He was distressed by the growing unemployment, and by the defeat of so many of his hopes. The Government's decision to stop work on the Guyra-Dorrigo railway had been difficult to accept, even though he and the other Northerners did not then realise that the halt would be permanent. 'Had we known what we know now, that was the time we should have forged ahead', he was later to write wistfully. Again, the need not only to abandon expansion plans within education and child welfare but even to cut back on existing operations must have been difficult to accept, particularly at a time when demands on both systems were rising. In addition, some of the Government's decisions forced him to go against long-held and publicly-stated beliefs. The decision to abolish rural awards was popular amongst many country groups, but Drummond had opposed their abolition at the August 1928 FSA Conference, using his traditional arguments:
If the farmer asked for abolition of the award on the ground that the industry cannot bear the cost, it raised a question that ought to be answered - the right of the community to ask the farmer and his employees to work for less return than any other section of the community. The solution was to find a way adequately to raie [sic] the producer's returns for his labor and capital.
If Drummond had no answer for the State's major problems, he did what he could to preserve his own programs and to ease distress. Throughout 1929 and 1930, he pushed forward the construction of the Armidale Teachers' College building, almost certainly (as Newling later surmised) because he wanted to beat the growing collapse. This plan was successful, but the building's completion coincided with a dramatic drop in the intake of trainee teachers, so that it was almost echoingly empty. Drummond's actions over the College came under strong attack, particularly from William Davies. In December 1930 Davies, again Minister for Public Instruction following the elections in October, launched a biting attack on Drummond, accusing him of 'absolute waste and extravagance', indeed of buying his electorate.
Drummond had a sneaking sympathy for Davies' problems as Minister, but was unrepentant, repeating his old argument that those going to Armidale rather than Sydney should not suffer: 'I was determined that every student of the Armidale Teachers' College should be proud of it', he told the Assembly. In response to the charges that the College had benefited his electorate, he stressed that it was designed to serve a wider need, that is, it was 'really the college of the north.' In any event, although Davies' 'white elephant' charge stuck, 'Drummond's white elephant' changed over time from a term of derision to a compliment, as changing economic conditions first filled and then over-filled the College.
Apart from pushing the College forward, Drummond's other moves during 1930 were small-scale. He faced growing demands from his own electorate, for he was its main link to the new Government relief programs. He was able to persuade the Unemployment Relief Council to allocate funds to carry out ground improvements at the College, and also found money for extensions to the Armidale High School. Beyond this, he directed his Department to test local timbers to see if they could be substituted for imports, he allowed soup kitchens to be established outside schools, and he moved to bring women inside the exemption provisions of the Public Service Salaries (Amendment) Act which were intended to prevent the salary of a married officer falling below 300 pounds.
As 1930 proceeded, the Bavin-Buttenshaw Government began to disintegrate. During the debate on the 48-hour week bill, the deteriorating political situation forced Bavin to call an emergency Cabinet meeting.
He then told us that the Govt Whip had informed him that if we went ahead with our Bill to restore a 48 hour week we would be defeated. He then asked each Minister in turn what he advised to meet the crisis, to withdraw the Bill or go ahead & be defeated. Ministers were almost at breaking point & with one accord answered "go ahead". Rather flippantly I quoted the battle cry of the Zulu warriors of Charka..." If we go forward we die. If we go backward we die. We will go forward and (maybe) live."
As long as I have memory the tense scene in that Cabinet room will remain etched on my mind. When the last Minister had spoken, the Premier sat back with a sigh of relief and said "Well gentlemen that is the end of our Govt." Almost as he ceased speaking his private phone rang. He picked up the phone, listened briefly and came back and with a laugh said, "Gentlemen that was the Whip he says that John Ross ... will vote with the Govt. We will still have to carry on."
Throughout 1930 the Government teetered on the edge of defeat. In Drummond's view, the only thing that saved them 'was that no-one was able to tell a demoralised people a better way of dealing with the problem.'
The Scullin Federal Labor Government, which had been elected in October 1929, had decided to use the tariff as its main anti-depression weapon. In April 1930 a revised tariff schedule was introduced increasing protection rates, followed by no less than six further increases between June and December 1930. The Government believed that these increases would reduce imports and increase employment, a hope shared by the Labor opposition in New South Wales. In the April 1930 debate on the economy, Lang accused the Bavin-Buttenshaw Government of conspiring with the employees to reduce the living standards of the worker. In his view, the Scullin tariff increases would soon increase production and even allow a rise in the standard of living. Since the tariff increases raised costs at a time of falling prices, country spokesmen took a different view. The Federal Government's tariff policy, Drummond told the Armidale Branch of the Country Party, 'was crushing the soul of the great primary industries.'
In addition to its moves to reduce imports, the Federal Government tried to expand exports. A successful campaign was launched to encourage wheat-growers to expand production, upon promise that industry stabilization and price support measures would be introduced. The result was disaster: a combination of Commonwealth Bank and Nationalist opposition, plus Government ineptitude, prevented the introduction of the necessary measures notwithstanding Country Party support. The subsequent crop had to be sold at a loss, plunging wheatgrowers further into financial misery. Anti-Labor feeling grew in wheat-growing areas such as the Riverina.
As the Depression intensified, it became clear that the tariff increases were not going to bring the desired increase in employment. The Federal Government therefore came under increasing pressure, particularly from the Commonwealth Bank, to adopt expenditure and cost-cutting policies similar to those already adopted in New South Wales. In July 1930, Sir Otto Niemeyer, a senior official of the Bank of England, arrived in Australia to undertake a review of the Country's financial position. On 18 August Niemeyer addressed a Premiers' Conference in Melbourne. His message was simple: Australia had been living beyond its means, and there was no chance of the country returning to normality until steps were taken to correct this. In the discussion that followed, the Premiers unanimously agreed upon a series of measures, including the need to balance their budgets in 1930-31. A standing Committee of Commonwealth and State Governments was appointed to supervise the operations of the Melbourne Agreement.
David Drummond took a strong dislike to Niemeyer from the moment of their first meeting in the New South Wales Cabinet Room:
When he told us that the only way out was "to tighten our belts" etc I thought of the ... decent hard working men and women losing overnight their employment, their homes, living on a pittance of food relief and looked speculatively at the place on Sir Otto [which] might have a belt and wondered what would happen if he tried to tighten it.
Drummond's intense, indeed intemperate, response was both personally unusual and unfair. Not only was Sir Otto presenting the conventional wisdom of the time, but many of his views had previously been supported by Drummond himself and accepted by the Government of which Drummond was a senior member. The reasons for Drummond's response can only be surmised. However, his reaction probably flowed from his concerns about the likely impact of Niemeyer's prescriptions. To Drummond, with his ideological roots deep in country populism, priding himself on his concern for the ordinary working man and woman, and with a deep distrust of big city capital and finance, Niemeyer may well have represented the uncaring enemy.
The New South Wales elections had been set for October 1930. By accepting the terms of the Melbourne Agreement, the Bavin-Buttenshaw Government delivered itself into the hands of the Labor opposition. At first it seemed that the left wing of the Labor Party might save it, for a few days after the Melbourne meeting the Political and Industrial Committee of the Party met and decided to recommend to the Central Executive a five-point plan including rejection of the Melbourne Agreement, repudiation of war debts and a five-year moratorium on other overseas debts. This recommendation raised fears in Australia and overseas, and the Lang forces were able to persuade the Central Executive to adopt a compromise instructing Federal members of the New South Wales Party to reject the Melbourne Agreement and urging the Federal Government to take steps to dissolve the Loan Council. Lang followed this decision up in his policy speech by denying that Labor stood for repudiation of the state debts: 'The Labor Party sets its face against all repudiation', he declared.
The Government tried to capitalise on the repudiation issue, but without success. Its campaign was a sombre affair, seeking electoral endorsement not only for the Melbourne Agreement but for its general policies of reduced costs, increased working hours, and reduced spending. 'The Ministry did not think there had been a Government since Federation which had stood up to facts and committed what was considered political suicide, other than this one', declared Drummond. Labor's campaign was a complete contrast. Lang promised to reject the Melbourne Agreement, to maintain living standards, to increase public works spending, to lift the special unemployment tax, and to restore both the 44 hour week and the social service cuts that had been made. It was an attractive package, promising a return to normality and prosperity. The Labor campaign itself was a vicious affair, during which Drummond came under personal attack from Lang over what was to be known as the Guyra Sheep Stealing Case. This was a bizarre if fascinating episode, which touched Drummond at two of his most sensitive points, his integrity and reputation as 'Honest Dave', and his friendship and admiration for Colonel White.
The case began early in 1929 when graziers in the Guyra District, concerned at the theft of thousands of their sheep, formed a Spot Defence Association. In June 1929 White and L.P. Dutton, acting on behalf of the Association, saw the Acting Commissioner of Police in Sydney to press for action. He arranged for them to see a Detective Lawrence to discuss the case. On 13 June Lawrence travelled to Armidale, accompanied by two police agents, Manning and O'Brien, whose job it was to act as agents provocateur. Both men had police records and had been used before by the police in this type of role. The two agents apparently achieved quick results, with Manning claiming that the stock thefts were being organised by a man called Bert.
On 17 July Lawrence was summoned to Guyra, arriving about 4am. He was met by Dutton and O'Brien, and handed a piece of cigarette paper by O'Brien containing the names of four men who he alleged had been receiving stolen sheep from Bert. Lawrence went to a property owned by David Moore, one of the four men named, where stolen sheep were duly found, as well as sixty unbranded sheep belonging to Moore. Moore was immediately charged with stock theft and with having sheep with defaced ear marks, while a warrant was issued for Bert who had vanished.
The cases were heard at Guyra on 15 August. Moore was acquitted on theft, but convicted on the minor charges. Not unexpectedly, the case created a sensation in the district. There was strong local support for Moore, for many felt that the police agents had perjured themselves to get a conviction.
At this stage Drummond was still blissfully unaware of the whole affair. It was not until 2 September that he learnt of it, and then by accident. On the train to Sydney, he fell into conversation with a Guyra grazier, A.A. McKenzie, who could talk of nothing else. McKenzie's news disturbed Drummond. Knowing White and Dutton well, he was upset to hear that many locals considered that they had been personally involved in a conspiracy to convict Moore. He was also disturbed by the suggestion that the opposition was to be asked to take up the case. Immediately upon his arrival in Sydney, Drummond discussed the case with the Attorney-General. He also wrote indignant letters to two of his main Guyra supporters, protesting at the suggestion that the opposition should be asked to take the matter up. 'I cannot believe that this is correct', he told J. McMullan. 'I have represented the Tableland District for fully ten years in Parliament, and so far as I am aware, I have never failed to give every section of the community a square deal, irrespective of party, or sect'.
Drummond now pressed the Attorney-General by letter and in person. His efforts brought quick results. First-class Superintendent Leary, the acting Metropolitan Superintendent, was sent to Guyra to fully investigate the case. He decided that it did have a number of unsatisfactory features, not the least of which was that the man Bert, who had played such a key role, did not in fact exist! The warrant for Bert was withdrawn, police stations throughout the State were instructed not to employ either Manning or O'Brien again, and the papers were forwarded to the Crown Solicitor with a view to action being taken against some of those involved. Manning disappeared into Queensland, but O'Brien was brought to trial at Newcastle in September 1930, charged with having conspired with Patrick Manning to accuse David Moore of larceny. The case then became more complex still: Inspector McKay, the policeman who had appointed Manning and O'Brien, gave character evidence for O'Brien; O'Brien stuck to his story that he had seen Bert on four occasions but did not know him by any other name, and the case was dismissed.
It had been an immensely distressing experience for all those involved, a distress exacerbated by Jack Lang's intervention in the case. Lang began his attack in March 1930 with a call for a public inquiry. As the election campaign intensified later in the year, he widened his sights. His argument was simple: Drummond and Bruxner had, in association with two wealthy graziers, conspired to bring police agents into the district, then to condemn an innocent man, and finally to try to cover the whole scandal up. Whether Lang believed his charges is unclear, but in any event the case was central to his repeated assertion that the Bavin-Buttenshaw Government was corrupt, so he pushed it as hard as he could.
Those under attack were less happy. Drummond reacted very strongly indeed, for Lang was attacking his integrity, one of the pillars of his private and public personalities. Detective Lawrence shared Drummond's resentment. He wrote bitterly to Drummond in October that he had only met Drummond twice, and that on Church matters, and had never met Bruxner, and yet it was claimed that he had deliberately been sent to Guyra by them to do an injury to an innocent man. 'As a christian man and fellow worker in our church', he concluded, 'pardon me if I wish you Gods richest blessing, a thousand majority yourself and the return of an anti-labour Government.'
Lawrence's wish was not to be. The electorate was in no mood to question Lang's vision, and in a landslide result fifty-five Labor members were returned as compared with twenty-three Nationalist and twelve Country Party. Drummond retained Armidale, but his majority was cut from 3081 to 516. With the defeat of the Government, Drummond now moved his family back to Armidale: they would live in Sydney again, but from this time on Armidale was their permanent base.
One of the first moves of the new Government involved an old Drummond favourite, reform of the Legislative Council. As we saw in Chapter four, in 1927 Drummond had developed proposals for Council reform which were accepted in October. Following the return of the Bavin-Buttenshaw Government, moves to reshape the Council began almost immediately. However, they quickly ran into problems because of the difficulties involved in gaining Council acceptance. 'What I wish to emphasize at present', a senior member of the Council [J. Ryan] wrote to Drummond in December 1927, 'is that the question of Legislative Council Reform is much too important to be hurriedly determined, after a few meetings of a Cabinet sub-committee'. He went on: 'It will be wise, before submitting any bill to the Council, to create an atmosphere in that Chamber favourable to a well considered scheme'.
In these circumstances it is perhaps not surprising that legislation for Council reform was not introduced until 1929 and then not passed until early in 1930. The legislation provided for a Council of sixty, elected indirectly by the Council and Assembly together. It also contained a provision requiring the proposals to be submitted to the people by referendum before implementation. This provision reflected another new and important constitutional measure, the insertion of a new section, 7A, in the Constitution Act, 1902. To understand this measure, which was to establish a crucial constitutional principle, it is necessary to have some understanding of the New South Wales' Constitution.
A sovereign legislature, such as the British Parliament, cannot by definition bind its successors since to do so would place limitations on its sovereign powers. The New South Wales' Parliament was not in this position. Although New South Wales had, within limits, an uncontrolled constitution, that is the Parliament could do what it liked within those limits, the Parliament itself was a subordinate legislature deriving its authority from powers granted by the Imperial Parliament. Consequently, Section 5 of the (Imperial) Colonial Laws Validity Act was of vital importance. This specified, inter alia, that each Colonial Legislature had full power within its jurisdiction to make laws respecting constitutional matters 'provided that such laws shall have been passed in such manner and form as may from time to time be required by any Act of Parliament, Letters Patent, Order in Council or Colonial Law, for the time being in force in the said Colony'. The effect of this section was to give the New South Wales Parliament, subject to the provisions of the Commonwealth Constitution, full power to alter its constitution in any way it saw fit provided that any such alterations were in accordance with whatever 'manner and form' requirements were in operation at the time.
The Bavin-Buttenshaw Government decided to use the 'manner and form' requirement to bind future government actions towards the Council. The mechanism adopted was the insertion of a new section, 7A, in the Constitution Act by the Constitution (Legislative Council) Amendment Act, 1929. The new section provided in part that the Legislative Council could not be abolished, nor could its powers or constitution be altered, except by popular referendum. It also provided that 7A itself should not be repealed or amended except in the same way.
While this new provision did come into force, the Council reforms did not. Although the Act reforming the Council was passed, the referendum itself was postponed, at first until the general elections and then to a date to be fixed by the incoming government. According to Drummond, the primary reason for this delay was the Government's growing pre-occupation with the Depression.
The new Labor Government had no intention of proceeding with its opponents' reform proposals. Instead, it introduced legislation to immediately repeal 7A and abolish the Council. The Council allowed both bills to pass, and a number of Councillors then took legal action, obtaining an injunction prohibiting the presentation of the bills for royal assent. The subsequent court case, Trethowan and Ors - v - the Attorney General of New South Wales, was fought through to the Privy Council. The final decision, handed down after Lang's dismissal, established that the New South Wales Parliament was indeed subject to the 'manner and form' provisions and that, consequently, neither bill could be assented to until approved at a referendum.
While Parliament debated Legislative Council reform, the new Government was trying to come to terms with the State's disastrous financial position. Lang had promised a return to prosperity and normality, but in the circumstances of the time there was no way he could deliver. Worse, the State's financial position faced him with the prospect of having to introduce still further cuts in government services. This situation threatened the Government' survival, but Lang had also to contend with a challenge to his personal control of the New South Wales Party machine from E.G. Theodore, a former Premier of Queensland who had entered Federal politics in 1927 as member for the Sydney seat of Dalley. During the last months of 1930 Theodore was under a cloud, forced to stand down as Federal Treasurer by the Mungana scandal, but he was still an influential figure in the New South Wales Party and among those in the Federal Caucus who supported an expansionary economic policy. As the Depression worsened, Theodore's influence would grow, and as it did, so did the threat he posed to Lang. Lang's attempts to counter this threat while sustaining his government dominated New South Wales and, to a considerable extent, Australian political life throughout 1931 and into 1932.
The Federal Labor Government had accepted the Melbourne Agreement but, as we have already seen in New South Wales, many of those within the Labor Movement did not. From March 1930 there were a series of moves within the Federal Labor Caucus, supported by Theodore, to try and force the Federal Government to adopt an expansionary policy. These moves were ultimately successful, but split the Federal Party, for J.E. Fenton (who had been acting Prime Minister while Scullin was overseas) and Joseph Lyons (the acting Treasurer) resigned in protest.
On 6 February 1931, the Premiers met at Canberra to discuss a three year plan to rectify the economic situation. Theodore, again Federal Treasurer, suggested that a new and expansionary monetary policy be adopted. Lang countered with his own plan. This involved the non-payment of interest to British bond-holders pending re-negotiation of the loans on satisfactory terms, reduction in interest on all government borrowings to 3 per cent, and the introduction of an (undefined) 'goods standard' instead of the gold standard. Lang's plan, which came as a surprise even to his own State party, was impracticable, for it could not have been put into effect without the destruction of the New South Wales financial system. However, it allowed Lang to present an attractive counter to Theodore.
The battle between the two men now moved quickly to a climax. Lang persuaded the New South Wales Labor Party first to accept the Lang Plan and then to expel Theodore from the Party. In turn, the State Executive was expelled from the Federal Party. The split in the Party was now complete.
Events on the economic front were just was dramatic. From 15 March 1931 New South Wales systematically defaulted on interest payments, forcing the Commonwealth to make the payments instead. By the end of June, the net total paid out by the Commonwealth had reached nearly four million pounds. The move allowed Lang to maintain Government activities without further borrowings, but at the cost of growing economic chaos.
The Federal Government, hurt by the growing splits within the Labor Movement and facing an increasingly hostile Senate, was now all but helpless. At the Loan Council meeting at the end of April the Premiers decided to convene a Premier's Conference to develop a plan for the restoration of financial stability. The end result was the Premiers' Plan, adopted by all the States (including New South Wales) and the Commonwealth on 10 June. This provided, among other things, for a reduction of 20 per cent of adjustable Government spending (with the exception of old-age pensions which were to be reduced by only 12 per cent), an increase in Commonwealth income and sales tax and a reduction in public and private interest rates.
Lang may have accepted the Premiers' Plan, but he still had no immediate intention of resuming interest payments. However, towards the end of June the State's financial position deteriorated to the point where, even after non-payment of interest, public service salaries could not be met after mid-July. The Government therefore introduced emergency legislation which savagely increased income taxes by between 60 and 75 per cent. The Upper House rejected the Bill, leaving Lang no choice but to go cap-in-hand to the Loan Council. It agreed to provide the necessary funds but only if Lang agreed to resume interest payments, rejoin the Council and implement the Premiers' plan. However reluctantly, Lang had no choice but to agree: as from August 1931 the State's rebellion was, if only for the moment, over.
In the economic and political turmoil of 1930 and 1931 the very fabric of New South Wales life began to collapse. Many blamed the existing politicians and political parties for the problems and condemned them, while calling for new approaches. Such views were not new, but they were now expressed with great vigour. New political organisations mushroomed on the right and left of politics. The All For Australia League, formed in February 1931, had a claimed membership of 130,000 by the end of June. The Unemployed Workers Movement, formed in April 1930, claimed that it had an Australian membership of 31,000 by the middle of 1931. A strong undercurrent of fear ran beneath this political activity. Since the Russian Revolution there had been many, including Drummond, who feared the possible spread of communism; now the events of the Depression brought these fears to a new pitch. 'It became apparent', Drummond later wrote, 'that Lang had made a compact with the Devil in the Shape of the Communist Movement.' Although he recognised that Lang himself was not a communist, Drummond also believed that 'he was a born dictator and if things had gone a certain way it is difficult to assert what he would have done when smitten by "sight of power"'.
As the fear of revolution spread, private citizens began to arm, combining to form unofficial para-military organisations. On February 1931, just nine days after Lang announced the Lang Plan, a private meeting of eight men at the Imperial Service Club in Sydney decided to form the New Guard. In less than a year, the Guard had received applications for membership from 87,000 men. The Guard courted publicity, and this has given it a vaguely semi-comic air. However, it was arguably very dangerous: its strident rhetoric was associated with a well organised military structure, largely in Sydney, that might have allowed the Guard to seize power, if only for a short time, had political events moved in that direction.
Less flamboyant than the New Guard was the shadowy organisation known as the 'Movement' to its members. In Drummond's words:
A third, silent and solid "Australia" Movement organised by top Army officers in Reserve was preparing to provide the Commonwealth Govt with a disciplined and trained body of men to uphold "the peace, order and good Govt" of the State.
Formed in November 1930 the Movement, later derisively called the Old Guard by its New Guard rivals, aimed to build up a disciplined force of 9,000 men who would only be called out in the event of a situation beyond police control. The Movement was thus very different from the New Guard, for it saw itself only as a supplement to, and not a supplanter of, lawful authority.
Drummond did not approve of the New Guard and, as we shall see later, was worried at the prospect of civil war. At the same time, although there is no evidence to suggest that he was actually a member of the Old Guard, his words suggest that he sympathised with the Movement and had at least some knowledge of its operations. In a way this is not surprising, for it seems probable that at least some of his friends and associates were involved with it.
While the strength of para-military forces in the North is difficult to gauge, it is clear that units were formed. However, although there appear to have been small New Guard branches at Lismore and Newcastle, the great majority of Northern groups were almost certainly independent or associated in some way with the Old Guard rather than with the more efficient and extreme New Guard. Nevertheless, whatever their strength or indeed their affiliations, their very existence was an important influence in the increasingly confused political climate of 1931 and early 1932. This was particularly so because of the form taken by a new and major resurgence of separatist feeling.
The Third Armidale Convention (April 1929) had been followed by an All-Australia Conference at Sydney (February 1930) and then by a Constitutional Convention at Canberra (May 1930). The Sydney and Canberra meetings covered familiar ground, and neither reflected any great popular enthusiasm. However, new state agitation now resumed at the local level, independent of the central organisation. On 17 November 1930 the President of FSA at Murwillumbah telegraphed Page asking that he and Thompson organise a conference 'with a view declaring northern new state.' To Page, whose old enthusiasm had revived now he was in opposition, this was a golden opportunity. He immediately sent a telegram back, promising to place Salmon's telegram before a meeting of Northern members of the New South Wales Parliament. Initially Page had some difficulties in gathering the members together. It was not until 30 January that he met with Drummond and Alf Pollack at Cremorne (in Sydney) to discuss strategy. Unfortunately, Pollack died suddenly later that day; he had always been Page's key coastal lieutenant, so that his death, quite apart from the grief it caused his friends, 'left' (in Ellis' words) 'a decided gap in the ranks which was difficult to fill.'
A week after the Cremorne meeting the announcement of the Lang Plan electrified the situation. On 13 February Page came to Sydney to consult with colleagues as to the action to be taken if Lang carried out his threat to repudiate the interest payments on the State's overseas debts. This, Page maintained, would be an unconstitutional act which would make New South Wales a rebel state: in such circumstances the people of Northern districts would be justified, as had been the people of West Virginia during the American Civil War, in establishing their own government, loyal to the Federation, and in seeking admission as a new state. In the inflamed climate of the time Page's ideas, which he planned to make public in a speech to be delivered at Glenreagh (south of Grafton) on 17 February, could be interpreted as a call to revolution. Fearing the outcome, many of his close colleagues opposed the course he suggested. Nevertheless, Page was determined to proceed. He consulted a prominent constitutional lawyer on historical precedents and began to draw up a draft constitution for the new state. In addition, notices were sent out convening a special meeting of the Northern Executive, to be held at Armidale on 28 February, to discuss Page's ideas.
The Glenreagh speech was indeed very close to a call to arms. Given the political situation, Page proclaimed:
The people of the North seem to have no other course but to cut adrift from New South Wales. The people of Northern New South Wales refuse to have any part or lot in this matter of default. They will request recognition from the Federal Parliament as a State under the Federal Union of the area which will be organised of relationships and liabilities with New South Wales...
This appeal, Page went on, would be 'on all fours with the appeal of West Virginia', which was recognised by Abraham Lincoln as a separate state when it declared for the Federal Union.
Reaction to the Page speech was instantaneous, if mixed. Drummond immediately supported Page's stand. The question raised by Dr Page, he suggested, was crystal clear.
It simply is ... that the North will not be a party to any pact of disloyalty to Australia. Rather than acquiesce in such disloyalty, ti will, if necessary, appeal to the Commonwealth to grant it recognition of a provisional Government that will honor the obligations imposed on citizens by every canon of honor and by the Constitution of Australia.
The Armidale Express, while sympathetic to the cause, was more cautious: it warned that the proposed action was 'fraught with such grave consequences, not only to the North, or even New South Wales, but to the whole of Australia, that the irrevocable step must be taken only after the most thorough investigation.' At Murwillumbah the shops closed to allow attendance at a new state meeting which resolved that 'we decline at all costs to continue to pay taxes and tribute to be spent by caucus-controlled Government.'
Others took the opposing position. Lang immediately hinted at action for sedition, while the Empire Party, one of the new groups that had sprung up in the city, also suggested that Page was guilty of sedition for promoting secession. Within the North itself, perhaps the strongest riposte came from the newly arrived Anglican Bishop of Armidale, John Stoward Moyes. 'Divorce is ever a tragedy and a confession of failure!' he wrote in an open letter to the Northern Press. 'So I should think, is this New State proposal, conceived in antagonisms, and likely to be born in bitterness ... I hope, gentlemen, that deep loyalty to the nation will forbid the people of the North to be beguiled by such sinister proposals.' Ironically Moyes, convinced at last that the existing system needed changing, would later join the New State Executive.
Following his Glenreagh speech, Page launched a whirlwind campaign to gather support for the Armidale meeting. Although still technically an Executive meeting, this was not being treated as a full movement Convention. On 28 February more than 200 delegates met at Armidale to hear Page unveil his plan. The North should organise itself, Page said, 'into a self-governing unit, demand recognition from the Federal Government on the ground that we intend to obey the Federal law and Constitution and pay our debts.'
In Drummond's view, Page made an important tactical mistake here. The issues were so clear-cut to Page that he forgot that many of the delegates were hearing his plans for the first time, and was therefore understandably cautious about a course of action so clearly smacking of rebellion. Finally, after protracted discussion and with some misgivings and private reservations, the delegates carried a series of resolutions which placed the Movement on the course he proposed. Adopting the name 'New England' for the first time, delegates decided that a provisional executive should be formed consisting of New England Federal and State parliamentary representatives supporting the Movement, that tentative boundaries should be drawn up, that a convention should be called to draw up a constitution, which should then be submitted to the Federal Parliament, together with a request for recognition of New England as a self-governing unit within the Commonwealth. The provisional executive was authorised, in the event of New South Wales defaulting on interest payments, to take whatever steps were necessary to ensure that New England, and if possible New South Wales, honoured its obligations. The Armidale Convention also decided that New England should extend its full support to the Riverina and other associated Movements. This decision was a sign of the revival of separatist agitation elsewhere.
Following the Cohen Commission Report in 1925 the Riverina Movement had collapsed. However, in 1930 the economic troubles led to a new outbreak of Riverina-based agitation. Towards the end of 1930, the FSA and the Graziers' Association combined to form a new body, the Producers' Advisory Council, to organise country interests. The Council mounted an active campaign, holding protest meetings throughout the State to demand reduced government spending, taxation and tariff protection. The Council met with greatest success in the wool and wheat districts of the central west and the Riverina, areas hit particularly by the disastrous outcome of the Federal Government's 1930 Grow More Wheat campaign. In so doing, it prepared the way for a new Riverina Movement, led by a Wagga timber merchant, Charles Hardy Junior.
Charles Hardy was then thirty-two. During the late twenties, he had played a major role in Riverina activities, establishing a wide network of friends and contacts throughout the region. A man of great personal charm with a magnetic personality and a gift of oratory, Hardy was a talented agitator, a talent which would now make him one of the stormy petrels of New South Wales politics.
On 8 February 1931, a group of thirty men (including Hardy) from various parts of the Riverina met to consider what action might be taken in view of the deteriorating political and economic situation. They decided to adopt the Producers' Advisory Council Platform and to hold two mass protest meetings, one at Wagga on February 28 and a second at Narrandera on March 7. The following day Lang announced the Lang plan. With this added stimulus, the Wagga protest meeting attracted an estimated 10,000 people to the banks of the Murrumbidgee River. The first motion - which called on the Government to effect immediate and drastic reductions in the cost of government, to relieve primary producers from statutory burdens and to prepare proposals for drastic reductions in interest rates - was carried with wild cheers. Then Hardy moved that, in the event of the Government failing to give effect of the resolution by March 31,
.. immediate steps should be taken to hold a referendum on the question of the right of the Riverina to determine its own affairs and control its own destiny under the British Government, if necessary by secession, with its consequent refusal to pay taxation to existing Governments.
This motion also was carried with wild enthusiasm. A week later, on 7 March, a meeting of 5,000 people at Narrandera carried the same resolutions amidst the same enthusiasm.
The Wagga and Narrandera meetings were followed by a Riverina Convention at Wagga on 15 March. This decided that the Movement's objective should be to 'consummate the nationhood of Australia by endowing the Commonwealth with full sovereign powers and substituting Provincial Councils with wide local governing powers under the Australian Parliament.' A provisional Provincial Council of twelve was formed to act as executive; each member was expected to take responsibility for an area of Government, thus giving the Council something approaching the formal appearance of a Government.
Following the Wagga Conference, the Riverina Movement expanded rapidly throughout the Riverina, while sister movements sprang up in the west and the Monaro. However, the Movement's very success created significant problems for itself, for the Country Party, and the New England Movement. Its leaders, and particularly Hardy, had now to satisfy the expectations raised by their campaigns, but had no very clear idea as to how this might be done. The Northern leaders, and particularly the three key ones (Page, Drummond and Bruxner), knew from past experience just how difficult it was to achieve their objective within the existing constitutional framework. They, too, had taken advantage of the political situation created by lang to try and force their long-desired separation. However, they had done so with considerable caution and with some idea in their minds as to the direction to go. Hardy, by contrast, had delivered an ultimatum to the Government which it could not accept, thus facing the Riverina Movement with the choice of either pulling the trigger or risking loss of credibility. Hardy quickly realised his dilemma and softened his position, suggesting (as in the New England case) that if Lang defaulted on interest payments then it could be necessary for the Riverina Movement to assume control to avoid breakdown in public order. This eased the immediate problem, but left the Riverina Movement with no firm directions.
The problem arising from the Riverina Movement's uncertainty over tactics was compounded by its uncertainty over objective. The New England Movement had thoroughly defined its basic objective, self-government within a Federal system, and was able to maintain it despite fluctuating support within New England for other alternatives such as unification or county councils within the existing state structure. By contrast, the Riverina Movement had no such defined target. The old Riverina Movement had adopted new states on the Northern model as its objective, but there had always been strong support within the Riverina for other models, and particularly that variant of unification which called for the abolition of the states and their replacement by provincial councils with delegated powers. The new Riverina Movement inherited this mixed tradition. Its leaders included men such as J.A. Lorimer, one of the members of the Cohen Commission, who supported unification as well as those such as George Wilson who had always supported the Northern concept. Hardy's own position was somewhere in the middle. Although influenced by the Lorimer school, his views also bore a noticeable resemblance to those Drummond had set out in Constitutional Changes in Australia, and may indeed have been influenced by the booklet, for Hardy had read it and kept a copy in his possession.
Like Drummond, Hardy wanted areas such as the Riverina to have self-government. To achieve this, he suggested that all states should be abolished and replaced by smaller provinces whose boundaries would take geographical considerations into account. Again like Drummond, Hardy wanted a redistribution of powers between the provinces and the centre, with the provinces' powers safeguarded so that they could only be altered with the consent of the people within each province. As such, the new provinces would have sovereign powers in regard to their own defined local responsibilities. At this point, Hardy moved away from Drummond in two significant ways: he wanted to give the centre far more power than did Drummond; in addition, he wanted the Riverina to be controlled by a small council of eight rather than a larger parliament.
The objective adopted by the Wagga Convention reflected the Riverina Movement's mixed tradition; its wording suggested the unification model, since there was to be one central parliament with sovereign powers plus provinces with just local governing powers. This seemed to place the Riverina Movement on a collision course with New England, a course made even more dangerous by the Riverina Movement's huge and still growing popular success. For the Country Party, too, the Riverina Movement posed a real threat, for the Movement's attacks on the existing political order were aimed at all political parties. Over coming months, Drummond's life would be dominated by his attempts to find some form of accommodation between the New England and Riverina Movements and the Country Party.
While the Riverina Movement was organising itself, the New Englanders had moved to the next step in their plan. On 17 March the New England Central Executive (or, to give it its correct title, the Central Executive of the Self-Governing Area of New England) sent out invitations to a Constitutional Convention to be held at Maitland on 7 April 1931. Draft boundaries were also announced, taking in the Hunter Valley to just south of Maitland as well as Port Stephens.
It is unclear whether or not a formal Executive meeting had been held. If so, Drummond had clearly not been present, for the announcement worried him. He set out his reactions in a long, thoughtful and at times angry letter to Page, a letter that shows clearly some of the basic problems still faced by the Movement. 'I may say that there is a very strong resentment up here amongst our people re the calling of the next meeting at Maitland', he began. 'There is also grave resentment over the extension of the boundaries so far south especially in view of the obvious determination of the last meeting to keep well north of Newcastle.' These boundaries had been advertised as a definite basis for discussion, he remonstrated, but on whose authority? He could accept that there was 'an educational advantage' in going to Maitland, but the Hunter people were not strongly aware of the Movement so that to move the boundaries as far south as proposed was to risk almost certain defeat. There were also other risks.
I find ... that moves such as this one to Maitland conveys more than a suspicion that we are more concerned with winning a seat for the C.P. than with the good of the movement. That may, or may not, be the case but once let the idea that this is a stunt for the benefit of the C.P. take root and we will have more trouble on our hands than we shall comfortably get away with.
Drummond's choice of words here is interesting, for they suggest that some of his colleagues may have regarded the Movement as a Country Party stunt. However, this was certainly not true for Drummond:
In conclusion I feel that the time has arrived to take this matter up vigorously and push it to a conclusion. If we do not we stand dishonoured. Our meeting at Armidale will represent the final act in a political farce, but will ring down the curtain on a constitutional and national tragedy. You made a magnificent appeal on that day and your words struck deep. Now is the time too to press our eleven years of effort to a definite conclusion.
Page responded immediately. He explained that Maitland had been selected since, as the junction of the coastal and inland railway lines, it would enable men to come by train, thus avoiding the cost of car travel. 'Also, if we are going to have low southern boundaries', he added, 'we need to get the southern people into line and stimulate interest while the inclusion of the railway junction will be useful.' So far as the boundaries were concerned, this question was open although, in his view, the area selected should be large enough to permit further subdivision.
In the fortnight following this exchange, New South Wales did default on interest payments. However, neither the New England nor the Riverina Movement made any immediate comment. Pressed to state Riverina's plans, Hardy finally commented on 6 April that it was not considered wise to reveal any details until the plans were thoroughly settled. In fact, neither movement was idle. New England was heavily involved in preparations for the Maitland Convention, while the Riverina Movement was strengthening its organisation.
On 7 April 1931 the Constitutional Convention convened at Maitland under the chairmanship of Harold While. It was a representative gathering: the 100 delegates came from all parts of New England and included eleven parliamentarians as well as representatives from twenty-four shire or municipal councils. Page's opening remarks set the tone. 'We have met to devise a better means, not merely of governing ourselves, but of governing Australia', he told the delegates. The present system had failed. It had brought them 'to the valley of humiliation, of disaster, of shame and national dishonour.' Their job, now, was to do something to correct this.
The draft constitution to be considered by the delegates reflected the times: its wording suggests that it was a compromise between the political realities as seen by the parliamentarians and the views and wishes of their supporters. Opposition to party, politics and politicians was not as strong in the North as in the Riverina; there the Riverina Movement had rules that no politician would be permitted to speak from its platform or hold an executive position. Nevertheless, such opposition was still considerable and the proposed constitution reflected this: constitutional limits were placed on the new state's power to borrow; the legislature was forbidden to repudiate debts; the Auditor-General, Public Service Commissioner, Commissioner of Police and the judiciary were given statutory independence; power was given to the Provincial Legislative Council (the name adopted for the proposed unicameral legislature) to compel a Government to submit a Bill to the Chief Justice for an advisory opinion as to its legality prior to its becoming law; while the Constitution itself could only be altered by a referendum of the people. In this regard, a limited mechanism was provided by which the people themselves could compel constitutional change regardless of the wishes of the governing party. The constitution also reflected the prevailing desire for economy and simple government. The number of parliamentarians was limited to twenty-five who (other than ministers) were to be paid for the number of sitting days; in turn, these were limited to a maximum of forty-eight. In addition, the constitutional limitation on borrowing was associated with a further one on the level of taxation: any Government wishing to exceed these limits would have to put the matter to the people for approval.
As Drummond pointed out, the draft constitution represented a marked departure from other Australian constitutions because of the restrictions placed on the new legislature. However, a number of delegates thought that these had not gone far enough. 'One of the main things we are looking for in it [the new constitution] is that, although we shall have full sovereign rights as far as the State is concerned, those rights shall be placed more in the people and less in the State legislature', Alderman Macpherson from Grafton told delegates.
In addition to those clauses, the new constitution also contained a clause relating to freedom of contract, the right of employer and employee to negotiate their own terms. This clause was, as we shall see in a moment, symptomatic of a wider set of concerns. Nevertheless, its insertion was an unwise gesture for a Movement aiming to attract wide public support. It was doubly unwise in view of the decision to move the border south: although the proposed boundaries excluded the coal mining and industrial areas of Cessnock and Newcastle, they still incorporated areas of union and Labor strength. The Movement's new campaign would have attracted some Labor hostility in any case, given that the Lang Government was the principal target. However, the Convention decision on freedom of contract followed the abolition of rural industrial awards by the Bavin-Buttenshaw Government in 1929, the decision by the Producers' Advisory Council in December 1930 to press for the temporary suspension of all wage regulation and industrial awards, and the decision by the Riverina Movement to adopt the Producers' Advisory Council Platform. The Riverina Movement had already denied that it was anti-union, and certainly Drummond, or the other Northern leaders for that matter, would have vehemently denied that the Movements were anti-working class. Nevertheless, a unionist could have been forgiven for thinking otherwise.
Some of those within the New England Movement recognised the problem. 'We have had a great many speeches here, nearly all of them from primary producers', a representative of the Kyogle New State League, J. Montgomery, told the Convention. 'Now the working-man has as much right to a New State as we have.' In Montgomery's view, the Bolsheviks and red-raggers were created by the vile city slums, slums nearly always owned by the city Nationalists. New states could overcome such problems by creating jobs and better living conditions; the working man had to be made to realise this, and then his full support would follow. Views such as Montgomery's had always had wide support within the Movement, but on that April Tuesday delegates' concerns were concentrated elsewhere.
In Constitutional Changes in Australia, (now described by Bruxner as 'the only worthwhile publication I have seen anywhere dealing with the various Constitutional issues in "tabloid" form') Drummond had warned that New South Wales (and Australia) was in danger of an unrepresentative Parliamentary group's capturing power. Put simply, Drummond's argument was that the overwhelming population concentrations in Sydney and Melbourne meant that those cities controlled a majority of the seats in both the State and Federal Parliaments. As a consequence, a bare majority vote in those cities (but a clear minority in terms of the total votes) could deliver control of the State and Nation to an unrepresentative minority. Now current events gave Drummond's words something of the force of prophecy. As Page put it:
What has happened is the climax of a long series of attempts on the part of the Mother State to build up power in the great industrial centres of the metropolis. That power has been built up, and these centres have now been captured by a small industrial junta which is at present dominating the whole of New South Wales, and which aims at dominating the whole of Australia.
Although Page's words reflect the traditional country and separatist fear of the metropolis, it was a fear given powerful emotional force by political events. It was also a fear associated with another, that the very future of Australia as a nation was threatened by the possible secession of its component parts.
As discussed previously, Federation benefited the industrial states (and more specifically Sydney and Melbourne) at the expense of the non-industrial as a consequence of the differential impact of new Federal policies such as the tariff. The growing public and Government recognition of the disabilities imposed on the smaller states by Federation, had led the Commonwealth to introduce subsidies for Tasmania and Western Australia. However, these were very much a second-best solution. In the words of the 1929 British Economic Mission, a view shared by the economists Bridgen and Giblin, 'these subsidies, however, can only be regarded as palliatives of a system in which there is something amiss.' The deepening depression, and the Scullin tariff measures, brought the problem to a head: secession movements appeared in both Tasmania and Western Australia, while in South Australia the Federal Public Accounts Committee (inquiring into the State's position) heard evidence in favour of secession.
David Drummond, and the other New England leaders, had always regarded new states as a way of breaking metropolitan control. Now the danger to the Federation added a new twist to this argument. New states, they suggested, would ease the strain on the Federation by increasing the relative importance of the rural vote in the Senate. This would allow country interests in general, and the smaller states in particular, to exercise a more effective influence in regard to matters such as the tariff which adversely affected them.
Although the constitutional debate dominated proceedings, the Convention had also to address itself to a practical problem, the actual mechanisms by which the Movement's objective might be achieved. At the suggestion of H.E. Ireland, an observer from the Riverina Movement, it was decided that a delegation (including Drummond) should be appointed to confer with the other country movements to try to organise a common approach. The Convention also decided, as the next step in the Page plan, that a petition should be drawn up asking the Federal Parliament to request the Imperial Parliament to create a new state of New England. To Page, the petition would not only provide (in theory at least) a way of breaking the previous constitutional impasse, but would also, via its submission to the people along with the draft constitution, provide popular endorsement both for the constitution and for separation itself. Although the Convention accepted Page's plan, it also decided to press forward on more conventional lines; pressure should be maintained on the State Parliament for separation and on the Federal Parliament for constitutional amendment (along the lines suggested by the Peden Commission) to make separation easier.
The months following the Maitland Convention were busy and productive ones for Drummond. He had played an active part in the events leading up to the Convention, but had also been in many ways a subsidiary figure, falling back into his old role as Page's trusted lieutenant. Now, however, he emerged as a key figure, for in the events following the Convention his particular skills were most needed. Unlike Page, Hardy or (to a lesser extent) Bruxner, Drummond was not a mass agitator. He had deliberately turned himself into a good stump speaker, perhaps better than Page or Bruxner in terms of delivery and clarity, but he lacked that emotional spark that allowed the others to sweep a crowd before them. He was too concerned to explain, to appeal to the intellect rather than the emotions of this audience. In a very real sense he wanted to teach his audience just as he had so painstakingly taught himself. Again, while he could attract people and indeed turn them into life-long friends and supporters, he still lacked that easer of manner possessed by the others. Nevertheless, these weaknesses were offset by a very major strength, his ability to give form and coherence to ideas and to organisations. In the chaotic conditions of the time, it was this ability that was most needed.
The Maitland Convention may have given New England a draft constitution, and at least sketched out some of the steps that might be taken, but it left those involved facing four related problems. They had, first, to consolidate support for the separatist cause within the North. Secondly, they had to reach some measure of agreement with the other country movements as to organisation, objectives and method, or risk destruction by country in-fighting. Thirdly, the future relationship, if any, between the Country Party and the country movements had to be defined. Finally, there was the continuing problem, how to push the separatist cause to a successful conclusion.
Action was taken on the last problem first. A week after the Maitland Convention, Page took the opportunity to explain part of his plan to the House of Representatives. His argument was an ingenious one. The (Imperial) Colonial Boundaries Act of 1895 gave the Parliament at Westminster power to amend colonial boundaries, subject to the consent of the relevant colonial legislature. Now, Section 8 of the Constitution Act specified that the Colonial Boundaries Act would cease to apply to any colony becoming a state of the Commonwealth and that, instead, the Commonwealth itself would be taken as the self-governing colony for the purposes of the Act. Given this situation, Page argued, the Commonwealth could ask the Imperial Parliament to legislate to create a new state within the Federation, and that Parliament could legally do so regardless of the wishes of the Government of the existing state. Although Latham confirmed the legality of the process, the Government refused to act. While bitterly attacking the actions of the Lang government, Prime Minister Scullin made it clear that Labor policy was committed to the abolition of the states. Scullin's refusal could hardly have come as a surprise to Page. However, the debate had provided public affirmation that there was another constitutional alternative open to the new staters, one that required neither state approval nor constitutional amendment. This was an important advance, for otherwise the secession proposal depended only on the legal principles established by the West Virginia secession, which was hardly a solid base for action.
While Page was taking action in the Federal Parliament, moves began to draw the four country movements (New England, Riverina, Monaro-South Coast and Western) together, with the calling of a unity conference for 28 April 1931. The outlook was far from hopeful. Not only were the objectives of the New England and Riverina Movements different, but the Riverina Movement was also being courted by the All for Australia League and by Joseph Lyons, who had left the Labor Party and was now involved in the formation of a new anti-Labor Party. In addition to these difficulties, there were also attitudinal and personality differences. As we have seen, the Riverina Movement, and Hardy himself, were strongly anti-party and anti-politician. This difference was probably exacerbated by personal tensions between at least Page, Bruxner and Hardy. At a preliminary unity meeting, held on 28 March, Hardy had upset Page and Bruxner by offering to campaign in New England 'to stir up the people.' This offer was indignantly refused, with the two Northern leaders declaring that if they could not strike sparks from the North then no-one could. Following this first meeting Bruxner spoke of 'mushroom growth organisations which ... are only presenting the same ideal that the C.P. has preached for years', a comment that may have been true but was hardly tactful.
Despite these obstacles there were powerful forces working for unity. Whatever the exact wording of the Riverina objective, Hardy had made it clear that he wanted his new provinces to be sovereign within their defined powers. This meant that there was at least some common ground between the New England and Riverina Movements, and hence potential scope for agreement. In this regard, the decisions taken at the Maitland Convention were of real assistance. The draft constitution not only demonstrated that the New Englanders wanted simple and economic government, a key Riverina belief, but had also, by the adoption of the expression 'Provincial Legislative Council', cleared a semantic hurdle between the two Movements.
This last point is of far more significance than appears at first sight. Regardless of the similarities between the Movements' objectives, their supporters believed that they were different. The Riverina people saw their object as a midway point between unification and new states, and, as a consequence, argued for the abolition of the states and their replacement by provinces. In turn, the New Englanders felt that the Riverina Movement had in fact adopted unification as its objective and reacted very strongly to this. Thus perceived differences in objective, which reflected in part the different traditions and bases of support for the two movements, were entrenched by the rhetoric and counter-rhetoric of the protagonists. The adoption by New England of the Provincial Council title eased the situation by helping to reduce rhetorical differences.
There were other factors working towards unity. On Hardy's own assessment, the fall in farm prices associated with rigid farm costs (of which the tariff was an integral part) was a major factor in the rise of the Riverina Movement. This in turn made it difficult for the Riverina Movement (as for the Country Party) to join with the group led by Lyons, given that group's links with high-tariff manufacturing interests. In addition, the Nationalists, with whom Lyons was to finally join in May, had never been strong supporters of constitutional reform. The outlook was worse on the other side of politics since Scullin had already rejected the idea of states with any form of sovereign powers, thus rejecting a central part of Hardy's proposal.
Reflecting these pressures for unity, the Unity Conference held on 28 April 1931 was a considerable success. The movements managed to agree on seven common policies: a national convention to revise the constitution and facilitate the creation of new states; action to reduce costs of production; opposition to the financial policy of the New South Wales Government; opposition to Communism; support only for candidates pledged to give preference to country movement objectives; and the maintenance of a non-party attitude. This agreement was an important advance, but difficulties still remained, so a further Unity Conference was called for 18 June. This managed to reach agreement on all points. A revised seven plank platform was released which managed to reconcile both the New England and Riverina positions. It provided for the division of Australia into new self-governing areas with defined powers, and also specifically rejected Labor's unification policy. Noticeably, the previous non-party plank was dropped, thus opening the way for the Movements to join with the Country Party. In addition, the meeting agreed to establish a Central Council to co-ordinate activities, especially in the publicity field.
Drummond had played a central part in the meeting's success. It is not clear whether Drummond and Hardy had met prior to the April meeting. However, what is clear is that the two men had now begun to establish some measure of personal rapport. Their relationship was still in its early stages in June - both men were still using the formal 'Mr' in letters - but it was probably important in the meeting's success. In addition, Drummond's knowledge of constitutional matters and his negotiating and drafting skills also played a part. One of his New England friends (P.E. Tighe of Ballina) wrote to congratulate him:
I have just received from Mr. Hickson a copy of the report of the combined meeting in Sydney the results of which, it seems to me, could not have been more satisfactory. The Press did not mention the names of those who were present (except Mr. Hardy) but on reading the Press report I came to the obvious conclusion that some master mind identified with our Northern Movement had drafted the planks of the common platform, dissipating the mental cloudiness which seemed to surround the other movements.
On reading the typewritten copy of the report I was not surprised to find that you were the person responsible for clarifying the situation and giving the various movements something clear, definite, logical and practical to fight for.
The decision of the Sydney meeting to drop the non-party clause opened the way to some form of arrangement with the Country Party. There was logic in such an arrangement, for the Party was still the only political party committed to the separatist cause. Further, the Party's lack of certainty about its own future, which had led some of its supporters to argue that it should participate in moves to form a combined opposition, had now passed. In June 1931 the Party had unexpectedly won the by-election for the Upper Hunter seat formerly held by the Nationalists. Buttenshaw had opposed the decision to nominate a candidate, arguing that the previous coalition agreement which precluded the Party running candidates in Nationalist-held seats was still in force, but now the Party's success led him to reverse his position. In July he convened a joint meeting of the Parliamentary Party and Central Council at which he put the view of the parliamentarians that the Party must avoid unity and stand by itself with a bold policy. As in the past, it was Bruxner who put the hard line view held by him and Drummond. The Party should take the seats it wanted, he told the meeting. After a long discussion, Bruxner moved successfully, with Drummond seconding, that the Party contest all country seats.
The Party's decision opened the way for conflict between the country forces, and was attacked by Hardy on the grounds that it neglected 'the interests of people who want the consolidation of all forces fighting for sane government.' At the same time, it increased the pressure for some form of alliance between the country movements and the Country Party. However, there were still problems to be overcome before this could be achieved. Early in August Hardy discussed the situation in a long letter to David Drummond. The Country Party, he suggested, was strong in the North but weak elsewhere in the State. Reflecting this, there was a strong feeling among his own supporters that the Party, under its present leadership, could never become a major political body. Consequently, any suggestion that the Riverina, Western or Monaro-South Coast Movements should simply hand themselves over to the Country Party, as presently constituted, would be rejected outright. In his view the solution was to fuse the four country movements and the Country Party together into a new organisation called the United Country Movement. The individual country movements should retain their separate identities and be responsible for electoral organisation in their own areas, subject to direction from the central executive. Even under this arrangement, he suggested, it could still be claimed that the United Country Movement was the Country Party in another guise. To avoid this, he should become chairman of the new organisation, so that his followers could claim that the new body was truly representative of country thought.
Hardy was obviously concerned that these suggestions might give offence. 'Do not take offence from these remarks, I am trying to interpret the majority of public opinion', he told Drummond, stressing that he was not talking about political leadership in any shape or form. Should he be elected chairman he would, of course, 'be quite content to serve and be guided by men such as yourself on the political side.' The same caution is shown in the conclusion to this letter, a conclusion that also suggests Drummond's growing influence:
If there is anything further to comment upon, drop me a note as I tell you quite frankly I am relying on your guidance. Naturally the discussion between us shall be entirely private.
Hardy's caution was understandable. His suggestions did provide a sensible way of reconciling the conflicting interests of the different groups but, given the previous conflict, they could also have aroused opposition.
On 13 August 1931 delegates from the four country movements met to discuss the situation. Hardy began by outlining the history of his Movement. He told the meeting that the Riverina Movement, while prepared to support suitable candidates, had always been non-party. However, he was now of the view that the four movements should be welded into a new political force with constitutional reform as a major objective. Failure to achieve such unity, he suggested, risked the appearance of at least three anti-Labor candidates at the same time. He therefore moved that the four country movements form themselves into a new body called the United Australia Country Movement, with the existing movements acting as divisions. This motion was accepted, although the title was altered slightly to the simpler United Country Movement. It was also agreed to form a new executive comprising two representatives from each movement, including metropolitan supporters, to assume the functions of the previously established Central Council.
After this initial success, the meeting turned to discuss two potentially contentious issues. Fenn Lusher from the Riverina moved that Hardy should be appointed Leader of the new UCM, the title Hardy used in the Riverina Movement. This aroused immediate hostility. Page suggested that the title would be resented by members of the New England Movement and proposed instead that the position should be titled 'General Organiser'. Page's suggestion was unacceptable to Hardy, and a decision was deferred.
The second contentious issue related to the new body's political role. Delegates from the Monaro-South Coast Movement still supported a non-party approach, and therefore moved that the UCM support all candidates willing to advocate the Movement's policy. After discussion this motion was withdrawn, and the meeting accepted instead Hardy's suggestion that a plan be developed for approval by the divisions for the creation of a new political party, the United Country Party, to be controlled by divisional representatives.
That night lengthy discussions were held with the Country Party. When the meeting re-assembled on the fourteenth, terms of agreement were announced: these involved the continuation of the UCM as a reform movement, the alteration of the name of the Country Party to United Country Party, and the establishment of formal links between the two bodies. Agreement was also reached on the points to be given prominence in the fighting platform, including new states and tariff reform. These proposals were now duly accepted on the motion of Hardy.
The sole remaining question, whether Hardy should be declared leader, was quickly settled. A compromise had been worked out overnight, and Hardy was now, as he had originally suggested in his letter to Drummond, appointed Chairman of the UCM. However, before the meeting closed Drummond subjected Hardy to public questioning in a move obviously designed to allay New England fears. In response, Hardy assured the meeting that he was utterly opposed to unification and was in favour of the creation of smaller self-governing States. He would make it quite clear that his position as Chairman did not mean that he was the Leader of the Movement.
There were still a number of administrative details to be worked out, including the formal acceptance of the arrangements by the various divisions, but the Country Party and country movements were now effectively united. This must have been a satisfying result for David Drummond. Not only had the threat posed to the Country Party by the country movements been contained, but he now had a new political organisation solidly wedded to his prime objectives, new states and constitutional reform.
More good news was to follow. On 14 October Drummond attended a meeting in Sydney between representatives of the United Australia Party, the Country Party, the All for Australia League and the Producers' Advisory Council to discuss electoral arrangements. The Country Party's platform, including new states and tariff reform, was accepted as policy at a State level and for the joint Federal campaign. For the first time, all parties except Labor had made a commitment to the new state cause.
The October meeting seemed to have given the Country Party everything it wanted and cost it nothing. Unfortunately, this success proved illusory. The defeat of the Lang Government's emergency taxation legislation by the Upper House, a defeat which forced Lang to resume interest payments, rejoin the Loan Council and accept the Premier's Plan, had been greeted with some satisfaction. However, just as the Lang plan had helped generate separatist enthusiasm, so Lang's apparent return to financial conformity reduced it; with the defeat of the Government at the next election likely, the issue simply lost its urgency. Further, the unexpectedly successful merger between the All for Australia League and the Nationalists created problems for the Country Party, for the new United Australia Party became increasingly confident and aggressive. In addition, significant problems emerged at a Federal level.
It had been agreed at the October meeting that the Country Party platform, including its tariff and constitutional reform proposals, should be adopted as policy for a joint federal election campaign. Lyons' policy speech, delivered on 2 December 1931, reflected this. 'The present subdivision of Australia into states cannot be regarded as permanent', he declared. 'The provisions of the Constitution with respect to the creation of new states are vague and ambiguous. We consider that these should be amended and clarified.' Lyons' remarks on tariffs, while qualified, were also satisfactory from a Country Party viewpoint.
In the campaign that followed, the Labor Party made the tariff a major issue, appealing to manufacturers to help return the Party so that the existing tariff structure might be preserved. This stand frightened the UAP leadership who feared that it could lead to loss of votes in industrial seats. As a result, the Party's deputy leader (Latham) declared just two days before the poll that:
The policy of protection will be as safe in our hands as it has always been in the past. The tariff under which our great manufacturing industries have developed and flourished has been the work of Liberals and Nationalists... and we are not going back on that policy now.
Latham's words were hardly encouraging. Worse was to follow, for the Federal elections gave the UAP a majority in its own right. The new UAP Government ignored its promise to amend the Constitution to allow the easier creation of new states, and also increased tariffs.
The UAP's Federal election victory, its growing aggressiveness at state level, and the continued suggestions that it and the Country Party should merge, combined to renew Country Party distrust of the party. When R.W.D. Weaver, a UAP MLA, publicly accused Drummond of breaching the unity agreement during the Federal campaign, Drummond responded savagely. 'I desire to inform you that any such statement... is grossly untrue, misleading and opposed to fact', he wrote to Weaver. He was even blunter in a letter to George Wilson, suggesting that the remarks attributed to Weaver, and the gross misrepresentations to which page and his colleagues had been subjected to, were a revival of the Bligh Street (the Nationalist headquarters) 'tactics which have cursed the politics of N.S. Wales too long'. However, it was Bruxner with his neat turn of phrase who hade the most devastating (and public) attack on the UAP. When James Ashton, a UAP MLC, suggested that, as there was no difference between the parties on policy, there was nothing to prevent unity, Bruxner retorted that since the UAP had no policy it could not have the same policy as the Country Party.
If distrust of the UAP and the associated desire for independent action ran deep within the Party, there were still those who supported unity or at least wanted the facade maintained. The conflict between the two groups placed Buttenshaw in a difficult situation. By nature, he disliked hard positions, preferring always to look for a compromise. This was unacceptable to the hard liners and led to growing dissatisfaction with Buttenshaw's leadership. Finally, a deputation from the Parliamentary Party approached Bruxner and asked him to seek the leadership.
Drummond agreed that the Party needed a stronger leader, but he had always liked Buttenshaw, and it sickened him to see the Party's regard for Buttenshaw decrease and the open lack of cooperation increase. 'At this stage', he later recalled, 'I took on myself out of a deep friendship a task I hated.' He went to see Buttenshaw who, after a frank discussion, agreed to place himself in the hands of the Party. Poor Buttenshaw must have felt besieged on all sides, for Bruxner later told Aitkin that he also had been to see Buttenshaw to tell him about the deputation. On 26 April 1932 Buttenshaw met the Parliamentary Party and told them that he wished to resign. Bruxner was the only nomination for leader, Buttenshaw for deputy-leader. To Drummond, Buttenshaw's behaviour was a mark of his stature as a man: 'It said much for his sense of fairness, that our friendship remained real & untarnished till his death'.
A significant influence on the Party's decision to replace Buttenshaw had been the increasing chaos brought about by the actions of the Lang Government. By January 1932, New South Wales was again in deep financial trouble. On 29 January Lang informed the Loan Council that New South Wales would not be able to meet in full the interest payments (959,000 pounds) due in New York and London between 1 and 4 February, and asked for immediate financial assistance. Council members considered that Lang had not honoured his undertaking to reduce expenditure and suspected that the move was a ploy to shift the State's interest burden away from New South Wales, and accordingly assistance was refused. New South Wales promptly defaulted, first on overseas interest payments and then on internal ones as well.
Lang probably believed that the Commonwealth would be forced, as in 1931, to make the interest payments, thus allowing him to avoid immediate (and unpopular) cuts in expenditure. If so, he made a fundamental miscalculation. This time the Federal Government allowed New South Wales to default; it was not until 17 February, two weeks after the due date, that the Commonwealth finally stepped in and made the due payments. The next day the Federal Government introduced into Parliament the Financial Agreements Enforcement Bill which aimed to give the Commonwealth the power to recoup interest payments made on behalf of a state by seizure of state revenue. Lang responded with defiance. Anticipating the Commonwealth's action, the State removed from the banks over 1,000,000 pounds in cash and stored the money in the State Treasury. Now State Departments were instructed to collect cash and pay it direct to the Treasury, which in turn would pay State accounts in cash, including wages and salaries. When the Commonwealth responded by introducing further Enforcements Acts, the Lang Government responded (on 11 and 12 May) by rushing the Mortgages Taxation Bill through the State Parliament. This Bill, which was expected to raise up to 14,000,000 pounds, imposed a tax of 10 per cent on all mortgages to be paid within fourteen days of the commencement of the Act.
To Drummond, the situation had some of the elements of a mad comic opera. A cash system was difficult enough in the city, but in the country with its long distances it created some remarkable sights, such as bags of cash being carried by mounted constables from police post to police post. However, the comic opera elements in this system could not conceal the fact that the State was on the verge of civil disruption.
The Lang Government's decision to default, and the subsequent moves and counter-moves, raised again the possibility of action by the country movements. On 8 April, following a series of informal talks, the executive of the United Country Movement met in Sydney to discuss the situation. The New Englanders had previously discussed the possibility of armed rebellion. Drummond was horrified at this prospect. If, he had argued, 'we who represent the most stable elements of the community set our hands to action contrary to the normal method of law and order then we shall be responsible for a civil war of which no man can see the end.' Drummond's argument was supported by the ex-service members of the executive, and the military option was finally rejected. Nevertheless, while military action was ruled out, the New Englanders were now determined to press ahead immediately with their original secession plan. It was again Page who led the argument: 'Nothing succeeds like success in an affair of this kind', he told them.
Julius Caesar had damn well crossed the Rubicon even though there was a rule against it; and he had blasted well stayed there because he knew he couldn't get back even if he wanted to. That was what we had to do. Once we crossed there would be no turning back.
However, just as Page had faced opposition within the Northern Movement in 1931 to his plan for immediate action, now the other country movements were cautious. Even Hardy, now a member of the Senate, counselled caution. After a long discussion, it was finally agreed that if Lang made one more 'overt act' in defiance of the constitution then immediate action would be taken.
The executive defined its plans in great detail. Conventions were to be called together at Armidale, Wagga and Dubbo to appoint provisional governments. These would then take control of public services within their areas, hold elections for provisional legislatures, and petition for admission to the Federation. The plan was to be triggered by a coded telegram, and committees were appointed to supervise various aspects of its operation. Following the meeting a telegram was sent to the Prime Minister, Joseph Lyons, demanding an immediate referendum on the separation issue, while Page flew to Melbourne to see him. Lyons' reaction was understandably cautious: Cabinet would consider the situation, but he warned that if the plan was put into operation his Government might be forced to act against those who participated.
Although the New England leadership did not realise it, the UCM's executive's unwillingness to act was to prove fatal to their plans. To have any chance of seizing separation they needed to act immediately, to take advantage of the political chaos. True, the risks were enormous, but by so doing they would have opened up a new political situation that might have forced recognition of their claims. By deciding to wait they effectively withdrew from the political stage, allowing outside events to overtake their plans.
In these circumstances it is easy to underestimate the seriousness of the situation in April 1932, and to conclude (as Peter Loveday did) that Drummond and the others did not regard separation as a real objective and developed the idea of the overt act and the coded telegram only because political events (and their previous statements) meant they might have to fulfil their promises. However, to reach such a conclusion is to miss the point. The New England Movement had adopted the secession plan only after much agonizing and with understandable reluctance. The move came only after a long history of frustration, it arose in a super-heated atmosphere, and was doubly dangerous simply because it was led by men who were experienced and commanded community respect. Had the UCM accepted the need for immediate action, it seems certain that the North (and probably most of country New South Wales) would have followed them. The sense of lost opportunity would remain with the Northern leaders always.
As the UCM went ahead with its planning, the agony of the Lang Government entered its final days. Beset by external enemies, the Government now faced rising internal dissension as well. Despite the tensions, Drummond had retained his Labor friends. Early in May one of them remarked privately to him:
'David there are 90 men in this House and there's only one bloody man who is in favour of what Lang is doing.' I said 'Well, you know what to do - you can defeat him.' He said 'Yes, but we've got a lot of fellows who will simply go out on the dole if they're defeated now, and consequently it's very hard for them to make up their mind'.
Although the rebels were not yet prepared to act, it was clear that even if Lang survived the external pressures he was likely to face another internal challenge.
A few days after this conversation (Drummond does not give the date but it was probably on Wednesday 11 or Thursday May 12, 1932) Drummond took a break from the House to go for a walk through the Botanic Gardens. There he met Bertram Stevens, who had taken over from Bavin in February as UAP leader. Stevens invited Drummond to join him and, as the two walked through the Gardens, told him that the Governor, Sir Phillip Game, had asked him to come across to Government House for a talk. Drummond was immediately interested. The Governor had been under tremendous pressure to dismiss Lang - indeed, many of the UAP's supporters had taken to snubbing him publicly at functions because of his failure to do so - and the invitation suggested that he might finally be ready to act.
Leaving Drummond outside, Stevens entered Government House, returning about half an hour later. The Governor, he explained, had indeed told him that he was thinking of dismissing Lang, and had asked him for his advice. Stevens had replied that as he was neither Premier nor Attorney-General he was not in a position to offer advice. The Governor had then replied that he would withdraw Lang's commission, provided that Stevens and Bruxner agreed to form a coalition government. Stevens had responded that should he be offered a commission he would do his best to carry it out. When Stevens returned to Parliament House he was met by a deputation of between twenty and thirty Labor Parliamentarians who, in return for immunity in their seats, were prepared to cross the floor. Stevens, not confident that the Governor would shortly dismiss Lang, was able to reject the offer.
Although neither Drummond nor the UCM were yet aware of it, the long-awaited overt act had in fact occurred. On 10 May the Premier's Department had issued a circular to all Government Departments, requiring them to ignore the Commonwealth proclamation forcing payment of State revenue to the Commonwealth. On 11 May R.H. Beardsmore, the accountant in charge of the Accounts Branch of the Lands Department, stated that he felt obliged to obey the law and would therefore pay the monies to the Commonwealth, regardless of the Premier's Department circular; he was immediately ordered on leave by his Minister. The State was now clearly in breach of Commonwealth law. Two days later, on 13 May, after Lang refused to alter his position, the Governor dismissed him. The agony was over.
This post continues my story of the life of the New England Leader David Henry Drummond. You will find a full list of posts here.
The economic analysis of this chapter draws heavily from: C.B. Schedvin, Australian and the Great Depression. A Study of Economic Development and Policy in the 1920s and 1930s, Sydney University Press, Sydney, 1970. Supplementary material is drawn from: W.A. Sinclair, The Process of Economic Development in Australia, Cheshire Publishing, Melbourne, 1976; L.F. Giblin, The Growth of a Central Bank. The Development of the Commonwealth Bank of Australia 1924-1945, Melbourne University Press, Carlton, 1951; E.O.G. Shann and D.B. Copland, The Crisis in Australian Finance 1929 to 1931, Angus & Robertson Limited, Sydney, 1931; D. Copland, Australian in the World Crisis 1929-1933, Cambridge University Press, Cambridge, 1934; E.O.G. Shann and D.B. Copland, The Battle of the Plans. Documents Relating to the Premiers' Conference, May 25th to June 11th, 1931, Angus & Robertson Limited, Sydney, 1931.
Population figures have been calculated from the figures given in Appendix VII, R. Ward, A Nation For a Continent. The History of Australia 1901-1975, Heinemann Educational, Richmond, 1977, pp.446-447.
See R. White, Inventing Australia. Images and Identity 1688-1980, George Allen & Unwin, Sydney 1981, Chapter 9, p.140ff. The history of the League is summarised in: 'AIDA - The History', Australian Industries Development Association Bulletin No 341., June 1982, pp.7-9.
For a description of Country Party (and country) attitudes towards the tariff see: U.R. Ellis, A History of the Australian Country Party, Melbourne, University Press, Parkville, 1963, particularly Chapter 9, p.114ff; B.D. Graham, The Formulation of the Australian Country Parties, Australian National University Press, Canberra, 1966, p.118, 229-231, 245-247.
Cited Ellis, The Australian Country Party, p.115.
Copy in FP.
Giblin, The Growth of a Central Bank, p.63.
Schedvin, Australia and the Great Depression, p.73.
In the last two years of the twenties, 88 per cent of export income came from wool, hides and skins, wheat and flour, dairy produce, meats and metals. D. Clark, 'A Closed Book? The debate on causes', in J. Mackinolty (ed), The Wasted Years? Australia's Great Depression., George Allen & Unwin, Sydney, 1981, pp.10-26, p.23.
These figures are taken from the table in L.J. Louis and I. Turner (eds), The Depression of the 1930s., Cassell Australia, Melbourne, 1968, p.89.
Cited Giblin, The Growth of a Central Bank, p.64.
NSWPD, Vol.119, 10 December 1929, p.2248.
NSWPD, Vol.122, 8 April 1930, pp.4529-4551.
To give only one indication of scale, the value of buildings completed in Sydney in 1930 was 60 per cent of the 1929 level, falling to just 6 per cent of the 1929 level, falling to just 6 per cent in 1932. C.B. Schedvin, 'Building and the Trade Cycle in Australian Cities between the War', 35th ANZAAS Conference, Brisbane, 1961. Cited P. Spearritt, Sydney Since The Twenties, Hale and Iremonger, Sydney, 1978, p.57.
Louis and Turner, The Depression of the 1930s, p.89.
At the 1933 census (when economic conditions had begun to improve), 23 per cent of Sydney males were still unemployed as compared with 9.8 per cent in the remainder of New South Wales. Mackinolty, The Wasted Years?, p.201.
Material on public and private responses to the Depression is drawn from: D.A. Aitkin, 'Unemployment and Unemployment Relief in Armidale 1930-1932', BA (Hons) thesis, University of New England, 1958; Louis and Turner, The Depression of the 1930s; Mackinolty, The Wasted Years?; R. Millis, City on the Peel. A History of Tamworth and District 1818-1976, A.H. & A.W. Reed, Terrey Hills, 1980, pp.205-210; Spearritt, Sydney Since the Twenties, pp.56-66; and DM, p.140ff.
Albury Banner, 20 June 1930.
Daily Telegraph, 9 August 1928.
C.B. Newling, The Long Day Wanes, L.F. Keller, Hunters Hill, 1973, p.71.
Attacks are summarised in: E.S. Elphick, 'Armidale Teachers' College: Its Background, Foundation and Early Years', Litt B thesis, University of New England, 1972, p.123ff.
The attacks are contained in NSWPD, Vol.124, 5 December 1930, pp.268-280.
NSWPD, Vol.124, 5 December 1930, pp.269-271.
Armidale Express, 20 August 1930.
Armidale Express, 25 July 1930. See also Drummond's minutes to his Department of 1 April 1930 to 10 June 1930. Ministerial Letter Book, University of New England Archives, A248/Vol.2133, pp.114 and 123.
See Drummond's minute to his Department of 22 July 1930. Ministerial Letter Book, p.131.
See Drummond's minute to his Department of 18 June 1930. Ibid, p.126.
Armidale Express, 8 September 1930.
Sydney Morning Herald, Labor Daily, 27 August 1930.
See Sydney Morning Herald of 28 and 29 August 1930. The text of the resolution is set out in Shann and Copland, Crisis in Australian Finance, pp.32-34.
Labor Daily, 23 September 1930.
Albury Banner, 20 June 1930.
The discussion on this case is drawn from the Interview Transcript and from the Drummond papers, University of New England Archives, A248/3004. The writer had access to these papers, which were placed under a twenty year embargo, as a member of the Drummond family. The embargo itself is an indication of Drummond's continuing sensitivity on the issue, for the papers contain nothing discreditable.
Drummond to McMullen, 6 September 1929.
19 October 1930.
Unless otherwise cited, the discussion on Council reform is drawn from: K. Turner, House of Review? The New South Wales Legislative Council, 1934-1968, Sydney University Press, Sydney, 1969, chapter 1; and from Drummond Papers, University of New England Archives, A248/3009.
J. Ryan to Drummond, 21 December 1927. Emphasis in original.
The Constitutional analysis in the following paragraphs is drawn from a legal opinion in the Page Papers, National Library, MS1633/1022.
See P. Weller (ed), Caucus Minutes 1901-149, Volume 2, 1917-1931, Melbourne University Press, 1975, p.361ff.
Shann and Copland, Crisis in Australian Finance, p.182.
P. Loveday, 'Anti-Political Political Thought', R. Cooksey (ed), The Great Depression in Australia, Australian Society for the Study of Labour History, Canberra, 1970, 1970, pp.121-135. Reprinted in Mackinolty, The Wasted Years?, pp.129-145.
T. Mathews, '"The All For Australia" League', in Cooksey, The Great Depression, pp.136-147, p.139. See also J. McCarthy, '"All for Australia": Some Right Wing Responses to the Depression in New South Wales, 1929-1932', Journal of the Royal Australian Historical Society, Vol.57, pt 2, June 1971, pp.160-171.
A. Davidson, The Communist Party of Australia. A Short History, Hoover Institution Press, Stanford University, Stanford, 1969, p.60.
Unless otherwise cited, material on para-military organisations is drawn from: E. Campbell, The Rallying Point. My Story of the New Guard, Melbourne University Press, Carlton, 1965; L.F. Crisp, 'Heil without Seig', Review of Eric Campbell's The Rallying Point, Australian Book Review, November 1965, pp.12-13; P. Mitchell, 'Australian Patriots: A Study of the New Guard', Australian Economic History Review, Vol.9, No.2, September 1969, pp.156-178: R. Hall, 'The Secret', The National Times, January 23-28 1978, pp.12-13; R. Hall, The Secret State. Australia's Spy Industry, Cassell Australia, Stanmore, 1978; R. Darroch, 'The Man Behind Australia's Secret Armies', The Bulletin, Vol.99, No. 5106, May 2 1978, pp.59-65; R. Darroch, 'The Man Behind Australia's Secret Army', The Bulletin, Vol.101, No. 5212, May 20 1980, pp.58-70; and K. Amos, The New Guard Movement 1931-1935, Melbourne University Press, Carlton, 1976.
Col.Sec. Dept.File. Cited Amos, The New Guard, p.39.
Gray, '"An evil long endured", Newcastle's Depression', in Mackinolty, The Wasted Years, p.67.
The evidence on this point is largely circumstantial. Many, like Drummond, distrusted the New Guard. At Newcastle, for example, the Defence Organisation would have nothing to do with the New Guard 'whose communist bashing activities is despised.' (Cited Gray, 'An evil long endured', p.67). The apparent secrecy and loose organisation associated with many country groups was a feature of the old rather than the New Guard. New Guard groups held regular meetings and were tied to a formally organised structure, while new recruits had to sign attestation papers. In these circumstances, it seems unlikely that people could be members of the New Guard without knowing it. Further, Campbell's own story of the New Guard, The Rallying Point, suggests that Campbell knew little of country events.
Unless otherwise cited, material in this next section is drawn from: U.R. Ellis, New Australian States, The Endeavour Press, Sydney, 1933; R.N. Birch, 'The New States Movement in Northern New South Wales', BA (Hons) thesis, Sydney University (New England University College), 1947; E. Moore, 'The Causes of the Agitation after 1901, for the Establishment of a New State in Northern New South Wales', MA thesis, Sydney University (New England University College), 1953; U.R. Ellis, The Country Party. A Political and Social History of the Party in New South Wales, F.W. Cheshire, Melbourne, 1958.
Cited Ellis, New Australian States, p.205.
Page to Drummond, 18 March 1931. Drummond Papers, University of New England Archives, A248/3011/1.
Ellis, New Australian States, p.205.
Northern Daily Leader, 17 February 1931.
Quoted in Ellis, New Australian States, pp.205-206. See also Northern Daily Leader, 18 February 1931.
Drummond's statement was released on Friday 20 February. A copy of the statement is in the Drummond papers as is an undated Northern Daily Leader report. The quotation is taken from the Leader. University of New England Archives, A248/3011/1.
18 February 1931. Cited Ellis, New Australian States, p.207.
Northern Daily Leader, 27 February 1931. Cited Moore, 'The Causes of the Agitation', p.118.
Northern Daily Leader, 21 February and 14 March 1931. Cited ibid, p.119.
Sydney Morning Herald, 9 March 1931. Cited Loveday, 'Anti-Political Thought', p.122.
Armidale Express, 27 February 1931. Northern Daily Leader, 2 March 1931. For a life of Moyes see: D.H. Ingrouille, 'John S. Armidale. An account of the Public Life of John Stoward Moyes with Particular Reference to His Ministry as Bishop of Armidale', Litt B thesis, University of New England, 1976.
Quoted Ellis, New Australian States, p.208.
The resolutions are set out in Ellis, New Australian States, p.208. There is also a copy in the Page Papers, National Library MS 1633/1022.
Unless otherwise cited, material on Riverina agitation is drawn from: Ellis, New Australian States; Ellis, The Country Party; K. Swan, 'The Middle Reaches since 1900', in H.J. Frith and G. Sawer (eds), The Murray Waters. Man, Nature and a River System. Proceedings of a Symposium Organised by the Australia Academy of Science, The Academy of the Social Sciences in Australia, The Australian Academy of the Humanities, Angus and Robertson, Sydney, 1974, pp.124-139; and W.A. Beveridge, 'The Riverina Movement and Charles Hardy', BEc Hons thesis, Sydney University, 1954. (This thesis is usually recorded in this way. However, the microfilm is marked Government III).
The Council's policy can be found in Shann and Copland, The Crisis in Australian Finance, pp.67-68.
Quoted Ellis, New Australian States, p.208.
Quoted Ellis, The New South Wales Country Party, pp.142-143.
Hardy to Drummond, 21 March 1931. Drummond Papers, University of New England Archives, A248/3011/1.
A copy of the invitation is in the Page Papers, National Library MS 1633/1022.
Drummond to Page, 16 March 1931. Page Papers, ibid.
Page to Drummond, 18 March 1931. Drummond Papers, University of New England Archives, A248/3011/1.
Wagga Advertiser, 7 April 1931. Cited Ellis, The New South Wales Country Party, p.145.
Material on the Convention is drawn from Report of the Proceedings, Drummond Papers, University of New England Archives, A248/3011.
Page's speech is set out in Report of the Proceedings, pp.5-17.
Copies of the draft constitution can be found in the Drummond Papers, University of New England Archives, A248/3011 and in the W.T. Seaward Papers, Scone and Upper Hunter Historical Society Archives, Scone.
Riverina Movement. Full details organisation, Cyclostyled Circular. Copy in Drummond Papers, University of New England Archives, A248/3011.
Report on the Proceedings, pp.24-25.
Shann and Copland, The Crisis in Australian Finance, p.67.
Wagga Advertiser, 26 March 1931. Cited Beveridge, 'The Riverina Movement', p.17.
Report of the Proceedings, p.123.
Material in this paragraph is drawn from: Report of the Royal Commission on the Constitution, Government Printer, Canberra, 1929, pp.129, 200-202, 361-364.
Quoted ibid, p.202.
N. Batt, 'Tasmania's Depression Elections', in Cooksey, The Great Depression, pp.111-120, p.114; 'Could Tasmania Secede?' Today LXVII (3), 1 March 1930; 'Hobson's Choice in the West', Today, LXVII (8), 1 August 1930; T. Hytten, 'The Difficulties of the Small States', Australian Quarterly, 7 September 1930, p.50. The last three cited in Loveday, 'Anti-Political Thought', footnote 80, p.133.
Report of the Proceedings, p.122.
Unless otherwise cited, material in this next section is drawn from: Ellis, The New South Wales Country Party, p.148ff; Ellis, The Australian Country Party, p.174ff; Beveridge, 'The Riverina Movement'; Birch, 'The New States Movement', p.50ff; and Moore, 'The Causes of the Agitation'.
The debate is set out in CPD, Vol.128, 16 April 1931, pp.924-937.
Quoted Ellis, The New South Wales Country Party, p.144.
Daily Telegraph, 28 April 1931. Cited Beveridge, 'The Riverina Movement', p.17.
Evidence of the Royal Commission of Inquiry as to the Areas in New South Wales Suitable for Self-Government as States in the Commonwealth of Australia also List of Exhibits, Vol.1, Government Printer, Sydney, 1934, pp.2040-2041.
Wagga Advertiser, 29 April 1931. Cited Ellis, The New South Wales Country Party, p.148.
Wagga Advertiser, 19 June 1931. Cited Ellis, The New South Wales Country Party, p.148.
2 July 1931. Drummond Papers, University of New England Archives, A248/3011.
Material in this paragraph is drawn from Aitkin, The Colonel, pp.134-136.
Sydney Morning Herald, 24 July 1931. Cited Beveridge, 'The Riverina Movement', p.25.
3 August, 1931. Copy in Drummond Papers, University of New England Archives, A248/3011.
Text given in Ellis, The New South Wales Country Party, p.151.
Quoted ibid, pp.151-152.
Sydney Morning Herald, 3 December 1931. Quoted Ellis, The Australian Country Party, p.183.
Melbourne Argus, 17 December 1931. Quoted ibid, p.184.
8 February, 1932. Drummond Papers, University of New England Archives, A248/3011.
Drummond to George Wilson, 8 February 1932, ibid.
Aitkin, The Colonel., p.141.
Drummond's views are set out in DM, p.148.
Aitkin, The Colonel, p.141.
Unless otherwise cited, the material on the fight between Lang and the Commonwealth is drawn from Schedvin, Australia in the Great Depression, pp.273-4 and 351-354.
Quoted in B. Foott, Dismissal of a Premier: The Phillip Game Papers, Morgan Publications, Sydney, 1968, p.196.
Quoted in Ellis, The Australian Country Party, p.189. Ellis' source is his diary notes of the meeting.
Ellis to Beveridge, 13 September 1954. A copy of the letter is in Beveridge, 'The Riverina Movement', Appendix E, p.71.
Loveday, 'Anti-Political Thought', pp.134-135.
Interview Transcript. Drummond would never reveal the name of his informant who he described simply as a man who had occupied a very high place since as Minister.
The material in this and the next paragraphs is drawn from the Interview Transcript, DM, pp.153-154. I have also to thank Professor Don Aitkin for providing me with copies of his correspondence with Drummond on these matters.
Foott, Dismissal of a Premier, gives a clear picture of the pressures faced by Game.
There is some confusion here as to events. The DM, places this event after Stevens' second visit to the Governor, that is, after he had actually been given his commission. However, the Aitkin papers place it after the first.