Stanley Bruce’s great industrial relations blunder

by

J.T. Lang

Introduction: Fighting the Liberals’ attacks on unions

Bob Gould

The Howard government and its conservative backers are preparing with considerable fanfare for an assault on the trade unions through so-called reform of the industrial relations system after Howard gets control of the Senate on June 31.

This raises the issue of how the reactionary proposals of the Liberals can be defeated, as the labour movement faces these attacks in a rather defensive situation.

People who think there will be a massive groundswell of immediate industrial rebellion against these proposals are deluding themselves. The labour movement at the moment is rather battered and dispirited.

The traditional socialist slogans of mobilisation are still necessary and appropriate, but it’s extremely important to conduct a rapid educational program in the labour movement about the dangers of the conservative industrial proposals and about historical precedents.

A campaign for a militant industrial response has to be combined with exploring all the legal possibilities for defeating the Liberal offensive. Rhetoric about industrial mobilisation, on its own, won’t get very far.

It’s also necessary to construct the broadest united front, including the bureaucracies in the labour movement, whose interests are threatened to some extent, and state Labor governments, whose traditional prerogatives are threatened.

The Liberals have a tall order before them, legally. They’re talking about using aspects of corporations law to grab control of state industrial systems, forcing most industrial matters into the federal sphere and then abolishing most of the functions of the state systems.

Legally, that is a high-risk strategy. Even the current conservative-dominated High Court is likely to reject such proposals if they’re strenuously opposed by the states.

A big danger in this situation is left talk by sections of the union bureaucracy and state Labor governments about handing over the state systems to the federal government on traditional Labor centralist grounds.

Such moves should be strenuously resisted. The striking thing about the Liberals’ proposals is that they are an extraordinary rerun of the policies of the Bruce-Page conservative government in 1926 and 1928-29, which were defeated firstly in a referendum in 1926 and finally by the electoral defeat of the Bruce-Page government in 1929.

In some ways the social circumstances of the late 1920s were similar to now. The labour movement was in a relatively defensive situation and the economy was in a relative boom.

The political situation in the labour movement was quite similar too, with Matt Charlton, the federal parliamentary leader, supporting the transfer of industrial powers to the federal sphere, rather like Gough Whitlam did more recently.

The major difference is that in the late 1920s there was quite a bit of conflict on the conservative side about the proposals, with the turbulent figure of Billy Hughes opposing Bruce every inch of the way. There doesn’t seem to be the same scale of dissent on the conservative side in current conditions.

The most recent example of successful industrial resistance to conservative attack is the struggle of the Maritime Union a few years ago. That was a classic agitation combining industrial militancy, community mobilisation and the intelligent exploitation of every legal mechanism, which largely contributed to achieving the desired outcome: the preservation of the MUA.

In Jack Lang’s useful memoir, The Great Bust, which was largely ghost-written by Norm Macauley, there is a useful account of the Bruce-Page government’s failed attempt to do what the Howard government is hoping to do. The two relevant chapters are available below to assist the beginnings of a discussion, which will have to take place pretty fast if the next few months are to be used to prepare for mobilisation.


Bruce’s topsy-turvy referendum

From The Great Bust: The Depression of the Thirties, by J.T. Lang

Imagine a referendum in which every political leader in the Commonwealth was rejected in his own sphere of influence. That was what happened in Australia on September 4th, 1926. No one escaped the axe. It was a referendum to hand over industrial powers to the Commonwealth, and to provide limited powers over trusts and combines. Prime Minister Bruce sponsored the proposal. He was not only defeated throughout Australia but in his own state of Victoria as well. The federal leader of the Labor opposition, Matt Charlton, supported Bruce. He also had his advice rejected throughout the Commonwealth and couldn’t even carry his own electorate of Hunter.

As Premier of New South Wales I advocated a no vote. But this state voted yes. T.R. Bavin, who was leader of the Nationalist opposition, also advocated a no vote, but his state electorate of Gordon gave an emphatic yes vote. Mick Bruxner, Dave Drummond, Frank Chaffey and other prominent members of the state opposition, were against increased federal powers and met the same fate.

E.G. Theodore was premier of Queensland, and also was on the no side, only to have his state vote yes. Scullin, Latham, W.M. Hughes, Frank Brennan and Dr Maloney were all on the losing side.

If anyone wants to study the referendum device to prove just how unpredictable public opinion can be, and how difficult it is to carry a referendum, this vote provides a classic study. I have opposed every referendum since the first conscription referendum. Although the Labor platform provided for unification, I was always a federalist. I believed that the sovereign states had very real functions. The Commonwealth was always trying to filch them.

The state of New South Wales was always in the vanguard of social reform. We were many steps ahead of the other states. Many of the referenda were inspired by the hope of taking over control of our affairs, in order to deprive the people of this state of hard-won gains. That was precisely why Bruce introduced his referendum proposals in June 1926.

My government had passed a 44-Hour Week Act, which provided for a working day of eight hours, and a 51/2 day week. Instead of leaving the question to the courts, we had introduced it by legislation. The Tories were hostile. They said we were ruining the state. Industries would transfer to other states. We also introduced compulsory workers’ compensation, a new factories act, the widows’ pension and had motherhood endowment ready for Parliament. The Tories were in a panic.

Bruce had just swept the country in his law-and-order election and believed that he had a mandate to deal with the trade unions. The Crimes Act had been the first step only. He wanted to introduce compulsory ballots for trade unions. He also wanted power to bolster up the Crimes Act. There were still grave doubts as to whether it was constitutional.

In the 44-Hour Act, we inserted a provision that it applied to all workers within the state, whether they worked under federal or state awards. The employers, through the Clyde Engineering Company, Lever Bros and Metters, took the case to the High Court. It is known in the law books as the Cowburn and Amalgamated Engineers’ Union case. By four to two the High Court ruled that federal awards prevailed over all state awards, as did federal laws over state where the Commonwealth has jurisdiction.

Chief Justice Sir Adrian Knox, Sir Isaac Isaacs, and Justices Rich and Starke upheld the federal power. Messrs Justices Higgins and Powers, both well versed in industrial law, had the opposite viewpoint.

After studying the judgment, the Bruce-Page Cabinet decided they could stymie the 44-hour week right away if they could obtain full power over industrial matters for the Commonwealth. Only New South Wales and Queensland had the 44-hour week.

They appointed a Commonwealth Arbitration Court of three judges – Chief Justice Lukin, and Justices Dethridge and Beeby. They were given appointments for life at £2500 a year. The next move was to get the question of hours and wages transferred to their court.

Bruce and his Attorney-General, J.G. Latham, decided that the time was opportune for a referendum to increase Commonwealth powers. One of their problems was that a Nationalist Party conference in 1923 had voted in favor of limiting Commonwealth powers and transferring them back to the states. But that didn’t worry Bruce. He had just obtained a fresh mandate. Most of the states had returned Labor governments. In a speech to a select gathering at the Hotel Australia, presided over by Sir Owen Cox, Bruce, shortly after he had become Prime Minister, had suggested what was really needed in this country was a “dictatorship of six of the best brains of the land”.

Bruce knew that the Federal Labor Party had always favored unification. Fisher had put a referendum to the people in 1911 and 1913, which had suggested alterations to the constitution giving the federal government absolute power over all industrial problems, trusts and monopolies and other items in the Labor platform. They had been rejected on both occasions, with New South Wales leading the opposition. Hughes tried again in 1919 with proposals covering trade and commerce, as well as arbitration, together with power to nationalise monopolies. Again the Australian people had turned their thumbs down and nowhere more emphatically than in this state.

Bruce’s trump card was to invite Charlton and the federal Labor Party to confer with him on proposals which they could jointly submit to the people. The Federal Caucus referred the suggestion to the state branches of the ALP. Three states were in favor of collaboration while three were against. Again New South Wales opposed the suggestion. Charlton then decided that he would go ahead.

Bruce’s chief proposition was that the constitution should be altered in such a way as to hand over all power dealing with the regulation of the terms and conditions of employment, and the rights and duties of employers and employees in all industrial matters to authorities to be established by the Commonwealth. That meant giving absolute power to the Commonwealth Arbitration Court.

There was a second clause, intended as a sop to the Federal Labor Party, to grant control over trusts and combinations operating “in restraint of trade”. Charlton and his party didn’t realise that the clause could be used against trade unions as well as against powerful trusts. Then as a separate question there was a proposal to give the Commonwealth power “to protect the interests of the public in case of actual or probable interruption of an essential service”.

The federal caucus, after many comings and goings between the two parties, finally agreed to support Bruce in an appeal to the people. In Sydney, I immediately denounced it as an attempt to deprive the people of the 44-hour week. I pointed out that the states would jettison all rights to enact factory laws. Conciliation and arbitration courts would no longer be state affairs. Workers’ compensation, early closing, motherhood endowment, would be solely federal matters. The Commonwealth could kill the state laws. “The whole social and industrial life of the Australian people will be at the mercy of three legal gentlemen, who will be superior to all laws, federal or dtate. Mr Bruce’s proposals are fraught with tremendous danger to the peace, order and good government of the Commonwealth,” I told the Labor Party. The ALP executive backed my stand.

In Melbourne, Bruce and Charlton collaborated to the limit. The only criticism came from within the government parties. A West Australian member of the Country Party, Mr Gregory, called it an unholy alliance. WA Watt, a former treasurer and deputy prime minister, said that it would split all parties. He had grave doubts. He described the rival groups as two well-bred dogs watching the bone held in the Prime Minister’s hand. He was suspicious of giving judges too much power. “Even if they were angels from Heaven, I should hesitate to repose in these three judges of the Arbitration Court the enormous powers contained in this measure,” said Watt.

Hughes was also against giving the power to the judges. He said it should remain with Parliament. That was the original proposal of 1911. But it didn’t satisfy Bruce. He wanted Lukin, Dethridge and Beeby to have the power, and not Parliament. However, Hughes finally agreed that half a loaf was better than none and agreed to support the Bill. Mr Rodgers, a former Nationalist minister of trade and customs from Victoria, openly attacked the Bill. He said he preferred to leave industrial matters to the wages boards as they had then in Victoria. He said the Labor Party could appoint its own judges to bring in a 30-hour week and £10 a week wage.

The Bill to refer the proposal to a referendum was carried by 56 votes to two – the dissenters being Messrs Gregory and Rodgers. Watt and Hughes supported the Bill. A number of Labor members, including Frank Anstey, Percy Coleman and Billy Mahony, didn’t vote.

The fight then moved into the electorates. A council of federal unions was formed in Melbourne to urge a yes vote. The committee had unlimited money to spend and millions of pamphlets were distributed with arguments by Matt Charlton and Scullin in favor of the Bruce proposals.

The counter came when Albert Willis called an All-Australian Congress of Trades Unions in Sydney and invited Charlton to attend. It was the first meeting of the ACTU.

Charlton put up a passionate defence of his stand. He was told that he had been guilty of an act of treachery against the working class. The miners were particularly bitter, and they controlled his selection. Charlton said that the proposal was the same as Labor supported in 1911 and said that Bruce had seen the light. “For God’s sake don’t let your opinions bring disruption to the Labor movement,” he pleaded. He said every member of the Labor Party was free to vote as he liked

By 144 votes to 10, Charlton was rejected by the congress. It was a humiliating defeat. In Melbourne, Maurice Blackburn was one of the few to come out in opposition. On the other side of the political fence there was growing confusion. The Nationalists in this state wanted it. They wanted to kill the 44-hour week. The manufacturers, retailers and wholesale houses all backed Bruce with cash.

But Thomas R. Bavin, state leader of the Nationalist Party, was against it. “You will never get industrial peace through a Court.” He pointed out that they would be giving the power to the next federal Labor government. He had the foresight to see what such powers could lead to in the future. “The federal proposals would vest the whole power over the fortunes of Australia in a body of professional politicians sitting at Canberra who would be far removed from contact with the electors,” he told the Constitutional Association. “An enormous administrative machinery, such as had never been attempted in the world before, would be created to administer the affairs, of a large continent.”

Bavin and I had disagreed on practically every issue in politics. We were bitter opponents. But for once we thought alike. The Nationalists supporting no formed a Federal Union with R. Clive Teece, KC. as its president. Bavin led the campaign in NSW for the Nationalist no side, while I led the Labor side.

In Victoria, Bruce had more trouble with his own backers. The Victorian manufacturers were afraid it would bring the 44-hour to that state. Some of the Nationalist papers openly opposed Bruce for the first time. Sir Arthur Robinson, a powerful industrial figure, led the no campaign for the federal union in that state. He said he was opposed to giving more power to politicians who always wanted more power. “These politicians will be meeting miles from anywhere surrounded by thousands of public servants and they will get a distorted reflex of public opinion,” he said prophetically. “Politicians cannot get a reflex of public opinion when they are out of touch with the public. The atmosphere of Canberra will be that of officialdom, the atmosphere of the tax gatherer, and not of the taxpayer.”

Sir Walter Massy Greene agreed with that viewpoint. “It is as easy to find icicles at the equator as to get the federal Parliament to agree to limit Commonwealth powers,” he said. Among those to join the Federal Union campaign with the big money battalions in Victoria was a well-known barrister with political aspirations, R.G. Menzies. He was also on the no side. It was all very, very confusing to the average elector.

I campaigned throughout the state denouncing any plan to give power to a legal oligarchy. There were huge audiences everywhere. In Goulburn there were two attractions: Toti Dal Monte, the opera singer, and our meeting. We attracted the bigger house, but Toti got the money. In Bathurst, the mover of the motion congratulating me was a former engine-driver who been victimised in the 1917 strike, J.B. Chifley. He pledged his loyalty and was supported by Gus Kelly. Chifley still had to seek political honors. On the Sunday there was a vast meeting of 75,000 in the Domain, all with hands upraised for a no vote. Some of the federal Labor politicians had switched sides, leaving Charlton isolated. Our final advertisement was directed against control of Australia by the “Three Men.” They were judges Lukin, Dethridge and Beeby, who would become economic dictators of Australia as visualised by Bruce.

Bruce himself left Australia two days before the poll to go to an Imperial conference. We appointed state government scrutineers at every polling place. Before leaving, Bruce ordered the PMG to grant him an additional broadcast, although it was against the previous order of the PMG that sides should have equal time.

Then the numbers went up. We were all beaten. There were two proposals. Both were defeated by some 400,000 votes in all. The majority against them for no in Victoria was just on 250,000, in South Australia 120,000, West Australia 70,000 and Tasmania 10,000. There was a yes majority of 33,000 in New South Wales, and 16,000 in Queensland, on the principal proposal. The majorities for no were smaller on the question to give the Commonwealth powers to deal with industrial emergencies.

The actual figures in NSW on the principal question were:

Yes 566,973
No 533,284

The chief lesson was that even though Parliament was practically unanimous, the people still prefer to do their own thinking. It was certainly a topsy-turvy referendum.


Bruce’s blunder

When a government realises that it is losing its grip on the political situation it invariably commences to go from one blunder to another. It panics. It loses its perspective. It listens to too many advisers. Then in a moment of despair it is likely to take a desperate risk.

That was what happened to the Bruce-Page government. The 1928 election had rattled it badly. It was being sniped from its own cross benches. Its most effective critics were those on its side of the House. W.M. Hughes, Mann, George Maxwell, K.C., P.G. Stewart, all contributed to the disintegration process.

Then S.M. Bruce played right into their hands. He committed the blunder of blunders. He gave no preliminary warning. He didn’t consult his party. Even his ministers were in the dark until he had gone too far. It was a decision very much like that reached by Chifley in 1949 in connection with control of banking.

Bruce’s fatal mistake was to try to abolish Federal arbitration. It was a complete volte face. At every election he had campaigned for “law and order”. He was the great apostle of arbitration. He believed in arming the industrial courts with greater powers. He believed in penalties for those refusing to obey the awards of the courts. He wanted stronger ties between the courts and the parties.

In 1926 Bruce had tried to obtain supreme power over all trade unions by holding a referendum to give the Commonwealth complete control of arbitration. His real concern at that time was to upset my Government in New South Wales. He wanted to destroy our 44-hour week. He also wanted to sidestep child endowment. He also wanted to upset the state basic wage. But the people had rejected his proposals.

Then the Bavin Government came to power in New South Wales in 1927. The Nationalist Consultative Council believed that Bavin could do what Bruce had failed to do. They still wanted to get rid of the 44-hour week, which I had enacted by legislation.

Bavin promised that he would do it. He promised to get rid of the Industrial Commission. In particular, he promised to get rid of Mr. Justice Fiddington, who was a thorn in his flesh. His first suggestion was that he abolish the court altogether. He would rely on a kind of collective bargaining. There were to be committees of employers and employees. But they were to be drawn from panels approved by the Government. When Bavin realised that his plan was not practicable, he compromised by appointing two additional judges to the Industrial Commission – Mr Justice Street and Mr Justice Cantor. They could, if necessary, outvote the chairman of the commission, Mr Justice Piddington.

ut Bavin could not go through with his complete plan while the unions could still go to the federal courts. It would be no use abolishing the 44-hour week for state awards if a frederal judge could still give a 44-hour week. Bruce’s first reaction to the pressure of big business was to suggest to the premiers that they should hand over all their industrial powers to the Commonwealth. He proposed an alteration of the constitution by consent. It was to be another Loan Council formula. But Phil Collier, from Western Australia, shied clear. He didn’t trust Bruce. Queensland objected. Even Victoria had doubts. So Bruce had to retreat again.

Then the big four told Bruce that the costs of production must be reduced. That meant that either wages had to be reduced or the working week lengthened. It could mean both. There was also a very important recommendation reading:

“A change in the method prevalent in Australia of dealing with industrial disputes appears to us to be essential, and we hold that there should be a minimum of judicial and governmental interference in them, except in so far as matters affecting the health and safety of the persons engaged in industry may be concerned.”

Bluntly, that meant the return to the law of the jungle. Arbitration had protected the workers against sweating, against starvation wages and excessive hours. Now they wanted to go back to those vicious practices. Bruce was only too willing to listen to the big four.

Bruce also resented the hostility aroused over his withdrawal of the summons against John Brown. Hughes told him to his face that it meant the loss of thousands of Nationalist votes at the next elections. The big fines inflicted on the timber workers, the waterside workers and E.J. Holloway had only hardened opinion against the government. Bruce didn’t like criticism, especially when it came from powerful newspapers like the Melbourne Herald and Age. They were much too close to home.

Then, without warning, came the bolt from the blue. Bruce sent a long telegram to the premiers offering to vacate the field of arbitration altogether with the exception of the maritime industry.

At the same time he sent an urgent wire to members of the Government parties informing them of his decision. Most of them were appalled. From platforms all over the Commonwealth they had preached law and order. They had defended arbitration. They had alleged that the Communists wanted to destroy arbitration. Now their leader was doing precisely that himself.

Bruce, who had wanted absolute power over arbitration, now wanted none. He had no mandate. No one knew the reasons behind the move. His own party organisation was stunned. It was a complete reversal of form.

The Commonwealth had been in the arbitration business for just five years. The first Commonwealth Arbitration Act was passed in 1904. C. Kingston had drafted it and crusaded throughout the country explaining ow it would bring peace and justice to industry. He had been backed up in the early stages by his Prime Minister, Sir Edmund Barton, and later by his successor, Alfred Deakin. It was Deakin who described it as the “new era in industrial relations”. Then Mr. Justice Higgins had laid down the foundations of the New Province in Law and Order, as he described his court later.

For a quarter of a century every federal government had been trying to obtain more, and not less, powers over industrial matters. Now Bruce was trying to destroy it with one savage blow.

All the federal awards were to go into the discard. State awards were to prevail. The state governments were to have absolute power to define conditions governing hours and wages. But still no one knew what had moved the usually cautious Prime Minister to such a revolutionary state of mind. His own followers were as nonplussed as the unions. The engineers and the railwaymen had spent thousands of pounds in preparing and arguing cases in the Federal Court. Now they were to be denied an award. But why?

One explanation was that the attorney-general, Sir John Latham, had been so upset over the withdrawal of the John Brown prosecution that he had insisted that there must be no halfway remedy. If the government was going to retreat before John Brown, then it could not afford to stay in the field. It couldn’t have one kind of justice for the wealthy mine owner and another for a striking unionist. If that was the reason it at least did Latham considerable credit for consistency, even though the proposed remedy was a death-dealing purgative.

The timetable of events was most interesting. The vote on the John Brown censure motion was taken at 7.30am on Thursday, August 22, 1929. At 3.30pm that afternoon, Bruce rose in the House and produced his bombshell. He gave notice of his intention to bring in a Bill, called the Maritime Industries Bill, which would deal with industrial matters in relation to trade and commerce. Theodore, who was leading the Labor Party in Scullin’s absence, wanted to know something about the proposal. But Bruce told him that he would have to wait until the second reading stage.

Dr Page then presented his Budget. It contained a couple of shocks. But the treasurer was full of abounding optimism about the future.

Next day Mr Bruce produced his Maritime Industries Bill. The reason for the title was that the maritime and waterside workers were to be the only unions left with Commonwealth awards. They were to come under the trade and commerce powers of the constitution. The Conciliation and Arbitration Act was to be repealed. Existing federal awards were to remain in force only until June 1930. After that time they would come under state awards.

The arbitration judges were not to lose their jobs. They were to become judges of the Maritime Industries Court. They would look after the seamen, the marine stewards and the wharfies only. But they would not make the award in the first instance.

Instead there were to be committees representing both sides with an independent chairman, who could be a judge. But the unions were not free to nominate their own representatives. The government would do that out of a panel submitted. The chief judge would make the recommendations. There was to be no evidence in open court. The entire proceedings were to be in-camera without calling evidence.

There was also provision that the tribunals had to take into account the economic effect of their awards on the national economy. The Maritime Court would have the right of reviewing decisions reached by the committees. It would automatically review every decision, whether there was an appeal or not. The new formula satisfied the shipowners. They didn’t want to have their profits made public. They didn’t want their affairs probed.

For the rest, all the awards were to be torn up and tossed in the wastepaper basket. Why was Bruce taking such revolutionary action?

His theme was that Australia was already in a grave financial and economic plight. It was the first time the Prime Minister talked depression. To cure the depression he had one magic formula: get rid of arbitration. He offered it as his contribution to the economic crisis. His reason was naive: “The passing of this legislation will free industry from many of the embarrassments from which it has suffered in the past.”

By industry, Bruce meant big business. He meant Flinders Street, the shipping combine, the coal vend, industrialists and the graziers. How were they being embarrassed? By the shorter working week and award wages.

Bruce left the nation under no misapprehension. His policy was going to suit the John Browns. Of course, he clothed it in his usual self-righteous unction, that the Bill was not being brought forward in a party spirit. It was simply for the benefit of the nation and the empire. Later he was to regret his statement that it was non-party. Some of his own followers took him literally.

Then he proceeded to outline the plight of the nation. Public finance was in a bad way. Both the Commonwealth and the states had deficits. Bavin had one of more than a million, while Page had one of almost five millions. Prosperity was rocking badly. Loan money was difficult to obtain abroad. Public expenditure had to be reduced. But he still didn’t believe that he could abolish old age pensions or reduce them. So taxation had to be increased. But he was afraid that increased taxes might increase the cost of production.

Wool and wheat were the only two products which could be sold at a profit abroad. Even there there had been a heavy decline in prices. Secondary industries were being threatened by imports from abroad beingsold lower than local prices. But Bruce said that he could not agree with any increase in tariffs.

Then Bruce produced his magic elixir. The costs of production must be reduced. So they must get rid of duplication of awards and tribunals. His solution was a kind of collective bargaining. But because of large-scale unemployment, that placed the employer in the box seat when it came to the bargaining. So the government had decided to vacate the field of arbitration. Bruce wanted round-table conferences. Then the workers would realise that their claims for higher wages, shorter hours and better conditions would only lead to more unemployment. He was suddenly all in favor of the American system of collective bargaining instead of having industrial courts.

In particular, Mr. Bruce thought the workers should accept the piecework system and payment by results. They would then earn enough to keep their families. Of course, there would need to be safeguards.

“At present Australian industries are passing through a serious economic crisis. Tens of thousands of our workmen are unemployed. It is essential, therefore, that we should all recognise the urgency of improving the relations between employers and employees,” he said.

He also wanted equality in competition between the states. “Has any more fatal blow been struck at equality in interstate competition than the 44-hour week and child endowment legislation of the last Labor government New South Wales,” asked Bruce, again trotting me out as his King Charles’ head. But he still had no idea of the political hurricane building up. He was not left long in suspense.

Of course, Bruce knew that he had enemies. The enemies within his party were more dangerous than any on the Labor side. Chief of them was the irrepressible William Morris Hughes, who had founded the Nationalist Party. There were times when he believed that he had founded the Labor Party. That, of course, was historical licence. But there was no doubt about him being expelled from the Labor Party. There was also no doubt that he founded the Nationalist Party after the conscription break. He even hand-picked his own executive.

But his break with Bruce was now irretrievable. He was out to get his revenge for what he believed was the double-cross perpetrated by Bruce in 1923. He had waited patiently for almost seven years. Now it seemed as if might get his opportunity. But Bruce got in the first blow. He expelled Hughes from the Nationalist Party. With him went E.A. Mann, a caustic critic of the government, who was Nationalist member for Perth.

The Labor member for East Sydney, Jack West, raised the matter in House when he asked whether Hughes and Mann were to be barred from certain rooms and, if so, for how long. Bruce tartly replied that if he wanted know whether it was true that Hughes and Mann would not in future be invited to attend meetings of government supporters, the answer was in the affirmative. In short, they had been expelled from the Parliamentary Nationalist Party.

Riley Senior then asked Bruce whether the Nationalist Party had blown out its brains. Bruce said the suggestion was completely unwarranted. Frank Brennan followed by directing the attention of the Speaker to the fact that P.G. Stewart, Country member for Wimmera, had withdrawn his allegiance to the government, that the member for Wannon, A.S. Rodgers, had retreated to a private room in the basement of Parliament House, and now Mann would need a room, while even W.M. Hughes had been turned out of his own house. He wanted to know what steps the Speaker intended to take to accommodate all the segments of the government that were breaking off. Latham suggested they could all find refuge in the Labor Opposition rooms.

Bruce still had the numbers if he could hold the rest of his party together. His proposal was not getting the newspaper support he had anticipated.

Theodore, in the absence of Scullin, led the attack for the Labor opposition. He said at the caprice of one man, and without warning, the Bill had been flung on to the table of the House. One man was about to undo the work of generations. It was a wrecker’s policy. He recalled all Bruce’s speeches in favor of arbitration. How he would never give it up. How Latham had defended it.

Bruce had appointed a royal commission to inquire into the constitution. It had not yet finished its work. Yet the government was going ahead without waiting for the report.

Theodore said Bruce was the prophet of doom. Whenever an anti-Labor leader wanted to take away reforms, or reduce wages, he invariably tried to justify himself with doleful prophecies. Even Sir Robert Gibson, chairman of the Commonwealth Bank, had said things were not as bad as they were being represented. The stock exchange was still buoyant. To Theodore that was most important. Bruce was imagining the difficulties. The stock exchange quotations were at their highest level in 20 years. The banks were making record profits. So how could there be a depression?

The attorney-general, Mr Latham, tried hard to defend the proposition. As usual, he was academic. Latham argued from a legalistic brief. He had no time for political rhetoric. He tried to rely on logic. But he was arguing against his own previous convictions. He tried to rationalise the problem. He went back over the dry legal tomes dealing with the development of industrial law in Australia: the Harvester judgment, the engineers’ case. They were all given full treatment. He was on the defensive. He referred to the strikes of the marine stewards, led by Bob Heffron, the engineers, the waterside workers and the timber workers.

But he made no mention of the lockout of the miners. He said the unions had campaigned against arbitration. Senator Arthur Rae had written a book, The Curse of Arbitration. The ARU had rejected arbitration. Yet, at other times, the government was attacking those against arbitration as red-raggers and extremists.

Then Latham gave the show away. He referred to the action of my government in passing the 44-Hour Week in 1926. He said that if the timber workers had been deregistered in the Federal Court they would have obtained a 44-hour week under a state award. The government was clearing the way for Mr Bavin to bring in a 48-hour week again in New South Wales.

At that time there were only 88 federal awards in force in NSW as against 455 state awards. Once the state government had sole control of industrial matters, Mr Bavin could impose whatever industrial conditions were wanted by the Nationalist Consultative Council.

Latham rejected a suggestion by Curtin that the men could elect their own representatives to the Industrial Boards for the maritime industries. Frank Brennan said the proposal was begotten out of a craven spirit by cynicism. Bruce had given the impression that he knew little or nothing about the subject, while Latham had given the impression that he knew all about it but wanted to keep it dark.

They had appointed their own judges at bigger and better salaries, with bigger pensions and tenure for life. Now there was to be a dismal procession of self-confessed failures going back on their tracks.

Labor members like Norman Makin, J.B. Chifley, George Martens and Ted Riley Sen, who had practised in the industrial courts as advocates, trotted out all the achievements of arbitration. They were more legal than the lawyers. They cited the Commonwealth Law Report. They talked about common rule, and gave forth with lengthy extracts from various judgments. It was almost as if they were being deprived of their professional status.

Bruce’s chief defender from New South Wales was Archdale Parkhill, who had been Hughes’ chief propagandist when the Nationalist Party was first formed. He later went into the federal Parliament as member for Warringah. He said that when he was speaking on one street corner in Mosman, Theodore had been on another supporting the AWU candidate. Parkhill said that Theodore had said: “Mr Lang must be disciplined ruthlessly, with the gloves off.” An interjector had retorted, “Your number is up for Dalley,” and Theodore had replied, “There will be no shrinking on my part.” Yet, said Parkhill, a few months later Theodore was licking Lang’s hand. Parkhill didn’t like me. In that respect I was second only to Jock Garden in his hate list.

Then E.A. Mann, Nationalist member for Perth, entered the lists against Bruce. He started off delightfully by recalling Greek customs:

“A quaint local custom of one of the old Greek states was that anyone desiring to bring into the state a new law should appear before an assembly of the citizens to propound that law with a halter round his neck, so that should the law not meet with the approval of the assembly, or not be considered necessary for the requirements of the state, the halter might properly be used to strangle him.”

W.M. Hughes: “Oh, that those days might come back again!”

Mann replied they had. If the House rejected the Bruce Bill, the government would be politically executed.

In his budget Page had opened with a note of cheerfulness, with what was the triumph of hope over experience. Next day the Prime Minister had reversed the picture. Yet Bruce had described people who had issued similar warnings as Jeremiahs and croaking pessimists. Now he was saying, “We are in a bad way. We can’t carry on.” Now he said the only way was to reduce the cost of production. By that he meant reducing wages. Mann said the government was helping the Communists, who also attacked arbitration.

Bert Lazzarini quoted an interview given by Bavin to the Sydney Morning Herald, which indicated that he also proposed to scrap the existing system of arbitration. He proposed to follow the Bruce model.

Then another prominent member of the Government side took the floor against the measure. He was G.A. Maxwell, K.C., member for the blue-ribbon Nationalist seat of Fawkner in Victoria. He said that Bruce had said that the Bill should be considered on non-party lines. He proposed to accept the invitation. He refused to be branded a rebel or a traitor. He proposed to exercise his own judgment on a matter of grave national importance. The government had no mandate. It was against the Nationalist Party program. The party had not been consulted. He refused to be bound by the Prime Minister’s whim. His electors had returned him believing he supported arbitration. The first he knew of the volte face was the receipt of the Prime Minister’s urgent telegram. He had reserved his opinion until he had heard the Prime Minister’s defence. Having heard, he was satisfied that he had not made out a case. Instead of providing one supreme authority in industrial matters, the government was creating six –the state tribunals.

Maxwell was a brilliant lawyer. He dissected the measure. He exposed the weaknesses of the government’s arguments. He described it as the negation of every principle for which the Prime Minister was supposed to stand. In particular, he stripped Latham’s case of all its supports. He even had a dig at the moral and spiritual aspects of the matter. With regret, but without misgiving, he proposed to vote against the measure.

On Thursday, September 5, the debate was resumed in a sitting that was to last until 12.30pm on the following Saturday. For two days and nights the Bill was torn to shreds.

W.M. Hughes took up the attack. He said that it was without parallel in Commonwealth legislation. For 25 years they had advanced towards their goal. Every party had wanted more power. Now the Bruce government had sounded the trumpet for a general and shameful retreat. The temple of industrial arbitration was to be torn down. Not one stone was to be left standing. Bruce’s speech was full of sophisms, irrelevancies and platitudes. Latham had made a pretence of logic but had followed his leader. After being in recess for six months, the government now said they had to day and night to get the bill through. Delay would be fatal. Had some at financial cataclysm occurred?

Bruce had accepted a portfolio in his ministry knowing that arbitration was part of its policy. When Bruce became Prime Minister he took the policy with him. He had gone to the people for a mandate to enforce the industrial law. He had obtained his mandate. Now he said that compulsory arbitration was wrong, penalties were barbarous and all courts and tribunals must go. Yesterday he was the protagonist of penalties. Today he preaches the gospel brotherly love. The parties are to turn the other cheek, penalties are to be kept away. The system is as it was 10 years ago. It is the Prime Minister who has changed. He says he believes in a high standard of living, but the cost of production must come down. So he proposes to abolish the courts that have been the guardians of the economic and industrial welfare of the people and the only barrier between them and chaos.

“What would happen if the parties didn’t agree?” asked Hughes. The framers of the constitution had placed arbitration in the constitution just after the greatest industrial conflagration the country had ever seen, and while its embers were still warm. Those men had seen the “print of the nails,” they had thrust their fingers into the wound. He was reminded of the limerick:

There was a young lady of Riga
Who went for a ride on the tiger
They came back from the ride
With the lady inside
And a smile on the face of the tiger

That would be the position of the workers. If the price of meat came down would not the graziers suffer? If the price of bread was reduced, would not the farmers get less for their wheat? Mercilessly Hughes stripped Bruce down to his very spats. Bruce was a dilettante, said Hughes. He had made one attempt to amend the constitution but had walked out leaving the job to Latham. He had been recreant to his trust. He had betrayed the people. He had insulted their intelligence. He had affronted their sense of decency. “He is the creature of a day. What he does today, another can undo tomorrow.” The Bill was an attempt to save his face so that he would not be eternally confronted with the ghost of the hideous blunder he had made when he had withdrawn the prosecution of John Brown.

Frank Anstey quickly tangled with his old adversary, Dr Page. He said that the treasurer had lifted the debate to the lofty eminence of the sewer. “Far better it is to be ignorant than to be cultured, educated, talented and to sell one’s talents for the first mess of pottage that offers,” said Anstey, attacking Hughes’ former colleagues in the ministry who had betrayed him for Bruce.

P.G. Stewart was another to declare himself against his former leader. He said while the mines were still closed, the women were starving, John Brown still could be seen at Randwick with his field glasses slung over his shoulder.

Hughes: “John Brown’s body lies a-moulderin’ is the grave but his soul goes marching on.”

Stewart said members of the government had referred to trade unions as “basher gangs”, “a seething mass of maggots”, “running sores”, and “fangless snakes.” He would leave them with such nauseous expressions. He would oppose the Bill.

Bruce, in reply, showed how deeply he had been nettled by Hughes. He referred to his “sinister suggestions, poisonous and offensive charges”. At one stage in Bruce’s reply, Hughes interjected “Hear, hear.” The Speaker called him to order. Hughes naively wanted to know how he had offended. He was told that it was the tone in which he had uttered it that was offensive. Billy repeated “Hear, hear.” Bruce admitted it was contrary to his party’s platform with Hughes interjecting. “L’etat, c’est moi.” Bruce again repeated that the depression was not temporary and was due to a fundamental defect.

he second reading passed by 34 to 30 with W.M. Hughes, E.A. Mann, G.A. Maxwell and P.G. Stewart voting with the opposition.

>But the fight was not yet over. When the Parliament adjourned on Saturday afternoon, it still had no idea of the events ahead.

At the weekend members returned to their homes believing that the crisis was just about over. But Bruce was still very worried. He fully realised that the fight was entering the critical round.

Although arbitration was the issue before Parliament, outside there was raging a new political tornado. In the Parliament it was kept severely in the background. But in every city and in every bush town the people were experiencing the full impact of the best organised political pressure campaign in the history of the Commonwealth.

The movie interests had declared war on the Bruce government. The talkie age had just arrived. Like their own product the movie people had switched from the old silents to full-blast talkies on the political front. But the bad men were not the villains of the Hollywood sets. They were in Canberra.

Stanley Melbourne Bruce and Dr. Earle Page were being depicted as trying to foreclose on the mortgage of the old movie homestead. They were trying to rob the poor widows and orphans of the movie moguls. They were the vampires sucking the blood out of the innocent film distributors’ bodies. It all arose out of a very small mention in Dr Page’s Budget speech. After explaining that there was a heavy Commonwealth deficit, he announced that the Government had decided to increase taxes. Income tax was to be increased by £10 millions. In addition it was proposed to levy an Amusements Tax.

Page proposed a tax of 5 per cent., or 1/- in the pound, on the total receipts for admissions to all entertainments. “This tax will be a levy upon a national luxury, which, it is considered should make a special contribution in the present circumstances.” In those days it was still possible to obtain admission to a film theatre for a shilling. To suggest that those indulging themselves to that extent were plunging into wanton extravagance was hardly good politics.

Page said the government expected to raise £600,000 from the tax. He pointed out that attendances at amusements had risen from 78 millions in 1922 to 126 millions in 1928. What he overlooked was that they mostly had votes. To make matters worse, the government announced an extra duty of a penny per foot on all foreign cinema films imported into Australia. The film interests immediately got busy. They abandoned political neutrality. They decided to go after Bruce and Page. The campaign was organised by the Motion Picture Distributors’ Association. Its president was Sir Victor Wilson. He had been minister for markets and migration in the Bruce-Page government from 1923-26. He had been close to Bruce. Now he was the general in charge of the forces uniting to defeat him.

Petitions against the Amusement Tax were signed in every theatre in the Commonwealth. Members were bombarded with telegrams. Employees were told theatres would have to close. Builders were informed there would be no new theatres built. Shareholders in film companies were told that they` would lose their dividends because the industry could not stand the strain. The member for Angas, Mr Parsons, read to the House a telegram he had received:

    Your persistent silence suggests that you deliberately ignore vested interests whose life and livelihood is at stake. Unless intimation received your return immediately, our representative leaves by plane to demand you take action.

    Jepson, Secretary, United Amusement Interests.

The movie strategists realised that they could not defeat the Amusements Tax in the House. But the Maritime Industries Bill to abolish the Federal Arbitration Court provided them with their best chance. If they could defeat Bruce on that, then they believed they were in the clear.

All the weekend there were feverish discussions. Every member was lobbied. The Labor Party realised that it was getting unexpected allies. It didn’t hesitate to give the necessary pledges not to go ahead with the Amusements Tax. The idea of having all the resources of the movie people to call upon appealed greatly to Theodore.

In order to upset the government it was necessary to get three more votes, in addition to those who had voted against the government on the second reading.

Hughes was carrying the keg of dynamite. He had the time fuse all ready. Nothing gave him more satisfaction than this chance to get even with his two greatest enemies. He knew that Mann, and P.G. Stewart would do anything to assist him. They hated as much as he hated.

George Maxwell K.C. had already indicated that he was against the Prime Minister on grounds of principle, because it was a volte face on party policy. W.J. McWilliams, the Nationalist member for Franklin, had also indicated that he was against the bill being rushed through, and saw in it some kind of threat to Tasmania.

That made up two votes. Another was necessary. Where was it coming from? That was the big question canvassed over the weekend. There were all kinds of wild rumors. Bruce said that if there was any delay in implementing the proposal, he would go to the country.

Hughes threw down the challenge as soon as the House resumed consideration of the Bill in committee on the Tuesday. He moved an amendment that it should not be proclaimed until it had been submitted to the people either at a referendum or a general election.

Again he thrashed Bruce with violating his own platform. He said Bruce had concealed his intention from the people. He had promised that they would soon round Cape Desolation and proceed into the Bay of Plenty. Instead he had put the helm hard over and reversed course saying: “Unless you stand behind me in this, you will walk the plank. Unless you tear up your election pledges, I will excommunicate you.”

Hughes accepted the election offer. “It will be the end of the government and honorable members who support it,” predicted Hughes “The verdict will make it impossible for any political thimble-rigger further to cloud the issue … Let us go before the people and fight this battle once and for all.” Bruce took up the challenge. He denied that he had invited his followers to “walk the plank”. Many of them had voted against government measures. But Hughes and Mann had impugned the honesty and decency of the government on the John Brown issue. That was why they had been expelled. That was why they had “walked the plank”.

Bruce rejected the idea of another referendum. It was not constitutionally possible. He said that if Hughes’ amendment were carried the government would go to the people. He was confident that he would again win. Bruce’s announcement caused a tumultuous scene. There were cheers and counter cheers from both sides. Members were rocked by the shock.

J.H. Scullin, who had returned from a sick bed for the climax, said the government was somersaulting on its own policy. It was trying to load the court against the workers. He said the Prime Minister reminded him of a regimental sergeant-major marching his recruits around a drill hall. “The Prime Minister says, `Quick march!’ They march. The Prime Minister says, `Halt, right about face, quick march.’ They march back. They are the political awkward squad.”

The idea that a politician was not bound by the platform on which he was elected was outrageous. The government had betrayed its trust to the people.

The member for New England, Mr. V.C. Thompson, who had openly attacked the government’s proposal in his paper, The Tamworth Northern Daily Leader backed out. He was not in favor of a dissolution. He said that the issues would be twisted and distorted. They would have to wrestle with the prejudice of tens of thousands whose minds were being poisoned by pernicious American propaganda. He differed with his leader. He was still in favor of federal arbitration. But a referendum would be defeated.

“Can the opposition in this House speak for Mr. Lang?” asked Thompson. Scullin retorted, “Can the government speak for the big business and oil interests?” Thompson said that what Lang decided would go with the Labor Party in New South Wales. So he would vote against the Hughes amendment.

Then came the most dramatic moment of all. A new figure came into the spotlight. He alone held the destiny of the government in his hands. It was the immaculate figure of Walter Marks, Sydney solicitor and member for the conservative blue-ribbon seat of Wentworth. He had served in the Royal Naval Forces in the First World War and was Parliamentary Under Secretary for External Affairs from 1921 to 1923. Then Bruce dumped him.

Representing the elite of Vaucluse and Rose Bay, he had expected to be invited to join the Cabinet on the death of Pratten. Instead Bruce selected one of his most vocal critics –H.S. Gullett. To make matters worse, he gave him the portfolio that Marks wanted most, trade and customs. It was Gullett who took over film censorship. That was Marks’ particular hobby. For two years Marks had presided over a Royal Commission, which had inquired into the film industry. He had travelled abroad. In Hollywood he had been feted by the stars. He met Gloria Swanson, Clara Bow and Joan Crawford. There was even a suggestion that he might be invited to leave his footprints in concrete. On his return he spoke for hours about his thrilling experiences. He was full of plans. But Bruce put his report into a pigeon-hole. Marks was very upset about the withdrawal of the John Brown prosecution. He knew the Baron. Some of his clients had money invested in his mines. The Baron had even bought him a bottle of beer at Randwick. But still Marks thought the law should have taken its course.

When Marks rose, the House was tense and expectant. Marks fully appreciated that the cameras and lights were on him. Veteran gallery men said that the hushed silence was almost shattering. The fate of the government was in the balance and Marks knew it. The Herald next day said: “The house was literally breathless with excitement. As Mr Marks unfolded his reasons it would have been possible to hear a pin drop. Mr Bruce alone, of all his colleagues, remained unperturbed. He was magnificent.”

Mr Marks said that he had promised his electors to vote for the second reading. That was his only pledge. He recalled that he had appeared in the first arbitration case before Mr Justice O’Connor on behalf of the employees, with Hughes. He proposed to vote for the amendment. He would not be a party to repealing 15 Acts by a single vote. Even the graziers were opposed to abolition of the court.

It was the first time that he had ever recorded a vote against the government. He objected to Mr Bruce taking everything into his own hands. He had failed to consult his party. The Prime Minister had also failed to consult them on the John Brown case. But his chief grievance was that Bruce had not consulted him personally on the Amusements Tax. After all, he was the great authority on that subject.

“If any man knew the position of the industry, I did, and I should have been very pleased to give the government the benefit of all the information I had gained, but I was not consulted concerning the proposed increase in the tax on amusements,” declared Marks.

So Walter Marks, faced with the choice between Mr Bruce as Prime Minister and his loyalty to the movie interests, decided in favor of Hollywood.

“I told the Prime Minister he would have to go one way, and I would go another,” he said. He would not follow him in the proposal to impose the Amusements Tax, so he proposed to register his protest by voting for the Hughes’ amendment. “The present position cannot continue. Let the people give their verdict. There is one plank of the Nationalist Party in which I have always believed –that is liberty of thought, speech and action.”

He then disclosed that he had been bombarded by telegrams from branches of the Nationalist Party in Wentworth, although he had only told the Prime Minister. The telegrams had all been lodged within minutes of one another. The branches had not met. So who had lodged the telegrams? He knew that the Nationalists would oppose him, but his conscience compelled him to vote for the amendment.

That settled it. The gallant sailor had torpedoed the Government. The vote was quickly taken. The House was in Committee with J.G. Bayley in the chair. Sir Littleton Groom, the Speaker, did not record a vote. He regarded himself as an impartial umpire above party strife. Bayley’s vote was lost to the government unless there was a dead heat.

Hughes, Mann, Stewart, McWilliams and Marks all remained in their seats while the rest of the government side crossed to vote against the motion. Hughes was once more back with his former Labor associates. He sat next to Theodore. Marks was in most unusual company, sitting next to Frank Brennan. The Hughes amendment was carried.

Ayes 35
Noes 34
Majority 1

The Bruce government was defeated. Bruce was still supremely confident that the situation was well in hand. He had little idea of the further shocks in store for him.

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