Chapter 11
The Economy’s Collapsed — Anyone for Nationhood?
In This Chapter
Crashing badly — the end of 30 years of economic boom
Starting a Labor Party for working Australians
Federating self-governing colonies as part of a new dream of national unity
The 1890s saw the biggest changes in Australian society since the gold strikes of the 1850s. The long boom ended dramatically. After 30 years of economic good times that had sustained decades of colonial expansion, and during which colonial Australians had enjoyed the best standard of living of anywhere in the world, a long trough began, featuring higher unemployment, slower economic growth and very little immigration. (The big exception to this was Western Australia, where gold was discovered in the early 1890s.) The trough in most of the country would last until a second long boom began, after World War II in the late 1940s (see Chapter 18).
The great crash and subsequent 1890s depression had profound effects, both direct and indirect. Violent strikes was one effect, with a new organised political wing of the union movement — the Australian Labor Party — emerging from the comprehensive defeat of the unions in these industrial conflicts.
Another was the movement for nationhood itself. The federation of all the self-governing Australian colonies had been kicked around as an idea, on and off, for some 50 years before the 1890s. But the dominant wave of endless economic expansion and political progress had sustained colonial ideas and ambitions for four decades, putting all other ideas on the backburner. This was torn to bits in the economic and social strife of the early 1890s. The future could no longer be taken for granted. A new dream was needed. The idea of a new profound unity — ‘a nation for a continent’, ‘one people, one destiny’ — suddenly became a lot more compelling.
In this chapter, I cover the profound effects of the economic collapse of the 1890s, including the birth of the Australian Labor Party and the creation of Australia as a newly federated nation.
From Boom to Bust
Australia in the 1880s had achieved a high level of prosperity that had spread through all levels of society.
The real value of wages was high, as were consumption levels.
Many regions had functional full employment.
The demand for labour and for labourers had reached a peak in the 1880s because of big infrastructure projects and various construction booms — including the redevelopment of metropolitan centres, the continued expansion of the rail network and the expansion and consolidation of properties in the rural areas. (Refer to Chapters 8 and 9 for more on these construction booms.)
The suburban dream of home ownership was becoming a new reality for workers and for a new generation of Australians: The children of the gold-rush immigrants who were now reaching adulthood.
But as credit became more freely available and natural growth began to slow, Australia was heading from boom times to bubble times — and from there, it didn’t take long for the bubble to burst.
The bubble before the pop
The growth in infrastructure and construction had given good bargaining power to workers, and attracted large numbers of (mostly British) migrants from overseas. Some short-term trouble spots cropped up, such as South Australia, where development lapsed, or NSW and Queensland in the middle of the 1880s, but as some sectors finished their boom, others would begin. Colonial residents were remarkably fluid in their movements, often travelling from one colony to another, based on wherever the best wages, conditions and chances for making good money were.
With the sustained prosperity, houses were built and occupied by the owners. Home ownership became a possibility for a majority of the population. Workers put their savings in high-interest accounts in local building societies, and new suburbs began to radiate out from the metropolitan city centres.
At the same time as new migrant workers were saving money and having houses built, a generation with ambitions of home ownership was also coming to maturity. The 1850s gold-rush immigrants had themselves settled down and had children, and by the 1880s these children, Australia’s first baby boomers, were reaching adulthood, getting married, having children and setting up new homes. Put it this way: It was a good time to be a property developer.
The dream in the 1850s among gold-rush arrivals had been of land ownership — small farms and a life on the soil. For various reasons, this had proved a non-starter (see Chapter 8). Now, 30 years later, the dream of land ownership had transformed into the recognisably modern Australian suburban dream — the quarter-acre block.
The real estate market then entered an insane speculative frenzy phase: In January 1888, transactions on the Melbourne Stock Exchange passed the £2,000,000 mark. By July, Melbourne properties were selling for £1,500 per square foot — more than the prices for property in London. Land investment companies started declaring dividends for investors even before they’d sold any land. Between January and September, £13,000,000 passed hands in land sales. By the start of 1889, Melbourne banks and financial institutions had advanced a grand total of £113,000,000.
Think of Wile E Coyote in the Road Runner cartoon, shooting off a precipice. His feet keep whirring in the air before gravity hits and he plummets to earth. Australia by the late 1880s was in that moment after shooting off the ledge — its legs were churning faster and faster, but there was no solid ground beneath, just empty air. What came next? A dawning moment of realisation — ‘Uh-oh’ — and a very hard crash. Just ask Coyote.
And now for a big collapse
After a good 40 years of boom times, the 1890s depression hit. The big collapse was caused by three broad causes:
A stalling economy. In 1889, a collapse in the housing market, a crisis in the wool industry and a natural end to the expanding railway network all occurred.
Investment in freefall. A crisis in London capital markets in 1890 meant that British investors needed all their money back to prop up their own banking system.
A massive crash in the banking sector. Practically all the major banks had to suspend operations in the early months of 1893, and many had to shut down permanently.
Stalling economy
The 1880s building boom was based on unprecedented levels of borrowing and foreign (mostly British) investment. Australian colonies had become flavour of the investment month in British capital markets in the 1880s, as investors queued up to put money into Australian ventures. From the Australian point of view, this meant that ambitious expansion projects that would have otherwise been curtailed as natural growth slowed could continue and build to still higher levels.
However, the growth came with a very big but. In the midst of all this economic sunshine, the foundations were shaky. The growth rate in the 1880s had actually trailed right off, because the massive demand for new housing coming from the children of gold-rush immigrants who had come of age, married and started families had, by the late 1880s, largely been met. But not many people noticed. So much foreign investment was coming in — the amount borrowed by colonial governments nearly trebled in the 1880s, from £36,000,000 to £90,000,000 — and so many money-making projects were roaring along, that slowing growth was bad news that was easy to ignore.
A crisis was also brewing in the wool industry, with the international price dropping and a series of droughts wiping out many farmers’ stocks.
Decreasing foreign investments
In 1890, the Barings Bank in London nearly collapsed after its investments in Argentina ran into trouble. This close call (Barings was only saved after a bailout from a consortium that included most of the major London banks) made all British banks a bit nervy about their massive investments in similar southern-hemisphere colonial regions, and they started dragging their investments out.
Banks crashing loudly
In October 1888, a belated halt to the Melbourne real estate frenzy had been called when Victorian Associated Banks agreed not to lend out any further money in overdrafts for speculative land purchases. This came as a bit of a shock as everyone had become quite used to overdrafts and speculative investments — buying things, generally land, purely in order to sell them on when they increased in value in a very short time.
The shock got worse when land stopped appreciating in value and started bottoming out. Then the international wool price collapsed (refer to the section ‘Stalling economy’ earlier in this chapter). In 1890, British investors began to withdraw their large deposits (see preceding section), and banks began calling in their loans. Plenty of people were in deep, and weren’t able to pay off their debts. Banks foreclosed on pastoral properties, as many owners had taken out large loans to develop their properties, relying on the high price of wool to pay it off. Pastoralists began losing their properties to the banks.
The banks couldn’t recoup their losses on the sale of properties that had dramatically dropped in value and, as British investors continued to withdraw their funds, couldn’t cope with having to pay the money back so quickly.
In the second half of 1891, financial institutions collapsed in droves, not just in Victoria but across Australia. The worst of the increasingly severe economic depression, however, was felt in Melbourne. In January 1893, the prestigious Federal Bank of Australia, based in Melbourne, ran out of money and closed. In April 1893, the Commercial Bank of Australia, one of Australia’s largest, suspended operations, and 12 other banks soon followed. Understandably, depositors started to panic, and decided they wanted their money back. Thousands of small-time investors and depositors began to converge on their banks and demand their deposits be returned. Gold coins made their way into mattresses and private safes in households everywhere.
Then the National Bank of Australasia — established in 1853 and one of the oldest, soundest, most careful and conservative banking institutions in the country — suspended payment, ‘with the view of reconstructing the bank upon a basis favourable to the altered conditions of the money market’. The panic got worse. On the last day of April 1893, a Sunday, the Victorian cabinet met and decided to close all banks for the following week as they tried to deal with the financial crisis. On Monday, only three banks remained open.
The next day, two major banks, the Union and the Australasian, were paying out and, in the words of one reporter, on the footpaths of Collins Street all day ‘an eager mob surged’. ‘The people stood about in the street and on the opposite side of the way outside the Bank of Australasia till it looked more like the betting ring on a racecourse than anything else, whilst on the stairs of the bank, men at first literally fought with each other to get inside’. Another writer described central Melbourne as ‘like a disturbed ant-hill, men running hither and thither with their money, not knowing in whom to believe’.
The economic collapse of the 1890s had a number of long-term effects. The metropolitan cities — Melbourne and Sydney chiefly, but also Brisbane and Adelaide — were now seen as corrupt, decadent, soulless, heartless and artificial. For the first time, the bush, the outback and its workers — shearers, jackaroos, station hands, drovers and stockmen — became the embodiment of the ‘true’ Australia, and the bush legend was born.
Three strikes and we’re out — industrial turmoil
The biggest effects of the 1890s depression were felt by the working classes. After the economic and banking collapse of the early 1890s, depositors and investors lost their savings and investments. Workers lost homes. Businessmen weren’t able to pay their overdrafts and huge unemployment loomed for most members of the working class. The ‘workingman’s paradise’ (refer to Chapters 8 and 10) was coming to an end. In this new environment, it was no longer the worker who had all the bargaining power — now the business owners called the shots as they tried to cut costs. Bosses began to take on the unions.
Workers dealt with these attacks head-on — through a series of major strikes. Ultimately, these strikes would be unsuccessful, as the government intervened on behalf of the business owners and pastoralists.
Strike 1: Maritime strike, 1890
In 1890, wharfies and other maritime workers went out on strike for five months (from August through to December) to fight for what they saw as a basic right — their right to form effective unions. In industrial action that threatened to shut down industries and city lights across the country, more than 5,000 workers in both Melbourne and Sydney stopped much of the vital traffic in and out of the ports. Coal miners, transport workers, shearers and station hands throughout Australia all backed the maritime workers and staged sit-downs and strikes of their own.
When employers hired non-union labour, the government sent in police to protect them. The minister in charge of maintaining civil order in Victoria, self-described ‘ultra-radical’ (and future prime minister and Federation founder — see the section ‘New Nation? Maybe. Maybe Not’ later in this chapter) Alfred Deakin declared that ‘The first duty of a Government is to preserve order . . . to stop at nothing to protect the community’. Informed that violent riots were being planned, he sent in 200 Mounted Rifles, as well as the Victorian Rangers and all available cavalry.
Deakin wasn’t messing around when he sent in the troops, and neither was the commander of the Victorian Mounted Rifles, Colonel Tom Price, who had the following to say to his men: ‘If the order is given to fire, don’t dare let me see one rifle pointed up in the air. Fire low and lay them out. Lay the disturbers of law and order out, so that the duty will not have to be performed again. Let it be a lesson to them’.
The order to fire on the strikers never had to be carried out, however, as the violent riot didn’t eventuate. The strike was eventually broken and the maritime union’s power crushed as they ran out of funds to maintain the action. The wharfies went back to work, and the progressive government and the middle classes showed that when push came to shove they were on the side of ‘order’.
Strike 2: Shearers’ strikes, 1891 and 1894
The shearers’ strikes of the early 1890s had their origins in the mid-1880s.
In 1886, shearers’ unions began to form, first in Ballarat in Victoria and later the same year in Bourke and Wagga Wagga in NSW. In the middle of a wool boom, their bargaining power was good and they could force sheep-station owners to keep paying high shearing rates, even as the international price of wool began falling. However, sheep farmers began forming their own associations and tried to cut shearers’ wages. The stage was set for an almightly confrontation.
The first minor scuffle occurred in May 1890, when the Pastoralists’ Union of Graziers and Farmers decided to employ only non-union labour on one large property station in an attempt to break the hold of unions on the labour force. The attempt failed. Maritime unions in both Australia and Britain refused to handle the wool.
The fight was far from over, however, with the major showdown beginning in January 1891. Pastoralists, themselves pressured by the collapsing wool price, tried to cut wages. Shearers wouldn’t have a bar of it. Pastoralists tried to get around union demands by employing non-union labour — often Chinese labourers — which infuriated the shearers intensely. Shearing disturbances — such as work stoppages, attacks on property and assaults on non-union labour — began on a wide scale, on and near stations throughout a vast area covering Queensland and NSW down through the Riverina area to the Victorian border. In NSW, 28 per cent of the entire police force was sent to the districts affected.
When it came to policing the civil disturbances caused by the shearers, the police had a problem. The maritime strike had been huge but it was concentrated at the wharves and docks of the major port cities. The police knew where the trouble spots were, and where to find the trouble makers threatening insurrection. With the shearers’ strikes, the police had difficulty in knowing whether to break their force up to protect every shed that was trying to use non-union shearing labour, or to concentrate their forces where the major shearing camps were. It was a nightmare.
Many unionists were arrested during the 1891 shearers’ strike, with 12 put in jail. Property was destroyed and gunfights broke out as the police and army were called in. The union representing shearers in this strike was ultimately forced to capitulate when, like the maritime union in 1890, it ran out of money and lost the support of the majority of the population. The bulk of the press and most of the public saw the conflict as a question of anarchy versus order, of potential insurrection versus civilised society.
In 1894, shearers went on strike again against pay cuts. Non-union labour (mostly unemployed men who were happy to do any work for some pay) was brought in as the Queensland government passed a Peace Preservation Act, which gave it emergency powers to deal with any threats to order.
Strike 3: Broken Hill miners’ strike, 1892
At Broken Hill in NSW in 1892, the mine owners reversed a previous wage agreement, and then brought in non-union labour. A strike followed.
Future prime minister Edmund Barton (see the section ‘New Nation? Maybe. Maybe Not’ later in this chapter for more on Barton) was acting premier of NSW at the time and resisted demands to send in the army — he sent in plenty of extra police instead.
Leaders of the miners’ strike were arrested and charged (and some were convicted) with conspiring to ‘incite, move and persuade great numbers of the liege subjects of our Lady Queen to riots, tumults and breaches of the peace’.
Birthing the Australian Labor Party
The industrial strikes and turmoil of the early 1890s had failed to ensure worker demands were met. But it wasn’t all bad news. This failure encouraged the emergence of a centralised political party to act on behalf of trade unions. The logic was that if the government had used the law to come in on the side of the bosses in the three strikes of the 1890s (refer to the preceding section), then the best thing to do was to take control of government itself, and change the laws.
The resulting party was the Labor Party, and it was in luck. Such was the decimation of all the small craft-based unions, and the overwhelming defeat of the shearers, wharfies and miners in the industrial conflicts of the early 1890s, that the politicians in the Labor Party were able to steer the direction of the workers’ movement for the next 25 years. New ‘super unions’, such as the Australian Workers Union, were, like the new Labor Party, centrally organised with less participatory involvement from the majority of members. Labor politicians in these unions were prominent.
Much of the original aims of the industrial workers’ unions in Australia had been aggressively militant, with the main aim being to create a socialist society (where no-one had private property and no-one was out of work or had to work too much). But the political leaders of the new Labor Party moderated these early aims to come up with a ‘fighting program’ that they could put to voters. This was much more moderate — and much more successful. Members of parliament received what was, for workers, good pay, so Labor politicians didn’t have to worry about extra paid work just to earn enough to live on. They used their free time well, travelling (for free!) on trains throughout the colonies preaching their political cause. These politicians formed what was the first recognisably modern political organisation.
From little things . . .
On 1 August 1890, the first general council of the Australian Labour Federation began sitting in Brisbane. At this council, a parliamentary program, or ‘platform’, was drafted that all Labor politicians had to commit to.
The first Labor Electoral League in NSW was set up in March 1891 in the Sydney suburb of Balmain, and later in the year other leagues were set up in nearby industrial suburbs of Sydney. The agreed political platform now included an eight-hour working day, elected magistrates, support for the federation of the colonies of Australasia (meaning New Zealand too), and land nationalisation.
In June 1891, the Labor Party entered NSW parliament, with a staggeringly successful 35 members elected to the Legislative Assembly (of 141 total seats). For the rest of the decade, ruling NSW governments would have to do deals with the Labor Party.
Two Australian halves of a Labor story
The Labor Party had more of an immediate effect in NSW and Queensland than in other colonies. This was for two reasons:
1. Queensland and NSW had both received the lion’s share of new British immigrants in the 1870s and 1880s. Most of these new immigrants were hardened by class conflict in Britain, and brought new aggressive agendas to Australia.
2. Victoria and other colonies had already produced a kind of ultra-radicalism of their own, with the highly state-interventionist Colonial Liberalism being fostered by the gold-rush generation (refer to Chapters 8 and 10 for more on political radicalism in the gold-rush generation).
In Victoria, a trade union convention formed the Progressive Political League, which helped get 10 members voted to the Legislative Assembly in 1892. But they didn’t think of themselves as Labor only — they thought of themselves as radicals with Labor links. An unimpressed Trades Hall Council said this wouldn’t do at all, and formed a United Labor Party of Victoria in June 1894, but even then things stayed fluid in the political sphere. At elections, Labor candidates often agreed not to run against radicals and progressive liberals like Alfred Deakin, Henry Bourne Higgins and Isaac Isaacs (all of whom get talked about more in Chapter 12).
Labor politicos and Labor unionists — the struggle begins!
Because the 1890s depression had destroyed so much of the previous union power and so many of the small locally active unions, a new set of Labor politicians filled the power vacuum, with a centrally organised political machine. Later in the decade, when unions began to put themselves back together, they were absorbed into and organised by the new Labor political machine. Men with no previous union experience but with a lot of Labor political experience took charge of reorganising unions.
The best example of this is Billy Hughes (a future Labor prime minister you can find out more about in Chapter 13), who had a huge role in re-establishing a national wharf labourers’ union in 1899. The wharfies union had previously had their power crushed in the 1890 maritime strike (refer to the section ‘Three strikes and we’re out — industrial turmoil’ earlier in this chapter). Now it was a Labor politician coming in to set them back on their feet.
This kind of thing worried a lot of unionists — they figured that the Labor party had been built up to get political power for the union movement. But now it seemed like the political tail was wagging the union dog. For the moment they kept quiet about it, though (see Chapter 13 for more on when the conflict really heats up). In politics, Labor was proving an instant hit, getting seats in parliament, negotiating with different sides to get the best deal for workers and, for a few weeks in Queensland in 1899, even taking power. This was better than any Labor political movement in the world had done so far.
New Nation? Maybe. Maybe Not.
Colonial Australians in the 1880s enjoyed the highest standard of living in the world, as well as some of the most democratic governments. Colonies were self-governing, meaning Britain didn’t interfere in internal matters (although Britain still set foreign policy for the colonies). A little over ten years later the prosperity was gone, and the self-governing colonies had decided to form together into a new political entity: A federated nation.
Why Federation happened
Through the 1870s and 1880s, colonies operated like competing city-states, each with a central dominant capital as the main port and each tapping their respective vast interiors with separate railway systems. Each was self-governing, had established customs houses on their various borders, and trained their own defence forces such as local navies.
The main areas that could have created problems were internal trade and centralised defence. But these could have been solved without a federal form of government. One big problem with internal trade was that, when the states had developed their various rail networks, they’d used different rail gauges (or widths for the tracks), so the lines didn’t link up between the states. If you wanted to travel, or ship goods, by train between NSW and Victoria, for instance, you had to change trains at the border. But a centralised body could have been set up to determine a standard gauge and organise the laying of new tracks. If the push for internal free trade was strong enough, all that was needed was a customs union. If defence forces needed to be centrally coordinated (as visiting English experts advised in 1884) then, once again, a special body could be set up to do so, without going to all the extra bother of creating an entire extra layer of government and a new nation.
However, in the 1890s, colonial economies crashed and burned and the pitch ‘One Continent, One People’ became increasingly persuasive in the aftermath of strikes and chronic social disturbances.
The collapse of the old dream
The decades before 1890 had been sustained by a belief that the colonial way of life ‘had it right’. Progress and prosperity would continue to increase inevitably. While this was happening, the rule of ‘if it ain’t broke don’t fix it’ applied.
Even The Times of London agreed with this approach, arguing in 1888, ‘The prosperity and sense of security experienced by the colonies have tended to repress the desire for federation . . . [the colonies] will doubtless continue to make the same wonderful progress that [they have] done up to the present’.
At the start of the 1890s, the prosperity and sense of security came crashing to an almighty halt, and the terrible vision of intense class hatred appeared.
During the crash of the 1890s, Alfred Deakin lamented that ‘selfishness and shams, cant and materialism rule us, up and down and through and through’. Evidently a new dream was needed, something that would convert divided people into a single national community, turn ‘jarring atoms’ of divided colonial societies into ‘a united organism’.
Significantly, it was only after the great bank crashes and the maritime, shearers’ and miners’ strikes of the early 1890s that the movement for federation began to get real.
In late July 1893, the Corowa Convention, the ‘people’s convention’, took place. It was here that the idea of taking the federal idea and a constitution direct to the people in a national referendum was first taken up. Also significant is the fact that for as long as Victoria was pre-eminent as Australia’s leading colony and the prime mover for federation, there wasn’t a hope that NSW would join. After the great crash, though, with Victoria’s expansive economy crippled, NSW had less reason to fear sinister takeover plots from the colonists south of the Murray River.
Railing against second-rate ‘colonial’ status
In the 1880s, the children of the gold-rush immigrants reached maturity. They, unlike their parents, suffered under the weight of colonial birth. At this time, to be colonial was almost by definition to be inferior. However, this generation turned it into a badge of pride, declaring that their Australian birth and upbringing actually made them superior to those born in Britain.
Although many of their parents were of working-class British origins, the native-born children benefitted from their parents’ hard work and good economic fortune during the long boom to move into more middle-class professions. They also benefitted greatly from the new system of compulsory education brought in during the 1870s and early 1880s (refer to Chapter 10), which meant they began reading and writing and forming public opinions with vigour. The best example of this were the founders and writers behind The Bulletin magazine who, although they didn’t support federation (they wanted a republic completely separate from Britain), aggressively pushed the idea of Australian superiority and that it was ‘against the worship of imported habit and belief that the Australian must rebel’ (see the sidebar ‘Maverick Archie and The Bulletin school’ for more on this magazine).
By and large, native-born Australians felt the only way to prove themselves as equals to the British, and to stop being treated as ‘second-rate’ colonials, was to form the Australian nation through federation. Practically all leaders at the 1897 to1898 federation conventions were either native-born (like Alfred Deakin) or had arrived in Australia in early childhood (like Samuel Griffith). Without the native-born generation, federation wouldn’t have happened.
How Federation happened
Federation, as they say, didn’t happen overnight, but it did happen relatively quickly. There were just 12 short years between the first tentative steps and two new houses of a federal parliament and a constitution being in place.
In this section, I outline the major steps in the process.
Tentative first steps at Tenterfield
In 1889, in a speech at Tenterfield in NSW, NSW Premier Henry Parkes declared that it was time to stop messing round — basically saying, ‘Let’s get serious; let’s federate’. According to Parkes, the time had now come ‘for the creation on this Australian Continent of an Australian Parliament as distinct from a local Government’. Seeing as most other colonies and their leaders had already been kicking federation ideas around in the 1880s, only to have Parkes and NSW pour scorn on the idea and stop it short, Parkes’s speech got things moving nicely (although other premiers still objected).
Convening for Constitution
In March and April 1891, Henry Parkes held a National Australasian Convention in Sydney. Key players were statesmen Samuel Griffith, Edmund Barton (discussed in the ‘Three men who made Federation happen’ section later in this chapter), Charles Kingston and Inglis Clarke, who wrote a constitution — the idea being to get it passed by colonial parliaments, then British parliament and passed into law. The Constitution and the idea was heavily criticised in NSW for not being democratic enough. Parkes dropped the idea and, again, Federation looked to be a non-starter. It was, in the words of one gleeful NSW politician, ‘as dead as Julius Caesar’.
Getting real at Corowa
Popular federation leagues, made up of farmers, shopkeepers, business owners and ordinary citizens, formed in the 1890s to agitate for federation. For two days late in July and early August in 1893, delegates from these leagues converged on the town of Corowa on the Murray River in what became known as ‘the People’s Convention’. The Convention decided to follow the idea of John Quick, a delegate from Bendigo. Quick! said Quick — to the people! Have a popularly voted convention, draw up a new constitution, then take it back to the people in a referendum. One of the big opponents of the previous federation plan, George Reid of NSW, liked Quick’s idea. With NSW in, the idea took off.
People’s delegates attend conventions
Late in 1897 and early in 1898, three conventions took place in Adelaide, Sydney and Melbourne attended by ten delegates from each colony — except Queensland. A new Constitution was painstakingly formulated over many long nights, and prepared for the referendum. NSW Premier George Reid didn’t like it though — he thought the Constitution wasn’t democratic enough, and gave too much power to small states.
Referendum 1 — the people say No
In the first referendum on the Constitution, in 1898, the people said No. Well, they didn’t all say No. Plenty said Yes — in fact, across Australia the Yes vote doubled the No vote. But NSW had failed to come over — NSW parliament decided that much more than half of their colony had to say Yes, and the Premier George Reid gave it only the most lukewarm support possible. In both Victoria and NSW, the ALP also campaigned against it. Federation appeared down for the count for a second time in the 1890s.
Referendum 2 — the people say Yes!
With Federation looking like a lost cause, a conference between premiers was held and a new compromise was hammered out. Concessions were given (the new capital was now to be somewhere in NSW) and some changes made to the Constitution, which was then taken to a second referendum. This time the Yes vote was overwhelming. More than triple the amount of voters said Yes to those who voted No (377,895 votes for and 132,286 vote against) as Queensland voted for the first time.
Even WA says Yes!
Belatedly, Western Australia held a vote on the Federation. Thanks to the influx of eastern colonists to the Kalgoorlie and Coolgardie goldfields in the 1890s, the Yes votes were more than double the votes against — 44,800 voted Yes against 19,691 No. WA was snuck into the Federation at the last minute, with half a promise that the new federal government would build a transcontinental railway connecting the west to the rest of Australia.
Bingo! New Nation
The new Constitution made for a system and a new nation that was a curious combination of two distinct political traditions — American and British.
On the one hand, it incorporated the Westminster system of Britain’s parliamentary democracy, where government is formed from a majority of members in parliament, and where government and ministers are responsible to parliament and could be questioned in parliament, criticised there and voted out in parliament. Unlike the US, if you wanted to be in government in Australia, you needed to get a seat in parliament.
But the Constitution also followed the federal model of the US, by allowing for a federation of states that retained most of their powers and providing equal representation for the states in the Upper House, and giving the two houses of parliament the same names as those in the US — House of Representatives and Senate. The federal government wouldn’t exercise overwhelming central control (as was the case in Britain or Canada). Instead, the Constitution strictly defined and limited federal powers, leaving the rest to the states.
The Constitution set up two houses of parliament, as follows:
House of Representatives. This was the lower house of legislation, with the widest possible franchise and where each person’s vote has equal weight.
Senate. This was the upper house of review, which gave equal weight not to individual voters but to individual states (with senators still elected by individual voters).
The constitution also set up
A High Court, to decide states versus federal issues and interpret the Constitution.
A Governor-General, to represent the sovereign (at that point, Queen Victoria of Britain).
The federal level of government had responsibility for
Defence
Postal and telegraph services
Customs and excise taxes
Foreign trade and foreign affairs
Marriage and divorce laws
Immigration
Arbitration of industrial disputes (when the disputes cross state borders)
In these areas, Commonwealth laws would override state laws.
Three men who made Federation happen
On the road to Federation, three men were the main movers and shakers: Edmund Barton, Alfred Deakin and George Reid.
Edmund Barton — eat, drink and be merry, for tomorrow we federate
Edmund Barton was the native-born son of a broker, an early graduate of Sydney University, and permanently the clever kid in the class. Barton entered NSW parliament early, becoming the youngest ever Speaker (adjudicator) in the Chamber, but mostly he liked sitting in comfy chairs in exclusive clubs, staying up late drinking and talking and generally having good times. The Bulletin’s nickname for him was ‘Toby Tosspot’.
Barton seemed set to waste his many undoubted talents — but then Federation came along. This was the one cause he was able to throw himself into completely. He believed in the movement as a thing of destiny — coming up with the slogan ‘a nation for a continent and a continent for a nation’. Catchy, no?
A key player in organising the Corowa meeting in 1893, and heavily criticised by Henry Parkes and others in NSW for being too democratic, he was the main leader of the federal movement in the crucial conventions in 1897 and 1898, keeping his colleagues up way too late rewriting the proposed Constitution. Campaigning in 1898 and 1899, he crisscrossed the colony, driving through the bush on a buggy, addressing remote audiences and campaigning for the cause. By the time of Federation, he was so broke that a private collection had to be made for his wife and his children’s education. Things worked out okay in the end for him, though — Barton got to be Australia’s first prime minister.
Alfred Deakin — crushed by the crash, redeemed by Federation
Like Barton, Deakin was a precocious young native-born talent. At 15, he got involved with the spiritualist movement, and while attending seances and running a spiritualist Sunday school, he still managed to pass his final exams for law at 21, going on to the Victorian Bar.
However, Deakin became too busy writing poetry, essays and literary criticism to handle many cases. He began writing pieces for The Age newspaper, and became close with the paper’s editor (and political king-maker) David Syme. At 22, with Syme’s backing, Deakin entered the Victorian parliament.
Deakin went on to attend the first Colonial Conference held in London in 1887, where the young colonial caused mild scandal when he had the temerity to talk back to the British prime minister, Earl Salisbury, over the issue of security in the Pacific region.
Alfred Deakin got burnt by the crash of the early 1890s. Like most, he had speculated heavily in investments during the final boom phase, and managed to lose both his and his father’s savings. For the rest of the 1890s he refused to take any further part in Victorian politics (they kept pestering him to be premier) and worked as a lawyer to pay off his debts (and also as a kind of penance — he hated working as a lawyer). Luckily for him (and for Australia), he discovered the federation campaign as a great crusading cause. He was instrumental in taking the Federation campaign to ‘the people’, appealing directly to them.
According to Deakin, ‘Federation is like marriage; it is a lasting union. It is marriage without the possibility of divorce. It therefore is a time in a nation’s history when a clear issue should be submitted to a direct vote; it is when she is entering into the bonds of permanent matrimony. It is for the people to say whether the proposal is good or not, and in their hands alone should lie the ultimate power of acceptance or rejection’.
At the first referendum in 1898, it was Deakin’s passionate speech at a dinner of the Australian Natives Association in Bendigo that helped reignite enthusiasm for Federation when everyone was finding fault with the proposed Constitution.
George Reid — fat guy makes history!
Although he was an opponent of Federation in the first half of the 1890s, as premier of NSW, George Reid’s opposition to and eventual support of Federation helped make it more democratic when it finally came.
George Reid arrived in Melbourne from Scotland aged seven. In his early teens, he became interested in the radical political debates taking place in Victoria, going along with his dad to see demonstrations for manhood suffrage and political reform. Moving to Sydney, he began working life as a junior clerk in a merchant’s counting house, before joining the Colonial Treasury as an assistant accountant aged 19.
Good with money, George Reid was even better with eating, and apparently pretty good with women too. Alfred Deakin had this to say about him: ‘[An] immense unwieldy stomach, his little legs bowed under its weight . . . thick head rising behind his ears . . . [a] many folded chin . . . to a superficial eye his obesity was either repellent or else ludicrous . . . To a more careful inspection he disclosed a splendid dome-like head . . . a gleaming eye which betokened a natural gift of humour; and an alertness which not even his habit of dropping asleep at all times and places, in the most ungraceful attitudes and in the most impolite manner, could defeat.’
Reid’s sharp brain had him racing up the ranks in Treasury, and by 29 he was chief clerk of the correspondence branch. In the 1880s, he shifted into parliament, made enemies with Henry Parkes and became a fierce advocate of free trade.
Reid was very suspicious when Parkes suddenly became all enthusiastic for Federation. The 1891 Constitution he declared to be nothing more than a political ego trip — the product of ‘the great ambitious statesmen of Australia’. It wasn’t democratic enough, and it threatened to be a Victorian takeover — Victorian policies on tariffs and finance looked capable of overwhelming Reid’s and NSW’s commitment to free trade. Luckily for Federation, however, Victoria’s economic, demographic and political pre-eminence got broken by the 1890s depression. Reid, by now NSW premier, could be more open to the idea of Federation.
It would still take a while for Reid to be completely convinced. While he liked the more democratic approach of taking a Constitution to referendum, he still didn’t like the new Constitution — it was still not democratic enough. His half-hearted support of it in the NSW referendum (he earned the nickname ‘Yes–No Reid’) helped kill it off. But after changes were made to the proposed Constitution, and NSW was given the assurance that the future capital would be in their state, Reid joined Barton in campaigning strongly for Federation in the second referendum of 1899. As he was widely accepted as the best platform orator anywhere in the British Empire — Deakin said he aimed ‘always at the level of the man in the street’, using slang, crude jokes, screaming rants, and abuse to do it — his support was crucial.
So Federation was made. The decade that followed would show just how serious these nation-builders were about creating an Australian ‘social laboratory’, where the problems of the old world, which seemed to have caused the great economic crisis of the early 1890s, would be resolved forever.