J. T. Lang and the Depression

Abstract

In the closing months of 1929 a severe economic depression had suddenly interrupted Australia's upward spiral of prosperity, when following severe economic collapses overseas, the export price of Australia's primary products had slumped and Australia's credit in London had collapsed. Australia had been interrupted in the midst of very liberal overseas spending and as the depression increased in depth and duration, it became difficult for either Labor or its oppon ents to discern any new expansive force which would lift the economic system into renewed prosperity. One should not under-estimate the psychological aspects in volved, for the whole community reacted tensely to the alteration in its living standards, whilst the working class, possessing the least economic resistance, began a long period of distress.1 The ordinary citizen, who in normal times was apathetic towards politics, found that as his anxiety grew, he was torn between impatience for action and apprehension of the results of such action. With the economic system faltering, he was afraid of anything revolutionary, for that could lead to chaos. All he wished was for sufficient adjustment to restore the system to normal working order and free him from anxiety. Both Scullin and Theodore had realised the economic position from the inception of their ministry and this was a major reason why they wished the New South Wales dispute on the northern coalfields to end. Lang, too, as a business man, could not have failed to realise the gravity of the situation, but he was unwilling to relinquish either his personal role in Party factional conflict or his personal campaign against Theodore. For months prior to his return to office in November 1930, he was at pains to emphasize that he was opposed to Theodore's handling of the economic situation.2 Theodore was handling very tactfully a difficult political situation, for not only was the Scullin government at variance with the orthodox Sir Robert Gibson, Governor of the Commonwealth Bank of Australia, but it faced a hostile Senate. There was also the conservative nature of public opinion to be considered, as the restoration of public confid ence was a major factor in recovery. The obligation was upon Lang to aid the Federal government to restore confidence, and to consult with it closely, in order that Labor might speak with one voice. This was an occasion when solidarity could have proved its worth and a united Labor could have given leadership, whilst increasing its own stature. This much Lang owed to his own supporters, but he indicated that Theodore's measures were conservative and he failed to accept the responsibility of attempting to consolidate Labor's ranks in their interests and to minimise internal factional conflict.