PRIME MINISTER JAMES SCULLIN, THE GREAT DEPRESSION AND LABOR SPLIT – MICHAEL EASSON

Sworn in as prime minister in the week of the Wall Street Crash, in October 1929, James Scullin was bewildered and politically devoured by the economic and sociopolitical turmoil of the Great Depression. Scullin was Australia’s first Prime Minister of Catholic faith, which profoundly influenced him, though he saw secular and religious principles as compatible rather than competing, Scullin faced many policy and political challenges. Dr Michael Easson, a long-time member of the ALP, is the author of James Scullin (Australian Biographical Monograph, no 24). In his fascination with Scullin, Michael Easson found much to be admired in Scullin’s contribution to Labor history, in spite of his failure as a prime minister. To discuss this and more, Michael Easson addressed The Sydney Institute on Wednesday 9 October 2024. 

PRIME MINISTER JAMES SCULLIN, THE GREAT DEPRESSION AND LABOR SPLIT

MICHAEL EASSON

Thank you very much, Anne and Gerard, for putting on these functions and on this occasion allowing me to speak on a relatively obscure political leader.

James Scullin was born in country Victoria in 1876 and died in 1953. He was a Federal MP from 1910 to 1913, and again from 1922 to 1949, the leader of the Australian Labor Party from 1928 until 1935, Prime Minister from 1929-1932. He held the party together after several tumultuous splits during the Great Depression. John Curtin succeeded him as Labor Leader in the mid-1930s.

I wrote this book for two reasons.  One, because of the challenge: Scullin is known as the man who won with the biggest majority ever with the election victory in 1929 and remembered also as a one-term prime minister who lost office with the biggest defeat of any Labor figure. He was appraised as a political failure. In the words of the late Don Rawson – to whom I co-dedicated the book, a great Labor historian I knew a long time ago – he once told me that Scullin was the man who failed even at failure; meaning that even in going down as prime minister in the election in December 1931, it was a mess. The Labor Party was engulfed with various splits and divisions. It was seen that during his period as prime minister during the Great Depression he was bewildered and befuddled by the challenges. I thought it would be interesting to write about this person, to examine whether he was more interesting than the customary summation of his political life, whether there was more than just “failure”.

The second reason to write was because I was trapped – I say that whimsically – on a boat. Mary, my wife, took us on a cruise from Barcelona to Fremantle last year. There is a limit to the number of times you can walk the deck, with port visits on average every three days. I said to Mary, “I will join you for all our meals but maybe doing nothing otherwise would be exhausting. Let me find on-board a library and a good internet connection and let me look up Trove and do this work I have been thinking about for several years.

That is why I am here and why this book is now published.

Scullin is a person who stood for parliament for the first time in 1906, three years after he joined the Labor Party. In 1903, Tom Mann, a radical, eloquent unionist from the UK toured all over country Victoria and across Australia. He enthused people to join the Labor Party. John Curtin joined around that time as well as Scullin. Both were inspired by this radical, critical approach by Mann, hopes of and the possibilities for the trade unions and Labor to transform society.

With Scullin, an interesting question to evaluate was this: to what extent did Scullin’s Catholicism matter in the way he developed his political thinking? One of the stories that I found, in doing the research, is that Scullin carefully read and took copious notes about Rerum Novarum, the encyclical issued by Pope Leo XIII in 1891. This set out Catholic Church theory about the nature of and preferred organisation of civil society. Scullin went to his parish priest in Ballarat with his well-earmarked copy. Father Roper, who had just completed seminarian studies at St Patrick’s, Manly, and had just been posted to Ballarat, met Scullin. He asked: “Can we go over this encyclical please because it seems to convey a great deal about what Catholics should be thinking about in terms of their vocation in politics?” Father Roper looked at him, sighted the document in Scullin’s hands and said words to the effect: “I wouldn’t worry about it.” He had not made a study of it. This fellow later became a bishop. Nonetheless, Scullin was profoundly influenced by that encyclical and associated teachings of the church. He always argued that there was no inconsistency between Labor values and those of the church. He did not regard Catholic social teaching as grafting foreign concepts to Labor philosophy and practice. He believed they were completely compatible with each other. That was one of the issues I wanted to think and write about.

The other thing that is notable about Scullin’s career: not only was he the very devout Catholic who translated to the highest rank as a Labor politician, he also got intricately involved in the socialisation debates in the Labor Party in 1921. That was the debate about what Labor’s objective should be.

Consider his life – until then. He already had had an interesting career. In 1903, he joined the Labor Party. In 1906 he ran against prime minister Deakin as the Labor candidate for the seat of Ballaarat. He was defeated. The then Labor Leader John Christian Watson (about whom I also wrote about on the good ship Queen Elizabeth) would not campaign in the election in Ballarat because he hoped that Deakin would win, and Labor and the progressive Liberals would form a coalition. However, Ramsay MacDonald, the British Labour leader, did campaign in that election and in Ballarat, during a visit. Because of that campaign, Scullin became known to the public and admired in important circles of Victorian Labor. He was appointed an organiser for the Australian Workers Union. In 1910, he stood for election for Corangamite, a country electorate in Victoria, and won the seat in the election that saw the first majority Labor government in Australia. Andrew Fisher won that election in 1910. Scullin narrowly lost the seat in 1913 when Fisher (unexpectedly) lost the election. Scullin continued to be an organiser with the Australian Workers Union and later became a full-time editor of the Ballarat Echo newspaper. He had had several other jobs including for a period as a grocer when he first stood for parliamentary office.

In 1921 Scullin, heavily active in Victorian Labor politics, got involved in the debate about what Labor’s core objective should encompass. I am interested to understand how this person, of all people, could be so involved in the crafting of the Labor Party socialisation objective. Because, you would think, as a good Catholic, a person reading and believing in the principles of Rerum Novarum, the papal encyclical, that he too would be critical of state-controlled socialism, hostile to communism and condemning of untrammeled capitalism. The encyclical, to quote from part of it, said that “…public institutions and the laws set aside the ancient religion. Hence, by degree it had come to pass that working men have been surrendered, isolated, and helpless to the hard-heartedness of employers and the greed of unchecked competition.” So, it was censorious of unfettered capitalism, contemptuous of some of the more radical remedies springing from the Left. How could Scullin embrace the full-throated radicalism of Labor’s 1921 socialisation objective?

It turns out that he was very involved, the co-author, of that objective, first in June at the All-Australian Trade Unions Conference held in Melbourne, where he was the chair of the drafting committee of the socialisation objective (along with John Curtin). And then again at the Brisbane ALP Conference in October that year, where adoption of the socialisation objective became Labor Party policy. It turns out that, compared to many other of his colleagues, Scullin had a different view of what socialisation meant compared to nationalisation. He thought as a perspective that it was compatible with moderate and Catholic thinking. The meaning of the word “socialisation”, however, is almost lost in the mists of time. Scullin had in mind that society should be organised based on the fullest participation of ordinary people. He meant by socialisation that society should be organised such that people had the opportunity to be deeply involved in the workplace, were engaged in electing their representatives, and participated from the “grassroots” up in the organisation of society. He was hugely influenced by Hilaire Belloc and G.K. Chesterton, the Catholic writers, and by the British economist and socialist G.D.H. Cole, during the latter’s “guild socialist” phase.

My view is that all of this was incoherent. But Scullin’s motivations were based on those strands of opinion. One of the worst aspects of what was adopted, reflected in what Scullin moved, the resolution at both conferences in 1921, was to call for a Supreme Economic Council to manage the economic affairs of state, something that was clearly lead in the saddle bags of Labor leaders thereafter, until that was eventually repudiated at the ALP Federal conference in 1927. [The British Guild Socialists during World War One had coined the term Supreme Economic Council even before the Soviets. They wanted independent guilds to meet in a parliament of guilds, but this idea was never well-explicated. The conflating of Guild and Soviet terms was unfortunate, to say the least. As the Soviet concept was deployed in the early 1920s, it was reckless for Australian Labor to appear to “borrow” a concept with barely a word about what it meant in an Australian context.]

I wanted to understand where Scullin had come from, whether his Catholic thinking and pragmatic Labor politics influenced his political outlook – which, clearly, it did. He believed his religion was completely compatible with Labor values and social democracy. The debate on the socialisation objective, however, was an episode in Labor history which I never fully understood. To some degree, I still find this a mystery. Scullin was in the thick of it. Kim Beazley snr once wrote that even though Scullin was traduced by the Langites in the 1930s as this extremely cautious, moderate Labor leader, in his youth he was a firebrand in the Victorian Labor Party. The socialisation objective was just one aspect. Another was in 1916 when Scullin moved the resolution at the federal conference that all those labor MPs who had supported conscription were all expelled from the Labor Party, effectively never to return. That was the attitude of Scullin. I regard that as another extraordinary moment in the history of this party, where people were condemned to the fire. Perhaps “eternal damnation” was the Catholic principle that Scullin was sub-consciously applying! [I suspect Easter 1916, in Dublin, was the bigger influence. Scullin, the son of migrants from County Derry, was radicalised by the Irish uprising.]

Of course, part of Scullin’s history is that he got lucky. He was the editor of the Ballarat Echo. In 1922, the leader of the Australian Labor Party, Frank Tudor, the member for Yarra in the Federal Parliament, died. Richard Crossman, a UK politician craving preferment, wrote in his diaries in 1963 that in politics where there is death there is hope. [UK Labour Leader Hugh Gaitskell’s death in 1963 was the turning point in Crossman’s career.] Scullin stood for Labor pre-selection for the seat of Yarra, won that and then the by-election in February. He created a modest reputation for speaking on tax, money bills, and tariffs.

In 1927, the deputy leader of the Labor Party, Frank Anstey, took ill and Scullin won the ballot for deputy leader. When Matthew Charlton, the Leader of the Opposition and Australian Labor Leader took ill and resigned, Scullin was elected Leader. Scullin led Labor’s campaign in the 1928 elections. He lost to Stanley Melbourne Bruce, though Labor won eight seats in that election. Then, dream of dreams, the then prime minister Bruce decided that he would seek to end the national system of compulsory conciliation and arbitration. Legislation was drafted to that end, proposing to return industrial relations powers to the states, except for the wharves and for shipping. (Interstate trade was naturally and constitutionally a national responsibility.) The Bruce government’s proposed legislation was defeated in parliament. Billy Hughes led a revolt of government backbenchers. In the ensuing election in 1929, Scullin won a thumping majority.

Scullin became prime minister. In the week that he was sworn-in, the Great Depression began with the Wall Street collapse in October 1929. At one stage unemployment was 30 per cent. During his prime ministership, unemployment hovered between 20 per cent to 30 per cent. Scullin was prime minister from 1929 to 1932, defeated at the December 1931 election. And, in that period, no one really had an idea of what to do about the Great Depression. Many remedies were tried and talked about; everyone was an expert on what to do. The conventional wisdom led by Sir Robert Gibson, the chairman of the Commonwealth Bank board, was that you needed to cut wages, cut expenditure, and deflate the economy.

Yet this was at a time when already Australia faced major problems. For example, earlier in 1929, before the Wall Street collapse, a significant reduction in prices for Australian exports – wheat and wool products, for example – occurred. An attempt to raise money in the London market for an Australian government bond was under-subscribed by 80 per cent. There was a view in London that Australia was borrowing too much and not spending carefully on productive industries. There was too much political interference in where borrowings were spent.

Scullin came to the office facing calamity. The Labor Party and no one else knew what should be done. He had a deputy leader and treasurer in Ted Theodore, a former premier of Queensland, who had great promise. In 1929, Scullin persuaded Joe Lyons, a former Tasmanian Labor Premier, to run for a federal seat in Tasmania. Lyons was a very popular figure. In Scullin’s Cabinet, the only two with ministerial experience were former state leaders, Theodore and Lyons. Speaking of state premiers, there was Jack Lang in New South Wales, who was elected Premier in 1925 to 1927 and again from 1930, a determined opponent of Scullin.

Ultimately, the Labor Party split in many directions. The Lang group broke away from official Labor in March 1931, forming a minority rump within the parliament. In January that year, John Fenton and Joe Lyons, acting prime minister and acting Treasurer, respectively, from August 1930 to January 1931, left the Labor Party to form the United Australia Movement and, ultimately, the United Australia Party, in combination with the Nationalists. Lyons became Leader of the Opposition. Labor splintered in many directions, divided about the Premiers’ Plan.

As troubles brewed, Scullin was overseas for five months from August 1930 to January 1931. He renegotiated some of the terms of some of the loans that the Australian government had in London. His other notable achievement was “staring down” the monarch and his advisers to see the appointment of the governor general, the first Australian-born Governor General, Sir Isaac Isaacs. While he was away Lyons was acting treasurer.

In July 1930, Ted Theodore had to step aside from this post because the then conservative Queensland government had established a royal commission into allegations of corruption over the Mungana mines, the sale in 1922 of some privately owned mines in Northern Queensland to the Queensland government. The commissioner determined or found that there was a high probability that both Theodore and the subsequent premier, McCormack, had had secret shares in those mines. The commission found both former premiers guilty of “fraud and dishonesty” and abuse of ministerial position. The case against Theodore was circumstantial. [The commissioner adduced that because McCormack made regular payments to Theodore, equivalent to-half of the former’s receipts from the Mungana mines, that this pointed to Theodore as a co-conspirator and co-beneficiary of the sale. Theodore vigorously protested his innocence in and out of parliament.]

Theodore was an active, intelligent, and generally well-regarded political figure. Scullin wondered during the first six months of his prime ministership whether he should hand over to his able deputy. But this became impossible. Theodore had to stand aside while subsequent inquiries occurred, including the Queensland government taking civil action for damages. They were in no rush to do so. Eventually, there was a court case in 1931. That August, Theodore was found not to have a case to answer. But during the period Scullin was overseas, Theodore had a cloud over his head. Fenton and Lyons carried the burden of running the government. They thought that they were not looked after by Scullin when he returned to Australia.

Scullin decided on Australia Day 1931 that he would reappoint Theodore as the country’s Treasurer, even before he had been “cleared” and that he would revisit the Premiers’ Plan, in the making of which Fenton and Lyons were closely associated. [Theodore had toyed with reflationary measures. It is important to note that the “Premiers’ Plan”, the remedies agreed to by the Commonwealth and most of the state premiers, inspired by the country’s leading economists, was never a static set of measures or recommendations. As the initial cuts in wages and accompanying deflation hit hard, more liberal, reflationary measures, including devaluation of the Australian currency were devised. There was creative experimentation in Australia getting out of the contracting of its economy, especially after the fall of the Scullin administration.]

Throughout 1931, the Scullin government floundered with competing economic ideas vying for attention and favoritism. The prevailing wisdom initially was to deflate the economy in a period when there was already a collapse in the terms of trade. I do not think Scullin had much of an idea of what to do as prime minister in this period. Therefore, this idea of the man who failed even at failure seemed to be vindicated by the way that he handled the Great Depression challenges.

Yet, Scullin’s great achievement, in my view, was to prevent the Labor Party being taken over by Jack Lang, the ruthless, demagogic, “leader for life” of the NSW Labor Party, which formally broke away from federal Labor early in 1931. The Lang, anti-Premiers’ Plan, called for repudiation of government debts. There was a sinister, dark side to Lang’s rhetoric.

Despite the fissures in the Labor Party, with sizable parts of its membership all over the country quitting in disillusionment, defecting left and right or to Lang, Scullin soldiered on, as Opposition Leader, 1932 to 1935. He kept what was left of Labor united enough to prevent Lang seizing control of the party. Note that Lang’s supporters in the House of Representatives moved to a vote of no confidence in the government in November 1931. They succeeded, with Lyons relishing the opportunity for an election. As mentioned, in December Scullin and Labor were completely crushed, Labor winning just 14 seats in that result. Prime Minister Lyons, almost a year after he left the Labor Party, was sworn in as the United Australia Party’s first prime minister in January 1932.

Subsequently, Scullin remained a member of parliament for 18 years. Probably his greatest claim to fame thereafter was to be a great support to Curtin and to Chifley. When Curtin became prime minister, Scullin had an office in between Curtin and Chifley, the treasurer. Scullin was the great confidante of both. Scullin also participated in the caucus vote in 1942 over conscription – which Curtin proposed with Calwell opposing conscription of any kind – to allow Australian conscripts to fight in the “southwest Pacific”. The debate was whether we should conscript Australian soldiers to fight in the defence of Australia, given the Japanese invasions to the north, and to push back the Japanese. Scullin helped Curtin and Chifley win the day.

My conclusion about Scullin is that his period as prime minister was tragic. Yet, some of his ideas came to influence Curtin and Chifley. Especially, he played a major role in the changes to tax collection during the war when the Commonwealth took over personal income tax collection. He played a major role in the stability of the Curtin and Chifley governments. He lived a life of purpose. Although he demanded of government great things, he thought the enemy was those who showed indifference and apathy in the face of hardship and disadvantage. Erected over his grave in Melbourne cemetery, where he was buried in 1953, is a tall granite Celtic cross. Emblazoned on the stonework are Scullin’s words: “Justice and humanity demand interference whenever the weak are being crushed by the strong.” In his interesting and to some degree chaotic career, you can see that his message to posterity is that Labor’s historic mission is to civilise capitalism, to fight injustice. That is what he stood for and what his life represents.