AUSTRALIAN LABOUR

Nelson Evening Mail, Volume LXIX, 29 January 1936, Page 7

AUSTRALIAN LABOUR

RIFTS IN THE PARTY MONETARY REFORM INTEREST IN DOMINION Will Mr Savage be able to hold his 52 followers together and avoid a split on monetary policy, liko that which defeated the Australian Federal Labour Party in 1931? The question is propounded in a recent paragraph in tho Sydney “Bulletin,” which, like other Australian papers of all political colours, takes a keen interest in the rise of New Zealand Labour to power. The “Bulletin” quotes a remark made at Napier just before Christmas by the Minister of Public Works, the Hon. It. Semple: “The people will have to receive the benefit of the credit of the nation. That is a big job, making tor a revolutionary change m .the monetary system.” Its comment is: There is 'now one Parliamentary Labour Party, with 53 members in a House of 80. Maoriland is already wagering that before long- there will be at least two. Australian Labour had a majority relatively as great at the end of 1929. Within 18 months it had split hopelessly on ‘reform of the monetary system.’ ”

FACING THE DEPRESSION The fall of the Scullin Government in 1931 is worth recalling, although it must be remembered that the disputes which caused its downfall occurred at the depth of the depression and in circumstances which are not likely to be found in New Zealand during a period of.recovery. Mr Scullin took office in' October, 1929, with a party strength of 43 in a House of 76. As the next year progressed it was evident that the Commonwealth would have not only to meet a heavy fall in world prices, but also to stop' the drift of public finance and balance its Budget. At the invitation of the Government, Sir Otto Niemeyer visited Australia on behalf of the Bank of England and conferred with representatives of the Commonwealth and the States. The result was. the “Premiers’ Plan,” whereby all tne: Governments pledged themselves to balance their 1930-31 Budgets and generally to put their houses in order.. The Australian Labour Party, however, rejected the plan. Its caucus propounded another, the cardinal feature of which was “the nationalising of credit.” The Commonwealth Bank was to be the instrument for effecting this, and the purpose was the use of Australia’s credit to stimulate industry and liquidate loans.

THE RISE OF MR LANG Mr J. A. Lyons, who was ActingTreasurer in Mr Scullin’s absence at the Imperial Conference, and Mr J. E. Fenton, the Acting-Prime Minister, told the caucus that the proposals were futile, but without avail. In the end Mr Lyons ignored the decision and went on with his own Budget measures. The action taken by the caucus was mainly due to the rise of Mr J. T. Lang’s extremist party in New South Wales, culminating in its success at the State elections in November. In January, 1931, the caucus demanded the reinstatement as Treasurer, of Mr E. G. Theodore, who had resigned the previous July after the judicial decision, upon the Mungana mining leases. Mr Lyons and Mr Fenton, Minister of Trade and Customs, thereupon resigned and began the movement which led to the formation of the United Australia Party. Mr Scullin reconstructed his Cabinet, with Mr Theodore as Treasurer, and tho Government launched a series of, elaborate schemes to meet the financial crisis. These included a proposad to restore Australian currency to the 1929 level, inci’ease wholesale prices by .30 per cent, and maintain money wages. THE REPUDIATION PLAN Not satisfied with this, Mr Lang proposed to the Premiers’ Conference the suspension of interest payments to British bondholders until Britain dealt with Australian oversea debt “in the same manner as she settled her own foreign debts with the United States.” He also proposed that the gold standard be abandoned in favour of a currency “based upon the wealth which Australia can produce in the primary and _ secondary industries.” The repudiation plan was condemned by all the other Premiers and by Mr Theodore, 1 and some months later the - Commonwealth Government found itself obliged to rescue New South Wales from, tho effects of an attempt bv Mr Lang to ap-nlv the policy on his own account. j Messrs T.vons and Fenton joined the National leaders in opposing’ •’’VPr ;Theodore’s financial proposals, ywhihh many Australians reaavded as dangerous. In Mav the United , Australia* 1 Party "ms formed .asja consolidated Opposition. ( Mr Scullin saw that the country was turning against him and tried +o cqmnromise .with' the Onnosition, but his overtures were rejected. riFFFCTTON AND DEFEAT

Tn ill" end. the .Government was def°at,p‘l through the. defection of MV.-.T. A; Boa'lev. a Langite. who had been denrived of hi= novtfolio in the reconstruction. . Mr Beasley brought forward a. motion to appoint a Royal Commission to investigate certain charges against Mr Tlmodore. Tt was supported hv four other Labour members and the whole Opposition, and was carried by five votes. Mr Sen Bin thereupon resigned. In the election that followed the voters showed that thev would not have “Langism” at any price. Mr Lyons and his colleagues of the Coalition secured 53 seats. Mr Seullin’s followers 13. and Mr Beaslev’s Langites nine only. Tt was described hv a. Labour leader as “one of the biggest landslides in Labour’s history.”