LABOUR IN AUSTRALIA.

New Zealand Herald, Volume LXVIII, Issue 20766, 8 January 1931, Page 12

LABOUR IN AUSTRALIA.

DISSENSIONS IN PARTY.

DESIRES OF EXTREMISTS. TROUBLE FOR MR. SCULLIN. [from our own correspondent.] SYDNEY, a.m. 2. Plenty of trouble awaits the return of tho Prime Minister, Mr. Scullin, from tho Imperial Conference; in fact, it is said that ono of tho biggest storms in the history of tho movement is developing. The aim of a section of the Federal Labour Party—that section which is allied to the militant industrial movement—is to consuro Mr. Scullin and, if possible, remove hint from his position and replace him with a man more to their liking and one who would be more likely to do as he is told. Other Ministers havo been marked for slaughter, including tho actingTreasurer, Mr. Lyons, tho acting-Primo Minister, Mr. Fcnton, and the assistantMinister of Works, Senator Barnes. Consequently much significance is attached to a special conference of Labour mombers of both Houses which will bo held in Sydney before the return of Mr. Scullin. At this conference plans will be completed for a Com mon wealth-wide move against Mr. Scullin.

Thero is still sharp division in the Federal Parliamentary Labour Party between a section of tho Cabinet that is not prepared to risk tho ch'aos of unlimited inflation and the members-of tho caucus who, whatever their motives, are prepared to flood tho country with banknotes. Ono Labour member stated in Parliament that ho would bo prepared to flood the country with credit to tho extent of a thousand million. That may have been a figurative expression, but undoubtedly there is a section of tho caucus which, encouraged by men outside Parliament who believo that the banks are not doing all they could to meet tho crisis, would set the'printing presses going and produce artificial currency on a scale that has brought disaster to many another country. Mr. Theodore as a Factor. Another factor in tho Federal position is that tho supporters of Mr. Theodore, who resigned the office of Treasurer following tho report of the Queensland Royal Commission, are anxious to restore him to authority, and possibly make him the Prime Minister. It is significant that supporters of Mr. Theodore at tho Sydney Trades Hall, where most of the plots are hutched, havo been instrumental in carrying certain resolutions attacking both Mr. Lyons and Mr. Scullin during tho past two months.

Tho personal success of Mr. Lyons in the flotation of the £28,000,000 loan ha 3 brought him many friends among the saner elements of the unions and Labour leagues, and lias even strengthened his supporters in the Labour Party itself. It is fairly certain that but for tho fighting spirit evinced by Mr. Lyons at recent meetings of tha Federal Labour caucus a much, stronger demand would have been made for the reconstruction of the Ministry.

Some surprise has been expressed in Labour circles that Mr. Theodore should bo found among the opponents of the Cabinet's policy, because the Federal Budget which has led to so much criticism among the militants was actually prepared by Mr. Theodore before he vacated office. Mr. Lyons' policy in favour of the financial agreement that was reached by the Premiers in Melbourne has also been subjected to attacks by the Federal caucus. This agreement was adopted by the Prime Minister before his departure for England. For that reason the action of the militants in making Mr. Lyons the target for attacks is remarkable, to say the least of it. Militants and Moderates. All this makes it clear that the attacks aro aimed at Mr. Scullin, as well as Mr. Lyons, and tho moderate element is anxious that there should be what the Americans would call .a. " show down." It is certain that if the militants succeed in their campaign against the Cabinet it will have far-reaching effects on the future, not only of the party, but of Australia itself. With tho militants at tho head of affairs there would be a policy of " socialisation of credits " which, put more bluntly, means inflation, and there would follow a trial of strength between the Cabinet and the banks.

Until the Labour Party succeeds in obtaining a majority in the Senate—it would have to force a double dissolution and then" go before the electors—the banks will hold the winning hand. Existing legislation is not sufficient for the Federal Cabinet to force even the Commonwealth Bank to do something which the directors would oppose. The fate of the Labour Party in Australia is as much in the balance now as it was when the party divided over the conscription issue.