The Online Library of Liberty

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• United States Prefatory Note
• Chapter XXXVIII: The Beginnings of Democracy In North America
• Chapter XXXIX: The Frame of Government : State, Local, and Federal Constitutions
• Chapter Xl: the Party System
• Chapter Xli: the Actual Working of the National and State Governments
• Chapter Xlii: the State Governments In Their Working
• Chapter Xliii: the Judiciary and Civil Order
• Chapter Xliv: Public Opinion
• Chapter Xlv: Recent Reforming Movements
• Australia
• Chapter Xlvi: Australian History and Frame of Government
• Chapter Xlvii: Australian Legislatures and Executives
• Chapter Xlviii: the Executive and the Civil Service
• Chapter Xlix: Australian Parties and Policies
• Chapter L: Questions Now Before the Australian People
• Chapter Li: Labour Policies and Proposals
• Chapter Lii: Characteristics of Australian Democracy
• New Zealand
• Chaptee Liii: the Country and Its First Half Century of History
• Chapter Liv: Richard Seddon and His Policies
• Chapter Lv: Compuisoby Aebiteation In Tbade Disputes
• Chapter Lvi: the Working of the Government
• Chapter Lvii: Results of Democratic Government
• Part Iii
• Chapter Lviii: the Decline of Legislatures
• Chapter Lix: the Pathology of Legislatures
• Chapter Lx: the Executive In a Democracy
• Chapter Lxi: Democracy and Foreign Policy 1
• Chapter Lxii: the Judiciary
• Chapter Lxiii: Checks and Balances
• Chapter Lxiv: Second Chambers
• Chapter Lxv: Direct Legislation By the People
• Chapter Lxvi: the Relation of Central to Local Government
• Chapter Lxvii: Comparison of the Six Democratic Governments Examined
• Chapter Lxviii: Types of Democratic Government
• Chapter Lxix: the Money Power In Politics
• Chapter Lxx: Responsibility
• Chapter Lxxi: Democracy and the Backward Races
• Chapter Lxxii: the Relation of Democracy to Letters and Arts
• Chapter Lxxiii: the Results Democratic Government Has Given
• Chapter Lxxiv: Democracy Compared With Other Forms of Government
• Chapter Lxxv: Oligarchies Within Democracies
• Chapter Lxxvi: Leadership In a Democracy
• Chapter Lxxvii: the Later Phases of Democracy
• Chapter Lxxviii: Present Tendencies In Democracies
• Chapter Lxxix: Democracy and the Communist State
• Chapter Lxxx: the Future of Democracy

CHAPTER LI

labour policies and proposals

The Land Question

Omitting the earlier stages of the tangled history of Land legislation in Australia, let us regard the later developments it has taken in the hands of the Labour party.

Under the short-sighted policy that prevailed when Australia was being first settled, and for many years thereafter, much of the best land was suffered to pass into the hands of comparatively few owners. So far as regards land fit only for sheep, the existence of large estates may be justified by the fact that the small sheep-masters are less fitted to stand the risks of occasional dry seasons than are the large proprietors. On a small estate nearly all of a flock may perish by drought, with ruin to the owner, whereas the large pastoralist may pull through, not only because he has more capital accumulated from good years to fall back upon, but also because there is almost sure to be water available, even in droughts, at some point on his sheep-run.1 This reason, however, does not apply to lands fit for dairy-fanning or for tillage, and the holders of such small farms are few in proportion to the land available. To extend their number and facilitate the acquisition of land by men of moderate means is therefore an object desirable on non-controversial economic and social grounds.

In seeking this object, recent legislation has proceeded chiefly by two methods. One is the imposition of a Land Tax, progressive in proportion to the quantity, or rather to the value, of land held.2 This taxation, though in some States either proposed or not resisted by the Liberal leaders, has in the main been due to the Labour party. The large landowners have usually opposed it, but so far they have proved able to bear it. The aim of bringing more land into the market has, however, been only to a slight extent attained.

The other method is that of compulsory acquisition by the State of land suitable for sheep or for tillage, to be resold to small purchasers. This process, applied for some time past, but only on a small scale, has proved expensive, for purchase by the State tends to raise prices, and the price the State obtains on a resale may be less than that which it has paid. It has happened that the State, while purchasing land with a view to re-sale, is at the same time selling some of the remaining Crown lands for prices lower than those at which it has been purchasing land of like quality.

Other expedients have also been adopted. Sometimes the land is leased on a system whereby the tenant becomes owner after he has paid the price by instalments spread over a number of years. Sometimes long leases, perhaps virtually perpetual, are granted either at a fixed rent or with provisions for periodical revaluations, thus giving an opportunity for raising the rent (if the value has risen), so as to secure for the State the so-called “unearned increment.” The experiment has also been tried of perpetual leases, resembling what is called in Scotland a “feu,” whereby the tenant holds for ever, at a fixed rent, but cannot assign his interest without the consent of the State, which therefore can count upon having a solvent working tenant.1 Failure to pay the rent of course forfeits the lease.

The general result of all these plans has fallen short of the needs of the case and the expectations formed. Australia ought to have a much larger element of persons owning and living off the land, such an element as gives social stability to the United States and Canada. It may be added that while the Socialist party disapprove of permanent individual property in land, the Single Taxers, not so numerous here as in Western America, consistently condemn the exemption from taxation of any piece of land, however small.

The law relating to the distribution and tenure of the public land has been since the dawn of history one of the most difficult problems which economists and politicians have had to deal with. It was so all through the life of the Roman Republic. Every nation has committed so many errors that none is entitled to reproach others for their failures. But there is something peculiarly regrettable in seeing the vast vacant lands of a new continent so dealt with as to cause widespread discontent and involve, if not the waste, yet the unduly slow development of the wealth Nature has bestowed upon a new nation.

Financial Policy

The long struggle between Free Trade and Protection was for the time closed by the adoption of the Federal Constitution and the predominance of the Protectionist party in the Commonwealth Parliament. This result was partly due to the need for raising money for Commonwealth purposes by indirect taxation; and the policy has received further help from the steady raising of wages by the Wages Boards and Industrial Arbitration Courts, to be presently described. As wages went on rising, the manufacturers complained they could no longer make a fair profit unless import duties were also raised to enable them to exclude foreign competition. The workmen, already disposed to believe that constant employment and good wages depended on protective tariffs, accepted this view, so a plan was devised under which tariffs, prices, and wages were all to rise together as parts of a comprehensive scheme. This plan has received the name of the New Protection.

Among the Acts passed to give effect to this idea, one, the Excise Tariff Act of 1906, imposed upon agricultural machinery manufactured in Australia one half of the duty chargeable upon similar machinery imported, but provided for the exemption from this duty of such home-made machinery as had been manufactured under conditions either declared to be reasonable by a resolution of both Houses of the legislature, or approved by the President of the Commonwealth Arbitration Court.2 This Act was, however, pronounced invalid by a decision of the High Court holding that the matter belonged to the States and not to the Commonwealth. But the principles of the New Protection are being to some extent carried out in practice. When wages are raised by a Board or the Court, the manufacturer insists that in order to enable him to pay the higher wage he must be helped by a higher scale of duties. His demand finds favour and the import duty is screwed up accordingly. This adjustment of tariffs to wages in the joint interest of manufacturer and employee has been represented as an attempt to fix the prices at which goods are to be sold, but some of its defenders declare it to be no more than a proper effort to ascertain to just what point duties must be raised in order to enable the manufacturer to obtain a reasonable profit while he pays a reasonable wage. It seems to be no illegitimate development of Protectionist principles.

Europeans may ask why consumers do not complain when they find that in the effort to benefit the working class the price of articles is being constantly raised upon the workers themselves, who are the largest class of consumers and the class on which indirect taxation chiefly presses. The answer seems to be that the consumer, who is also, as a worker, a producer, feels, in Australia as in the United States, less interest in what he pays as a consumer than in what he receives as a producer, not because he gains more, for he probably loses more than he gains, but because wages are something direct and palpable, paid into his hand, whereas the higher cost of commodities, being diffused over many small transactions, is not directly felt, and seldom traced to its tariff source. It is nevertheless argued with some force that the New Protection ought to protect the consumer also, and that the fixing of the prices at which protected products should be sold would be a logical extension of the doctrine, if this proved practically workable, and could be done under the Federal Constitution.1

State aid to the producer is in Australia given also in the form of bounties upon the products of some industries. “The Bounties Act 1907, the Manufacturers Encouragement Act 1908, and the Shale Oil Bounties Act 1910, in providing for the encouragement of certain industries, provide also for the refusal or reduction of a bounty if the production of a commodity is not accompanied by the payment to the workers employed in that production of a fair and reasonable rate of wage.” 2

The most conspicuous instance of bounties was the large subvention paid to the sugar planters of Queensland for the maintenance of that industry, now that in pursuance of the “White Australia policy” they are forbidden to use the cheap labour of aborigines from the Pacific Islands. In response to this demand not only was the duty on imported sugar raised, but a large bounty also was granted.3 Given the will to maintain a “hothouse industry” and the resolve to have neither Kanaka labour nor that of immigrants invited from Southern Europe (who would, indeed, if they came, soon insist on an Australian rate of wages), this was the obvious course that remained. Bounties on the iron and kerosene oil industries are given on the ground that other wise they would go to the ground. Kerosene was an article so generally consumed that it would have been unpopular to raise the price, so the solitary producing company was encouraged to go on producing by the gift of 2d. a gallon up to £50,000, as otherwise foreign competition would have stopped local production.1

Legislation on Labour Conditions

The policy of safeguarding by law the health and comfort of persons employed in factories and workshops, and of limiting the hours of labour for women, with limits of hours and age for young persons, was adopted from Great Britain before the advent of the Labour party, and needs no special notice here. The eight hours' day for adult males was established by custom, though in some States laws also deal with these matters, prescribing holidays and fixing the hours at which shops must be closed. The extension of legal compulsion to working hours in such occupations as those of seamen and household or farm servants, and to places of public entertainment, has raised difficulties. A guest arriving in the later part of the evening in any hotel, except a large one where several shifts of servants are kept, finds it hard to get served. The restriction of employees to the special kind of work covered by their trade union makes it illegal for a farm servant to groom a horse.

In some States a minimum wage has been fixed by statute.2 No great opposition was made, even by those who objected to the principle, because the argument that everybody ought to be paid enough to support a family in tolerable comfort was deemed irresistible.

Trade Disputes and the Fixing of Wages

The significant feature of the Australian methods of dealing with these questions, now of the greatest gravity in all industrial countries, is that they apply compulsion to disputes which everywhere else except in New Zealand and since 1917 in Norway (possibly now in other countries also) are left to be settled by a trial of strength between the parties.

The Treatment of Industrial Disputes.—Few countries had suffered more from strikes during the later years of the nineteenth century than had Australia. The frequent defeats of the striking Unions, the losses resulting to both parties, the accompanying disorders, and the ill-feeling which strikes and lock-outs left behind, together with the failure of methods of conciliation, and finally the example of New Zealand, disposed the wage-earners to advocate the principle of compulsory arbitration as a means of raising wages preferable to the strike. After much discussion, two methods were devised, Wages Boards for fixing the rate of wages and hours of work in particular industries, and Courts of Conciliation and Arbitration for investigating and determining particular disputes between employers and employed.

A Wages Board is, in the five States wherein it exists, a body consisting of an equal number of persons chosen by the employers in any particular industry, and of persons chosen by the workers in the same industry, the Chairman, who must not be connected with the industry, being either elected by the other members or appointed by the State Government. A Board may be appointed either by the Ministry or (in the case of a new industry) by the Governor in Council. There need not be any dispute either pending or in immediate prospect. Once established, the Board goes on indefinitely, deals with disputes, in the particular industry, as they arise, and has power to review its own decisions. Its function is to fix, for the particular trade it has been appointed to deal with, both wages and hours of labour, but it has no power to determine other questions that may be in dispute. Its decisions apply to the whole of the industry throughout the State, binding the employers to pay and the workmen to work as the Board prescribes. In most States the enforcement of the awards is entrusted to the Factories Department in the State Government.

Courts of Conciliation and Arbitration, also created by statute, exist in New South Wales and West Australia. More important, however, is the Commonwealth Court, established by an Act of 1904, which has been subsequently amended. The chief differences between these Courts and the Wages Boards is that the former are set in motion only by an existing dispute, and deal with that dispute only, whether it covers a single industry or more than one, not (as do the Wages Boards) with the whole body of employers and employed in any given industry. The Commonwealth Court has jurisdiction in those disputes only which extend beyond the limits of a single State. It is presided over by a judge of the High Court, who may be assisted by assessors. Its action is usually invoked by a complaint proceeding either from a trade union on the one side, or an employer or group of employers on the other, but it may also be set in motion by a reference from a State industrial authority, or wherever the Registrar certifies the existence of a dispute. The proceedings, being in the nature of litigation, are judicially handled, but professional lawyers are not admitted to argue unless by consent of both parties, a consent not often given by the Unions.1 The powers of the Court extend not only to wages and hours, but to all conditions of labour and all questions in dispute, including the employment of Union labour only, or a preference for such labour, or the dismissal of employees. Though the award may not legally cover the whole of an industry in which the dispute has arisen, for some employers may not have in their service members of the Union which has intituted the proceedings, still the number of respondent employers may be so large (in one case it was 200) as to affect the vast majority, and so become virtually a rule for the trade. Very often the action of the Court is able to bring about a compromise, which can then be made, by consent, an award binding the parties.

One of the questions most frequently brought before the Court is that of a minimum wage, and the chief difficulty that had to be faced at the outset was that of finding what that minimum should be. The principle upon which the Commonwealth Court has proceeded is that of “securing to the employee a wage sufficient for the essentials of human existence.”

The tendency both of the Wages Boards and of the Courts has been to raise wages, but as prices have risen from other causes, it is doubtful whether legal regulation has done more than regularize and somewhat accelerate the process, and though an increase in wages need not necessarily result in increased prices, still in many industries the employers have been able (through trade associations and by other means) to pass on to consumers a considerable proportion of the increased amount of their wages bills. The suspicion that in this way part of the benefit of increased wages is lost naturally suggests to the wage-earners that what they are gaining is a nominal rather than a real increase.2

There is much difference of opinion in Australia as to the comparative merits of Wages Boards and Courts of Arbitration. Some prefer the former, because they cover the whole of a trade and are composed of experts; and it is alleged that as they come into being before a dispute has arisen, they can anticipate disputes and settle points with less friction than when those points are already in sharp issue. On the other hand, the Courts have the advantage of a wider range, covering every kind of controversy; they can proceed upon general principles, and the judge soon acquires experience in the questions that recur. Moreover, where a dispute extends beyond one State, some authority higher than that of a State is needed.

Few allegations of prejudice or unfairness have been charged against either the Courts or the Boards. Their wish to bring about peace is admitted. The Commonwealth Judge, whose decisions have been most closely watched and frequently canvassed, has generally, though not quite invariably, ordered a rise in wages, but this action seems to have had, no doubt with exceptions, the support of public opinion, and it must be remembered that the cost of living had even before the Great War been rising. Though it was at first the Unions that invoked the Court, the employers having become less suspicious than they were, sometimes set the Court in motion. The most humane and liberal among them often welcome a decision which, when it applies practically to the whole trade, screws up the men of harder hearts or more niggling minds to the level which these better men hold to be wholesome for themselves and the community. The employing class taken generally would rather have been left without the Court, but do not ask its abolition; and the growth of prosperity up to 1914 showed that the system of compulsory wage-fixing had not caused an industrial set-back.1

As in Europe and in America the bulk both of employers and of employees have hitherto agreed in deprecating recourse to compulsion for the settlement of labour disputes, a word may be said as to the reasons which enabled Australian workmen to enlist public opinion in its favour. Europeans deem it open to three chief objections. One is the interference with freedom of contract. Australians care nothing for that. They would call it a theoretical objection. The workers thought that compulsion would help them, and it did help them, for though wages would doubtless have risen anyhow, much strife might have been needed to secure the rise.2 A second is that the matter is not strictly judicial, but rather for the discretion of the Court (an argument like that used against the jurisdiction of the English Chancellor in the sixteenth century), and that as there is no general rule to guide the Court, different judges may apply different principles. And, thirdly, it is urged — this point being strongly pressed by Australian employers — that the method operates unequally upon the two parties to a dispute.1 The employer can be compelled to pay certain wages so long as he keeps his factory open, and he can escape liability only by closing it, whereas the individual workman cannot be compelled to work. The power given to the Court to meet this difficulty by fining the Union has not proved effective. In the earlier days, the awards were usually obeyed, but it is to be remembered that they have almost always prescribed a rise in wages. The gravest test will come when, in less prosperous times, workmen are denied some increase they ask for, or employers begin to ask for a reduction. In 1912 the system was working more smoothly than had been predicted. Recent accounts are less satisfactory. The Court still does excellent work in many of the main disputes; but it is alleged that when a strike has been compromised by an award conceding part of what was asked, another strike soon follows to obtain the rest of the demand, and that this process often repeated produces constant unrest. The frequent delays in the proceedings of the Wages Boards, the inevitable technicality of some of the rulings in the Courts, give rise to irritation. Strikes have not ceased, and some have attained alarming dimensions. In 1916 there were in various places 506 separate strikes, in one of which the (then Labour) Government surrendered, through the agency of a Commission, to the Unions in a strike entered on in defiance of the Act providing for adjudication by the Court. This gave a shock to the authority of the law. The Unions have sought to widen the range of the Commonwealth Court by so amending the Constitution as to give it jurisdiction over all disputes arising anywhere in the country. On the other hand, that extreme section of the wage-earners, sometimes described as Syndicalists, who call themselves the Industrial Workers of the World (I.W.W.), denounce all peaceful methods for settling trade disputes, since they desire to overset by general strikes the whole industrial, or so-called “capitalistic,” system as it now exists.1

A review of the compulsory system as worked during the last fifteen years points to the conclusion that its failure to prevent strikes has been due to two causes, first, that as there could not be finality in the awards, the temptation to the Union leaders to make fresh demands soon after a rise in wages had been secured kept up irritation and uncertainty, and secondly that there was no means of compelling the wage-earners to comply with the awards. An eminent Australian of long experience has written: “The introduction of penalties in the form either of imprisonment or of fine, is an illusory protection. If the organizations concerned are reasonable and imbued with a spirit of obedience to the spirit and letter of the Law, neither imprisonment nor any other sanction is necessary. If the organization is strong, aggressive, and unreasonable, the threat of fine or imprisonment will not be a deterrent.” 2

One result of the legal regulation of wages, and of the attempts at a legal regulation of prices also, has been to bring the employers in every industry into closer relations with one another. They are made respondents together in proceedings taken by Unions to obtain higher wages or better conditions. They are forced into frequent conferences and combinations, and thus a sense of class interest is strengthened, and occasion given for those “friendly agreements” and “honourable understandings” in respect of prices and distribution which excite much displeasure in Labour circles. Those of the Labour leaders, however, who look forward to the nationalization of all property and all industries, probably regard with satisfaction whatever makes against the old individualism, even if in the meantime it induces those “combines” which in Australia, as in America, are objects of public aversion. The completeness of the organizations on both sides makes for strife, just as the possession of great armaments disposes nations to war. As employers leagued together harden themselves for defence, so trade union secretaries feel that they must justify their existence by making fresh demands: young men come into office in the Unions, and throw the militant Australian spirit into each fresh contest. Unceasing controversies create an atmosphere of disquiet and suspicion.

Want of space prevents me from pursuing this subject here, but a further discussion of the working of a similar system will be found in the chapter on New Zealand. Though in both countries the application of compulsion illustrates the tendency of the Labour party to extend the power of the State into new fields, a disposition common to all who think they can use that power for their own purposes, it must be understood that the public opinion of Australia as a whole, alarmed by the mischief which strikes were doing, and sympathizing with the desire of the wage-earners for a larger share of the products of labour, was generally favourable to the experiment. In 1919, though it had not satisfied the hopes it had at first raised, there were only two sets of extremists who would abolish it, the most rigid employers who dislike any interference with business, and the revolutionary Communists who wish to make an end of capitalism either by force of arms or by stopping the whole machinery of production and compelling capitalist governments to surrender.1

Governmental Industries

The entrance of the State into the field of industry as an employer has been supported by various arguments, some of them but distantly related to the real motives. Can it not by appropriating to itself the profits on vast national undertakings which would otherwise be absorbed by the rich, and by taking to itself the control of the making or selling of the articles in which a monopoly is being created, relieve the people from the pressure of monopolies or “trusts” (to use the American term), benefit the workers by providing employment when work is scarce, and by paying good wages, set an example other employers will have to follow? To those who cherish Collectivist ideals, it seems to provide the easiest, because the least startling, approach to that absorption by the community of all the means of production and distribution which is the ultimate goal of their hopes.

It is not, however, to any Collectivist views that the State ownership of Australian railways is to be ascribed. That was the natural result of the economic conditions which existed when lines began to be built. Nothing could be expected from private enterprise, for there was little capital in the country, nor was it then easy for private persons to obtain large loans in England, so the duty devolved on a public authority of providing directly, or by way of subsidy, those means of communication which were indispensable to the development of the country. The States assumed the duty. 21,181 miles of government lines were open for general traffic in 1918, besides 1241 miles similarly open but under private control, four-fifths of which were in Queensland, West Australia, and Tasmania.1 For a long time the railway administration remained in the hands of Ministries and the general managers they appointed, but political interference and favouritism were at last found so harmful that in each State control was transferred to Commissioners appointed by the Governor in Council (i.e. the Ministry). In New South Wales and Victoria there are three Commissioners, in the other States one only.

In every State the Minister for railways still directs legislation and answers questions in the legislature; otherwise the Commissioners have a free hand, though ministers can dictate the general policy to be followed, being in this respect subject to an embarrassing parliamentary criticism, for every member can bring forward any grievance a constituent, most frequently an employee, puts before him, and the unceasing pressure for higher wages is hard to resist. Railway construction is in some States assigned to the Commission, in others to the Public Works Department. Except in respect of the inconveniences arising from the existence of five different gauges, the railway system is worked with fair efficiency. Management is honest and the traffic grows. The general result shows a very small balance of profit after deducting from earnings the cost attributable to construction, equipment, loans, and working expenses.

Public management has its drawbacks when politics come in, as Australia has seen before and may see again. But there are also evils incident to the private ownership of those great lines of transportation which control the commerce of a country and hold in their hands the fortunes of large districts. From these evils the United States and Canada, and (in a less degree) France also, have suffered.

The undertaking by the State of industries usually left to private enterprise has been due to various causes. Besides the desire to secure good conditions of labour for the workers, there has been put forward the need for checking monopolies. This was made the ground for starting Government brick-works, when it was alleged that a ring of brick-makers was trying to secure exorbitant prices. So in West Australia the Government undertook the transport of beef to defeat the plans attributed to a “Beef Ring,” and started a line of steamers to resist a Shipping Combine. The New South Wales Government recently opened a mine at Lithgow.1 Some coal-mines have been acquired because the industry was deemed to be of national importance, and had frequently suffered from strikes, the miners being largely influenced by extremist propaganda. Australian opinion on the subject is still in a fluid state. While cautious men confine themselves to proposing to regulate by law industries in which sweating exists or monopolies threaten public welfare, the more advanced school seeks the extension of government action as a step towards Communism, and has carried in gatherings of the Labour party a demand for the “nationalization of basic industries.” The same issues that perplex Europe are being pondered in Australia.

A very high and universally respected Australian authority wrote to me as follows: “With regard to those great services which stand out as fundamentals of the life of a civilized community, a time of comparative quiet should be chosen for proposing special legislation. Some means of direct control, by the Board of Trade or other body in which employers will have a say, of freights, fares, wages, and working conditions will be necessary. If some real and not illusory representation is given to the men, accompanied with powers of continual inspection and publication (if thought desirable) of results, then but not otherwise will it be practicable to carry and enforce provisions making strikes in these services an offence against the law. … The fetish of trade secrecy must not be permitted.”1

It is no less difficult than important to ascertain the actual results of the State assumption of industries. Some sections of State employees certainly gain in having better wages, and all gain in greater security for employment. But what of the community at large? Is the work efficiently done, and done as cheaply as it would be on a system of private employment? My stay in Australia was not long enough to enable me to probe the matter to the bottom, and some of my informants may have been biassed. But such evidence as I obtained went to show that, in proportion to the wages paid, less work was done than private employers obtained. The workers were said to do as little as they well could. “The Government stroke” has passed into a byword. “They dropped the tools the moment the hour came for stopping,” because “the slower the work goes, the more of it remains to be done.” One informant not hostile to the Labour party remarked that the systematic practice of slack working to make every job last long had a bad effect on character, because it prevented men from doing their best. The foreman fears to keep the men up to the mark, or to dismiss them, because they may appeal to their Union, and the Union can influence the member of the Legislature for the district, and he in turn the Executive Government.2 If a Labour Ministry is in power, it cannot resist Labour pressure. Some of my informants declared that these things were notorious in the case of the great irrigation works undertaken by New South Wales and Victoria. Grievances real or fancied are constantly brought up in Parliament, wasting its time and lessening the authority of those who direct the work. When complaints accumulate, a Commission of Enquiry may be appointed, with further expenditure of time and money, and no relief of the disquietude. It is alleged that where Government owns the wharves, the workers, though paid twice as much per ton for loading and unloading as the ordinary market rate, loiter over their work to prolong it.

The Unions, practically controlling the Government whenever a Labour ministry is in power, are both employers and employed, and it is natural that where considerations of State business interest come into opposition with personal and political self-interest, State business interest should go to the wall. Some one has summed up the Labour policy as “more wages for shorter hours: less work, and more amusement.”

The Australian idea seems to be that instead of setting out to get work done and paying wages for it, Government should set out to pay wages and find work as a reason for the payment.

State employment is an easy way towards this goal, and has been accompanied by the virtual acceptance, in some States, of the liability of the Government to find work for persons unemployed. The logical development of this policy will obviously be the absorption by Government of the means of production and distribution, a development contemplated by most of the Labour leaders, though by not very many of the followers, and by a still smaller proportion of those who, though not wage-earners, support the party by their votes, in the hope that it will better their condition. In all progressive or aggressive parties there are some who are hotter, some cooler, some who have clear, others muddled minds, some who fix their eyes on a distant goal and march steadily towards it, others for whom one step at a time is enough. The rank and file of the Labour party are not yet Socialists in the common acceptation of the term, but (to adapt a phrase of Aristotle's) “though they are not Socialists, they do the acts of Socialists.” When a French observer had called them Socialists “sans doctrine,” another answered, “Say rather sans declaration,” but if that phrase suggests that they conceal their views it applies only to a minority. Socialist doctrine may grow, but at present they are divided not only as to aims but as to methods, for a section, stronger by youthful vehemence than by numbers, despises constitutional action, seeking, by frequent strikes and the use of violence in strikes, to overthrow the capitalistic system, while the more moderate elders complain that the recklessness of their young friends retards instead of hastening progress.1

Privileges for Trade Unionists.— Even before the creation of a Labour party it had been a prime aim of the leaders of the working men to strengthen the Trade Unions by drawing into them as many as possible of the workers. This was then desired for the sake of success in strikes, for the employers always fought a strike by bringing in non-Unionist labour (those who are in England called “black-legs” and in Australia “scabs") to take the place of the strikers. After Labour parties in the legislatures arose, there was a further advantage to be expected from the growth of the voting power of the Unions, for they form the basis of the party organization, so efforts were made to prescribe membership of a Union as a condition for Government employment. Another plan was to provide in the awards of Wages Boards and Courts of Arbitration that a preference should be accorded to Union men in the competition for work. This issue, warmly debated when the first Compulsory Arbitration Act was before Parliament in 1904, and again when an amending Act was passed in 1910, was settled by a provision leaving to the Court a discretion to direct that preference should be given to Unionists, “whenever it is necessary for the prevention or settlement of the industrial dispute, or for the maintenance of industrial peace, or for the welfare of society.” It would appear that such awards have been sometimes revised, so as to add, as a condition, that admission to Unions shall be open, as some have been accused of closing their doors against applicants, or of limiting the number of apprentices. A third part of the Labour policy is to restrict to the Unions the right to bring employers before the Arbitration Courts. When the Industrial Peace Act was being discussed in the Queensland Legislature in 1912, it was opposed by the Labour members because it omitted this restriction. The tramway strike of 1911 in Brisbane had arisen from a demand that only Union men should be employed. Though the number of members of the Unions — estimated in 1910 at about one-tenth of the total number of workers — has largely increased under the aforesaid provision for preference and through constant struggles with employers, there are still trades in which they constitute a minority of persons employed.

In 1905 the Commonwealth Ministry of the day, then receiving the support of the Labour party, passed, at its instance, in a Trade Marks Act a section prescribing a so-called “Union Label,” to be affixed to goods wholly manufactured by members of Trade Unions. This section was two years later declared invalid by the High Court, not only because such a label was not a trade-mark in the ordinary sense the term had when the Constitution was enacted, but also because it attempted to extend Federal action beyond the powers granted.

A request was seen in the Federal Labour platform of 1908 which included as a plank, “Arbitration Act amendment to provide for preference to Unionists,” while the Australian “Liberal Union” platform of 1912 contained the two following sections, which seem designed to pledge its members to a different doctrine, viz.: “To maintain the right of all men and women to work and enjoy the fruits of their thrift and industry, and to secure equal opportunities for all to do so,” and “to oppose preference to, or the penalizing of, any section of the community, whether as employers or employees.”

Proposed Labour Amendments to Federal Constitution

There remains another important issue, raised by the Labour party, that of amending the Federal Constitution so as to enlarge the powers of the Commonwealth Government. Two currents of opinion have brought the party to this conclusion and proposal. The first is the desire to extend the jurisdiction of the Arbitration Court to deal with all industrial disputes wherever arising. The second is the wish to enact uniform legislation in the interests of Labour over the whole continent. A third aim is to get rid of the Legislative Councils which are the strongholds of conservatism in the States, and thereby to complete the sovereignty of universal suffrage. Every party, when it finds itself in a majority, desires to use its power drastically, doing all it can while it can, for the mere possession of overwhelming strength is an incitement to put it forth in action.

The Federal Constitution had left to the States legislation relating to commerce, industry, and labour disputes within their respective limits, while authorizing the Commonwealth to regulate foreign and interstate commerce, and to provide for the settlement of Labour disputes extending beyond the frontiers of any one State. When objects which it had been sought to effect by Commonwealth legislation proved unattainable because the laws had been pronounced by the High Court to be ultra vires, the only means of effecting those objects was by amending the Constitution. Thereupon the Labour Government of 1910 brought forward and passed through Parliament two amendments, extending the power of the High Court to deal with Labour disputes wherever arising, authorizing the Commonwealth Parliament to legislate on the conditions of labour and industry generally, including combinations and monopolies, and enabling the Commonwealth to carry on any industry which each House might declare to be the subject of a monopoly. These proposals, rejected by a popular vote in 1911 by a large majority were, when resubmitted in 1914, again rejected by a smaller majority on a larger vote, the difference being possibly in part due to the fact that this second voting coincided with a general election at which the Labour party gained a victory.1 To secure the fair consideration of any alteration of the Constitution, it ought to be put separately before the people. The War having interrupted the further testing of public opinion, proposals for making particular amendments to the Constitution have now passed into the wider question of undertaking a general revision of that instrument, especially for the purpose of readjusting the relations of the Commonwealth to the States. If this task is to be undertaken,— and there seems to be a growing feeling that it has become necessary,— it would be best committed to a Convention specially chosen for the purpose, a plan which American experience commends.

The conditions which ought to determine the allotment of powers between a National Government and State Governments have changed in our time through the swifter means of transportation, and consequent increase in internal trade, and with the growth of huge incorporated companies operating all over a large country. Economically, therefore, there is a case for enlarging Federal powers. But political considerations point the other way, for local needs and conditions require local treatment, and are better understood and dealt with where local public opinion controls the legislature than by a Parliament of the nation. Queensland is to some extent, Western Australia and Tasmania to a greater extent, cut off from the other States, and each has problems not always the same as theirs. Men can show in the local legislature those qualities which fit them for the wider parliamentary arena; experiments in legislation or administration can be tried on a small scale, the other States watching the results and profiting thereby. The same passion does not rage with equal force over a whole country when it is checked by the existence of local divisions, even as in a large lake cut up into smaller patches of water by numerous islands scattered over its surface the waves run less high and subside more quickly than happens where one whole unbroken sheet is swept by a mighty blast. Local legislatures stimulate local political life, and give a variety to political thought: The existence of the States constitutes a certain check on the power of demagogues and the vehemence of any popular impulse. To entrust the destinies of the continent to one parliament and one set of ministers would throw on Australian statesmen a burden they may not yet be able to bear, and involve risks of a hasty action which might imperil the future.

If there is less respect in Australia for the Federal Constitution as a fundamental instrument than existed in the United States from the time of Washingon till the end of last century, this is due not merely to the fact that it is still young, but also to the dominance of issues which are the same all over the country. That which is called in America “States' Rights” sentiment is observable chiefly among the leaders in the State legislatures, who are attached to their local public life with which their own fortunes are bound up, and in men of the richer class, who are moved quite as much by their fear of the power of Labour as by any constitutional considerations. With the masses who have occasionally returned the Labour party to power theoretical and even practical arguments of a constitutional kind carry no weight. Labour policy covers the whole sky. Its leaders desire to take the shortest path to their goal, and “have no use,” as the Americans say, for any checks or restrictions, or, indeed, for any scheme that cuts up political power into fragments.

These remarks are ventured with reference not so much to the aforesaid amendments, which have been dropping into the background, as to the general issue of virtually abolishing the States and giving Australia a Unitary Government like that of New Zealand or Great Britain, an issue raised in the South Australian Labour platform of 1909 under the heading, “Unification of Australian States,” and which may again come to the front, though other objects are more immediately desired by the Labour party.

Labour Policy in Other Constitutional Questions

How far, it will be asked, has the most advanced political thought of Australia moved towards those expedients which radicalism favours in other countries, such as the election of judges, as in most of the American States and in the Swiss cantons, and those methods of direct legislation by the people which are practised in Switzerland and in many American States?

The answer is: Very slightly, because Australian radicalism has not found them necessary. A Queensland Labour Congress (in 1910) passed a resolution demanding “an amendment of the Constitution to deprive the High Court of power to declare unconstitutional bills passed by both Houses of the Federal Parliament,” but it does not appear that Labour men generally are committed to such ideas. The introduction of the Initiative and Referendum found a place on the Federal platform of the Labour party in 1908, and is sometimes referred to by their leaders as desirable, but it was not pushed further after the party gained control of the Federal Parliament. In the United States direct popular voting has been widely adopted, first, because the State Legislatures were distrusted; secondly, because the power of the “party machine” had controlled the action of those bodies and delayed legislation which large sections of opinion desired; thirdly, because the faith in popular sovereignty had become a dogma of almost religious sanctity. None of these causes exists in Australia. The legislatures obey the voters and the ministers obey the legislatures so promptly that the people can obtain what they want without their own direct vote, and this is so conspicuously the case as regards the Labour party that it is hard to see what they could gain, so long as their organization does its work effectively, by exchanging for caucus rule the direct rule of the voters, who might act more independently when acting outside the Organization, refusing to obey its dictation upon issues directly submitted to their own personal judgment. Nevertheless, the march of democratic sentiment may ultimately lead Australia into the American path. There is no feeling of respect for the legislatures to deter her, and every people is liable to be attracted by the suggestion that their power will be best exerted directly by themselves.

[1]The extension of railway communications has been tending to reduce this source of loss, because when water cannot be found for the sheep it has become easier to take the sheep to the nearest water.

[2]Estates below £5000 in value are exempt, and the rate, beginning at one penny in the £ (i.e. 1/480) for estates between that and £18,000, rises thereafter by one half-penny in the £ up to sixpence in the £ on estates of £80,000 or more. An additional one penny in the £ (1/240) is charged on all owners who do not reside in Australia.

There are also progressive income taxes in force, but these are now too common in other countries to require description here. In some States there exist both Federal and State income taxes.

[1]This may be compared to the tenure called in the Roman law Emphyteusis.

[1]Handbook for Australia, p. 468, where a valuable discussion of the whole subject, too long for quotation here, may be found. No proceedings against dumping have in fact been taken. The matter, however simple it may look in principle, proves puzzling in practice.

[2]To leave to Parliament the determination of what were “reasonable conditions” was to impose on it a duty difficult to discharge in an independent and impartial spirit.

[1]What is said in the text about legal enactments regulating trade and labour is to be taken as referring generally to the facts as they stood in 1913, when things were fairly normal. I have not found it possible to keep abreast of the changes, legal and economic, that have come to pass since that year, and conditions were, of course, abnormal during the Great War and for some time afterwards.

[2]Federal Handbook, p. 471.

[3]This has now ceased.

[1]See Turner, First Decade of the Australian Commonwealth, p. 303.

[2]It was originally fixed in New South Wales at four shillings a day, but this was not meant to be necessarily a living wage, that being left to be settled by the Arbitration Courts from time to time. A prominent politician once said that a minimum wage of seven shillings a day was “fixed like the law of gravitation.”

[1]A high authority, head of an Industrial Court, testifies to the great saving of time when lawyers conduct the cases of the parties.

[1]I quote from an instructive article in the Harvard Law Review for November 1915 by the President of the Court (Mr. Justice Higgins), in which the principles on which the Court acts, the mode of applying those principles, and the results so far attained, are set forth with singular clearness and fairness. Those who are interested in the subject are recommended to consult this article, and a later one by him in the same Review (volume for 1919).

[2]“While the percentage of wages paid on the total value of the output of manufacturing industries increased between 1908 and 1912 from 19.08 to 21 per cent, the percentage available for interest, depreciation, other charges, and profit also increased uniformly from 16.5 in 1908 to 17.9 in 1911, though it decreased slightly (to 17.2) in the following year, showing that, in spite of the increased wages, the percentage available for interest, etc., had increased. Available evidence, therefore, indicates that the effect of the legislative control of wages and conditions of labour has been of benefit both to wage-earners and employers."— Federal Handbook (ut supra), p. 478.

[1]A well-informed Australian friend, not belonging to the Labour party, wrote to me in 1912: “Whatever may be said in detraction of the system of legal regulation of wages, it is undeniable that at no time in the history of Australia has the general level of return on capital been higher than it is at present or has been during the last few years.”

[2]A Labour organ wrote in 1914: “Compulsory arbitration, in Labour's conception of it, is an instrument of progress, a means for bringing about, without violent dislocations of the social fabric, a more equal distribution of wealth.”

[1]See as to this Harvard Laic Review (ut supra), pp. 33 and 37.

[1]In 1895, when in charge of a measure brought into Parliament to deal with the matter, I found British working men just as generally opposed to a compulsory settlement of trade disputes as were employers, and this seems to be still the attitude of both parties.

[2]Australia, Problems and Prospects (published in 1919), p. 36, by Sir Charles Wade (now a Judge of the Supreme Court of New South Wales).

[1]As these pages are passing through the press cablegrams from Australia state that a measure is pending in the Commonwealth Parliament for materially altering the constitution and functions of the Arbitration Court, and creating another body for settling disputes.

[1]Between 1912 and 1917 a trans-Australian railway 1051 miles long, connecting South Australia with Western Australia through a region largely uninhabited, was constructed.

[1]In 1917 a Fire Insurance Office was set up by the Labour Government of Queensland, and employers were required to effect insurances for workmen's compensation either with the Government office or with private offices licensed by the Government. No licenses were issued.

[1]In Australia, as in England, the possibility of granting to the workers some share in the management of industries, as well as in profits, is beginning to be considered as its importance deserves.

[2]Sir C. Wade observes, ut supra, p. 45: “In Government undertakings laxity in discipline or efficiency was soon manifested by loss instead of profit. … As in construction [of works] so in the administration of Government Departments political interference should be avoided. Experience shows that if a strike takes place in a Government establishment, Ministerial intervention is enforced and a concession made to the strikers. The Government position is always difficult. If the Ministry resist the demands, votes may be imperilled; if they yield, discipline may be threatened.”

[1]When in 1919 the extreme Socialist (Marxian) party launched a scheme (similar to that of the I.W.W. of America) for the creation of one all-embracing union of Australian workers,— popularly called the O.B.U. (One Big Union),— in order to organize general strikes and reach its ends by revolutionary methods, strong opposition came not only from the moderate Labourists in general but from the powerful Union called the A.W.U. (Australian Workers' Union), which includes the bulk of the rural workers, and also from the politicians of the Labour party. See as to this Round Table, Nos, for June and for September 1919.

[1]Of. Federal Handbook, p. 576.