Chapter 2
Reid’s anti-socialist
gamble
From early 1904 to December 1906, the national Freetrade party leader, George Reid, made a bold attempt to realign federal politics on an anti-Labor/Labor basis. In August 1904, Reid became “Joint Prime Minister” with Allan McLean at the head of a coalition of Freetrade MPs and conservative Protectionists supported by Alfred Deakin, thus splitting the Protectionist party. In February 1905, he launched an anti-Socialist campaign in the hope of building a mass-based anti-Labor party “on the ground”, and pulling the majority of Protectionist MPs behind his coalition.
Had Reid succeeded, a national conservative party would probably have been organised on the basis of a fiscal truce, accepting the 1902 tariff. The specifically Freetrade party would no longer have existed, but free trade ideas and revenue tariff strategies would have been a significant component of bourgeois politics alongside protectionist ideas from Victoria, in much the same way as the modern Liberal Party has encompassed free trade and protectionist tendencies, as well as republicanism and monarchism, liberalism and conservatism. Certainly the Melbourne Age newspaper, that tribune of protectionism, saw any possible coalition as strengthening Freetrade, “by the solidifying of its own ranks and the division in those of the protectionists. It would have been an act of protectionist suicide.” In a very real sense, the fate of free trade and low tariff politics in Australia hung on the success of Reid’s anti-socialist gamble.
Reid’s project failed. In June 1905, his coalition with conservative protectionists was destroyed by Deakin and his first anti-socialist campaign collapsed. In early 1906, Reid launched a second anti-socialist campaign, with the much narrower aim of changing the balance of forces at the federal election that December. This he again failed to do. The result was widely seen, including by Reid himself, as a vote for protectionism, for upward revision of the tariff. Scotton summed up the enduring significance of Reid’s anti-socialist campaigns:
the anti-socialist controversy marked the beginning of a new alignment of political forces on a nation-wide Liberal-Labor division… To this extent, the period of the Reid-McLean government and the subsequent anti-socialist campaigns can be seen as a transition between the earlier period, which was dominated by interstate rivalries and the fiscal controversy, and the period after 1909 when the nation-wide two-party system was established.
Reid had good reasons to believe he might succeed. Both he and Deakin had declared a “fiscal truce”; Deakin before the December 1903 election and Reid immediately afterwards. The election itself had seen both Protectionists and Freetraders lose seats to Labor, ending up with 25 each. Deakin’s own attempt to continue governing after the election with Labor support had collapsed in April 1904, with Labor forming a minority administration.
But the fundamental factor enabling the Reid/McLean coalition to emerge was a savage sharpening of class hostilities, especially in Victoria. The drought and recession which gripped Australia from 1901 had especially squeezed farmers and the rural economy, and a movement for cuts in taxes, government spending and the size of parliament was whipped up, first in the Victorian town of Kyabram. The agitation spread, and was soon taken over by the professional political organisers of Melbourne’s commercial establishment. The National Citizen’s Reform League (NCRL) was set up, and replicas organised in other states, such as the People’s Reform League in New South Wales. The right wing William Irvine became Victorian Premier on the back of this agitation, and targeted the state’s railway workers, cutting salaries, putting the workers on short time, and insisting their union disaffiliate from Trades Hall.
Amidst protest meetings and working class anger, the engine drivers called a snap strike. Writing anonymously, Alfred Deakin told how:
The men are being supported by every trade union in every State, so vividly is it realised that their future is absolutely bound up with that of the Victorian strikers. Funds are pouring in from far and near… The unions are so well organised throughout Australia that the struggle may extend in any direction… This is the darkest hour.
The well-to-do mobilised behind the government and hundreds of university students joined vigilance committees at railway stations. For “Affable Alfred”, that supposed friend of labour, it was time to take the gloves off. “No one can venture to hope that the end is in sight unless the State Parliament at once passes a measure that will awe the strikers into surrender.” Irvine responded with the Strike Suppression Bill, which included a £100 fine or twelve months’ jail for joining a railway strike, gave wide powers to the government to break up strike meetings and prohibited the printing of strike notices or collecting money to support the strikers. After a week the strikers surrendered and Irvine announced a cut of 400 jobs.
The Victorian railway strike was a turning point in class relations in Australia. Benham and Rickard comment that the strike intensified the sense of “them and us” amongst the working class. Bongiorno reports that the phrase “civil war” was used by both sides to describe class relations in Victoria in 1903-4. The last vestiges of the old liberal-labour alliance typical of the 1890s were destroyed. The bitterness lingered for years; when Alfred Deakin came to construct his Ministry in 1909 after the fusion of all the bourgeois parties, his long-time Victorian organiser, J Hume Cook, campaigned for the exclusion of Irvine, warning:
This man must be excluded at all costs. When one thinks of the thousands and thousands of Railway men and their relatives in every State, as well as all the other Civil servants, his inclusion would probably spell disaster: especially in Victoria.
When the Conciliation and Arbitration Act was introduced into parliament in 1903, Labor moved immediately to amend it to cover railway workers (to give them a means to appeal against state government actions), and when that amendment passed with the support of some radical liberals, the Deakin government dropped the measure as a whole. Labor was intransigent. When Deakin reintroduced it after the 1903 election, and Labor succeeded in getting amendments passed to include state public servants and preference for unionists, Deakin resigned as Prime Minister. Labor’s own attempt to pass an Arbitration Act also failed, leading to the defeat of the brief Watson Labor ministry in August 1904. If the Arbitration Bill was, as historians say, the wrecker of governments, then behind this wreckage lies the class divisions brought to boiling point by the railway strike.
Ruling class alarm was aroused to fever pitch by the growth and discipline of the Labor party: its caucus, its pledge, and the trade unionist control of its conferences. However moderate Labor politicians were in the Legislative Assembly, out in the suburbs, the towns and the bush, agitators were at work, railing against employers, big landowners, the “money power”, and militarism. The political labour conferences passed socialist resolutions and bound the parliamentarians to the party platform and to the decisions of the parliamentary caucus. In the minds of bourgeois politicians and newspaper editors, the emergence of this disciplined Labor party undermined the very fabric of parliamentary democracy by making Labor politicians less immune to the everyday corruption, intimidation and influence-peddling of conventional politics. The ruling class mood is captured by this comment from the Victorian Employers’ Federation journal:
There was a time when a sentimental feeling prevailed that to be “democratic” was to be something good. Those days have gone. The word has so long been associated with everything that is bad in our legislation…that people generally wish to hear no more of it…it now stands only for the Labour socialists…
The NCRL and the People’s Reform League in New South Wales imposed more right wing agendas and a commitment to “retrenchment” on the politicians. In 1903, an employers federation was formed in New South Wales with assistance from Victoria, and a national body in 1904. The Victorian Employers Federation and NCRL tried to get the protectionists and free traders to unite on an anti-socialist basis for the 1903 federal election, but failed. In New South Wales, the People’s Reform League financed both Reid’s anti-socialist campaigns. It consisted of pastoralists (the largest group), wool merchants, tea merchants, importers, lawyers, the editor of Pastoralists’ Review and the General Manager of the state’s largest industrial enterprise, Mort’s Dock.
For a short period of time, even Deakin argued that the fiscal rivalry had to be buried in the common class interest, despite his later attempts to hide this. At some stage during the brief Watson government, Reid and Deakin produced a draft coalition agreement, attacking Labor’s “control of its minority by its majority”, and declaring for fiscal peace until the next election. On 1 August, with Watson still in office, Deakin made a strident anti-Labor speech at the founding meeting of a new organisation centred on his electorate of Ballarat, the National Political League. On 15 September 1904, a few weeks after Reid assumed office, Deakin wrote sympathetically of Reid’s attempt “to rally the moderates of all opinions — Free Traders or Protectionists, Liberals or Conservatives — against the advocates of extreme Socialism.”
“The antithesis which Mr. Reid presents is real,” Deakin wrote. “The country has to make its choice between the more or less Socialistic proposals before them.” Deakin deplored the attempt by radical Protectionists, many of them his friends, to revive the fiscal issue. “The recrudescence of fiscalism at this juncture,” he wrote, “bids fair to prevent a straightforward development of the real situation in Federal politics.” However treacherous Deakin was to prove, the class bitterness employers felt towards Labor had pulled him into coalition with Reid.
There were three components to Reid’s 1905 anti-socialist campaign. First, he began a propaganda campaign against socialism in general, and against Labor’s adoption of such a terrible doctrine. Days after the New South Wales Political Labour League adopted a new, socialist objective, Reid warned that,
anyone who has been watching the evolution of Labour leagues in Australia cannot help seeing that they have resolved upon a policy of absolute socialism, of a destruction of individualism and private enterprise, and of making the country one huge Government establishment of which the Labour Leagues shall be the rulers.
By March 1905, Reid’s propaganda had become even more alarmist.
I consider that the people of Australia are at the present moment in a position of grave political danger. There is a vast organization, full of enthusiasm, single-minded in political action, whose members do not fight amongst themselves over even the fiscal question, which is bent on overthrowing, as soon as possible, all the foundations on which our industrial system, and, I believe, our national prosperity, are based. My grave duty at the present time is, it seems to me, to endeavour to prevent Australia going down into the depths of socialistic chaos.
Reid embarked on a staggering campaign of private and public meetings to whip up anti-socialist fears, organise the anti-socialist movement and enrol patriotic citizens in his new movement. Over a four month period, from February to June 1905, he travelled to Hobart for a Premier’s Conference, back to Sydney, to Melbourne, Adelaide and then Western Australia during April; back to Adelaide, Melbourne and then Sydney; then northern New South Wales and the tablelands where he spoke in at least twelve towns. After returning to Sydney in late May, he headed again for Queensland in early June, travelling as far north as Rockhampton, returning to Sydney for the launch of his new anti-socialist Australian Liberal League on 13 June.
Backing Reid, the Sydney daily newspapers launched their own systematic denunciations of Labor and socialism. The Sydney Morning Herald ran a twelve-part series called “Labour in Politics”, which aired a remarkable array of grievances. Labor had raised expectations to an unrealistic level, had paralysed parliament by its party politics and support in return for concessions which upset the “science of politics”. Labor meant bureaucracy and burgeoning bureaucracies and centralism were increasing the burden of taxation; Arbitration was “a petty machinery for harassing employers”, and part of an attempt to bring all administration under Government control. Labor was out to crush the states, and defy the laws of economics. Reid’s campaign was also taken up with enthusiasm by the right wing Australian Women’s National League (AWNL) in Victoria, which alleged that Labor would abolish the throne, destroy religion and the marriage tie, and take children away from their parents. As Scotton comments, “They introduced into the campaign an element of near-hysteria.”
The second component to Reid’s initiative was to set up a new political organisation, the Australian Liberal League (ALL), to campaign against socialism. It was to be organised around a few basic principles, with detailed policies to be developed by the rank and file, in conference, rather than being dictated by the professional politicians. Members joined by signing their name to a list headed “Australia Liberal League: For liberty, loyalty, progress and enterprise against Socialism”. By 10 June, the ALL claimed 1000 members in West Sydney and other branches starting with over 2000 members. The movement was officially launched on 13 June, two weeks before parliament reconvened for its 1905 session at major rallies in nine Sydney electorates. Reid claimed 60-70 large meetings were held across New South Wales.
The third element to Reid’s campaign was his attempt to lock in both leading and rank and file protectionists, to build a movement that really transcended the fiscal (and state) divide. In New South Wales, he had some modest success. It appears that Tom Ewing, the Protectionist MHR for Richmond, was a member of the organising committee, and that other protectionist campaigners, such as P. Heffernan were active. Scotton comments:
participation by protectionists in the A.L.L. was acknowledged by Reid’s critics, who were in the strange position of saying that the A.L.L. was a Freetrade organization and no protectionist would join it and at the same time attacking protectionists for joining and supporting it.
In Victoria, an anti-socialist alliance was organised, consisting of delegates from the Farmers, Property Owners’ and Producers’ Association (FPOPA), the AWNL, the Reform League and the Victorian Employers’ Federation. However, no protectionist leader was prepared involve themself in a campaign associated with Reid unless Deakin was involved, and Deakin stood aloof from Reid’s initiative.
Before Reid’s anti-socialist campaign could develop any grass roots momentum in Victoria, Deakin made a sensational and equivocal speech at Ballarat on 24 June  1905, four days before the resumption of parliament, which The Age declared was Reid’s “Notice to quit”, since the Reid-McLean government could not survive without Deakin’s vote. Deakin took office at the head of a new Protectionist ministry, now guaranteed of Labor’s support.
The defeat of the Reid/McLean government in June 1905, represented a significant defeat for free trade politics in Australia. Explanations generally focus on Reid’s personal hunger for office at any cost (which led him to accept office without the active participation of Alfred Deakin), the tenuousness of Reid’s parliamentary majority, and on the way the Tariff Commission he appointed in December 1904 gave a new platform for manufacturers to campaign for higher protection.
Rather more importantly, ruling class militancy seems to have diminished enough by 1905 to allow the more determined protectionists to revive the fiscal divide. Pastoralists’ Review and the Australasian Insurance and Banking Record almost entirely lacked news or hysteria about strikes, unlike in 1906 when they reported a revival of economic strike action. The recession which had driven the employers’ offensive of 1901-4 had given way to an extraordinary recovery. By 1905, Australian capitalists were enjoying high levels of production, higher prices and higher profits all round. In 1906 and 1907, the recovery would become a raging boom. So George Reid was trying to whip up an anti-socialist campaign in an environment where farmers were finally making some money, where factory owners were investing huge amounts to increase production and hiring more and more workers and when there were relatively few strikes. He was trying to feed off the resentment employers and middle class people felt towards the union movement and the Labor party at a time when the economic basis for that resentment had diminished.
The shift from purely class to class/fiscal politics can be seen in the attitude of the Victorian Chamber of Manufactures, Deakin’s most important base of support. In 1902, the Chamber had been centrally involved in establishing the Victorian Employers’ Federation, which aimed to submerge “all individual politics — protectionist or free trade, conservative or liberal — in order to oppose what we consider aggressive legislation.” John Rickard wrote that, “In the early days of the V.E.F. the threat of federal arbitration tended to overshadow other issues, and fiscal controversy was avoided.” However by 1904, the Chamber of Manufactures was losing members and responded by reviving agitation for higher tariffs. In 1905, there was an attempt to sever relations with the VEF (which supported Reid’s anti-socialist campaign), a move which soon succeeded. At the same time, the determination to fight the class struggle first saw the Sydney Chamber take the opposite position; it supported the Reid/McLean government and resisted Victorian efforts to reopen the tariff issue. In 1906, it refused to pledge itself to work for protection.
There is a similar, documented shift in the attitude of Sir John Forrest, Minister for Defence in the Barton/Deakin governments from 1901-4, with him urging Deakin to cooperate with Reid in 1904, and then urging him to overthrow Reid in June 1905, arguing, “The only result of a continuance in office of Reid must be the destruction of the Protectionist party.”
This reflects the most significant feature of Reid’s 1905 campaign: its failure to “break through” and cohere Protectionists, both in parliament and outside, against Labor. His coalition never “gelled” and Reid was politically paralysed. He violently attacked Labor’s impact on federal politics, and the “socialistic” legislation passed under its influence, but when asked what he would repeal, could come up with very little indeed, because it would have meant criticising the earlier governments of his Protectionist allies. When Reid attacked encroaching state socialism, he was asked exactly what the government should get rid of, and there was very little indeed, since government railways, ports, telegraphs, roads, and other services were widely supported, by much of the middle class as well as workers. The prominent New South Wales Freetrader, Bruce Smith, insistently and publicly asked Reid exactly what he was going to do to roll back socialism, and the Sydney Morning Herald lamented in April 1905, “Why must he be flogged to action?”
In March 1906, George Reid and his supporters launched a second anti-socialist campaign, which ran right up until the election of December 1906. The politics of the second campaign were little different from the first. Reid once again declared the fiscal issue “sunk”, and set out to draw protectionists under the anti-socialist banner. The highlight of the campaign, and the event which gave the campaign its credible start, was a two-night debate in April between Reid and WA Holman, Deputy Leader of the New South Wales Labor party.
The purpose and organisation of Reid’s 1906 campaign were somewhat different from his earlier effort. In 1905, he had sought to build a grass-roots organisation and movement and use that to persuade (or force) Protectionists to “bury” the fiscal issue. In 1906, his campaign aimed to win the electorate to anti-socialism in the hope that a fiscally “neutral”, anti-socialist government could be elected to replace the Deakin government, which ruled with Labor support.
Once again, a large proportion of the Sydney business establishment was behind Reid’s campaign. Alfred Deakin commented that, “Mr. Reid has larger funds, greater organization and more candidates than any Australian leader has ever possessed,” while Sir William Lyne alleged that Reid had access to £10,000 (equivalent, perhaps, to $2 million today) for his campaign, some of which clearly came from the Tobacco trust led by the Dixson family, presumably concerned at Labor Senator George Pearce’s campaign for the nationalisation of the industry. The Australian Democratic Union (ADU) which Reid now set up, “more closely resembled the normal small, highly centralized electoral machine.”
In Victoria, the Anti-Socialist Alliance (ASA) consisted of the Citizens’ League (formerly the National Citizens Reform League of Kyabram fame);  the Farmers League (the Farmers, Producers and Property Owners Association) and the Australian Women’s National League, the latter two each claiming 12,000 members. However this right wing mountain appears to have been mobilised behind parliamentary mice. There was, says Scotton, little liaison between the anti-socialists in parliament and the ASA campaign for their re-election (reflecting perhaps a fear of being tainted as Reidite puppets). Only three candidates for the House of Representatives appeared to have had anything to do with it.
Undaunted, Reid again engaged in an extensive propaganda tour for anti-socialism, speaking in Victoria and New South Wales during May and June, and travelling the whole of Queensland during July. Reid virtually ignored parliament, to the point where even the Daily Telegraph, which supported his campaign, noted the bitter resentment of other MPs.
The end result of Reid’s campaign was bitter failure. The Anti-Socialists ended up with 33 members in the House of Representatives, Deakin with 16 and Labor with 26, giving Deakin a clear majority, even without the five or so Anti-Socialists who would generally support his government. Defeat was made more bitter, no doubt, by the substantial reduction in MPs who accepted Reid as their leader, down from 25 to 19.