CHAPTER XXXI. FROM THE TREATY OF VERSAILLES TO THE SECOND WORLD WAR
British and Australian statesmen had both thought that most of the British immigrants would settle on the land, and produce farm products that would be sold mainly in Britain. Great plans were made for closer settlement in addition to the soldier settlements that already had been started. The gigantic Hume Weir was planned to provide more water for irrigation settlements. It was thought that the British market would take all that could be produced, but the problem of markets was not so simple. Within a few years there was such an increase of dried fruits that prices fell, and growers were threatened with ruin. The Commonwealth urged the British government to give a preference to Australian wine and dried fruit, by putting a higher duty on foreign than on Australian products. The British government was not keen to do this, because Britain has to sell most of her exports to foreign countries and they might retaliate by putting higher duties on her goods. However, it was urged that Australia could not take so many British immigrants unless this were done, so in 1925 the British government gave way. But what was to happen when the British people had all the raisins, currants, and wine they wanted? Other nations would not be prepared to take them on better terms than were given to growers in Greece or California. However, for the present the British market served our needs. But meanwhile the dairy-farmers were also complaining that their prices were not profitable enough; they complained that the cost of the manufactured goods they had to buy was raised by the duties on imports. They could not get these duties reduced, and Britain would not put duties on foreign butter, so they could not get a British preference. However, the Paterson Butter Plan gave them what they wanted in 1926. Australian consumers were charged a higher price for butter than it fetched on overseas markets, while New Zealand butter was kept out by a duty. Similar arrangements were already being used for dried fruits and sugar, and so the production of all these went on increasing; so did the production of wheat, wool and metals. By 1929 there was a relative overproduction of primary products on the world's markets; their prices dropped heavily and a world depression began that was to have widespread and disastrous results. The causes were many and complicated, and cannot be detailed here. We are more concerned with its results for ourselves, but before looking at those we must notice some other things that were happening in the expansive nineteen-twenties.
In addition to the great growth in farm production there was a great growth in the number of Australian factories and of the people employed in them. Actually the value of factory goods grew faster than that of farm products, and the number of factory workers certainly grew much faster than those on farms. It was a period of great prosperity for Australian manufacturers, and it was marked by the growth of the iron and steel industry, textile manufactures, rubber goods and many other things. We were making more and more things that had previously been imported, and our people were becoming skilled in more and more occupations, which of course is very desirable. But there were also some disturbing features about this growth of manufactures, because much of it was only possible because of high duties on imported goods. We have already noticed how this had led Australian farmers to ask for tariff duties and for financial assistance. But high duties also enabled manufacturers to make good profits, and this encouraged wage earners to ask for higher wages. This was only to be expected, and their demands were hard to refuse because they were continually getting stronger through their organization in trade unions. Accordingly there were quite a lot of industrial disputes in these years, and some of them were very bitter. In 1925 there was a great shipping strike throughout Australia, and the Commonwealth government tried to deport two of the seamen's leaders, Walsh and Johnson, on the ground that they were 'undesirable immigrants.' The High Court held, however, that the Commonwealth did not legally have power to do this. Trade unions continued to press for higher wages and better conditions for their members, and there was a good deal of industrial unrest. But when prices and profits began to fall it was no longer possible to get these demands granted. In 1928 and 1929 there were two big but unsuccessful strikes by the timber workers and the waterside workers; in both cases the men refused to accept an award of the Commonwealth Arbitration Court. This Court, set up in 1904, had done a great deal to improve wages and conditions, especially under the presidency of Henry Bourne Higgins from 1907 to 1921. But the Prime Minister, Mr. Bruce, in 1929 decided that the system was not working satisfactorily, and proposed to abolish the Commonwealth court, and to leave industrial arbitration to the States. He was overwhelmingly defeated in the elections at the end of 1929, and Labour returned to power under the leadership of Mr. J. H. Scullin, after a period of 13 years 'in the wilderness.'