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'Good-bye the state's progress': State Enterprise and Labor's Plan for a North Queensland Steel Industry, 1915–20
Shawn Sherlock*
| The Ryan and Theodore Queensland Labor governments of 1915–20 have been presented as trailblazers in the development of policies of state ownership, but also as examples of the practical limits of Labor's approach. While most previous work has focused on the enterprises that were successfully established, such as the butchers' shops and the state hotel, this article examines the ultimately unfulfilled plans to build a state iron and steel works in northern Queensland. It sets the plans to establish a nationalised iron and steel industry in Queensland in its specific local and regional context, and acknowledges the influence of a broader regional development agenda. It is argued that while the nationalisation issue has traditionally been seen in 'big picture' terms, regional and local factors need to be considered in more detail. |
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| 'God help us, it will be Good-bye millions of money, Good-bye the state's progress in iron manufacture, Advance the devil and all his angels. "Mammon is supreme"'.1 This melodramatic statement ends a pamphlet from the Bowen Chamber of Commerce printed in September 1919. Littered with similar quotes, the pamphlet gives a clear idea of the heat generated by the debate surrounding Queensland Labor's commitment to public ownership during the period of the Ryan and early Theodore governments. Complicating the nationalisation issue in Queensland were the factors of local interest, electoral concerns, financial responsibility and the perceived need to promote industrial development, particularly in the steel industry. Ideology and commitment to a 'socialist objective' were important to these debates, but it will be argued here that local factors were at least as influential on the outcome. This article will examine the politics of the plan to establish a state iron and steel works in northern Queensland in the late 1910s in the context of Labor's commitment to state enterprise, and the connection between broader policies of development and the influence of localism on 'big picture' politics. |
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Denis Murphy, one of the most influential historians of Queensland Labor, argued that Queensland was a colony and then a state dominated by the rural, and to a lesser extent, mining sectors.2 Murphy made the general point that Queensland Labor, more than its other eastern state cousins, was 'a regionally based party'.3 Queensland was also relatively slow in comparison to the other eastern states in terms of its industrial development. Federation and the subsequent challenges faced by Queensland's fledgling manufacturing industries in competing with the more advanced manufacturing sectors of Victoria and New South Wales (NSW) have been blamed for much of this. While the extent of Queensland's relative tardiness in developing a significant manufacturing sector has been more recently challenged by the work of David Cameron, this regional influence and its political importance is worthy of closer inspection.4 An acknowledgement of the importance of local and regional factors can help us make better sense of Labor's early experience in Queensland and throughout Australia. |
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Also fundamental to any examination of Labor's role in the plans for a Queensland steel industry is the reference to nationalisation from the Party's earliest platforms, those of the Queensland based Australian Labour Federation (ALF) of 1890.5 The plank called for the nationalisation of all wealth and all means of producing and exchanging wealth. This has been written off by historians such as Dalton and Murphy as having been little more than a flight of utopian socialist fancy inspired by the influence of William Lane, but it is nonetheless significant that nationalisation was prominent in the hopes of early labour figures, even if it was more as an issue to fight over than to move towards.6 Further complicating the nationalisation question in Queensland was the importance of the populist commitment to regional development in this state. If we agree with Murphy's argument that what is central to an understanding of early Queensland Labor was its regional, decentralised nature, then the role of regional development in Queensland politics becomes important. Regional developmentalism is taken here to refer to the idea that furthering the development of rural and regional areas within Queensland was a vital and justifiable end in itself. Not restricted to the Labor Party in its influence, considerations of economic viability and sustainability were often given second billing to the need to 'open up the country'. |
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This was reinforced by the political reality in Queensland during the period in question that the population while thinly spread across the state, was not as completely dominated by the capital city as was the case in the other eastern states. Regional areas were able to exert stronger pressure on state governments for assistance and investment than was the case elsewhere. This can be seen to have important implications for questions of ownership and the role of the state within the emerging Queensland economy. It will be argued here that this regional developmentalist ethos was at least as significant to the growth of state enterprise, particularly in relation to iron and steel in Queensland, as any commitment by Labor to a socialist inspired nationalisation agenda. |
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The link between early Labor governments, nationalisation, and the development of the Australian iron and steel industry has been dealt with by historians in most detail in relation to NSW.7 Queensland's plans, which are the focus of this article, have been less comprehensively examined. Murphy touched on the plans but didn't deal with them in any depth, preferring to focus on those enterprises that did actually get off the ground. Tom Cochrane dealt with the plans in his book Blockade, but mainly in the context of their connection to the Queensland 'loans affair' of 1920–24.8 Recently David Cameron has incorporated the Queensland government's steel plans in his broad ranging PhD thesis, but with a focus on the economics of the plan, and its place in the wider history of manufacturing in the state.9 This article presents a more detailed account of Labor's plans, as well as incorporating an analysis of the influence of locality and developmentalism on the eventual outcome. |
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Queensland Labor and State Enterprise | |
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Labor in Queensland had held office in minority government and coalition with the Liberals before 1915, but never in its own right. Celebrated for forming the 'world's first' labour government for seven days in 1899, Queensland Labor was an influence from opposition or in coalition rather than a governing party in its own right before T.J. Ryan led them to power in 1915.10 Despite the initial radicalism of the Lane inspired platform of 1890, Queensland Labor developed a reputation for liberal/radical inspired reformism rather than socialist inspired revolution. The influence of the bush unions, particularly the Australian Workers Union (AWU) can be seen here.11 While stressing solidarity the bush unions also saw closer land settlement and an extension of small independent farming as desirable political ends. Labor in Queensland as much as anywhere else in Australia had to incorporate small scale capitalism into its reformist view from very early on, forming an obvious impediment to any notion of radical nationalisation programs.12 |
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During the first decade of the new century Labor's numbers in the Queensland lower house grew steadily and ultimately saw them share power in a series of coalitions with liberal politicians.13 This experience was beneficial in both convincing the electorate of their ability to lead, and also in terms of fulfilling some key platform commitments in the area of electoral reform. However it also highlighted to the broader movement the piecemeal nature of reform likely to be achieved through the parliamentary system and entangled Labor further within existing structures of power. The struggle between those urging a pragmatic approach to political power, and those in the movement arguing for more radical change was very publicly borne out in the Queensland experience. Coalition government showed both the influence of liberal ideology on the Labor politicians and their commitment to pragmatic politics, as well as ultimately convincing the Party of the necessity of governing in its own right. |
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This had obvious implications for Ryan and later Theodore in their pursuance of state enterprises. It was argued quite explicitly by Ryan that these enterprises were to be established in competition with monopolies, rather than as any wholesale nationalisation. The majority of Labor's extensive state enterprise program was clearly established to compete directly with existing private interests. This did not go without comment from contemporaries, with Labor consistently arguing that the Ryan government was interested in using competition to protect the public from the evils of the monopolists. As a Labor Government pamphlet from 1918 noted:
Where the Government has entered into the arena of trade, the object has not been to secure monopoly or to squeeze out of business legitimate private traders, but to protect the public by competing with the latter on fair and efficient lines.14
These arguments were in response to the equally consistent claims from the left of the movement that rather than state socialism these enterprises were merely a form of state capitalism.15 |
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Among the key state enterprises to be established by the Ryan government in this period were the state butchers' shops, pastoral stations, coal mine, batteries, sawmills, cannery, hotel, railway refreshment rooms, and the insurance office.16 Of these the butchers' shops are perhaps the best remembered, and proved the most popular.17 They also directly attacked the artificially high price of meat during the war years, supporting in a very public fashion Ryan's contention that state enterprise had an important role to play in achieving practical results for workers. This was pragmatic socialism, or indeed Socialism at Work as the government was to proudly proclaim in pamphlet form in the lead up to the 1918 election.18
One class of reformer would seek to protect the public from the exaction of monopolists, or combinations of capitalists who collectively constitute monopolies, by regulation, which, though permitting those centres of power to exist, would fix wages, working conditions, and prices. An alternative plan has been the straightout nationalisation of whatever producing or trading concern can be shown to exercise a power harmful to the people. The Queensland Government, in most of the enterprises embarked upon during the last two years, has shaped a middle course between these two methods.19
These enterprises met with mixed success. The general pattern was for initial small profits followed by more significant losses during the 1920s.20 Labor opinion was however mixed on whether profitability was to be the key measure of success for the enterprises. Other objectives, such as attacking monopoly interests and effectively regulating prices overall, as well as saving the government money on key consumables were seen as at least as important by many contemporaries.21 Before 1920, debate within the Party centred less on how profitable the enterprises were, than on their electoral popularity and the extent to which these enterprises could be seen as going far enough in pursuance of Labor's commitment to public ownership. Indeed the Party's election pamphlet Socialism at Work bluntly claimed that, 'In each instance, the State has not aimed at making profit from its undertaking, though, in most cases, profit has accrued'.22 |
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Plans for a state iron and steel works were present in Ryan's electoral address before the 1915 election. Ryan declared that,
We will ascertain the practicality of establishing, in proximity to our rich iron and coal deposits, works for the production of iron and steel.23
The plans to establish a state enterprise in the iron and steel industry can be seen as being different to the pattern of competitive enterprises outlined above. The major potential competitor was in NSW in the form of the Broken Hill Proprietary Company's (BHP) steelworks at Newcastle, opened that same year. As highlighted by the recent work of Malcolm Abbott, this carried baggage of its own in the broader nationalisation debates of the time having only been built after a backdown on a planned state works by the McGowen NSW Labor government.24 |
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The 1913 Queensland Labour Party Constitution and General Rules which Labor took to the 1915 election also made mention of the potential steel plan.25 Apart from the general commitment to 'the collective ownership of the means of production, distribution and exchange' contained in the Objective, the platform also committed Labor to 'State Control of the Iron Industry' as the first point in the General Programme dealing with mining, before a reference to state coal mines. The direct linking of the proposal for a state iron and steel works to the mining industry from the outset is noteworthy. Mining in Queensland had to this point centred on metals rather than coal, with the result being both greater direct involvement by the miners in the mines themselves, and stronger boom and bust cycles endured by the industry. Gold had dominated the industry in the latter part of the nineteenth century, with copper and tin also prominent in the early twentieth century. Mining for metals was based in the central and northern parts of the state, coinciding with Labor's strongest electorates. Future Labor premiers E.G. Theodore and W. McCormack were, for example, both heavily involved in northern metal mining. |
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The manufacture of iron and steel is obviously linked to mining due to the need for raw materials, however the link between Queensland Labor, mining in the north of the state, and the proposals for a nationalised steel industry ran deeper than this. Metal mining in particular had fallen on tough times in northern Queensland despite the high war-related prices of the period. Labor owed much of its support to these mining areas, and became involved in a series of schemes to use the government to directly prop up the industry. The most famous of these was the so called 'Mungana Affair', where the Ryan government bought out the Chillagoe smelters and entered into an arrangement to also purchase a series of mines to feed them.26 With links to the area through their electorates and through their mining pasts, Theodore and McCormack played important roles in convincing the government to move into the metal mining field. By the end of the 1920s, the issue of conflict of interest was to have significant political implications for Labor and these two men in particular. The plans for a state iron and steel works need to be considered against this backdrop of state support for the mining industry, and as the debate over the location of the works will show, the issue of Labor's support for northern development. |
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It is also important to acknowledge the broader changes in metals mining and its links to manufacturing and industrialisation at a national level. During World War I, the links between mining and manufacturing in Australia were reinforced and the groundwork laid for the growth of influence of these sectors on the Australian economy that was to take place across the following decades.27 Kosmas Tsokhas argues that the Hughes government was directly involved in this push to an industrial future through its encouragement of the development of a secondary treatment industry for metals such as lead and zinc to replace the German smelters inaccessible as a result of the war.28 This was in opposition to British interests, a fact further emphasised by Hughes' controversial establishment of a state shipping company, the 'Commonwealth Line' against the express wishes of the Admiralty.29 The war years proved a pivotal period in the process of industrialisation nationally, with the interdependence of manufacturing, mining and the state a defining feature. Hughes employed an aggressively interventionist approach to reorganising the metals sector at a national level, although ultimately it was to be leading private sector enterprises who would reap the major benefits.30 Labor's iron and steel proposal in Queensland occurred within and was influenced by this context of broader national change. |
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Iron and Steel | |
The first legislative steps toward the works came in 1917 with the Ryan government's establishment of a Royal Commission into the potential success of a state iron and steel industry. The Commission was instructed to examine the:
Location, quantities, and suitability of iron ore deposits;
Location, quantities, and suitability of fuel supplies;
Most suitable site or sites for central works;
Primary cost of erecting and equipping such works.31
The Commission was established on 8 June 1917, and submitted a progress report to parliament on 11 August 1917. The speed of the progress report suggests the desire of the government to be seen to be pushing ahead with its plans to establish a state works and fulfil another platform commitment. This initial progress report stated the obvious — that it had not had enough time to examine the key questions, that due to the fact that no previous government had made serious enquiries into the area the knowledge of the stocks of relevant raw materials was insufficient, and that a site could only be determined once the existence and location of the resources had been determined.32 Despite these misgivings the progress report still found that everything required to make pig iron was to be found in the state, that a plant to manufacture pig iron could be built for around £5,000, and that this plant could also be used to test iron ore samples from across the state. It also found that the manufacture of pig iron given contemporary prices, and the best estimate of future prices, would be profitable to the state, and that the location of a pig iron works need not impact on the location of any future iron and steel works.33 |
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In terms of the eventual results of Labor's steel plans, this progress report is particularly illuminating. One of the fundamental dilemmas of the proposals for a state works was the lack of detailed knowledge of Queensland's iron ore reserves. It appears to have been almost an article of faith in the minds of some of the members that there had to be substantial reserves just waiting to be found. There were reports from all over the state, particularly the north, of ore mountains crying out for exploitation, which tended to evaporate on closer inspection. E.C. Saint-Smith of the state geological survey department was exclusively assigned to look for significant iron ore bodies in the state, and was able to uncover several potential supplies, in particular at Iron Island, Mount Lucy, Biggenden, and Mount Leviathan, but all of these required further more detailed studies to ascertain their exact size and the percentage of usable iron.34 It was to remain almost tantalising for proponents of the scheme that the ore seemed to be there, was believed to be there, but when they tried to determine its exact quantity and usefulness it proved elusive. Despite this the Royal Commission in its final report recommended that the Government should push ahead with an initial commercial scale pig iron works at a cost of approximately £100,000, with a view to a later upgrade to a steel works when more was known concerning the ore reserves.35
We are firmly of the opinion, however, that the evidence collected indicates definitely that Queensland possesses all the essentials, including both the raw material and fuel, for the successful manufacture of this particular commodity as a national industrial undertaking.36
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The Commission found that the best way forward for the steel industry in Queensland was for the government to assume ownership and control rather than private enterprise, despite the example of the BHP works in Newcastle and the Commission's lengthy questioning of General Manager Guillaume Delprat, and visits to Port Waratah.
Your Commissioners, from the outset, considered the question merely from the point of view of the nationalisation of the iron industry, holding that the State was such a large consumer of the manufactured article that it would be of greater benefit to the people if the State undertook the development of the iron resources and established the necessary plant to produce a commercial article rather than allow it to revert to private enterprise.37
This undoubtedly reflected the partisan make up of the Commission. All of the Commissioners during the two stages of the Royal Commission process were sitting Labor members, with Ryan having failed in attempts to get Opposition members to take part in a broader ranging 'Public Works Commission'.38 Labor certainly tried to find answers that would support their state enterprise agenda. |
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The report's recommendations showed strong faith in the future of an iron and steel industry in Queensland, and a further series of suggestions were given to promote the development in a practical fashion. As well as the plans for an immediate start on a commercial pig iron plant, the Commission recommended that the government retain the services of a 'thoroughly qualified expert', who would be appointed general manager of the works, and who would be given the task of selecting a suitable site. The 'expert' would also be entrusted with the future expansion from solely iron to steel manufacture. The politically sensitive nature of the issue of the location of the future works is highlighted by the Commission's reticence to directly suggest anywhere in particular despite a choice of location being one of the four key questions they were set. That they were happy to address the bedrock issue of the ownership of the planned works, but were content to hand over the question of its location to an 'expert' to decide at a future date shows the sensitivity of regional interests, and emphasises the dominance of the developmentalist ethos in Queensland politics at the time. It was easier and seemingly less controversial to argue for the state ownership and development of the iron and steel industry than it was to suggest which locality should 'benefit' from the decision. Indeed the further development of the state was seen as the prime motive for the establishment of the works by the Commission. In the section of the report headed 'Recommendation' the Commissioners argued,
Queensland is a vast State of magnificent distances, and although we have a greater mileage of railways than any other state ... there are still many districts crying aloud for railways and tramways ... Steel rails will therefore be greatly in demand for girdling the State with an iron band. With all the essentials for their successful manufacture within the control of the State, a new era of prosperity will dawn for Queensland as soon as they are assembled together, and the enterprise started on its way.39
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Regarding the specifics of the site, the report only stated that any decision needed to consider the issue of whether it was better to carry the coal to the ore or vice versa, something it argued was best left to the 'expert'. Townsville, Bowen, Rockhampton, Gladstone, Maryborough, Ipswich and Brisbane were all mentioned as potential locations, but it was considered wise for the expert to 'get the views of the local bodies' at these places before finally deciding the question.40 The members of the Commission may have been part of the 'fraternity of labour', but local interests were still of paramount importance. Loyalty to the movement and to any broader notion of class position was complicated and to varying extents compromised by local and regional realities. This was borne out in the protracted difficulty in choosing a location, before settling on one which was impractical in a series of ways. Regional and local political interests can be seen to have won out over other considerations. |
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The reaction of the conservative press highlighted the complexity at the heart of the iron and steel issue. In the middle of an aggressive anti government and particularly anti state enterprise campaign, the Brisbane Courier could still manage to grudgingly support the government's interest in the potential for a Queensland based steel industry, whether publicly owned or otherwise.
In these days, when the cost of iron has soared to an enormous price, something very beneficial might have been done for Australia if the Government had expended in the development of the iron mines at Biggenden even a quarter of the amount which was expended in the erection of the State hotel at Babinda.41
This type of back-handed support for the government's interest in iron and steel was typical of the Courier's approach to the issue at this time, and reflected the cross political nature of the developmentalist debate in Queensland. While certainly not calling publicly for the nationalisation of the industry, the conservative press very much keyed into the widespread support for 'developing' the state. Industrial and regional development was seen as an almost unassailable good. |
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Having received the progress report from the Commission in August of 1917, the Ryan government drew up a Bill to construct a state iron and steel works. Introduced on 18 October 1917, just two months after the progress report of the Royal Commission and with the investigations still continuing, the Bill announced plans to 'ascertain the practicability of establishing, in proximity to our rich iron and steel deposits, works for the production of iron and steel'.42 The Worker noted the immediate opposition to the nationalisation component of the plans from Labor's parliamentary opponents, but also commented wryly on the support for the plan from those anti-Labor members whose constituencies contained potential iron reserves.43 The support for regional development again hurdled ideological barriers. |
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The Queensland State Iron and Steel Works Bill was debated extensively before passing the lower house and was then held up and amended in the upper. The amendments were designed to effectively scupper the Bill. The government was to be allowed only a maximum budget of £100,000 to build its works, a figure that paled next to the £1.5 million suggested as a realistic amount by the Paul Royal Commission in NSW in 1912. Nowhere was this sort of money being suggested in Queensland — indeed the final Royal Commission report only suggested the much cheaper option of a commercial pig iron works being built initially, but if the government was serious about a state iron and steel works it was obvious £100,000 was an unrealistic limit. The government made a last minute attempt at compromise suggesting a £250,000 limit, but the Legislative Council refused to budge.44 Amid the ongoing debate about the future of an upper house Labor was pledged to abolish, the Bill was declared lost. |
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The issue did not fade from view however. The Commission was still to present its final report at this stage, and the government called an election for early 1918. The state iron and steel works plan was an important campaign issue, both for the government in reinforcing its desire to push ahead with important 'socialist' reform, and for the opposition in attempting to sell its message of the dangers of excessive government intervention in the economy. This debate was held against the backdrop of the heated battle then underway over the future of the Queensland upper house. Labor was pledged to abolish it, and argued strongly that its momentum had been held up by the obstructionist conservative majority in the upper house. Likewise the anti-Labor forces, including the Brisbane Courier argued virulently against Labor's 'disloyal' push to remove the Legislative Council. |
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During the campaign, the proposed iron and steel works was promoted by Labor as both a positive step in developing Queensland's resources and securing its future, and as supporting evidence in its claims of obstruction against the Legislative Council. In his election policy speech delivered at Townsville Theatre Royal on the 18 February 1918, Ryan was applauded at the mention of the plans for a state works, and again at the mention of the 'short-sightedness' of the Opposition in hindering the plan and allowing 'millions of pounds sterling' to be sent out of the country to purchase iron and steel products that could have been produced in Queensland.45 Ryan pursued the line that the Council under instruction from the lower house was being deliberately obstructive, and that Labor would reintroduce the legislation if re-elected. The proposed works was not the focal point of the speech, but it was an important part of it. Labor obviously saw the plans as both popular with voters, and as a tool to combat the Opposition's anti-Labor, anti-socialist rhetoric. |
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Labor won the 1918 election convincingly, increasing their vote by almost two per cent and their representation by three seats.46 The iron and steel issue was to maintain its importance over the next term in office before becoming a key factor in the Queensland loans affair that was to dominate the 1920 election. With the Royal Commission report to be formally presented in mid-1918, the key question beyond how to get the plans through the upper house came to centre on the location of the proposed works. This was to prove very controversial and took up much of the time of the 'expert' employed by the government to manage the works. This expert was J.W. Brophy, recruited from his position as Chief Mechanical Engineer at the BHP Newcastle steelworks in October 1918.47 Labor now had two experts working on the iron and steel project, the government geologist E.C. Saint-Smith, and Brophy. Both experts were under pressure from the various hopeful regions of Queensland to declare their sites to be the most suitable. |
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Regional Development and the Choice of Location | |
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Correspondence files from the Mines Department show regular contact from the regions requesting Saint-Smith or Brophy visit them to assess their claims to suitability. A report put together by the Department in December 1918 listed 'Ipswich, Pinkenba, Maryborough District, Gladstone, Rockhampton, Bowen and Townsville' as being the 'sites seriously suggested up to the present'.48 The minutes of evidence to the Commission demonstrate the obvious importance attached to the question of the potential site even before the legislation was passed. The Commission took evidence at Newcastle, Brisbane, Mount Mulligan, Herberton, Cairns, and Cooktown. As well as hearing evidence at these locations the Commission also travelled to Lithgow, Iron Knob in South Australia, Sydney, Melbourne, and to various mines throughout Queensland. These visits and hearings showed both the desire to observe the contemporary private Newcastle works in operation, and also the significant regional influence on the Commission from within Queensland. This was not just a Brisbane focussed Commission. It took information from the various regional stakeholders and was keen to be publicly seen doing so. As well as the various mining and steel making experts that might have been expected to make up the bulk of the Commission's witnesses, it is significant to note the involvement of representatives from local Chambers of Commerce essentially 'spruiking' for their regions. Cooktown, Townsville, and Ipswich all were directly represented in this way and Town Clerks from other regions were also in contact with the Commission. Even before any concrete decisions concerning the project had been made, the battle over 'winning' the works for the various locations was well under way. |
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There were many conflicting needs for the government when deciding on the potential location. Raw materials were obviously needed in such quantities for the project that their source locations would have a bearing. In the case of the BHP works in Newcastle, the company had used the issue of the location of raw materials as a bargaining tool when dealing with the NSW Labor Government. Delprat suggested that while BHP would prefer to bring the iron ore from South Australia to the coal reserves at Newcastle, it would only do so if they had the support and cooperation of the government. BHP's preference for Newcastle over other sites ran deeper than this however. It offered other significant attractions, not least its sizable population and ready made labour force. After the decision had been taken this was kept no particular secret. Delprat explained as much to the Queensland Royal Commission when he was asked to express an opinion on the matter.
You must be close to a labour centre — close to the workshops where you can obtain all the assistance you require ... If you get away from the big centres you have to erect villages for your workmen and all that sort of thing. If I were going to start iron and steel works in Queensland I should select a site somewhere close to Brisbane.49
He went on to argue that this was more important even than having the works near ore supplies. Shipping the materials an 'extra 100 miles makes practically no difference to the cost at all'.50 What was most important in Delprat's opinion was to establish the works near a big population centre, near a University and its chemical testing facilities, and near a transport hub. |
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This was advice Labor didn't want to hear. Labor was to attempt to solve a series of problems with their choice of location for the works. The already politically sensitive nature of the decision was further complicated by their desire to pursue the objective of the 'development' of the north. While Brisbane, Ipswich or even Rockhampton appeared logical choices given their significant population bases and proximity to transport and raw materials, Labor was strongly influenced by the call of 'northern development', and the desire to reinforce its electoral hold on the region. The small northern coastal town of Bowen came to be the focus of Labor's plans to establish the industry. Situated between Mackay and Townsville on the north Queensland coast, Bowen was the centre of an electorate that Labor held and was keen to consolidate. It was also the town nearest an important component of Labor's state enterprise push, the new Bowen state coal mine. Coal from Bowen had tested well in terms of its coking potential and Labor had hopes of it becoming the cornerstone of a nationalised coal industry.51 Bowen, given sympathetic railway extensions, could be seen as a potential northern industrial port for the mines of the northern inland such as the Chillagoe and Mungana mines which had recently been taken over by the state. It possessed a deep but under-developed harbour, and thus fulfilled the role for Labor of a potential new site for an expansion of industrial development into the north. |
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Key to the choice of Bowen as a site was its proximity to raw materials. The argument ran that it was the most convenient location to assemble all the materials for the production of iron and steel, and that the workers would easily relocate. The very isolation that Delprat had warned them against seemed an attraction to Labor as a 'lure' to the immigrants that were expected to flood into Queensland in the immediate post-war period. Jobs and the securing of an industrial future for the north were of primary importance to the decision making process. This was no passive process however. The people of Bowen formed a coalition of interests to actively lobby the state government and the 'expert' Brophy to choose it as the site for the works.52 Through a series of letters to the minister for mines, the geological survey division and Saint-Smith in particular, the Bowen Chamber of Commerce led the chorus of local opinion pushing Bowen's credentials. In tandem with the Chamber was the local newspaper editor, and the local Labor member — all seemingly with varying loyalties and agendas, but all united in their desire to bring a nationalised iron and steel industry to Bowen. |
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As well as lobbying through letters to key figures the Bowen Chamber of Commerce and the local newspaper united to publish a series of pamphlets which were sent to anyone who would read them. State Iron and Steel Works; Their Location and Working the Advantages of Bowen, Queensland, and Some Facts About Bowen, North Queensland, Australia published in 1919 and 1920 both presented strong partisan claims for the choice of Bowen for the works.53 As well as presenting the 'facts' about the presence of raw materials close to the town as an incentive, the Chamber wasn't backward in goading the government along political lines. Eschewing the standard conservatism of the business community, Bowen's chamber clearly saw the ideological motivation behind Labor's nationalisation plans and far from arguing against state ownership of the works, used the left's traditional accusation of Labor's 'selling out' against the Ryan government.
Here is the chance to uplift the worker. Will the government of the day rise to the occasion, and putting their precepts into practice 'leave their footprints on the sands of time'? Or will they, swayed by the cities political majorities, pander to ignorance and self interest, and place these State iron works amidst crowded and cramped surroundings?54
The Bowen lobby obviously saw the potential east Brisbane site of Pinkenba as their main competition and attacked it aggressively. They argued that carrying the materials to the workforce didn't make sense, as 'all past history teaches this'.55
Is the Ryan Government, upon this, the very eve of another lease of power, or otherwise a descent into political oblivion; are they going to make Brisbane another slum city like Melbourne and Sydney is, through congestion, by concentrating 3,000 ironworkers and their families at Pinkenba?56
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This form of approach demonstrates many things about the push from Bowen to secure the works. Firstly it shows how far the debate had come from mid-1918 and the deliberations of the Royal Commission. Correspondence in the Queensland State Archives concerning the site decision highlights the initial support for Bowen from the Mines department and the government generally. While no official decision seems to have been taken, by the time of the hiring of the 'expert', Brophy, Bowen was firming as the site of choice due to the junction of raw materials available at the site, and the deep water access. The correspondence between the Bowen Chamber of Commerce, the local member Charles Collins, and the department was cordial and supportive of Bowen as a site and hopeful of confirming the 'enormous' iron ore supplies that were held to be present in the region.57 By September 1919 and the publication of the pamphlet by the Bowen Chamber however, a distinct note of desperation was present, and the language as highlighted above was one of an emotive campaign being publicly launched to try and embarrass the government into establishing the works at Bowen. Much of this attack was delivered along lines that were seen as being potentially most damaging to the government, particularly that of a backdown on support for northern development. |
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From this point the project entered a difficult phase. Brophy was pushing ahead with plans for the works, travelling to the southern states looking to source equipment and pursuing potential sources of iron ore.58 Questions were asked in parliament by the Opposition concerning this search for a site, with the aim of embarrassing the government over the slow pace of the project. 59 There were clear statements as late as September 1919 that the government had not yet chosen a location.60 Given the earlier focus on Bowen and surrounds as a favoured site, as well as the investment by the government in the state coal mine in the area it seems reasonable to assume that this apparent change of heart wasn't coming from Labor. Brophy would appear to have been cooler on Bowen's charms than the government, less convinced of the practicality of establishing such a large industrial project in such a remote location. Indeed much of the passion aroused in the pamphlet from the Bowen Chamber of Commerce seems to have stemmed from an interview Brophy gave to the Daily Mail in August of 1919 in which he argued that the site would likely be near a major population centre because the issue of the availability of labour was of primary importance.61 By 1920 in spite of this advice the government announced its favoured site. Bowen had finally won out. |
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By 1920 however, plans to build the works were already beginning to falter. While the government was still going through the public motions of support for the plan, other factors were conspiring to dull their enthusiasm. Relating specifically to the project itself, the difficulty in sourcing sizable and reliable enough quantities of iron ore was hindering progress. Brophy seems to have been less convinced than the government of the usefulness of the Queensland based ore and began scouting for deposits outside Queensland in Yampi Sound, Western Australia, as well as islands off the Queensland coast as far afield as New Caledonia. It seems they could find ore, but not in quantities or places that were of sufficient size or suitability to convince them to take the final step. BHP had previously offered to supply them with ore, but the government perhaps didn't wish to be seen to be reliant on either private enterprise, or the major competitor for its key raw material. This was at a time of financial and electoral crisis for the government. With the state enterprise program generally starting to accumulate losses, enthusiasm for the most expensive of all the state undertakings began to wane. While supporters of state enterprise may have argued that the programme should not be judged on profitability alone, this was an easy way for opponents to assess the schemes and argue that they were expensive failures. While the year 1918–19 has been seen as the high point of the state enterprise programme, the desire to keep prices as low as possible for the consumer, and the ready acceptance of losses as part of the broader political objective soon ate away at profits with the programme overall registering net losses from 1923.62 |
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These losses were central to the end of the plans to develop the state steel works when set against the backdrop from 1920 of what became known as the Queensland 'loans affair'. While there is not the scope here to present a detailed overview of the loans affair, the crux of the matter centred on a delegation of leading Queensland conservatives led by Sir Robert Philp who convinced the leading City of London financiers to block the new Queensland Premier's attempts to raise new loans.63 The delegation was primarily concerned with Labor's planned changes to the Land Act which would have increased pastoral rents.64 Tom Cochrane has argued in Blockade that when Premier Theodore found his efforts to raise new loans in London stymied by the City financiers' refusal, a by-product was that the state iron and steel works proposal was effectively killed off. Indeed he argues that Labor saw this as a primary motive of the conservative delegation.65 |
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This can only be the subject of speculation, but in the light of significant cross-party support in the Queensland parliament, and the grudging support of the conservative Brisbane Courier despite its concurrent anti state enterprise campaign, there would appear to be at least enough evidence for an alternate view. Given the complexity of the nationalisation debate in the period, tied as it was to other divisions over the role of the upper house, the differences within the broader community brought to the surface by the war, the desire for northern development, and the broader ideological battle between the conservatives and what they saw as the reckless socialism of Labor, it was not impossible for Labor's opponents to undermine the state enterprise program generally on the one hand, and support one major component of it on the other. Desire for industrial and regional development saw many of Labor's critics support the Bowen steel plans. The fact that by stopping the loans from London a key group of these critics were also signalling the end of the emerging Queensland iron and steel industry was probably seen by them as an unfortunate but inevitable cost of the plan to derail Labor's 'socialist' agenda and undermine their ability to govern. When on 10 September 1920 Theodore opened Labor's campaign for re-election with the comment that 'Not the least unfortunate of the calamitous consequences of our enemies' action is the delay in the establishment of the iron and steel works', he was effectively signalling an end to Labor's dream of nationalising the iron and steel industry in Queensland.66 Despite his mention of 'another alternative', and interest from 'reputable engineering firms in England', the plan was at an end.67 As Cochrane has also argued, it may have suited Labor for both inner Party and broader electoral reasons to argue that their grand dream of a nationalised iron and steel industry was specifically brought down by the Philp delegation to the City of London, but the evidence does not support such a view. |
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Conclusions | |
| What this example of Labor's attempts to establish a state iron and steel works in Queensland shows us is the complexity of the nationalisation issue, and the extent to which factors beyond ideology, class and 'big picture' politics were important to its development, and therefore worthy of historical attention. Its specific spatial context — regional Queensland in the 1910s, was important to the course that was eventually run and is vital to our detailed understanding of events. While previous historians such as Murphy have focussed on the political lessons for Labor of the state enterprise experiment, by neglecting the specific regional and local context of the debate, the field is ripe for a new appraisal. As a cartoon from the Worker of October 1917 argued, the 'lesson of nationalisation' promoted by Labor during the period was that if the 'people' regained 'possession of those two [coal and steel] industries ... you have in your hands the basis of all industry'.68 What we see in the specific instance of the Bowen proposal is both the difficulty in deciding exactly which group of 'the people' was to benefit most immediately from this state largesse, and the challenges for Labor in pursuing its nationalisation agenda. |
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The Queensland iron and steel example shows us the limits of Labor's ability to act in the field of nationalisation policy. While competitive enterprises were established in many areas, the desire to establish the 'basis of all industries' was unsuccessful. This was despite almost all the key requirements being in place in Queensland, in a way that they weren't in the comparable NSW experience. Queensland Labor was able to point to the successful private BHP works built in NSW a few years earlier as a prototype for what could be achieved. They were deliberating during a period of high demand and therefore high prices for steel. Despite an anti-state enterprise backlash from conservative interests Labor was able to point to broad support for this particular venture. At a local level, communities were ready to welcome the industry with open arms, indeed the difficulty was to be found in choosing the 'lucky winner'. While raw materials were not entirely procurable from within the state in easily accessible quantities, the government had made efforts to secure supplies from various locations and had the fallback position of being able to access ore from BHP. For all this potential, the industry was stymied by the inability to secure loans from the City of London, and by Labor's eventual disillusionment with the state enterprise programme generally, as its costs and problems mounted from 1920. The difficulty of Labor's position as a reformist rather than revolutionary party is highlighted by this example. By opting to work within the system, Labor was constrained by the system. Their reforms could stretch only as far as the established structures would allow. It was a lesson repeated frequently throughout Labor's history. |
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What is also evident from the Queensland example was the important role of regional development to the plans for any expansion of state enterprise into fields such as iron and steel. While previous work has focussed on the political and economic factors relevant to the nationalisation debate during this era, it has tended to marginalise the importance of the overriding populist commitment to the 'development' of Queensland's wide open spaces. This can be seen to cross political boundaries and class allegiances. Regional development was seen as an unassailable good in itself and was an important factor in the decision making process. No-one wanted to be seen to be hindering industrial 'progress', and no-one wanted to be seen to deny the north its industrial future. This factor pushed the boundaries of practicality at times, with experienced advice such as that from Delprat to base the works near a large population and transport centre being ignored in the rush to satisfy the developmentalist urge. |
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Shawn Sherlock is a PhD candidate in the School of Humanities and Social Science at the University of Newcastle. His thesis examines the local and regional context of Labor's plans to establish state iron and steel works in Queensland and NSW in the period 1900–20. <shawn.sherlock@newcastle.edu.au>
Endnotes
* The author would like to thank Dr Erik Eklund and the two anonymous referees for their valuable suggestions and comments on this article.
1. Bowen Chamber of Commerce, State Iron and Steel Works; Their Location and Working the Advantages of Bowen, Queensland, W.H. Darwen, Bowen, 1919, p.11.
2. See Denis Murphy, Colin A. Hughes and R.B. Joyce (eds), Prelude to Power: The Rise of the Labour Party in Queensland 1885–1915, Jacaranda Press, Brisbane, 1970; Denis Murphy, Colin A. Hughes and R.B. Joyce (eds), Labor in Power: The Labor Party and Governments in Queensland, 1915–57, University of Queensland Press, St. Lucia, 1980; Denis Murphy (ed.), Labor in Politics: The State Labor Parties in Australia, 1880–1920, University of Queensland Press, St. Lucia, 1975; Denis Murphy, T.J. Ryan a Political Biography, University of Queensland Press, St. Lucia, 1990.
3. Murphy, Labour in Politics, p. 176.
4. David Cameron, An Historical Assessment of Economic Development, Manufacturing and the Political Economy of Queensland, 1900 to 1930, PhD thesis, Department of History , University of Queensland, 1999.
5. Australian Labour Federation, 'Political Aims of the Federation', in Brian McKinlay (ed.), Australian Labour History in Documents, Volume II, The Labor Party, Drummond Publishing, Melbourne, 1990, p. 8.
6. J.B. Dalton, 'An Interpretative Survey: The Queensland Labour Movement', in Murphy et al (eds), Prelude to Power, p. 6.
7. Malcolm Abbott, 'The New South Wales Labor Party and the Proposal to Nationalise the Iron and Steel Industry, 1890–1918' Labour History, no. 70, May 1996, pp. 115–30.
8. Tom Cochrane, Blockade: The Queensland Loans Affair 1920 to 1924, University of Queensland Press, Brisbane, 1989.
9. Cameron, An Historical Assessment of Economic Development, pp. 319–330.
10. See Ross Fitzgerald, Seven Days to Remember: The First Labor Government in the World: Queensland, 1–7 December 1899, University of Queensland Press, St. Lucia, 1999.
11. For more on the AWU see Mark Hearn and Harry Knowles, One Big Union: A History of the Australian Workers Union, 1886–1994, Cambridge University Press, Cambridge, 1996.
12. R.W. Connell and T.H. Irving, Class Structure in Australian History, Poverty and Progress, 2nd edn, Longman Cheshire, Melbourne, 1992, pp. 126–58.
13. For more information on the coalition era in the early 1900s see D.P. Crook, 'The Crucible — Labour in Coalition 1903–7', in Murphy et al (eds), Prelude to Power, pp. 56–73.
14. Queensland Government, Socialism at Work, Government Printer, Brisbane, 1918, p. 5.
15. 'Australian', Worker, 14 June 1917, p. 4.
16. Kay T. Cohen, A Different Outfit: State Trading Enterprises in Queensland, 1915–1930, MA thesis, Department of Government, University of Queensland, 1987, p. 5.
17. Denis Murphy, 'State Enterprises', in Murphy et al (eds), Labor in Power, p. 153. Murphy cites interviews with contemporaries where the popularity of the butchers' shops in particular was said to have led to pressure being placed on ministers to provide shops in various electorates, and to find jobs in state enterprises for constituents.
18. Queensland Government, Socialism at Work.
19. Queensland Government, Socialism at Work, p. 6.
20. Cohen, A Different Outfit, pp. 6–8.
21. Denis Murphy, 'State Enterprises', in Murphy et al (eds), Labor in Power, pp. 138–56.
22. Queensland Government, Socialism at Work, p. 6.
23. T.J. Ryan, 'Election Speech at Barcaldine, 1915', in Murphy et al (eds), Prelude to Power, p. 296.
24. Abbott, 'The New South Wales Labor Party and the Proposal to Nationalise the Iron and Steel Industry, 1890–1918'.
25. Queensland Labour Party, Constitution and General Rules, Queensland Labour Party, Brisbane, 1913.
26. See K.H. Kennedy, The Mungana Affair: State Mining and Political Corruption in the 1920s, University of Queensland Press, St. Lucia, 1978.
27. For more detail concerning this shift see Connell and Irving, Class Structure in Australian History, ch. 5 and Peter Cochrane, Industrialization and Dependence: Australia's Road to Economic Development, 1870–1939, University of Queensland Press, St. Lucia, 1980, pp. 90–100.
28. See Kosmas Tsokhas, 'War, Industrialisation and State Intervention in the Semiperiphery: The Australian Case', Review, vol. 19, no. 2, April 1996, pp. 331–57.
29. See Kosmas Tsokhas, 'W.M. Hughes, The Commonwealth Line and the British Shipping Cartel, 1914–1927', Prometheus, vol. 8, no. 2, December 1990, pp. 288–303.
30. See Kosmas Tsokhas, 'The Forgotten Economy and Australia's Involvement in the Great War', Diplomacy and Statecraft, vol. 4, no. 2, July 1993, pp. 331–357.
31. 'Report: Royal Commission on State Iron and Steel Works', Queensland Parliamentary Papers, (hereafter QPP) vol. 2, 1918, p. 1827.
32. 'Progress Report: Royal Commission on State Iron and Steel Works', QPP, 1917, p. 1825.
33.Ibid., p. 1826.
34. 'Report: Royal Commission on State Iron and Steel Works', QPP, p. 1830.
35.Ibid., p. 1829.
36.Ibid.
37.Ibid.
38. Labor tried to establish a 'Public Works Commission' representative of both major parties during its first term but had the legislation rejected by the upper house. Ryan claims he also gave the Opposition the opportunity to take part in the Royal Commission process but had his overtures rejected. See: T.J. Ryan, Policy Speech, 18 February 1918, Queensland Branch of the Australian Labor Party, Brisbane, 1918, p. 8.
39. 'Report: Royal Commission on State Iron and Steel Works', QPP, p. 1832.
40.Ibid. p. 1831.
41.Brisbane Courier, 7 June 1917, p. 6.
42.Worker, 25 October 1917, p. 17.
43.Ibid.
44.Worker, 20 December 1917, p. 16.
45. T.J. Ryan, Policy Speech, 18 February 1918, p. 7.
46. Colin A. Hughes, 'Labor in the Electorates', in Murphy et al (eds), Labor in Power, p. 63.
47. Draft report, Randolph Bedford to A. Jones MLA, 17 October 1918, series A/8714, file 8630B, Queensland State Archives (hereafter QSA), 2.
48.Ibid.
49. Report of the Royal Commission on State Iron and Steel Works, QPP, p. 32.
50.Ibid.
51. Draft report, Randolph Bedford to A. Jones MLA, 17 October 1918, series A/8714, file 8630B, QSA, 5.
52. For recent work on the importance and make up of these coalitions see: Erik Eklund, Steel Town: The Making and Breaking of Port Kembla, Melbourne University Press, Carlton, 2002, pp. 91–113; Greg Patmore, 'Localism and Industrial Conflict: The 1911–12 Lithgow Ironworks Strike Revisited', Labour and Industry, vol. 10, no. 1 1999, pp. 57–78.
53. Bowen Chamber of Commerce, State Iron and Steel Works; Their Location and Working the Advantages of Bowen, Queensland, W.H. Darwen, Bowen, 1919; Bowen Chamber of Commerce, Some Facts About Bowen, North Queensland, Australia, W.H. Darwen, Bowen, 1920.
54. Bowen Chamber of Commerce, State Iron and Steel Works, p. 5.
55.Ibid., p. 1.
56.Ibid., p. 10.
57. E.C. Saint Smith to Chief Government Geologist, 16 April 1918, series A/8714, file 2709, QSA; A.V. Murray to Under Secretary, Queensland Department of Mines, 26 August 1918, series A/8714, file 6397, QSA; A.V. Murray to C. Collins MLA, 26 August 1918, series A/8714, file 6398, QSA.
58.Brisbane Courier, 28 August 1919, p. 6; 29 August, 1919, p. 4.
59.Ibid.
60.Brisbane Courier, 29 August 1919, p. 6; Bowen Chamber of Commerce, State Iron and Steel Works, p. 1.
61. Bowen Chamber of Commerce, State Iron and Steel Works, p. 1.
62. Cohen, A Different Outfit, p. 6.
63. For a fuller account of the Queensland loans affair see Cochrane, Blockade.
64.Ibid., p. 8.
65.Ibid., p. 78.
66. E.G. Theodore, Policy Speech, 10 September 1920, Queensland Branch of the Australian Labor Party, Brisbane, 1920, p. 16.
67.Ibid., p. 17.
68. 'The Lesson of Nationalisation' in, Worker, 25 October 1917, p. 1.
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