War Economy, 1942–1945 (Australia in the War of 1939-1945: Series 4 Civil)

AUSTRALIA IN THE WAR OF 1939-1945 SERIES FOUR

CIVIL VOLUME I V

WA R ECONOMY, 1942-1945

AUSTRALIA IN THE WAR OF 1939-1945 SER IES 1

(ARMY )

I. To Benghazi. By Gavin Long. II. Greece, Crete and Syria. By Gavin Long. III. Tobruk and EI Alamein. By Barton Maughan. IV. The Japanese Thrust. By Lionel Wigmore. V. South-West Pacific Area-First Year. By Dudley McCarthy. VI. The New Guinea Offensives. By David Dexter. VII. The Final Campaigns. By Gavin Long. SERIES 2

(NAVY)

I. Royal Australian Navy, 1939-42. By G. Hermon Gill. II. Royal Australian Navy, 1942-45. By G. Hermon Gill. SERIES 3

(A IR )

I. Royal Australian Air Force, 1939-42. By Douglas Gillison. II. Air War Against Japan, 1943-45. By George Odgers. III. Air War Against Germany and Italy, 1939-43. By John Herington. IV. Air Power Over Europe, 1944-45. By John Herington. SERIES 4 ( C I V IL ) I. The Government and the People, 1939-41 . By Paul Hasluck. II. The Government and the People, 1 942-45. By Paul Hasluck. III. War Economy, 1939-42. By S. J. ButZin. IV. War Economy, 1942-45. By S. J. ButZin and C. B. Schedvin. V. The Role of Science and Industry. By D. P. Mellor. SERIES 5

(MEDICAL)

I. Clinical Problems of War. By A llan S. Walker. II. Middle East and Far East. By A llan S. Walker. III. The Island Campaigns. By A llan S. Walker. IV. Medical Services of the R.A.N . and R.A.A.F. By A llan S. Walker and Others.

The writers of these volumes have been given full access to official documents, but they and the general editor alone are responsible for the statements and opinions which the volumes contain.

WAR ECONOMY 1942 - 1945 by

S. J. BUTLIN and C. B. SCHEDVIN

CANBERRA AUSTRALIAN WAR MEMORIAL

First published 1977

National Library of Australia card number and ISBN ISBN for complete set of

22

0 64299366 1 0 64299406 4

volumes:

ISBN for this volume:

WHOLLY SET UP, PRINTED AND BOUND IN AUSTRALIA AT GRIFFIN PRESS LIMITED, NETLEY, S.A.

CONTENTS Page

Preface

xiii

Chronology

xv

1

T H E I M P A C T O F P A C I F I C W AR

2

TH E S E A R C H F O R MA N P O W E R

15

The Use o f Diverted Manpower.

21

as

a Factor in Other Wartime Issues

Aliens

27

Women

29

Manpower for Works .

34

The Universities

36

.

39

.

EX P AN D I N G M U N I T I O N S P R OD U C T IO N

48

New Locations for Production

54

Explosives

60

Weapons

62

Torpedoes

69

Tanks .

70

Aircraft Production

79

The Turning Point for the Munitions Organisation

84

P R O B L E M S OF D O M E S T I C S U P P L Y

90 90

The Allied Supply Council and Lend-Lease

98

Procurement

105

Clothing and Textiles .

114

G R O W T H OF M U T U A L A I D United States Lend-Lease

6

24 26

Controls

5

.

Wages

Assessing the Results

4

13

The Schedule of Reserved Occupations and Diversion of Manpower Manpower

3

1

.

121 121

The Extent of Mutual Aid.

128

Australian Reciprocal Aid

131

A L L I E D WO R K S

140

.

Labour for the Allied Works Council .

144

Equipment and Materials

149

.

The Diminishing Need for the Council

V

152

7

R E O R G A N I S I N G CI V I L I A N I N D U S T R Y Efforts to "Rationalise"

160 1 60

Clothing . Packaging

1 64

Bread

1 67

Efforts to "Concentrate" Flour-milling

1 67 1 68

.

Superphosphate

1 69

Banking and Insurance

1 69 171

Tea

8

The Problems of Advertising

173

Brands and Trademarks

1 74

Scope of the Activities of the Department of War Organisation of Industry

177

Wines and Spirits

177

Matches

1 78

.

Newspapers

181

Refrigerators

182

Furniture

1 84

The Retail Trade

185

R U R A L I N D U S T RY U N D E R S T R A I N

1 89

The States' Role i n Agricultural Production Goals and District Committees

195

Labour for Rural Industry

196

.

The Women's Land Army

1 99

Exports a Continuing Problem

201

Wool

201

Wheat

204

Barley

206

Apples and Pears

207

Canned and Dried Fruits

209

Wine

210

Rabbit Skins

9

1 54

.

211

Hides and Leather

212

C R I S I S I N S HI P P I N G

215

Shipping Organisation

215 219 220 225 225 227 230 240

Requisitioning Chartering

.

Labour The Seamen's Union Stevedoring Cargo Control Shipbuilding

vi

10

L A N D T RA N S P O R T

247

Military Demands on Rail Systems

254

Railway Equipment and Construction

257

Labour

260

Coal for the Railways

262 265

Fuel for Road Transport

11

12

249

Restrictions on Passengers and Freight

Substitute Fuels

267

Vehicle Accessories

27 1

Restrictions on Road Transport

275

Commercial Deliveries

276

Pooling

277

Sources of New Vehicles

279

CO N S U M E R R A T I O N I N G

286

The Decision to Ration

287

Clothing

294

Tea

300

Sugar .

302

Butter

304

Meat

305

M E E T I N G I N F L AT I O N

3 10

"The National Economic Plan"

314

Investment and Property Control

3 16

Price Control

325

Uniform Tax

331

13

T H E WA R E C O N O M Y I N M I D - P A S S A G E

339

14

R E A S S E S S I N G MA N P O W E R P R I O R I T I E S

348

15

In Search of Policy

348

Towards Regional Specialisation .

360

Screening for Labour .

366

Rural Labour Organisation

374

The Manpower Release Tangle

380

M U N I T I O N S IN R E T R E A T

391

The Struggle for Production Control

391

Restructuring Production .

400

Aircraft Production

410

Dismantling the Arsenal

419 vii

16

S U P P L Y I N T H E F I N A L P HAS E

424

The Directorate of Supply .

425 425

Contracts

17

18

Commodity Controls

434

Clothing and Textiles .

438

Coal

443

Minerals Production

453

Towards Restriction of Mutual Aid

458

Mutual Aid in Stage II

468

S H I P P IN G A F T E R T H E C R I S I S

473

Shipbuilding

482

Waterside and Maritime Problems

485

Post-War Policy .

495

F O O D P R O D U C T IO N A N D A L L O C A T IO N Agriculture and the War Economy

19

20

21

473

The Supply of Shipping

497 498

Production Planning and Contracts

501

Allocation

527

P R I C E ST A B I L I S A T I O N A N D W A G E S

536

Towards Price Stabilisation

536

Price Stabilisation in Application

547

Cost of Subsidies

552

Wages

555

Rent

562

Prices Enforcement

564

F I N A N C IA L P O L I C Y

570

Th e Tax Harvest

570

Loans for Victory

578

Interest Rates

586

Investment Control

589

External Finance and Trade

598

Mutual Aid: Termination and Settlement

605

Banking Legislation

612

TO W A R D S A N E W SO C I A L OR D E R

625 626

First Steps . The Employment Approach

630

Australia and Article VII: The Defence

637

Australia and Article VII: Broader Horizons

654

Full Employment at Home

673

viii

22

23

24

25

R E C O N S T R U C TI O N-T H E M A N P O W E R D I M E N SI O N

680

Plans and Planners

680

Manpower Budgeting

685

Population

701

R E C O N S T R U C T I ON-T H E FE D E R A L DI M E N S I O N

707

National Works .

707

Regional Planning

712

Housing

7 15

Training and Education

724

Soldier Settlement and Rural Industries

733

IN D U S T R I A L R E C O N S T R U C T I O N

742

The Secondary Industries Commission

742

Principles

745

The Role of Exports .

748

Motor Vehicles

752

.

Shipbuilding, Textiles and Optical Instruments

762

Disposal of Munitions Factories

767

T H E CO L L A P S E OF T H E W A R E C O N O M Y .

773

Preparing for the Transition

773

The "White Paper Controls"

777

Disposal

794

IN D E X

799

ix

ILLUSTRATIONS Page "That's what we get for writin' to Man-power for a shearer." (Cartoon by Percy L�gy)

W

"All right-tenner a week or I work in a munitions joint!" (Cartoon)

28

.

"Now, before you leave us, Sarah, I must know how you peel the eggs before frying them. " (Cartoon by Percy Lindsay)

"Where is Everybody?" (Cartoon by Armstrong)

30 96 1 10 1 10 111 1 18 138 142 142 143 1 62 1 66 226 266 268 288 290 296 326 352

"Righto! Boys, get your identity cards ready-we're from the Manpower!" (Cartoon by Dixon)

354

"Blocking the Road." (Cartoon b y Wells) Introducing Our New Inspector. (Poster) Instead of These we are making These. (Poster) Bread Zoning Released 1 , 5 14 Carters. ( Poster) "It's moments like these . . . " (Cartoon by Frith) "The New Embarkation Line. " (Cartoon by Wells) Why does Mummy do all the War Work? (Poster) Women wanted to Can the Crops. ( Poster) No One Else can do Your Share. (Poster) "Dedman Sells no Tails. " (Cartoon by Armstrong) "You can't just say 'We'll build our nest here'. " (Cartoon by Miller) "My Country 'tis of Thee!" (Cartoon by Armstrong) "The Stork Got There First. " (Cartoon by Wells)

.

"We girls know when you men do run out of gas these days." (Cartoon) "Her Letter to Her Soldier. " (Cartoon by Scorfield) "The Lights that Failed. " (Cartoon by Armstrong) "Around the Troughs." (Cartoon by Armstrong) "Alice in Blunderland. " (Cartoon by Frith) .

"Never mind about my hat and coat-would you please check these in?" (Cartoon by Dixon) He's Telling Santa Claus. (Cartoon by Hallett) The Home Front . . . "Don't you know there's a war on-between the unions?" (Cartoon by Frith) Change over to a Victory Job. (Poster) "Honourable thanks Absentee. " (Poster)

.

Clothing is Vital. (Poster) "No inspector, jewels are safe. It's the half-pound of rump missing!" (Cartoon by Miller) Dairy Farmers, too, have a victory to win. (Poster) Put all you've got in the Third Liberty Loan. (Poster) " Better not ask too much for 'er or we'll 'ave the Prices Commissioner on our tails!" (Cartoon by Percy Lindsay) "Hail and Farewell. " (Cartoon by Armstrong) "This Jemmy's no Good, Gimme the Gelignite. " (Cartoon by Eyre Jr) Rehabilitation. (Cartoon b y Hallett) "Haven't you got one empty house?We haven't had a decent haunt for five years!" (Cartoon by Dixon)

xi

486 494 494 495

steak that's

Food i s a munition of war! ( Poster)

Revocation of Controls. (Cartoon by Scorfield)

436 442

510 526 526 527 546 572 616 698 722 786

MAPS AND DIAGRAMS Page

Commonwealth Shipping Administration-Organisation as at 30th September 1 942 (diagram) Merchant Shipping Casualties i n Australian and Territorial Waters resulting from enemy action (map) .

.

Other Merchant Shipping Casualties from 1940 to December 1945 (map) Australian Railways (map)

218 241 242 252 396 548

Location of Government Munitions Factories (map) Retail Prices, Quarterly 1939-48 (diagram) Commonwealth Income Taxes before Uniform Taxation-Personal Exertion Income Remaining

576

Commonwealth Income Taxes after Uniform Taxation-Personal Exertion Income Remaining Money Supply and Selected Bank Assets 1939-45 (diagram) Interest Rates 1942-45 (diagram) Melbourne Index of Industrial Stock Prices 1938-46 (diagram)

576 585 588 596

.

.

xii

PREFACE

T

HE structure of this volume like that of its predecessor is a compro­ mise between clarity and chronology. For Australia the war from

early 1942 on had two clearly defined phases: 1942 was the year of maximum danger when invasion and defeat seemed possible, even, to the fainthearted, likely and the conversion to a full war economy was pursued helter-skelter. By early 1943 it was being recognised that the conversion was too complete and the favourable fortunes of war implied a substantial degree of reversal. The prospect of eventual peace was reinforced in 1944 and 1945 by the constraints on Australia's warlike activity imposed by Allied and especially American strategic planning, so that the theme of post-war reconstruction at home and internationally came to bulk large. Accordingly, roughly the first half of the volume is concerned with the first phase, from the entry of Japan into the war up to the early months of 1943. Since the story cannot advance on all fronts simultane­ ously there is a series of chapters on particular topics, the order of which is largely dictated by the limitations on pursuing any one of these topics far without making the reader aware of what was going on at the same time in other fields. Generally, topics are carried forward to varying dates in the first half of 1943 but in some instances later parts of the story are summarily recorded to avoid interrupting later narratives by reverting to minor sequels to what had been important developments. Chapter 13 surveys briefly the achievements of 1942 and from the standpoint of mid-1943 looks ahead as a bridge to the second part of the volume which broadly follows the same pattern as the first. Reconstruction themes are not pursued beyond the end of hostilities except to the extent necessary to complete the wartime story; the volume is concerned with war and not with what happened after. Broadly, S. J. ButIin has been responsible for the first half of the volume and C. B. Schedvin for the second, but each has contributed pieces to the other and drafts have been discussed between us so that no specific point can be safely attributed to one of us alone. One major difficulty in completing the work should be recorded. The creation of an Australian government archives organisation, in itself a highly desirable and overdue development, for a number of years uninten­ tionally limited access. Records which had been readily identifiable and easily found through individual departments became "lost" or inaccessibly stored as departments thankfully divested themselves of their accumula­ tions. In the process there was some unfortunate destruction, most notably in size and importance the records of the Department of Supply and Shipping. Successive governments have been reluctant to provide the resources needed to examine, put in order, and make accessible vast volumes of material covering not merely the war of 1939-45 but dating

xiii

back three-quarters of a century. The Whitlam Government finally took, in 1975, the necessary basic steps towards adequate staffing and organisa­ tion, still to be fully implemented, but this was too late for us. Notwith­ standing, we have only gratitude for the way archives staff have sought to meet our needs. For varying periods four researoh assistants-Faith Fogarty, Cathy Munro, Helen Townsend and Jane North-have suocessively provided us with invaluable essential help and to each our debt should be acknowledged. Preparation of the manuscript for the printer has been in the experienced hands of Joyce Fisher whose expertise in this and other fields has con­ tributed to several volumes in this series as well as to otqer books. She has said that her epitaph will be "she was mentioned in prefaces"; she should once again be so mentioned with grateful appreciation so that not only she but her friends may know that the skill and devotion she gives to the vast amount of work that lies between an author's manuscript and a finished book are appreciated by the people who have caused the most trouble and best know what she has done. The index has been prepared by Mr. E. Zalums. S. J. BUTLIN C. B. SCHEDVIN

Sydney/Melbourne, February 1976.

xiv

C HR ON OL O GY 1941

7-8 Dec

Japanese begin landings in Thailand and Malaya and attack Pearl Harbour

11 Dec

Italy and Germany declare war on United States of America

1942

25 Dec

Fall of Hong Kong

23 Jan

Japanese forces capture Rabaul

3 Feb 19 Feb 8 Mar

First Japanese air raid on Port Moresby Japanese attack Darwin Japanese troops enter Rangoon Japanese forces occupy Lae and Salamaua

9 Mar

A.I.F. troops from the Middle East begin to arrive in Australia

17 Mar

9 Apr 18 Apr 5-8 May

General Douglas MacArthur arrives in Australia American forces on Bataan surrender G.H.Q. South-West Pacific Area established in Melbourne Battle of the Coral Sea

20 May

Allied forces withdraw from Burma

26 May

German offensive in Western Desert begins

31 May-l Jun 4-6 Jun

Japanese midget submarines raid Sydney Harbour Battle of Midway Island

18 Jun

Mr Churchill arrives in America for conferences with President Roosevelt

21 Jul

Japanese invade Papua

7 Aug 25-26 Aug 17 Sep

American marines land in southern Solomon Islands Japanese forces land at Milne Bay Japanese drive over Owen Stanleys haIted by Aus­ tralians at Imita Ridge

25 Sep 23-24 Oct 2 Nov 7-8 Nov 12-15 Nov

Australians Stanleys

begin

counter-offensive

Battle of El Alamein begins Kokoda recaptured Allied landings in French North Africa Naval Battle of Guadalcanal xv

in

the

Owen

19 Nov

Russians announce launching of counter-offensive at

23 Jan

Organised Japanese resistance in Papua ends

29 Jan

British Eighth Army enters Tripoli

18 Feb

9th Australian Division arrives at Fremantle

Stalingrad 1943

2-4 Mar 12 May

Battle of Bismarck Sea Trident Conference in Washington between President Roosevelt, Mr Churchill and tihe Combined Chiefs

of Staff 13 May

Campaign in North Africa ends

14 May

Hospital ship Centaur sunk by Japanese

30 Jun

Americans land on New Georgia in central Solomons

10 Jul

Allies invade Sicily

14-24 Aug 21 Aug 3 Sep

First Quebec Conference between President Roosevelt, Mr Churchill and the Combined Chiefs of Staff Australian Labor Party wins Federal elections Allies invade Italy

11 Sep

Australian troops enter Salamaua

16 Sep

7th and 9th Australian Divisions enter Lae

2 Oct

Australians capture Finschhafen

1 Nov

American forces land on Bougainville in

northern

Solomons 22 Nov

Cairo Conference between President Roosevelt, Mr

28-30 Nov

Teheran Conference between President Roosevelt, Mr Churchill and Marshal Stalin

Churohill and General Chiang Kai-shek

15 Dec 1944

2 Jan

Americans land on New Britain American Sixth Army task force lands at Saidor in New Guinea

23 Jan

Australian troops clear Shaggy Ridge

31 Jan

American forces invade Marshall Islands

22 Apr

American landings at Hollandia and Aitape in New Guinea

24 Apr

Australian troops enter Madang, New Guinea

27 May

American forces land on Biak Island

6 Jun 19-20 Jun

Allied forces invade Normandy Naval Battle of the Philippine Sea xvi

2 1 Jul

u.s. marines invade Guam

15 Aug

Allies invade southern France

17 Sep

First Allied Airborne Army lands in Holland

5 Oct 11 Oct 23-26 Oct 24 Nov 1945

British forces land on mainland of Greece American Third Fleet attacks Luzon in the Philippines Naval Battle of Leyte GuIf Superfortresses attack Japan from bases in the Marianas

3 Jan

Allies occupy Akyab in Burma

9 Jan

American forces land on Luzon

4 Feb

Yalta Conference between Mr Churohill,

President

Roosevelt and Marshal Stalin 1 Apr 12 Apr

American forces land on Okinawa President Roosevelt dies; Mr Harry S. Truman becomes President of the United States

28 Apr

Mussolini shot by partisans in Italy

30 Apr

Hitler commits suicide in Berlin

1 May

Australian troops land on Tarakan Island

7 May

Germany surrenders unoonditionally

11 May

Wewak captured by 6th Australian Division

26 Jun

United Nations Oharter signed at San Francisco

5 Jul 13 JuI

Death of Australian Prime Minister, Mr John Curtin Mr J. B. Chifley elected leader of Federal Parliamentary Labor Party and becomes Prime Minister

16 Jul

Potsdam Conference between representatives of Britain, United States, and the Soviet Union to draw up terms for Japanese surrender and to discuss military and political issues connected with termination of hostilities

26 JuI

Mr Clement Attlee elected Prime Minister of Great Britain

6 Aug

First atomic bomb dropped on Hiroshima

8 Aug

Soviet Union declares war on Japan, effective from 9th August

9 Aug 15 Aug 2 Sep

Atomic bomb dropped on Nagasaki All offensive action against Japan comes to an end Japanese envoys sign the Allied instrument of surrender aboard the U.S.S. Missouri in Tokyo Bay xvii

CHAPTER 1 THE I MP ACT OF P AC I F IC W AR

T

HE Japanese many-headed assault on 7th December 1941 was a profound shock to Australians. Japan was traditionally the potential

enemy; in 1939 planning had presumed active Japanese hostility from the outset; during the second half of 1941 the prospects for peace in the

Pacific had deteriorated steadily. But few Australians thought the situa­ tion at the beginning of December was hopeless, or contemplated that Japan was on the verge of challenging America as well as the Allies by direct attack. The shock was correspondingly severe as the full range of Japanese plans became clear. Initial attacks on Kota Bharu in Malaya and Singora and Patani in Thailand and on Hong Kong were overshadowed by the startling news of the devastating raid on Pearl Harbour and the less important one on Manila in the Philippines. The news was heavy with portents and threats, the full meaning and magnitude of which it was difficult to comprehend. America was, at last, in it; henceforth she was a full fighting ally, and it was impossible to con­ ceive America being other than finally victorious. But it was Japan that had attacked America, and the crushing defeat she inflicted at the outset in Hawaii underlined both Japanese confidence and Japanese ability to strike hard. America might be an active ally, but the implications of Pearl Harbour offered no comfort to Australia, no assurance of immediate or effective aid. And Japan seemed strong for attack wherever she chose. In the days that followed, the initial shock was accentuated by the unbroken record of Japanese aggressiveness and Allied inability to make more than token resistance. Guam fell on 10th December and Wake, assaulted the next day, on the 23rd. The air attacks on Manila were followed by a landing on the 12th. American strength in the Pacific seemed an illusion. Meanwhile news of Malayan fighting, as available to the public, was disquieting. The loss of Prince of Wales and Repulse con­ firmed the pitiful air weakness of British, Indian and Australian forces in Malaya;

the repetition of news of one

retreat followed by another

sharpened fears already acute enough, while optimistic and soothing reports from Malayan commanders were soon being read as forewarning of another defeat impending. In January the immediacy of the threat to the Australian mainland became real. Rabaul in territory held under a League of Nations mandate was bombed on the 4th and subsequently, until strong forces landed on the 23rd, the same day as Kavieng in nearby New Ireland was assaulted. Singapore fell on 15th February, and Rangoon on 8th March. Darwin had on 19th February the first and most severe of a series of bombing raids, to be followed by other raids on north-western ports. Timor was taken on the 23rd; in the following days there were severe naval losses north of Java, the position of which was apparently hopeless. On 8th March

2

THE I M P A C T O F P AC I F I C WAR

Japanese forces landed a t Lae and Salamaua o n the mainland o f Aus­ tralian New Guinea, and on the 12th Allied forces in Java surrendered. At that point the Japanese had achieved in three months what they had planned to achieve in six. They held a line stretching from Rangoon in Burma down to Timor, through northern New Guinea and north through Wake Island to the Kuriles, and enclosing Malaya, the Netherlands East Indies, the Philippines and the last American outposts of Wake and Guam. Within that vast area only Australian guerillas in Timor and a doomed American force in Bataan qualified Japanese victory. Her air supremacy was overwhelming, and her negligible naval losses stood out starkly against the repeated destruction of Allied vessels on almost every occasion of conflict. To Australia what had happened seemed but a foretaste of what was to come. From Britain little could be expected. What forces could be spared from Europe and the Middle East would clearly go to the defence of India; any optimism concerning British aid must have been quenched by the evident determination of Churchill to give Indian defence priority over Australian, even to the extent of diverting Australian forces, returning from the Middle East, to that theatre. Such help as could come must come from America. And however great that might ultimately be, it was brutally clear that it would not be, for some time, large. American troops landed in Aus­ tralia late in December 1941 had consisted only of some units that had been on their way to the Philippines and the intention was to find means of ferrying them forward to those islands. The urgent need for aircraft, it appeared, would not be met for some time except by token forces. Warn­ ings from America indicated that for a while American mobilisation would probably reduce supplies of warlike material below the level enjoyed under Lend-Lease before the Japanese attack. Those supplies must come across sea routes threatened by the dominant Japanese navy. Help would come but, immediately, Australian defence must be sustained almost wholly by its own forces. The economic events of the first three months of Pacific war must be seen against this background. Abruptly the country so far participating in a distant war, was plunged into near-at-hand conflict, in which attempted invasion seemed certain. What could be or should be done on the economic front was dictated by the probability that war would be waged on Australian soil, and the certainty that for some months only limited American aid would be available. Moreover, for more than three months the full dimensions of this situation were unfolding. In December it was still possible to hope that Malaya would hold; by January the question was whether the Indies could delay the Japanese long enough to permit defence in New Guinea and on the northern coast to be organised; by February invasion seemed likely. Worst of all, the Japanese seemed irresistible. The effect of this developing threat on Australian attitudes is the

THE I M P A C T O F P A C I F I C WAR

3

concern of another volume.1 It was a period of great uncertainty and fear, but not of panic. In a national broadcast on the day following the Japanese attack, the Prime Minister, John Curtin, declared: I can give you the assurance that the Australian Government is fully prepared. It has been in readiness for whatever eventuality, and last Friday the initial steps were taken and fully carried out. From early this morning the Service Ministers of the Cabinet and the Chiefs of the fighting Services have done everything that has to be done by them. The War Cabinet met and put into effect the plan devised for our protection. This afternoon, the full Cabinet met and I am able to announce to you prompt decisions on a wide variety of matters-all of them vital to the new war organisation that confronts us. All leave for members of the fighting Forces has been cancelled. An extension of the present partial mobilisation of Navy, Army and Air Forces is being prepared. The Minister for Home Security will, tomorrow, confer with Army authorities on air raid precautions. Regulations will be issued to prohibit the consumption of petrol for purposes of pleasure. A conference will be held by the Minister for Supply with oil companies on the storage of fuel and the security of that storage. Arrangements will be made for all work on services that are essential nationally to be continued on public holidays in future, while, in this connection, all transport services will be concentrated upon necessary purposes. The Minister 'for Labour will leave for Darwin immediately to organise the labour supply there. An examination will be made to ascertain what retail establishments should continue to trade after 6 p.m.­ so as to conserve light, coal, transport services.

Most of the measures referred to were naturally military, and it was the duty of a Prime Minister to reassure the public. But on the economic front there was some justification for the claim of preparedness. The plans for a Manpower Directorate, for instance, were well advanced; and other plans were in fairly specific form. More generally, a wide range of measures which took precise shape in the following weeks had been canvassed, so that in the new atmosphere they could be implemented at short notice. Controls which a month earlier would have been unwelcome could now be hurried forward with the certainty of public co-operation. There was preparedness in this wider sense, not of a set scheme for action should Japan attack, but of recognition of problems and exploration of solutions. What the new situation would demand on the economic front was as unclear and as changing as were the military demands of Pacific war. Now, as at no earlier time, what was required of the economy was dictated directly and immediately by a fast-changing military situation. Neatly inte­ grated economic planning was neither possible nor sensible in December­ February. An urgent military need which demanded major use of economic resources might disappear within days and be replaced by a new one. Thus the Japanese attack which might have increased the need for supplies for the Eastern Group Supply Council, based in India, by its onrush made the shipment of such supplies virtually impossible-and, for example, clothing accumulated, to provide welcome easing of Australian rationing months later. Northern defence works appeared at one stage so urgent that the import of Javanese labour was sanctioned, but the speed of the Japanese advance made the labour unavailable and changed the strategic need. 1 See P. Hasluck. The Government and the People.

1942-1945 (1970)

in this series.

4

THE IMPACT O F PACIFIC WAR

Japan's rapid approach brought a sharp intensification of air raid precau­ tions work. Such a fluid strategic situation meant that economic strategy must remain obscure until the military demands were more clearly defined. What was clear, assuming that Australia was not overrun within a brief space of time, was the general direction in which economic policy must go. There must be great and immediate expansion of the armed forces, to which all other demands must be subordinated, and labour must be diverted to air raid precautions-in other words, a great call on manpower engaged in production, a call which must be met at once. Munitions, and especially aircraft production, must be expanded-but along broadly the established lines. War supplies of all sorts must be produced in greater quantity, including, it presently appeared, war supplies for the Americans. Defence works must be rushed ahead in many places, including remote ones. Oversea supplies would be, at least temporarily, tenuous, even supply of the most vital materials. The economy must be prepared in haste for sustaining a greatly expanded war effort even though territory might be lost to an invader, and any locality under actual or threatened attack. Several morals were painfully plain, so plain that it does not seem they were even formally stated, although recognition of them was con­ stantly implicit in what followed: the great and central need was man­ power-manpower for the forces, for air raid precautions, for war production, for the essential minimum civil needs; all "non-essential" activities must be slashed ruthlessly, and the civilian standard of living seriously curtailed; economic aid from America was likely to be slower in arriving than major military help must be, and therefore, in the short run, Australia must depend primarily on her own manpower and productive resources. These central issues were obvious. What could not be seen was how far action must go, whether total resources would be adequate, and, above all, whether there would be time enough for the required far­ reaching transfers of activity. But the main lines were clear, and action could proceed. The forces could be expanded; non-essential production could be slashed; the organi­ sations for controlling and directing mass movements of labour, and for executing a great works programme, could be created. How far it might prove to be necessary to expand the forces, to cut living standards and to regiment labour, could scarcely be guessed, and must be left to emerge with time. At least from December 1941 to March 1942 it seemed clear that what could be achieved in that critical period could not possibly be too much. Rather the driving force was the conviction that the most that could be done might well be too little or too slow. Whether it would in the end be enough and in time, could only be determined by the unfor­ giving arbitrament of battle. What therefore was striking at the time remains noteworthy in retro­ spect. There was no panic in the Administration. There was fear, deepening as the Japanese pressed on, that invasion and defeat might be very near. But fear only becomes panic when no solution to pressing danger can be seen, or when it seems that all hope is lost. In those early

THE I M P A C T O F P AC I F I C WAR

5

weeks of Pacific war Australians could take some comfort from having America as an ally-at least, in the end, Japan must be defeated, since defeat of America was unthinkable. If for a few months the Japanese could be held, military and economic aid must come from America in quantity. In the months to come, in the popular and in the political mind the cheering fact seemed to be the presence of United States troops on the Australian mainland. But during 1942 and 1943 events in the South-West Pacific Area were not to be vitally influenced by United States ground forces; even the United States army air forces were not a major factor until a year after Japan's attack. From time to time during 1942 and 1943 United States naval forces intervened decisively, but this was largely invisible to Australians. The strongest then-effective military reinforce­ ment that could or did reach Australia during 1942 was the return of the A.I.F. from the Middle East; the determined insistence on this return to Australia rather than Burma against the stubborn opposition of Churchill rested on appreciation of the hard fact that no other immediately opera­ tional ground forces were available. In the short term the primary form of American aid was to be in supply. The military task was clear and, at least, not hopeless; so was the economic. The best economic effort of which the country was capable might not prove enough, in the sense that invasion and even complete occupation might precede an ultimate Allied victory in the Pacific. But the broad pattern of advance of the economy was sharply defined. The immediacy of the threat swept away the resistances and released the inhibitions that had dogged the first two years; for the first time the Government was confronted by a population clamouring to be told what to do and what to sacrifice, and critical only of apparent slowness or tenderness in applying the scourge. But it would be grossly false to see the economic decisions of December-March as panic responses to repeated disaster. What was noteworthy was how the Administration, in the circum­ stances as they were then known, did what was to prove the right thing. That must not be attributed to confidence in being "saved" by America. At the highest political, Service and administrative levels there could be no illusions as to the scale on which American military or economic aid would be immediately available. Nor would thankful reliance on early rescue have prompted the drastic reorganisation of the economy which was pressed through during the first half of 1942. The "rightness" of what was initiated in the first three months of Pacific war was conditioned primarily by the brutal clarity with which the essential lines of policy were defined, for government and population alike, and secondarily by the two years' experience of less immediate war and all that that had entailed. For some weeks, however, the activities of the Government could only be obscurely known to the public. After the first sweeping announcements time was required, even if measured only in days, to translate principles of action into legal form, to bring organisations into being, and to deter­ mine what persons should move where. Undue precision in advance

6

T H E I M P A C T O F P AC I F I C WAR

announcements-as happened with curtailment o f holidays--could pro­ duce confusion, and criticism deriving from that confusion. The plans for the Manpower Directorate were endorsed within days, but regulations could not be published until a nucleus organisation had been created and other preparations made. Cuts in petrol rations could be determined, but could have no effect until the current ration period expired at the end of January. Opinion therefore, as reflected in or moulded by the Press, tended to be critical, not so much of particular actions as of the lack of this or that action. The Sydney Morning Herald declared in magisterial tones that the Government may be sure that they will have the country solidly behind them ... . It must use the authority then given it. The public looks for the strongest action and will be critical only of hesitation and delay.2

This was an accurate enough forecast; there was such criticism, most of it misdirected in inevitable ignorance. For, in retrospect, the "rightness" of what was done was matched by the speed with which action, even if necessarily withheld from the public, was decided and executed. What was initiated during the first three months makes a pattern readily intelligible against the definition of the demands upon the economy. In foremost place was the enlargement of the Services. Before the Japanese attack numbers in the forces were 382,100. Immediately large call-ups commenced. By March the net total of the Services had grown to 5 5 4,700. The rapid removal of such numbers of efficient workers placed great strain on essential production and made the already planned manpower organi­ sation even more urgent. Later the tradition was to develop that the Services demanded too much in this transition period and that a primary purpose of the Manpower Directorate was to restrain unreasonable Service demands. Some months later this was true, but by then circumstances were very different. By then the Services were expanded beyond a size which could be maintained for more than a year or so by a popUlation of 7,000,000, and, in any case, once the Manpower authority was in existence it was natural and reasonable for the Services to press their claims for manpower, and for the Manpower authority, in its role of arbiter, to seek to restrain them. But in the first weeks the issue was not seen by anyone in the terms later attributed to this period. No one questioned the urgent necessity of rapid increase in the Services, and on several occasions, it was the Services that took long views. For instance, curtailment of exemp­ tions for University students in December was liberalised in January on the initiative of the Adjutant-General; he was concerned that the army should not receive recruits who would not be ready for battle for months, at the cost of being short of specialist officers a year or two later when, if the Japanese were held, they would be sorely needed. Moreover it was he, not educational authorities, who used a parallel argument concerning training for skills which had no special military use, and (later) the • 12 Dec 1941.

T H E I M P A C T O F P A C I F I C WAR

7

Commander-in-Chief had already begun to reduce the establishment of the army before War Cabinet demanded that this be done. Hard on the heels of action to enlarge the Services came multiplication of specific controls over materials and goods, shortage of which was already of concern to Munitions and the Services. Some of these had an obvious relationship to the demands implied by the transfer of large numbers of men into camp-control over certain types of timber, over tinplate (with special reference to food containers) , over liquid fuel drums, toothbrush handles, boot nails and boot nailing machinery, hand tools, motor vehicle spare parts, bitumen, leather and the like. These listed took effect mainly in December or early January. In later weeks controls of this type multiplied and were tightened. Parallel action was taken to open bottlenecks and eliminate trouble spots in vital production. Aircraft were clearly of the highest priority and hence the clash between Commonwealth Aircraft Corporation and the Aircraft Production Commission, which was of long standing, was dis­ posed of promptly, substantially by subordinating the Corporation to the newly appointed Director-General of Aircraft Production. Personal con­ flicts at the Lidcombe, New South Wales, engine factory were similarly dealt with. These were matters which brooked no delay and could be executed forthwith. There was equal speed in creating the Manpower Directorate, although its operation necessarily could not be effective for some weeks. As has been noted in the previous volumeS the Directorate grew directly out of the Manpower Priorities Board and followed closely the blueprint it had drawn. Time was required primarily to secure the nucleus of senior staff and prepare administrative procedures; that delay permitted but did not arise from argument over the need for full powers of direction of labour, which was resolved by shelving the issue. Direction was not to be necessary for some months. With the Manpower Regulations of 31st January 1942 there was in existence a central executive authority respons­ ible for co-ordinating the now clamant demands for labour. Somewhat more time was required to create the organisation for the vast construction programme demanded not alone by the accommodation and related needs of a rapidly growing army, but by defence works in innumerable places, by new transport needs, by airfields, by storage requirements. Parallel demands for American forces almost immediately had to be added and, if possible, integrated. The special labour needs were to be met by the creation of a Civil Constructional Corps, independent of the Manpower Directorate but co-ordinated with it. The central organising authority took the form of the Allied Works Council, planned to utilise whenever and however practicable the established construction organisa­ tions of State and local government, statutory corporations, railways and private enterprise, and to create new organisations wherever they would be more effective. • S. J. Butlin. War Economy 1939·1942 (1955) in this series.

8

T H E I M P A C T O F P ACIFIC WAR

The specific issue of co-ordinating construction for Australian and American needs had a wider parallel in co-ordination of Australian and American Service demands on the civil economy. A transient body, the Administrative Planning Committee, was replaced by a permanent Allied Supply Council on 5th May 1942, with functions which were to grow with time. Thus far what have been noted are the highlights of action which was demanded as the immediate response to a specific and urgent need. Mean­ while action was preparing in other directions. There was a rapid spread of "releasing" controls, that is those in which the approach was that all resources of all kinds would be needed, and non-essential uses of them should be prevented or sharply curtailed, without close inquiry as to the precise or immediate war use for the resources that might be released. The purest example of this approach was the first Prohibition of Non­ Essential Production Order of 23rd February, which took the form of simple prohibition of production of a variety of listed articles. This particular order was prepared in haste to meet a government decision to establish the central principle of blunt prohibition of non-essential activities at a moment when the public was shocked by the first raid on Darwin; the list of goods was in fact made up late at night with no more guidance than could be got from trade directories. But the central principle was not new, nor was it adopted without thought or restricted to this sort of application. Already general restrictions on holidays had been applied to all production and not only to that classed as "essential"; restrictions on pleasure activities which used petrol or encouraged absenteeism (for example horse racing) were in force. Presently there was to be drastic curtailment of retail deliveries, and, more generally, the whole "rationalisation" policy of the Department of War Organisation of Industry. That policy, already formulated before Pearl Harbour, was based upon recognition of the fact that essentiality was a complex concept, and blanket prohibitions had severely restricted use; in the main, eliminating the non-essential de­ manded tedious investigation and difficult and contentious planning. Over the next few months this more sophisticated approach was to prevail, but still guided by the dominant principle that the non-essential must go. Consistent with this approach was the conviction that civilian produc­ tion should be directed to satisfying essential civil needs more adequately, partly in recognition of existing deficiencies, partly because these deficien­ cies would become more acute. In the Department of Supply which had been primarily concerned with Service supply and had already established "controls" of, for instance, jute goods in December, a system of controllers was developed. Much of the complexity of the Department of War Organi­ sation of Industry'S rationalisation activities stemmed from the need to devise schemes to ensure that essential needs were adequately served. But in many directions it was fairly clear that the best planning would not secure sufficient civilian supplies. The probable need for formal coupon rationing of goods to civilians was generally recognised, and preparations for it were initiated. It was to be unfortunate that it was not implemented

THE I M PACT O F PACIFIC WAR

9

early, when the public mood would have ensured acceptance. In the end it had to be introduced when, in fact and in appearance, it was the solu­ tion to an emergency, and when so much delay ensured that, on the one hand, ready acceptance was lacking (an attitude reflected by some Minis­ ters) and, on the other, any administrative preparations produced immediate widespread rumours. Finally there must be noted the Government's broad financial policy, which was announced in February. One facet of it was the avowed deter­ mination of the Government to eliminate the States from income taxation. The opening shot was establishment of a committee to report on how this might be done, and the sequel was long delayed. In the end, by August, the policy was established that there should be one income tax throughout Australia. The delay meant that the weapon was not unsheathed until 1943, but it did place in the hands of the Commonwealth power to peg the spending of State governments and, in total, of individuals. Associated in principle but not in form were the Economic Organisation Regulations of more immediate application. Broadly these were intended to peg wages at the level of the date of the regulations, 19th February; to limit profits to 4 per cent per annum; to direct price control to controlling profits; to peg interest rates and prohibit speculative dealings in property. Such sweeping principles were to prove difficult in application, as with the pegging of wages, or so difficult in administration and so complex in their effects that, eventually, they were abandoned, as with profit limitation. But in the mood of early 1942, as Singapore fell and New Guinea was invaded, they appeared to the Government as desirable and practicable, and, in general, to the public as acceptable. Eventual abandonment or weakening of the proposals should not disguise the fact that for perhaps six months they achieved a significant purpose. Broadly there was con­ formity to the intention of the regulations, not because investors and em­ ployees on the whole accepted them but because they served as a guide to conduct, so long as fear of invasion was dominant. Together uniform taxation and the Economic Organisation Regulations represented the application to broad financial problems of the same approach as was embodied in the Directorate of Manpower or the Prohibition of Non­ Essential Production Order: in a pressing national danger citizens should be told what to do and what to sacrifice. For perhaps six months after Pearl Harbour, .the principle worked; fear of the Japanese embodied the most potent form of self-interest. As important as the specific acts of economic policy so far sketched were the attitudes they expressed. There was a great and willing surrender of political authority. Parliament continued to meet, indeed more fre­ quently. Later in 1942 debate was to be determined and hard knocks given and received, as with civilian rationing. But for several months members tacitly recognised that war and the outward conventions of political freedom were inconsistent. Cabinet devolved extensive executive authority on informal committees, some of which came into being simply for a single act at the request of the Prime Minister. Ministers really

10

THE IMPACT OF P ACIFIC WAR

exercised, without reference to Cabinet, powers which were already nomin­ ally theirs, but which previously were not exercised without prior Cabinet endorsement. Thus the sweeping regulation 59 of the original National Security Regulations was the explicit authority for a wide range of execu­ tive action for the first time without necessary reference to Cabinet. In December and January there was a spate of delegations to officials of Ministers' executive powers. Regulations and orders tended to be in sweeping terms, to be spelled out by officials. Thus the Essential Materials Order of February, perhaps the most pedantically precise of all wartime orders, contained a clause which in effect gave the Director of Supply in the Department of Munitions power to rewrite the terms of the order to suit any occasion. It could be said that the surrender of democratic political authority was the price of rapid action and the efficient formulation of controls. What must be noted is the speed with which this development occurred, and the ease with which it was accepted. But it had some unfortunate results. Senior officials came to be better known to the public than their Ministers, to announce policy decisions, and to sign orders which as recently as November would have been the prerogative of Ministers. Many of them came to like the notoriety and to seek it.4 Among Australians generally there was a ready abandonment of in­ grained doctrines which in 1941 had been effective brakes on action. For some months there was ready acceptance of the pegging of wages and of profits. Plans for permitting the Americans to import Javanese labour for northern works, which in form outraged the White Australia policy and challenged deeply-held union principles, were adopted without difficulty by a Labor Government. When the first prohibitions of non-essential production were announced the Department of War Organisation of Industry was besieged by its victims, mostly small businessmen whose livelihood had been abolished, and scarcely any sought more than guidance as to what he should do. Publication of plans for extensive employment of women in replacement of men evoked no hostility. Within the Administration there were established habits of mind which were later to be sources of difficulty. There developed a deceptive faith in controls whose efficiency depended upon the victims' co-operation. "Black-marketing" did not become part of the Australian vocabulary for perhaps a year, because the thing itself was of minor importance. But most of the controls applied during the first half of 1942 were incapable of rigid enforcement against unco-operative citizens. As much as any people Australians had always regarded the government as fair game and, in a normal atmosphere, instructions to report scattered stocks, to charge fixed prices for goods of highly varying quality, to do this or refrain from that, would have been of limited effectiveness. For the first half of 1942 fear of the Japanese was the overriding sanction. That was not true of late 1 942, still less of 1 943, a change which many officials had to learn by • For discussions of such developments see Hasluck,

The Government and the People, 1942-1945.

THE I M P A C T O F P A C I F I C WAR

11

painful experience. The maintenance, for instance, of a ritual of price control under State authority for ten years after the war ended reflected naive belief in "controls" which was mostly born in 1942. There developed too a disposition to control for the sake of control, to pursue "tidiness" as a goal in itself, to seek completeness in detailed administration far beyond the point where any useful wartime purpose was served. This was true of much of the late 1 942 rationalisation activity of the Department of War Organisation of Industry. The effective sanction for reorganisation of an industry was often the removal of part of its labour by the Directorate of Manpower; at that point the industry might have been left to work out its own salvation, but its members naturally welcomed the readiness of War Organisation of Industry officers to do the work for them-and to take the public criticism. Similarly there developed a disposition to identify "austerity" with a contribution to the war effort. With Curtin this had the justification of his puritan views; consciously or not he was pursuing other objectives besides those of war; but with many officials there could be no such justification for the readiness with which they assumed that a restriction was desirable. Restriction on beer, for instance, was probably a misguided policy, if only because of the man-hours wasted in liquor queues, but Curtin's emotional obsession with this subject found willing collaborators amongst officials with no such personal feelings. So too there was excessive concern with "fairness". Too often effort was devoted to arranging "fair" sharing of a supply that was too small to satisfy more than a small part of demands, where it did not really matter much whose demands were met. When production of non-essentials was prohibited, the prices of the existing stock should not have mattered, but such goods were invariably brought under price controI. The Department of War Organisation of Industry'S objective of "concentration of industry" foundered on undue concern with fairness. These reflections on later consequences do not detract from the magni­ tude of what was achieved in the early months of Pacific war. But much more was achieved then than the specific things outlined above. There were set in motion forces which developed great momentum, and con­ tinued to drive economic policy along the lines broadly defined in March. Until perhaps September there was little to restrain the intensification of restrictions on the civil economy, the enlargement of production and of Services' commitments for manpower, or to prevent controls spawning controls. The lines of advance required had been caustically etched in December, emotional reactions had established obsessions, and the plunge towards a totally regimented war economy could be described as headlong. By the end of 1942 it would be necessary to face the fact that the Australian economy was overcommitted, in the sense that it could not achieve all that, by then, it was planned it should do; and wrongly com­ mitted, in the sense that by then, some of the objectives being sought were attainable only at the expense of more vital ones. In January it could seem that whatever could be achieved might fail in being too little or too

12

T H E I M P A C T OF P AC I F I C W A R

late; b y December i t was clear that what was then being attempted or planned was too much. In a sense this overcommitment of the economy was inevitable, and indeed desirable. Setting in motion drastic recasting of the structure of an economy under the spur of national danger was easier than slowing down that process under way, when the danger was only less, not eliminated. Going too far was for this reason almost inescapable. Moreover phrases such as "overcommitment", or "slowing down" meant concretely deter­ mining the degree to which, for instance, munitions production should be allowed to have labour at the expense of other apparently equally essential activities; deciding how to balance food production against size of the armed forces. By the time these questions became the leading ones, the latter half of 1942, overcommitment had already occurred. Equally the overcommitment could be described as desirable : it was overcommitment only in the sense that the worst did not happen, in part because of the very intensity with which resources were diverted to defence. Had the battle of Milne Bay or that of the Owen Stanleys not been won; without the code-breaking that produced victory at Midway; if the Americans had been pushed out of Guadalcanal-then the position at the end of 1942 would have been very different. Until all threat of invasion was past the only sensible principle for economic policy was that the most could not be too much. There could be criticisms of particular applications of the principle-for example persistence with tanks or torpedo production. But it could also be said that it was the pursuit of the maximum as the only limit, established as a principle in the first three months, which ensured that a year later it should then be too much.

C HA P T E R 2

T H E S E A R C H F O R MAN P O W E R

P

ROPOSALS for a comprehensive directorate o f manpower went to the Cabinet a few days after Pearl Harbour.1 The occasion was the clear need for urgent action but the proposals themselves were the fruits of the analysis by the Manpower Priorities Board. More than ever the work of that Board showed its value, for a carefully considered and integrated scheme, adapted to the demands of the crisis but inspired by wider and longer-term principles, was circulated to Ministers in little more time after the Japanese attack than was required for the clerical work. The resulting Cabinet submission is the key document on the smooth and rapid transition from the miscellany of administrative bodies and weakness of policy of the preceding two years to the integrated administra­ tion of a unified policy which was to be one of the conspicuous features of the year of danger, 1942. The immediacy of the Japanese threat was the compelling force behind the adoption by the Government and accep­ tance by the people, but the substance of what was done derived directly from the Board's planning. Specifically it was proposed that one authority responsible to the Minister for Labour and National Service should, for policy-making, replace the existing constellation. It should compile and maintain continu­ ously up-to-date, a manpower register. For its operation it should have national service offices throughout the country, using for this purpose established State or Commonwealth agencies where appropriate, and in particular the existing capital city National Employment Offices. The administration of the List of Reserved Occupations should pass over to the new authority, which also would establish a register of "protected" estab­ lishments, have power to control exemption from military service, and be the sole channel for engagement of labour by all employers. The regulations which embodied the Government's acceptance of sub­ stantially the whole of these proposals were issued on 3 1st January 1942.2 The seven weeks' interval represents not delay but action at great speed. In that interval the proposals had been before all three Cabinet bodies (the scheme was of direct concern both to the Production Executive and to the War Cabinet, while the abandonment of liberties in employment was a revolutionary step for a Labor Government) ; there had been exploration of the wisdom of adding powers to direct labour to employ­ ment (not part of the original proposals) ; and discussions with State representatives whose administrative agencies were to be used and whose Labour departments must provide a major part of the staff. All this had to be achieved by Ministers and senior officials beset on all sides by the fast 1 The original agendum to Production Executive ( 10/1941) was dated 13 Dec; it was before the War Cabinet (Minute 1646) on 31 Dec and was referred to the Full Cabinet which discussed it on 6 Jan. It was endorsed by the War Cabinet on 19 Jan when a supplement to the original submission was a draft of the Manpower Regulations. 2 Statutory Rules 1942, No. 34.

14

T H E S E A R C H F O R M AN P O W E R

changing demands for immediate action as the Malayan calamities developed. There was equal speed in bringing into being the new Directorate of Manpower, made easier by the transfer intact of the senior staff of the Manpower Priorities Board. W. C. Wurth, the Board's chairman, became Director-General and his new deputy directors in the State areas which were the basis of organisation were the old deputy directors of the Board.3 A head office for each State, controlled by a deputy director, was promptly established, with a National Service office in each military district, these offices in general being controlled by the officer who had formerly acted as Manpower Officer administering the List of Reserved Occupations. The Employment Offices of the Department of Labour and National Service were similarly absorbed, readily enough since they were responsible to the same Minister as the new Directorate.4 Much of the speed and ease of organisation might therefore be explained by the taking over of authorities which were employed on their former activities. This not only avoided the task of creating new instruments, but obviated resistance from authorities which might have been displaced but could, as things were, continue their old functions with a new efficiency and enthusiasm. But integration of existing authorities was merely a procedural step; the task of the Directorate was far larger and wider than that of the old agencies. As one reflection of this fact, a much greater staff was required. In February 1 942 total staff throughout Australia was 324, mainly officers absorbed from former organisations. In March it was 9 17, in June 1 , 306, and by the end of the year 1 ,958. The major source was State public services, properly enough, since their departments of Labour contained the officers with relevant experience and skill. Consistently with the form of organisation and the source of staff, administration was decentralised on a State basis. The Director-General at a later date described the general operation : the Director-General determined how many men should b e recommended for release from the Army for a particular industry in each State; the Deputy's organisation determined which individuals should be withdrawn. Or again, the Director-General prescribed the level of employment which should be maintained in, for example, the textile industry in the various States. The Deputy's function was to maintain that level.1\

On the whole the basis of this type of devolution was observed. It was expedient, in view of the politics of Australian federation and the sense of semi-independence of State officials implementing a Commonwealth policy. But it was also sensible administratively, especially in relation to Aus3 N.S.W.,

C. J. Bellemore; Victoria, D. Cameron; Queensland, F. E. Walsh; South Australia, L. C. Hunkin; Western Australia, H. T. Stitford; Tasmania, M. S. Wilson. A formal exception was New South Wales where the Board's deputy director W. Funnell became Assistant Director­ General of Manpower; he was replaced as deputy director by another senior State official, C. J. Bellemore . • The Directorate was the responsibility of the Minister for Labour and National Service; in practice, whatever formulas may have been used from time to time, the Directorate was a department separate from Labour and National Service with close relations on some matters of common concern, but no closer than those with a number of other departments. • W. C. Wurth, Control of Manpower in Australia, February 1942-September 1944 ( 1944 ) , p. 43.

R E S E RV E D O C C U P A T I O N S A N D D I V E R S I O N O F M A N P O W E R

15

tralian distances and the divergent economic circumstances of the States, notably in their industrial patterns and the degrees to which they were drawn into munitions and related work. The central function of the Directorate was the allocation of manpower -now for the first time genuinely including women in that term. Initially the Directorate was confronted by three major consumers of labour. First were the Services, who had now to cope, not with supplying volunteers for a distant war and organising the basis of precautions at home, but with the threat of a powerful enemy close at hand, an enemy who within weeks was occupying Australian territory. Between Pearl Harbour and the creation of the Directorate as an operative authority, 1 00,000 men had been called up for service; by June a further 1 00,000 had been enlisted. Until February only the List of Reserved Occupations controlled call­ ups, although the Services were keenly alive to their own dependence on the maintenance of certain civil activities and this awareness was probably a more potent and effective restraint during this emergency period than was the List. 6 Of equal importance with the Services were munitions and allied industries. War at hand implied larger forces; active war implied greatly accelerated expenditure of arms and equipment; Japanese naval superiority enforced greater reliance on Australia's own productive re­ sources. These two, the Services and munitions production, were the familiar consumers of large masses of labour. They were now joined by a third-"works" : constructional works ranging from defensive works in the north and round the coast to inland defensive air stations and camps for Australian and American forces. This demand for labour, new in the magnitude and urgency of the work to be done, demanded its own stream­ lined organisation. For some months these three vital demands dominated the work of the Directorate. Its task during those months was to divert all the men and women who could be found to these three consumers, and to hold the balance between them. THE S C H E D U L E O F R E S E RV E D O CC U P A T I O N S A N D D IV E R S I O N O F M A N P O W E R

The Directorate inherited the List o f Reserved Occupations, and took over the power to control exemptions from military service which until then had been the chief formal control over the use of manpower.7 This was strictly only a control over compulsory not over voluntary enlistment, and at this stage only over males. Over employment in protected establish­ ments control was wider since Regulation 1 4 prohibited either compulsory • The semi-official

Control of Manpower in Australia conveys a contrary impression, but this was almost certainly unintentional. The writer remembers the concern of senior Service administrators early in 1942-before the Directorate-that the List should not operate mechanically to call up University students indiscriminately. The concern was unashamedly self-interested but it was also unexpectedly liberal. Such attention to a numerically small group was a fair example of thinking at the highest Service level and is adequate reply to contemporary suggestions of panic call-ups. The particular case also illustrated the Service desire that some civilian authority should take the responsibility for decisions of manpower priority. It could be represented as a desire to avoid responsibility; more important was the recognition of the problem of priorities which explains why the Services welcomed a civilian authority which, superficially, imposed restraints on them. 7 Regulation 6 of National Security (Manpower) Regulations.

16

THE S EARCH FOR M ANPOWER

or voluntary enlistment of such employees without Manpower consent, and applied therefore to women as well as men. These were c-l

Total

Females

Males

Balance of previous estimates

Revised estimates

Amount of revision

400 10,000 6,000 14,300 3,300

7,200 95,700 30,600 30,400 1 2,700 36,400

6,600 43,000 3 1 ,300 34,900 10,900 36,500

-600 -52,700 +700 +4,500 -1 ,800 + 1 00

34,000

2 1 3 ,000

1 63,200

-49,800

:Ii

t!l Vl

t!l > :;d n :Ii 'I1

0 :;d

�

> Z "C 0

�

t!l :;d

ASSESSING THE RESULTS

41

These figures, as in May, did not include private contractors to the Departments of Supply and of Munitions, but separate estimates by the Commonwealth Statistician and the Director-General of Manpower put these at 20,000 men and 1 0,000 women for July-December. In total, 1 49,000 men and 44,000 women were required. A grim footnote added that these figures made no provision for Army needs if invasion occurred or large-scale hostilities developed to the north-when the Army might demand another 40,000 men. The committee turned to examine possible sources of male labour. Normal net natural increase entering the labour market would be about 1 5,000 in the six months : juvenile labour, mostly lacking skill and unsuitable for the Services, the Allied Works Council, or heavy manual labour. Unemployment was nominally 7,000 but most of this was labour in process of changing jobs; the actual reserve was put at 2,000 mostly persons of low efficiency. From the "unoccupied" 30,000 might be obtained if normal retirements were postponed. Civil factory production demonstrated how severely the non-war sector had been squeezed. Of 700,000 factory employees, about 500,000 were directly engaged on munitions, aircraft and war supplies, leaving only 200,000 for civil production; compared with a corresponding pre-war figure of 540,000 these 200,000 meant that the cut in factory employment on civil needs was approaching two-thirds. Such factories would have to face considerable reorganisation as men were withdrawn for the Services and replaced by older workers. Ruthless rationalisation might enable 1 0,000 men to be replaced by women, but it was clear that in the end no net release of manpower could be imposed on civil factory production. Gold-mining could yield about 5,000 men if current plans for virtual suspension of production were completed. Civil building had been reduced to low levels, but perhaps 5,000 men suitable for work on Allied Works Council projects could be obtained by cutting air raid precautions works in southern Australia. Rural industries presented special difficulties. Since the outbreak of war they had lost twenty-five per cent of their male labour, and maintenance of essential food supplies and exports to Great Britain might well be threatened by labour shortage. At the same time labour was being spent on less essential foodstuffs (wheat and apples for instance ) . The com­ mittee concluded emphatically : . . unless full advantage is taken of the opportunities for redistributing rural labour and for restricting Australian consumption to essential levels, it will be necessary either to curtail the shipment of primary products to the United Kingdom or to withdraw large numbers of men from the Army in order to provide manpower for rural industry. The Committee considers that neither of these alternatives can be contemplated, and that accordingly the necessary action must be taken without delay, and in spite of opposition from sectional interests.5 •

Even so, seasonal peak demands might require temporary releases from the Services and expansion of the new Women's Land Army. The conclu• Report, 20 Aug 1942, p. 8.

42

THE

S E A R C H F OR M A N P O W E R

sion was that for 1 942 n o labour could b e obtained from rural industry, although if redistribution of rural labour was enforced substantial numbers might be obtained in 1 943. The remaining source of men was "service" industries. From the public service 1 0,000 men might be squeezed if 5,000 women were recruited. Transport could yield none, the best to be hoped for being that further restrictions would make possible the maintenance of essential transport. Retail trade, if treated with vigour approaching brutality, might yield 20,000 men but this "represents nearly 25 per cent reduction in employ­ ment and requires an organised scheme for the extensive closing of shops". Commerce, finance, and other services could be forced to give up 50,000 men in exchange for 25,000 women, if the Government would face "radical commercial reorganisation and liquidation of many firms". In sum, the most optimistic estimates were that 1 45,000 men might be extracted-if replaced in part by 40,000 women-but only if policy were unreservedly ruthless. The proposed employment of women, to facilitate release of men, meant that the women needed were in total 80,000. Towards this net natural increase would provide 5,000 juveniles, and registered unem­ ployed 3,000. Existing employment would on balance be a consumer of labour, except for 20,000 from retail trade. Hence the only important source for more than 50,000 women must be the "unoccupied". Unmarried women aged 1 4 to 59, and married women without dependent children, were

estimated

at

1 ,300,000,

but regarded

as

unavailable.

Already

800,000 women were in employment. The conclusion was painfully clear. If allowance were made for women with domestic responsibilities other than children, and for physical or other disabilities, the objective of 52,000 would mean completely exhausting the maximum possible supplies of female labour. That was not likely to be attained even with a compulsory call-up; short of compulsion the most optimistic estimate the committee could make was that 35,000 might be obtained. There was a deficiency of 1 7 ,000 and the optimism of even that estimate is underlined by the fact that in the very special conditions of January to June unoccupied women had provided the same number, 35,000, for the Services and civil employment. Yet the attainment of the needs for men was dependent upon obtaining the women required for the partial replace­ ment of men by women. Without the most determined and unrelenting use of compUlsion, the committee repeated again and again, these optimistic estimates, whether for male or female labour, would be quite unattainable; they contemplated that the deficiency might in fact prove to be 40,000 men and 30,000 women. Within the broad totals there were critical shortages of skill, which alone might imperil the whole programme. It was estimated that the Departments of Aircraft Production and of Munitions alone required nearly 1 5 ,000 additional engineering tradesmen between July and December, a figure

ASSESSING THE RESULTS

43

which was more than half the 27,600 they already employed. (Both these figures included major contractors as well as government factories. ) Production Executive had on 3rd August6 approved of restricting employment of engineering tradesmen in non-protected undertakings, except under Manpower Directorate permit, but less than 1 ,000 were expected to be released. The Army had proposed to release some trades­ men on leave without pay for civil employment, but they would be subject to recall at twenty-four hours notice. The Commonwealth Technical Training Scheme was turning out 600 trainees a month, but was limited by trade union reluctance to extend dilution and the unwillingness of men to undertake training which carried no overtime pay. The most that could be expected between July and December, if these obstacles were overcome,

was about 4,500. The main source must therefore be further dilution. The Department of Aircraft Production urged that removal of all restrictions on dilution would solve the shortage. The committee was sceptical, in view of the time required to negotiate dilution arrangements with the trade unions , but recommended that dilution be pressed as a matter of great urgency. The total picture that emerged from the committee's survey was grim and uncompromising. Members reiterated at every stage of their report that only the most drastic and urgent action could make it possible to meet total needs, and their doubts whether, even so, success would be possible. But it seems that it was not yet possible for senior administrators collectively to say bluntly to the Cabinet what many of them individually believed, namely that Australian manpower resources were seriously over­ committed, and that a necessary concomitant of vigorous action to secure more labour must be critical scrutiny of commitments to bring their total within the attainable. What the report did was to declare : . . . It had already been made clear that to obtain the numbers required ( irrespective of skill) in the stipulated time will demand an effort of heroic proportions, and that the skilled labour position is even more unpromising. The Committee as a whole is not prepared to express its confidence that the war production programme can be carried out to schedule if it depends upon the use of skilled labour on the scale estimated by the Production Departments, while members are unanimous that the Army's contingent requirement of an additional 40,000 reinforcements cannot be supplied, failing a general change in the manpower situation, without placing an unbearable strain on essential industry. Moreover the Committee considers that however confident one may be in the success of the drastic action now recommended, it is a wise and consistent policy to take precautionary measures against the possibility of some deficiency in fulfilment of the war commit­ ments scheduled for completion in 1942.

It therefore proposed that a committee7 be appointed to review com­ mitments, particularly • Production

Executive Agendum 79/1942, Decision 102. (See amendment to National Security ( General) Regulations, Statutory Rules 1942, No. 373, 2S Aug. The order under the amended regulations was to cover some thirty-two types, mainly metal working, toolmaking, shipping and optical.) 7 To comprise : the Commander-in-Chief (or representative), Director-General of Munitions, Director-General of Aircraft Production, Director-General of Manpower, Director of War Organisation of Industry, Chairman of the Standing Committee of the Allied Supply Council.

44

THE

S E AR C H

FOR MANPOWER

the possibility o f a lack of correspondence between personnel and equipment in the Services and any strategic consequences involved; the measures necessary to ensure the balanced progress of war production, in the event of a differential incidence of shortages of all kinds in the various items of the programme; the possibility of correcting any lack of balance or shortage in equipment supplied by shipments from overseas; the advisability of curtailing or eliminating any production projects to permit of concentration on the remainder; the advisability of a substantial release of men from the Services to accelerate the flow of munitions and aircraft; and the plans to be made with respect to the Army's contingent requirement of 40,000 reinforcements.8

The committee reiterated its May view : "every new project, and every further increase in Service programmes, will involve sacrificing some project already approved. Before endorsing any new proposals which make further calls on manpower, therefore, War Cabinet should in every instance decide which portions of the present programme are to be abandoned in order to make the necessary manpower available for the new projects". On the other hand, the committee did not hesitate to recommend drastic action to ensure that every available man or woman was doing essential work. Specifically it proposed that the Director-General of Manpower should have "and use extensively" power to direct both men and women to transfer from one job to another, and should have powers of compulsory call-up of unoccupied men and women. (The latter to await proper facilities in factories etc. ) The Department of War Organisation of Industry was to press ahead with industrial reorganisation, especially concentration of industry and prohibitions of non-essential production, and severe restric­ tion of retailing, commercial and financial activities. Major transfers of labour within the rural field must be imposed (reduc­ tions in wheat, fruit, barley and wool were stressed) , and the Department of War Organisation of Industry should extend its rationalisation activities into rural industry. At seasonal peak periods the Army must release men for short period employment; the Women's Land Army should be rapidly expanded. In view of the dependence of the whole programme on employing every available woman, special steps were urged. Welfare facilities for women in industry were to be improved ; part-time employment of women should be developed; the Women's Employment Board should be assisted by subsidiary tribunals; a modified system of reserved occupations should apply to Service recruitment of women; and Service recruitment should pay regard to the uneven scarcity of women in different States ( as was already established for men ) . Finally extension of hours of work to "the maximum consistent with health and efficiency" should be adopted. The report went first to the Cabinet sub-committee, which submitted the whole report to the Cabinet with some qualifications of its own. Extension of hours of work, if adopted, should be general, and not con­ fined to munitions and aircraft production. The Air Force should be permitted to continue recruiting ground staff as volunteers. ( The committee had criticised this. ) And there were a few other minor qualifications. But, 8

Report, 20 Aug 1942, p. 21.

ASSESSING THE RESULTS

45

as a whole, the facts were too starkly clear for the Ministerial sub­ committee to do other than submit the report for all their colleagues to consider. This they did, in the War Cabinet, on 3 1st August and decided the proposals should be submitted to the Full Cabinet and their decisions, subsequently, to the Advisory War Council. But the War Council also directed that the proposed committee should include Navy and Air Force representatives, and that since the Committee's "terms of reference" were "closely related" to the Allied Supply Council, the Services Munitions Co-ordinating Committee, the Defence Committee and the Service Boards, the proposed committee was "to maintain the closest collaboration and avoid overlapping or duplication".9 The Full Cabinet on 22nd September approved the broad principle of the plan " . . . with the reservation that it would not be possible to carry it into effect by December 1 942; that gradually and in the light of circum­ stances as they occur the tempo of the plan be accelerated so that it may be developed as rapidly as possible" .1 The Advisory War Council con­ firmed these decisions on 1 5th October.2 The Full Cabinet's direction to the proposed committee was that it report to the War Cabinet on the lines quoted earlier from the report of the original committee, and that the Director of War Organisation of Industry was to arrange a meeting "as soon as the assembly of certain necessary information . . . " had been completed. In carrying out the direction of 22nd September that the proposed committee should include Services and Supply representatives, a letter went from the Prime Minister to these Ministers, and the Minister for the Army was asked to notify the Commander-in-Chief Allied Land Forces. This produced a firm protest from General Blarney about the terms of reference of the committee, in particular the suggestion that it should look at "the possibilities of a lack of correspondence between personnel and equipment in the services and any strategic consequences involved". The Minister for War Organisation of Industry, J. J. Dedman, was conciliatory-Blarney had misunderstood-the intention was not to interfere but to provide the Army with additional information "for consideration in connection with any plans of reorganisation". The upshot was a letter from Curtin (dated 4th January-two days before the Committee met) which told Dedman that he entirely agreed with the view "that strategical questions are not matters for consideration by the proposed Committee" .3 The War Commitments Committee reported for the first time in January 1 943. The report was a brief, compelling document with added • War Cabinet Minute

2327, 31 Aug. 327, 22 Sep 1942. Council Minute 1090.

1 Full Cabinet Minute • Advisory War

3 By some confusion the letter to Blarney from Headquarters at Melbourne had spoken of the proposed committee as the "Strategical Committee". It was in his reply to Blarney's complaint

that Dedman's letter to the Prime Minister suggested "an appropriate narne for the Committee might perhaps be 'War Committnents Committee' ''.

46

T H E S E AR C H F O R M AN P O W E R

force because of the membership o f the Committee.4 Dominating the whole manpower problem was a simple piece of statistics. Commitments would require for each month, January to June 1 943, 35,000 persons; the utmost that could be available was 1 0,000 a month. Given that simple contrast, commitments could not be fully carried out, and the attempt to carry out all might imperil the most vital. In more detail, demands for labour were : Net Manpower Requirements--J anuary-June 1 943 Deficiency in 1942 programme at end of 1 942 Males Navy Army 40,000 6,000 Air Force Munitions and Aircraft Production 3 3 ,000 Allied Works 79,000

Requirements for 1 943 programme January-Junel943 Males 5,000 25,000 22,000

Females 1 ,000

1 7,000 42,000

Females 25,000

Total requirements January-June 1 943

8 ,000

Males 5,000 65 ,000 28,000

Females 1 ,000 25,000 8 ,000

1 5,000

1 3 ,000

48,000

3 0,000

67,000

22,000

146,000

64,000

Note: These must be regarded as approximate figures only, but should give a reasonable picture of the magnitude involved. Aircraft and Munitions production figures include the requirements of private contractors, on the basis of estimates made in the Second Report of the Departmental Manpower Committee. Required Monthly Rate of Supply of Manpower January-June 1 943 Males Service Recruitment Munitions and Aircraft Production

Females

1 6,000 8 ,000

6,000 5,000

24,000

1 1 ,000

An optimistic assumption was that the average monthly supply ( 1 0,000 -half men, half women ) of October to December 1 942 might be repeated for the first six months of 1 943. But this was an optimistic assumption. Experience during 1 942 had been

April to June July to September October to December

Average monthly labour supply 40,000 25,000 1 0,000

Percentage of women 20 25 50

The optimism of assuming that 1 0,000 a month would b e obtainable was underlined by consideration of possible sources. Rural industries could not be expected to make any net contribution. Civil factory production, • The relevant meeting was aranged by Dedman for 6th January. On this occasion the Prime

Minister was in the chair, the others, present in person, being: Minister for War Organisation of Industry (J. J. Dedman) , Chief of the General Staff (Lieutenant-General J. Northcott) , First Naval Member (Admiral Sir Guy Royl e ) , Chief of Air Staff (Air Vice-Marshal G. Jones) , Director-General of War Organisation of Industry (G. T . Chippindall) , Director-General of Allied Works (E. G. Theodore) , Director-General of Manpower (W. Wurth ) , Director­ General of Munitions and of Aircraft Production (Essington Lewis ) , Chairman of Standing Committee of Allied Supply Council (D. J. Nolan ) . War Cabinet Agendum 197/1942, Supple­ ment 4, Appendix A.

ASSESSING T H E R E S U L TS

47

which had lost over two-thirds of its pre-war labour force, was almost squeezed dry. Unemployment could be disregarded. Excluding married women, the unoccupied were now very few. Normal net natural increase available for employment would be 2,500 men and 1 ,000 women a month; and most of these too young for the Services or heavy labour; they could only assist the Services or large sections of essential industry as replace­ ments for older workers in less vital occupations . The only significant labour source was "white collar" occupations, which had been seriously cut already, and could yield further labour only after complex and time­ consuming reorganisation. The supply of labour was virtually exhausted. The Minister for War Organisation of Industry, it may be noted, was not entirely convinced, and, in submitting the report to the War Cabinet, he wrote : I do n ot consider that we should resign ourselve s to the serious retardation of the war programme which this rate of flow impl ies, and I bel ieve that, if the Government is prepare d to take vigorous action, irrespective of pressure from the interests affected, the monthly supply of manpower for war purposes can be substantially accelerated.

But the committee as a whole recommended that the Defence Committee immediately review present plans for the expansion of the Services and of war production. This was the vital conclusion. In addition, there was a scheme for a Manpower Commission of three to five members ; a series of specific proposals concerning skilled labour; and endorsement for more effective action against absenteeism and for discipline in protected establishments. But these were minor matters compared with the blunt acknowledgement, at the highest level, that there simply was not enough labour, and that commitments must be cut. The War Cabinet decisions were as clear-cut as the report. Nominally, the Minister for War Organisation of Industry was given the opportunity of justifying his belief, but "subject to the Minister consulting the Prime Minister regarding those proposals [for restricting non-war production] , which should be submitted to Full Cabinet". The Manpower Commission was discreetly abandoned; ground staff for the R.A.A.F. overseas were not to be despatched; and there were minor decisions on skilled labour for shipbuilding and the Army. But the -central decision was review of the plans of the Services and the war production associated with them. Facts had been faced.

CHAPTER 3 E X P A N D I N G M U N I T I ONS P RO D U C T I ON

J

APANESE entry into the war in December 1 94 1 was followed by a

great expansion in munitions programmes. There was a sense of the compelling need of more of everything, more weapons, more ammunition, more ships, more aircraft, and a need for new and different weapons. And that sense of urgent need underlined the realisation that for some time, an uncertain but critical time, there must be greater self-dependence in producing munitions as well as in battle. The crumbling of what had seemed so secure, the British shield to the north, was accompanied by the expectation that supplies of weapons and aircraft from Britain would be seriously interrupted, if not stopped. The United States was not yet ready to supply on a massive scale, and the destruction of its Pacific Fleet at Pearl Harbour seemed to threaten that for a long time to come its supply routes to Australia too would be precarious. Moreover, United States full participation in the war meant a new approach to allocation among the Allies from its arsenal, and new admin­ istrative machinery. Thus at the end of January 1 942 Roosevelt and Churchill agreed upon the establishment, with headquarters in Washington, of a series of "combined boards" to operate in principle so as to pool United States and United. Kingdom resources. A Combined Shipping Board was designed to organise a broad pooling of shipping resources, though with important reservations about control over the movement of ships. A Combined Raw Materials Board was to plan the utilisation and allocation of raw materials. A Munitions Assignment Board had like functions, and the word "assignment" had a sinister ring to Australians, even those who accepted the principle of deployment of total Allied resources according to the strategy of the grand alliance. Clearly the United States would have rapidly expanding needs for its own armed forces, now committed to combat. Roosevelt shared the Churchillian view that the first priority was defeat of Germany, while the Australian Cabinet and senior commanders and public servants were under no illusions about Churchill's attitude that in the short run the fate of Australia was secondary. It was in this mood and against this background that plans for pro­ ducing munitions at a greatly expanded rate, and for undertaking manu­ facture of new weapons, were assessed and too readily adopted. In retrospect, it was to become clear that many of the plans of 1 942 were mutually self-defeating. Technical achievements in production-the casting of tank hulls, production of torpedoes, and others which were less con­ spicuous (or less publicised ) -were many, and total production of at least the simpler forms of munitions for which programmes were well advanced was impressive. Indeed by the end of 1 942 there was surplus capacity for a range of weapons and ammunition. There were impending surpluses in .303-inch ammunition and other items, excess capacity for 25-pounder guns and ammunition, pyrotechnics, anti-aircraft guns on static mountings,

E X P A N D I N G M U N I T I O N S P RO D U C T I O N

49

3 .7-inch anti-aircraft ammunition, universal carriers and the like. But for other technically more demanding weapons too often the story was to be of delay so long that the weapons were no longer needed, or were obsolete by comparison with alternatives which became available from overseas. There was insufficient foreknowledge of the total demands on machine tools; materials and labour, the separate demands for which were being separately expanded beyond the possibility of total commitments being met. There were over-optimistic assumptions about ability to carry through production of new weapons. More particularly, far too great a variety of weapons was incorporated in the programme . The torpedo programme, for example, was in the end a technical triumph, but it did not · produce torpedoes for possible-and have come in In early 1 942

use in battle. Even had the original time schedule proved it did not-its realisation in usable torpedoes could not time to contribute to turning back the Japanese advance. with supply interrupted from the United Kingdom and the

United States, the shortage of torpedoes appeared desperate, but long before Australian torpedoes could be hoped for the immediate fate of Australia would be decided and if that did not prove to be defeat and occupation American supplies would be available well before Australian ones were ready. And so it proved. So too the tank programme initiated in 1 940 seemed to those who made the final decisions in early 1 942 to have become more urgent. The alterna­ tive view was that a few months, during which not even the most optimistic could hope for Australian tanks to be available for combat, would decide whether the Japanese would be held. The tank programme, too , was the outstanding example of what applied to other plans : the attempt to produce weapons not previously produced of a type beyond immediate capacity. Such a project involving a long gestation time neces­ sarily meant that at an early stage commitment had t 6 be made to models and designs which were already obsolescent. Moreover, the final products were likely to be inferior to those of the enemy and those which would become available from the United States as soon as, if not sooner than, the Australian production. Initiation of the programme may have been justifi­ able; persistence with it after the first months of 1 942 was inexplicable. A simple, if imperfectly measurable, index of the increasing demands on shrinking resources created by the great expansion in munitions pro­ grammes was the labour commitment. Tolerably accurate figures for direct employment by the Department of Munitions are available, though during 1 942 Munitions and Manpower argued about their accuracy. Less satis­ factory figures are available for employment in annexes, while for employ­ ment by private contractors on munitions projects no satisfactory records exist which distinguish munitions work from other defence contracts. The figures in the following table therefore are for part only of munitions production, and are intended to illustrate the extremely rapid inflation of the munitions demand on the labour market and the inability of the War Commitments Committee and the War Cabinet, despite the policy decisions

50

E X P AN D I N G M U N I T I O N S P R OD U C T I O N

which followed recognition i n the latter part of 1 942 o f gross over­ commitment, to restrain, still less to reverse, the expansion. Hindsight is not, of course, delayed foresight, especially in relation to the unpredictable course of global war. Many of the individual projects undoubtedly appeared to be justified in the crisis months of 1 942. Even so, with all allowance for the fog of war, the slowness with which the implications of their total were recognised and assessed is remarkable. That recognition of over-commitment was giving rise to vocal and in­ creasingly urgent criticism from outside the Department of Munitions and the Services from early in the second half of 1 942, but it was to take months for it to be accepted at Cabinet level, and even longer for curtail­ ment of commitments to become effective. Within Munitions this view was not readily or promptly accepted. The technical man's reluctance to abandon a challenging technological task because of its demands on scarce resources, together with personal ambition and a laudable conviction of the overriding importance of producing the means of waging war, had their part. The high degree of independence of action conceded early to the Munitions organisation insulated it in substantial degree from a compulsion to justify its planned scale of operations in competition with other demands. Thus the War Cabinet in February 1 942 gave the department a general authority to continue production of items of munitions as existing orders were com­ pleted, in anticipation of further orders.2 The argument used, which was to be advanced repeatedly in 1 942 in relation to specific weapons, was that efficient production required continuity of operation, and that it was inefficient and wasteful to shut down and thus allow trained labour and specialised equipment to be dispersed when there was reason to believe that renewed Service orders would presently require rebuilding of the organisation for renewed production. It was a plausible but question­ begging argument, the more plausible because those who advanced it were men genuinely concerned to meet demands promptly and efficiently. The general authority was an expansion of power granted to Munitions in October 1 94 1 3 to establish productive capacity in advance, even when no firm orders had been received, in the light of discussion with tbJ Services of what they planned to order. Again the plausible argument was that months of delay could be saved, but it meant piecemeal commitments to particular projects without any co-ordination to fit them into a total which could be achieved. Moreover Munitions was not in a position to know what actual orders were being placed except those received by itself, and was even less well-equipped to forecast future orders. Thus in May 1 942 the Victorian Board of Area Management wrote to the Director­ General of Munitions4 complaining that Munitions had failed to persuade the various authorities to agree on any machinery for co-ordinating the orders being placed, on the same groups of suppliers in private industry, 2 War Cabinet Minute 1904, 18 Feb 1942.

• War Cabinet Minute 1425, 23 Oct 1941.

' Letter

of

25 May 1942.

Department of Munitions! Government Factories and Establishments

Administrative Staff

30.6.41 30.6.42 30.6.43

Male

Female

Total

Male

980 2,107 3,118

493 1 ,6 1 7 3,115

1 ,473 3,724 6,233

1 8 ,976 3 1 ,973 32,2 1 0

Tota!

Female

Total

Male

Female

Total

5,756 16,245 22,548

24,732 48,2 1 8 54,758

1 9,956 34,080 35,328

6,249 17,862 25,663

26,205 5 1 ,942 60,991

7,920 1 5,055 1 3 ,885

750 3,079 5,388

8,670 1 8 , 1 34 19,273

Annexes 30.6.41 30.6.42 30.6.43 1 Figures taken from

(Not available)

1945

"Munitions Digest".

Total employment of males and females of both departments is thus set out at 80,264 for 30th June 1 943 . However, the Acting Commonwealth Statistician, S. R. Carver, in a report to the Manpower Directorate on 7th August 1943 placed male employment in "Munitions, Shipbuilding and Repair, and Aircraft" at 90,000 (subsequently revised to 90,900) and female employ­ ment at 3 8 ,000 (subsequently revised to 39,400 ) . Employment by private contractors for defence purposes was placed at 320,000 males and 106,000 females, although this would presumably include contractors to other authorities such as the Department of Supply and Shipping, and also include direct employment of civilians by U.S.A. S.O.S. (United States Army Services of Supply ) . In J. K. Jensen's scribblings on the Munitions copy of Carver's memorandum the estimates are queried-the latter because there was no sound basis for the estimates and the former because employment by Aircraft Production is included with Munitions.

52

E X P A N D I N G M U N I T IO N S P R ODU C T I O N

by the Navy, the Air Force, Government Munitions Factories, the Contract Board, Aircraft Production and Boards of Area Management. A continuing problem and a continuing source of friction between the Services (especially the Army ) and the Munitions Department was the relation between Service orders (both in their timing and their amount) and the production capacity to meet those orders. In one sense it is an inescapable problem of war for which no perfect solution can be found. Operational needs for particular weapons and equipment can only be imperfectly foreseen and may change rapidly. Production, especially of other than the simplest weapons, requires massive capital equipment. Training of workers and acquisition of materials requires time, while the production process itself is long. Moreover, to be both technically efficient and not unduly costly, production needs to be in quantity and maintained at a constant or predictably changing rate. Reconciliation of these in­ herently contradictory requirements can never, in war, be other than rough, and it is inevitable that both groups of needs should be inade­ quately met. Service orders in a fluctuating military situation must almost always be formulated too late for the production ideal and demand more than can be provided to fit the operational timetable, while productive capacity built up to meet Service needs may all too often come into operation in time to produce more than is then needed or even produce weapons no longer wanted. Programmes for production in Australia of tanks and torpedoes involved complex issues, but these issues included the central one that those items of munitions production which used massive quantities of skilled labour, materials and machine tools over a long period produced eventually an obsolete tank and an obsolescent torpedo at a time when supplies of advanced types of both from other sources were more than adequate for Australia's shrinking needs. These instances are extreme, and in such cases the failure to assess more critically the probability of the outcome is the central criticism of the original decisions to undertake torpedo and tank production. But the basic conflict was between the imperfectly predictable and rapidly fluctuat­ ing munition needs of active war and the dependence of efficient produc­ tion on continuous and smooth

operations

initiated on the

basis

of

long-term planning. During 1 94 1 the issue was becoming more clearly recognised, especially as the difficulty of obtaining raw materials and components from the United States and the United Kingdom increased--delays in deliveries were ranging up to eight months. Discussion involving L. J. Hartnett of the Ordnance Production Directorate, General Sturdee,5 Chief of the General Staff, and Essington Lewis secured a War Cabinet decision in October that the Director-General of Munitions might act to establish production capacity for needs foreshadowed by the Services, even though 5 Lt-Gen Sir Vernon Sturdee, KBE,

CB, DSO. GOC Eastern Comd 1939-40; CGS AMF 1940-42 and 1946-50; GOC First Army 1944-45. B . Frankston, Vic, 16 Apr 1890. Died 25 May 1966.

E X P A N D I N G M U N I T IO N S P R OD U C T I O N

53

n o firm orders had been given.6 This however was only a small part o f the problem and further proposals to the War Cabinet a few days later emphasised that the only long-term munitions plan that could be said to exist was the Army's estimates of its requirements for arms, ammunition and explosives. Even so munitions contractors were running out of work while at the same time production (for example of 3-inch mortars and machine-gun carriers ) was being delayed. Cabinet decreed that the Services were to provide schedules to cover total requirements of various items, showing the basis of calculation, quantities on order, with Munitions or elsewhere, and orders not yet placed. These schedules were to be revised quarterly and scrutinised by the existing Army and Munitions Co-ordinating Committee to establish long­ term production targets and priorities. The Cabinet would concern itself primarily with financial authorisation.7 The difficulty was that this planning was to be within "the limits of approved policy" which the Cabinet in January 1 942 could only define in circular terms as that on which the Army based its schedules and the needs of the Army in Australia and nearby islands. Munitions, it should be noted, was not bound to obtain financial approval in advance for new projects; the Director-General sub­ mitted estimates to the Minister on whose approval he could act, with formal Cabinet submission later. Further, and at times acrimonious, discussion was precipitated by presentation to the War Cabinet of a letter dated 24th January from Hartnett. He was highly critical of the elaborate ordering procedures, inadequate control over costs, efficiency and profits of contractors. He urged, as part of a wide-ranging prescription, that the number of separate steps by which the Army placed an order should be cut from twenty-three to six; that the Army should yield to Munitions its authority on design so that designs would be adapted to ease of production; and that, in consultation with the Army, Munitions Directors should determine pro­ duction rates regardless of current orders. (As well he wanted an excess profit tax, cuts in non-essential industry and other objectives. ) The Army, not incorrectly, took many of these points as an attack on its own efficiency and an attempt by civilians to interfere with the Army's right to determine its own needs, including the design of equipment. Feelings were exacerbated by a number of incidents. Thus in May 1 942 it was alleged that a junior Air Force officer threatened seizure of the equipment of two companies if they did not produce transport equipment for torpedoes in place of the other munitions work on which they were engaged. The exact truth is elusive, but the incident indicated both the antagonisms and the lack of co-ordination. J. K. Jensen, Secretary of the Department of Munitions, had already proposed8 replacement of the Army and Munitions Co-ordinating Com­ mittee by one covering all Services. The former concerned itself only with 6 War Cabinet Minute 7 War Cabinet Minute

8 17

Dec

1941.

1425, 23 Oct 1941. 1477, 6 Nov 1941.

54

E X P A N D I N G M U N I T IO N S P RO D U C T I O N

the Army and primarily with arms and ammunition. His Services and Munitions Co-ordinating Committee was to include all three Services, to meet under the chairmanship of the Director-General of Munitions, and to cover all munitions requirements. It was to appraise requirements, revise production programmes, translate requirements into orders, deal with modification of design to meet manufacturing needs and determine priorities in production. These were large functions which required the Services to accept scrutiny of their demands on a comparative basis and, by specifying the Chairman, put the Services, as it were, in the position of clients rather than masters. Not surprisingly, several months went by until the plan was approved in April, and the new committee did not in fact hold its first meeting until August.9 It is not possible to determine how far this delay was explained by the involvement of all in the urgent immediate demands of 1 942, by the time required to prepare data in relation to an operational situation which had so many shocks and surprises, so many defeats and victories, as the first nine months of the Pacific war, or how far delay was due to the reluctance of the Services to accept restraint on their separate freedoms. The basic organisational device was obvious enough as a broad framework for relating Service demands to productive capacity, and was designed before December. Certainly by the time the new committee first met the whole munitions programme was under fire, primarily on the general ground ( even when expressed in very specific terms ) that total Australian manpower was over-committed, and that the munitions programme was far too ambitious. In the event, therefore, the chief function of the committee was to super­ vise a general cutback in munitions and to determine priorities in this context. In this role it remained important for some months but declined to insignificance by the end of 1 94 3 . N E W L O C A T I O N S F O R P RO D U C T I O N I n the early years o f war, production o f munitions was concentrated in or near capital cities, partly because the existing government establish­ ments were located there, as were the private factories or other government establishments (for example railway workshops ) to which contracts were allotted. Early expansion continued on this base, especially because this was the easiest source of labour while manpower shortage was not acute. But during 1 9 4 1 and especially 1 942 conscious efforts were made to decentralise munitions production into inland areas, partly because of security considerations, but even more in search of dwindling labour supplies. ( Questions of transport and water-supply could also influence particular choices. ) As an illustration of security planning, locations for production of cartridge case and other components of gun ammunition were chosen to be between filling factories in Maribyrnong, Victoria, and Salisbury, South • War Cabinet Minute 2086A, 9 Apr 1942.

55

N E W L OCATIONS FOR P RODUCTION

Australia, because if either filling factory were bombed-and i n the early part of 1 942 there was a genuine fear of bombing of munitions establish­ ments near Melbourne and Adelaide-these components could be shipped to the other. But even in such a decision availability of labour was probably at least as important. The Munitions Board of Area Management in Victoria in August 1 9 4 1 gave its blessing to locating munitions produc­ tion in country towns where labour was available, and where the early effects of war had even created unemployment of labour not easily mobile. There were limits to work which could be farmed out, for example, to motor vehicle workshops : items had to be standardised within the capacity of the workshops concerned which did not normally have elaborate equipment. Best results were usually obtained by allocating a single item or narrow group of items to a particular establishment so that a continuous flow of output could be achieved. Farming out to small scattered establish­ ments therefore required a great deal of organisation, the difficulties of which were only justified by the need to use labour and equipment where it could be found, a policy urged by the Treasurers of State governments, local authorities and others who saw inherent virtue in any manufacturing development in country towns. Impressed by early experience especially in Victoria, the Department of Munitions in February 1 942 endorsed an enlarged programme of expanding munitions production in country towns.10 In

Victoria

the

decentralisation

into

motor

garage

workshops

in

particular was organised through the Victorian Automobile Chamber of Commerce which accepted responsibility for organising and managing the scheme, for which it was paid twenty per cent of the contract costs. In developing a similar plan in New South Wales some thirty garage work­ shops were selected as suitable : investigation showed that seven of these were already doing munitions work on sub-contract, nine were willing to undertake it, ten had insufficient labour, and four ignored all requests for information. A number of others were already fully occupied with vehicle repair and reconditioning for the Army, work which was taxing Queens­ land workshops to capacity. Tasmania and South Australia likewise had insufficient plant and manpower to take on munitions work without prejudicing vehicle maintenance. In Western Australia some very modest munitions work could be farmed out to garages. To some extent the relative success of this programme in Victoria was explained by the better organisation possible over a geographically small area in close proximity to major factories, but there was also the fact of an early start. By the time the Victorian scheme had proved its worth other war demands on garages elsewhere had grown and their labour supply had fallen so the scope was less. Much more important in increasing production was the building of government munitions factories in country districts. The extent of this development in the period of great expansion is indicated in these figures : 10 War Cabinet Agendum 3 15/41,

1 5 Feb 1942.

56

E X P AN D I N G M U N I T I O N S P R ODU C T I O N Number of Munitions Factories Beginning 1943

Middle 1941 Capital Country City New South Wales Victoria Queensland South Australia Western Australia Tasmania Total

2 5 1 3 1 1

9 2

13

12

Total

Capital Country Total City

11 7 1 4 1 1

2 4 1 3 1 1

20 8

25

12

35

22 12 I 9 2 1

6 1

47

(The figures do not include a few factories not yet in operation at both dates.) In short, the total number of factories was doubled, the increase being entirely outside capital cities. They were concentrated in three States, where munitions production was already developed. These were the States with the largest amounts of available labour; the new factories were commonly producing components which had to be brought together, often at one of the metropolitan locations. There were also security reasons. Queensland had little or no labour of relevant types to spare but it was in any case virtually a forward base for operations, an inappropriate location for a munitions plant. Tasmania and Western Australia had little labour to offer and transport problems made them unsuitable. But they were also regarded as vulnerable to attack. While the development of factories in country towns was in substantial measure intended to use the labour, including skilled labour, available there, skilled workers continued to be acutely short whether in city or country. Early programmes for training, and for "dilution" of labour have already been recorded,l but the need continued. In December 1 94 1 Munitions estimated its additional labour needs for the next six months as 1 6,94 1 males and 1 2,734 females, including 8 3 8 toolmakers and 2,676 other skilled tradesmen, and the outlook for these was bleak despite the fact that by then 1 4,335 had completed or would complete training by June 1 942. Increasingly the difficulty in maintaining training schools for tradesmen was that the machines and the teachers were urgently wanted for immediate munitions production. For example, the United States Lend-Lease authorities were unwilling to approve requests for equipment while the same type of equipment was located in training schools.2 Never­ theless by May 1 943 when the training programme was being reduced there were 7,706 undergoing training. Associated with these training programmes was dilution of

skilled

labour. The unions had reluctantly accepted the principle with restrictions and safeguards,3 but the restrictions on the use of semi-skilled workers and trainees were seen by Munitions as a major constraint on production. A 1 See Butlin, War Economy, 1939-1942. 2 War Cabinet Agendum 215, Supplement 4, 8 Aug . 3 Butlin, War Economy, 1939-1942.

1942.

N E W L O C AT I O N S F O R P RO D U C T I O N

57

series of conferences in the first half of 1 942 culminated in June in what in effect was a deal by which the Amalgamated Engineering Union accepted further dilution with additional pay margins for skilled and semi-skilled workers. However, the Cabinet insisted these margins must be determined by normal procedures before a conciliation commissioner, not by direct government action.4 There were efforts too to increase the employment of women, for example by adapting their shift hours to fit in with the hours their children were at school and to improve amenities in the hope of reducing absen­ teeism which was becoming a matter of concern. Among women in particular a good deal of absenteeism was attributed to difficulties of shopping for family needs, because of elimination of delivery services, the need to queue to secure scarce goods, and so on. But there were other factors involved, for absenteeism was prevalent among men also. One common factor was the large amount of overtime being worked. By the end of 1 94 1 production of ammmunition was at high and increasing levels. The oldest ammunition factory was at Footscray, Victoria, followed by Hendon and Pinsbury in South Australia, and eventually there were 1 1 major and 1 6 small factories and 90 commercial annexes, most coming into operation in 1 9 42-43, engaged in ammunition production. In December of 1 9 4 1 production of .303-inch ammunition of all types had reached a level of 40,000,000 rounds a month; production was proceeding satisfactorily with 2-pounder practice shot, mines and 3 .7-inch forgings; compared with June 1 940, shell production at Maribyr­ nong had increased by 6 1 8 per cent. Output of 2-pounder anti-tank shells was lagging and had again to be slowed down in January 1 942 to expedite production of shells for the 40-mm Bofors. A special difficulty was . 303-inch armour-piercing ammunition for the Royal Australian Air Force. Machines had- been ordered from the United States but had not been delivered; special imported steel was no longer available and an Australian substitute took time to develop, and was only becoming available at this time. The old Footscray factory, which it was intended should produce only this ammunition, was being reconstructed. Projected general increases in ammunition output were restrained during 1 942 by difficulties in securing labour and by machinery and machine­ tool problems. In some cases happy solutions were found with Australian substitutes. Stewarts and Lloyds (Australia) Pty Ltd developed a machine, using weldless tubes, to produce shells for the 1 8-pounder, 25-pounder, 3 .7-inch anti-aircraft, 5-inch howitzer and the 6-pounder, which was markedly superior to other equipment in use. Initiated in February 1 940 it had by September 1 942 produced over 2,000,000 shells, half of them during nine months in 1 942 when it was able to tum out over 3 3 ,000 a week compared with 20,000 on other machines. When in June of that year it was planned to enlarge output, partly in expectation of a rapid • War Cabinet Minute

2196, 12 ]un 1942.

58

EXPANDING MUNITIONS P RODUCTION

increase i n need for 25-pounder shells, partly b y increased forging relative to machinery capacity so as to build up reserve stocks of shell bodies, manufacture of another such machine was approved. It was expected to take nine to ten months to make, but the best forecasts for import from America promised a similar delay and higher costs. Army demands could not be forecast accurately in either quantity or type. Thus in June 1 942 a special order for 4,000 mines was approved, not because they were currently required but to avoid shutting dow:1 productive capacity which would be needed at a future date. Changes in needs for different types of ammunition brought production problems. Thus the increasing emphasis on aircraft and aircraft weapons from the end of 1 9 4 1 brought new ammunition needs. A simple example was the decision to adapt the 2-pounder anti-tank gun for use as an anti-aircraft gun. The most practicable way to secure the new kind of ammunition required quickly was to combine the 2-pounder anti-tank cartridge case with a Bofors shell, fuse and igniter. This hybrid required modification of the gun chamber and created an unforeseen increased demand for fuses and igniters. There were production difficulties too because of the wide range of ammunition being produced and the large number of factories and com­ mercial annexes involved. There were as a result great difficulties in co-ordinating and controlling the flow of components, with the inevitable consequence that surplus components accumulated because supply of others was not in step, and productive equipment often operated below capacity. Thus in July 1 942 Toowoomba Foundry in Queensland had to be instructed to curtail production of primers because output of these had outstripped other components. Accumulation of such difficulties led in mid- 1 942 to a special Army­ Munitions survey designed to pin-point the source of difficulty in main­ taining the flow of ammunition in the types and quantities desired. The June 1 942 report of the Director-General of Munitions described as a general limitation "our ability to obtain machine tools, jigs, fixtures and gauges to schedule" but there were many other specific problems . Insufficient cordite was holding up output of 3 . 7 -inch ammunition (earlier insufficient cartridge cases were a holdup ) , and 2-pounder anti-tank shell. Fuse production was handicapped by shortage of aluminium because of the prior claims of aircraft production, and this was holding up production of three types of naval shell, Bofors shell and 20-mm ammunition. Man­ power shortages, lack of machine tools and gauges were constantly mentioned, and for one type of shell, refreshingly, "lack of drive in pro­ duction directorate". The Director-General's conclusions were that new commitments to supply ammunition to the Americans must be restricted to types which could be produced with existing equipment ( including tools) which were not currently sought by the Australian forces, and that proposals to produce new types of ammunition must be scrutinised for their effect on existing programmes. There was more than a suggestion of pressure on the American Army to expedite the delivery of Lend-Lease

N E W L O C A T I O N S F O R P RO D U C T I ON

59

tools and gauges, but it was also true that the Americans wanted ammuni­ tion (for example 105-mm and 1 5 5-mm) not then used by the Australians. Nevertheless during 1 942-43 planned capacity for ammunition produc­ tion progressively came into operation. Among the major factories were Footscray, producing small-arms and gun ammunition, employing in mid1 942 9,3 1 1 workers, nearly half of whom were women; Finsbury, South Australia, employing 5 , 346 mainly on cartridge cases ; Hendon, South Australia, with 2,7 1 2 workers producing . 303-inch ammunition at the rate of 1 1 0,000,000 rounds a year; Rocklea, Queensland, producing mainly . 303-inch cartridges ( capacity 220,000,000 rounds a year) and other small-arms ammunition; Maribyrnong, Victoria, producing thirty different types of shell and several types of bomb. There were at this date various government factories commencing or near to commencing production mainly in country towns. These included : Wagga and Albury, N.S.W., fuse factories-capacity 650,000 a year. Goulburn, N.S.W.-capacity 750,000 6-pounder shot and 650,000 fuse; production due to start in November 1942. Tamworth, N.S.W.-capacity 2,350,000 primers; production due in January 1943. Welshpool, Western Australia-a small small-arms ammunition and fuse unit. Rutherford, N.S.W.-cartridge cases; production due in October 1942. Derwent Park, Tasmania-capacity 2,000,000 6-pounder and Bofors cartridge cases; production had started in June. Hamilton, Horsham and Stawell, Victoria-factories to machine shell forgings produced at Maribyrnong. Port Pirie, South Australia-25-pounder shell; production (650,000 a year) due in Ohe establishment of the Department of Supply and Shipping in Ootober 1 942 are shown in the accompanying chart. The Allied Consultative Shipping Council had its origin in the confused shipping position of January-February 1 942. The greatly increased de­ mands following Japanese entry into the war, and especially those associ­ ated with the movement of American forces into Australia, had to be faced in the confusion and disorganisation of defeat and retreat, wiuh refugee ships hastily seeking safety in Australian waters, including Ameri­ can ships diverted en route to the Philippines. Ad hoc emergency decisions had temporarily to take priority. But it was evident that some systematic arrangement was necessary to cope with a situation in which American, British, Australian and Dutch ships were all involved and the common purpose must be pursued with regard to the interests and rights of control over their own ships by these governments. Rapid inter-governmental exohanges during the first fortnight of Feb­ ruary bore fruit in the War Cabinet decision on 9th March to establish the Allied Consultative Shipping Council with ,the general function of promoting co-ordinated use of shipping in the Australian area irrespective of national ownership.5 There were a number of Dutch ships in the area, and when later that month the Nethedands had organised a Mission in Australia, it too was added. Three months later, in recognition of the diversion of Norwegian ships to Australia, there was a representative of the Norwegian Trade and Shipping Mission, and later again, in August, the chairman of the Maritime Industry Commission and an Army repre­ sentative were included. The Council had itself no powers of aotion-the "Consultative" of its title emphasised this-and indeed it would have been impracticable to devise a formula to give control over the ships of five nations. But in operation, during most of 1 942, the Council's conclusions were of great importance. Meetings, usually once every three weeks, were means of canvassing problems and solutions, exohanging information 'and seeking agreement on action, which could ,uhen be formally implemented by the organisation directly responsible. So long as in Australia a series of separate bodies, responsible to different departments, dealt with aspects of the total shipping problem, the Council was the primary route through which those bodies, and those for whom national representatives were spokesmen, were brought to co-ordinate their actions. Once the Depart­ ment of Supply and Shipping was established the Council ceased to have so much importance; it was also true that policies and methods of action •

Its initial membership comprised Sir Owen Dixon for the Shipping Control Board (chairmap ) , and representatives of the British Ministry of War Transport (Sir Thomas Gordo,? ) , the UOited States War Shipping Administrat�on, the Department of Commerce, the Austrahan Navy, the British Phosphate Commission (SIr Arthur Gaye) . Gaye, who was also a member of the ShIP Chartering Committee, was executive member.

C H A R T No.2 -

C O M M O N WE A LTH S H I P P I N G A D M I N I STR A T I O N

-

ORGANISATION

AS AT 30'9-42

COMMON WEALTH GOVERNMENT M I N I S T E R FOR T R A D E & CUSTOMS

� ....... ,"""" ...... ....... " \ " \

.....

-

-

--

....... ....... ...... \ ��\-- -- .:::: , \- ..... \\ - ,, \ -, -\ \ .... ..... , .... , " ..... ' , , .....

..... ..... -..... ........ .. ........ ... ... ....... - � .-__ .... _ :-.. 31.___--.,

, I

MARITIME INDUSTRY COMMISSION Nat. Sec. (Maritime In dustry) Regs. No.2 o f 1942, 2-1'42

BRANCHES ALL STATES

SHIPPING MANAGEMENT COMM ITTEE

CENTRAL TRAFFIC COMMITTEE

TAS. TRAFFIC COMMITTEE

......

Nat. Sec. (Salvage Board) Regs. No.129 of 1942, 14'2'42

STEVEDORING INDUSTRY COMMISSION Nat, Sec. (Stevedoring Industry) Regs. No.159 of 1942, 2'4'42

CENTRAL CARGO CONTROL COM MITTEE Nat. Sec. (Cargo Control) Regs. No.195 of 1942, 23'4'42

STATE CARGO CONTROL COMMITTEES

AT EACH MAIN PORT

_ _ _ _

LIAISON

R E QU I S I T I O N I N G

219

had been worked out and called for less consultation, while, overall, the shipping position had not the desperation of 1 942. Among the Council's earliest conclusions was one that twenty-one Dutch vessels in Australia should pass under the exclusive control of the American Army; and another that arrangements be provided for regular exchange of information about shipping movements, shortages, arrangements for port accommodation, repairs, cargo handling and coastal convoys. As an example of the varied topics covered, a meeting on 7th October discussed ways of speeding up repairs; shortages of lighters; replacement of a chartered ship sunk; refugee ships idle in Western Australian ports; convoy problems ; coal stocks; cargo space for raw sugar; the Department of War Organisation of Industry's plans for eliminating the very small amount of non-essential cargo still being carried; and crew demands for leave. After the Department of Supply and Shipping became fully operative the appearance of an item on the agenda normally meant that it was particularly serious or difficult at that time. Council meetings were, effec­ tively, ways of making the various interests represented all aware of an unsolved problem, or often a means of bringing pressure to bear on one of the Council's constituents, for example on the Americans to make more ships available for the coast, or to find solutions for the friction that arose from the use of Chinese and Lascars on coastal ships. REQU I S I T I O N I N G

Ships under the immediate direction of �he Shipping Control Board were obtained either by requisitioning ships on Australian register, or by chartering. In the breathing space of 1 94 1 the Board worked out principles for placing all ships requisitioned on a standard time charter, under which the operating company would run a requisitioned vessel as agent for the Board which would meet all costs and be credited with all earnings. The shipowner received 6 per cent of all freight as a management fee; 5 per cent depreciation per annum and 4 per cent interest on capital ( both calculated on the value of the ship) ; and allowances for superintendence, hire of gear, and for claims for pillage and damage.6 Between July and December 1 94 1 some 77 interstate steamers had been requisitioned, and during the first six months of 1 942 a further 24 interstate ships, one intrastate steamer, and 37 small craft, trawlers, launches and ketches were added. In the second half of 1 942 a further 3 interstate and one intrastate steamer were added together with 47 miscel­ laneous craft. By that time most of Australia's coastal vessels not taken over by the Services ( including the Americans ) had passed under the control of the Board, and through it of its Management Committee. The total number of vessels requisitioned by the Board was : • The superintendence fee was initially 9d. per ton for loading,

a similar amount for unloading general cargo, increased later to Is. (payable retrospectively from 1 Jan 1942) and to Is. 3d. (payable from 1 Oct 1942 ) . Hire of gear was paid for at 7d. per ton for general cargo. Originally claims for pillage and damage were limited to lOd. per ton; but from 1 Jan 1943 the Board met actual amounts of claims.

220

C R I S I S I N S HI P P I N G

To end of 1941 1942 1 943 1944 1 945

Interstate Steamers 77 27 8 1 3

Intrastate Steamers

Trawlers, Launches, Ketches, Small Craft

2 5 11 1

84 4

1 16

19

88

Formally the ships of The Broken Hill Pty Co. Ltd were not requisi­ tioned but they were used, nevertheless, in accordance with decisions of the Board. C HART ERING

The second source o f ships for the Board was the chartering of overseas vessels including as a special case a number of vessels which took refuge in Australia when Japan attacked. As was noted earlier, originally chartering had been primarily 'a means of finding ships for Australian exports and the twenty�four ships under charter in December 1941 were the result of this policy. Subsequent charters were as much for use in local waters, but ships were much harder to obtain. There were fewer left available as the British Ministry of War Transport 'and the United States Shipping Administration were effectively in control of that supply, while other owners (for example Norwegian and Greek ) were increasingly reluctant to charter for Australian service which could include carriage of coal or iron ore in vessels not designed for that purpose. Of the 66 vessels ( excluding refugee ships ) at one time or another on charter to the Board, 25 were obtained from the Ministry of War Transport, 1 0 from Norwegian owners, 8 Greek, 6 Panamanian registry, and 2 Yugoslav owners; 2 were taken over from Westralian Farmers Ltd., 2 from the Commonwealth, while the "River" class ships built in Australia were chartered to the Board as they were completed. In summary chartering of such vessels was :

1 942 1943 1944 1 945 1946

On Charter at 1 January 24 22 31 33 37

New Charters* 7 10 (2) 8 (4) 15 (5)

Ships Lost 7 1 1 1 1

Charters Terminated 2 5 10 24

* "River" class ships included in the total, in brackets. At the end of 1946 therefore the Ship Chartering Committee had, apart from one British War Transport ship chartered until March 1947, reduced its fleet to 1 1 "River" class ships owned by the Commonwealth.

The position in the first half of 1 942 was worse figures suggest. The new charters were three, but as from the Commonwealth Government and two were British Ministry of War Transport they represented

than these annual one of these came transfers from the more a change of

221

CHART ERING

control than a net addition to shipping resources. Against this, five chartered ships were lost. The second six months of 1 942 were better. Only two chartered ships were lost, and there were four new charters. Nevertheless over the year as a whole chartered ships were reduced by a net two. A second special source of chartered vessels was the refugee ships which entered Australian ports in 1 942. A number of �hese were already on charter to the British Ministry of War Transport and of the rest those not taken over by the Americans were chartered by the Ministry, whioh then made most available on sub-charter to the Shipping Control B oard. As has been noted, the Americans secured all the Dutch refugee ships and as well six vessels transferred at the end of 1942 from India originally destined for the Shipping Control Board. The Board's 1 942 acquisitions were 7 ships of Burns Philp & Co. Ltd, 6 Norwegian ships and 6 miscellaneous small ships, two of which were transferred to the Americans. The United States Army demands on Australian shipping owners were a sore point. The Americans had s ecured all 2 1 Dutoh refugee vessels for their exclusive use on the Australian coast, together with two other refugee ships surrendered by the Shipping Control Board. In response to requisitions Australia had handed over 'another 23 ocean-going vessels and requisitions of a further 28 small craft were agreed to. In June 1942 the United States requested a further 42 specified craft ranging from 24 to 1 ,500 tons whioh led the Board to strong high-level protest. The B oard summarised the position of the Australian ocean-going coastal fleet at the end of June : Sea-going ships in the coastal trade at outbreak of war . New construction and other additions (for example, refugee ships) .

Losses by enemy action Australian Navy requisitions United States requisitions •

170

•

70 11 61 23

240

95

145 Remaining Note: These figures omitted coal and iron ore carriers and 28 small vessels requisitioned by the United States Army.

The Board insisted that it could not agree to the handing over of another 42 small craft for whioh no clear case had been made by the Americans. The Board wanted Curtin to take the matter up with MacArthur, but instead it was decided to counter-attack by presenting a case to the British and American shipping authorities in Washington for the 'allocation of more ships not merely to Australia but to the South­ West Pacific Area generally, with a proposal that the 2 1 Dutoh refugee ships should be included in a pool, not reserved for sole American use;

222

C R I S I S IN S H I P P I N G

and withdrawal of the request for 42 ships was soughU But the Americans pressed their claims through MacArthur and ultimately secured the small vessels they sought, at the end of the year, overbearing resistance with arguments of military necessity. By October the American demand had become 1 5 trawlers and 1 0 small cargo vessels needed by the end of the month, and a further 1 5 small cargo vessels by the end of November. MacArthur made the request direct to Curtin.8 Although the demand meant drastic reduction of some services-only four Australian trawlers would remain outside Service control, for example-Curtin's acquiescence meant that the only issues remaining were the choice of particular vessels and the basis on which they should be transferred. The Americans wanted complete control; the Shipping Control Bnard wanted at least reversionary rights by having the ships made available on oharter. The solution adopted, which again gave the Americans what they wanted, was that the Navy should requisition the vessels.9 Enemy action in Australian and New Guinea waters from the beginning of 1 942 was a further serious restriction on shipping both for coastal and overseas carriage. Up to the end of 1 94 1 only 9 vessels were casualties. But in the first six months of 1 943 1 3 merchant ships were sunk by torpedoes, bombs or shells and a further 7 badly damaged, while there were other losses not so directly related to enemy action. 1 In the second six months there were 4 1 oasualties of which 7 ships were sunk by direct enemy action; there was a sharp rise in the number of strandings and collisions, so that some 3 1 vessels in all became tntal losses. For the first half of 1 943 26 ships were bombed or torpedoed, 1 6 of these being sunk. Thereafter losses by direct enemy action declined but miscellaneous casualties, especially strandings, continued high until 1 945, and despite the activities of the Salvage Bnard the majority of casualties were total losses.2 A supplement to coastal shipping was the use of overseas vessels for carriage between Australian ports. The Australian chartering programme had been originally aimed at, especrally, finding ships for exports. But in the circumstances of 1 942 it was logical to. use some of these, for part of the time, in coastal traffic, and when such ships travelled between Aus­ tralian ports as part of an overseas voyage to use empty space for shipment between those ports. During 1 942, of the 3 ,800,000 total tonnage carried by chartered ships, nearly 2,000,000 was coastal cargo. The cargo from Australia to overseas ports was varied : cereals, sugar, copra; and from overseas ports phosphates, sulphur, chrome ore, salt, bitumen, newsprint; as well as general cargo in both directions. ( "General" cargo 'accounted 7 Telegram to

Australian Minister in Washington,

• Letter of 18 Oct 1942.

1 1 Jul 1942.

• Protests by W. J. McKell, Premier of N.S.W., against the choice of small vessels serving the south coast of that State were successful. Letter to Curtin 4 Nov and reply 17 Nov 1942. 1 These figures and those that follow exclude small craft, but do not distinguish Australian from, for example, American vessels. 2 In the second half of 1943, 7 merchant ships were sunk by bombs or torpedoes and 2 were bombed but remained afloat, but there were 26 ships aground, and out of a total of 40 casualties half were beyond salvage. All these figures are taken from reports on the activities of the Salvage Board.

CHARTERING

223

for forty per cent of the overseas loadings. ) The most important coastal cargoes were iron and coal, which accounted for over ninety per cent of the coastal cargoes carried in ohartered vessels; although, ,as noted earlier, Greek and Norwegian owners were unhappy about the intensive use of their ships for this purpose. Similarly ships directly controlled by the British Ministry of War Transport were used for this coastal traffic when cargo space was available and to a much lesser extent Americans vessels, reinforced as 1 942 went on, by the American willingness to use newly constructed ships in this way on their first voyage.3 From April to November 1 942 the monthly average of coastal tonnage carried by ships on overseas voyages was 1 8 8 ,000, a figure that was exceeded in 1 943. In addition to direct enemy action, reduction in the carrying capacity on the coast resulted from the introduction of convoys for vessels on the main coastal routes on 8th June 1 942. With the inevitable delays in marshalling convoys land their reduction to the speed of the slowest ship, tonnage carried in convoyed ships during 1 942 was reduced by amounts estimated variously as high as one-half. Until well into 1 943, despite authority for faster vessels to sail out of convoy, the reluctance of crews to sail thus made convoying a serious handicap on tonnage carried. The first, natural, reaction of Australian authorities had been to seek more ships from Britain and the United States, which by now between them virtually controlled the world supply. Repeated representations were made to London and Washington, stressing especially the need for ships to carry coal and iron ore. Thus in July a cable to both set out the position. The reserves of iron ore, for example, in Newcastle and Port Kembla were set at 300,000 tons; usage to the end of the year at 1 ,200,000. With the present ships available 540,000 tons could be moved if there were no further losses. There were four overseas chartered ships engaged in moving iron ore 'and a further five to seven were to be allocated to the work, and these could be expected to carry another 400,000 tons. The conclusion was that all reserves would be exhausted by December, and the blast furnaces could not function if they were dependent on precarious further supplies. A similar gloomy position was presented for coal. In the exchange of frequent cables Australia stressed the overall short­ age of ships, the heavy losses and expanding needs. London was more responsive than Washington. Australian requests to both were a mixture of the case for more ships in general, and specific requests for particular vessels as it appeared they might become available. Thus, knowledge of some Dutch vessels in India inspired requests which London supported, and eventually yielded six small ships. Similarly an Australian request for Yugoslav ships to be diverted from the Ohilean nitrate trade succeeded because of British Ministry of War Transport sponsorship. Arguments that 3 The much

lesser contribution of American ships than British ships is partly accounted for by the different overseas voyages engaged in. British ships commonly approached from the west bound for Australian east coast ports. American shipping was predominantly engaged on Pacific voyages.

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Nonvegian ships being used exclusively in the South-West Pacific Area by the American Army should be pooled were less successful. The primary need, it was stressed repeatedly, was for large ships of 8 ,000 tons capacity for coal and iron ore, and other bulk cargoes, but any ships were useful since reallocation of vessels could help the critical need for ships for these coastal cargoes. There were some successes. The United States War Shipping Administration was not easily convinced of the desperateness of the situation (to some extent influenced by American reports of inefficient port labour and slow turnaround) and was not prepared to make long-term allocations of ships to Australia. Rather it was disposed to make its chief assistance in the form of the first voyage of newly constructed ships to Australia, or short-term allocations of ships for carriage to and from Australia, to release others for coastal work. Thus London reported in July that the War Shipping Administration had agreed to allocate three voyages a month to supplies for Australia and offered "first sailings" in addition. In September the War Shipping Administration released two small ships to Australian control. Every piece of such lassistance was valuable, but tJhe total relief during 1 942 was small. The Dutch ships from India could not arrive until near the end of the year, and for a time there was fear that the United States Army would take permanent control of them beyond the six months for which the Americans were conceded the use of tlhese ships. The War Shipping Administration was not prepared to make other than short-term commitments of its vessels. Those ships which did become available to Australia were in any case usually old, slow, small and in need of repair.4 The demands of coal and iron ore on shipping provided by overseas ships in Australian waters has been noted. What emerged in 1 942 as the key demands on suoh coastal shipping as was not requisitioned, were tlhe movement of coal from Newcastle to Melbourne and Adelaide and ship­ ment of iron ore from South Australia to Port Kembla and Newcastle. In the first two years of war the inroads on the coastal fleet had been small, and large stocks of iron ore at Newcastle and of coal in Victoria and South Australia had coped with short-term fluctuations in shipping But in the early months of 1 942 shortage of ships, longer turnaround and the demands on the vessels for military purposes produced a rapid run­ down of stocks. At first the Shipping Control Board was not greatIy alarmed, appar­ ently believing that use of overseas vessels to carry these two commodities, and greater co-ordination in the 'alIocation of cargoes over the coastal fleet would be adequate.5 But by June the inability to meet demands seemed despemte. Moreover other needs were not being satisfied. In May, for example, the Shipping Control Board was considering a great accumula­ tion of civilian cargo for Western Australia (heavily dependent on the eastern States for manufactured goods ) whioh there seemed no immediate • Thus a cable to London on 16 Oct protested that certain Norwegian ships would be laid up

for repair for a considerable period, although hire had to be paid in full.

5 For example, Shipping Control Board Meetings, 3 Feb 1942.

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prospect of moving. The introduction of coastal convoys reduced the carrying capacity of a fleet already depleted by Service requisitioning, both Australian and American. But coal and iron ore were the main sources of worry. The Victorian Railways had eight weeks supply of coal, Victorian gas works six weeks, Commonwealth Railways in South Australia barely four weeks. The iron ore to be moved was 200,000 tons a month; ships available to the Shipping Control B oard could carry 90,000 tons a month. Help from overseas ships was confidently expected but the amount and timing were uncertain because of their dependence on convoys. If there were no further losses and no further increase in demands, deliveries of ore would be deficient by 300,000 tons by December. In short the prospect was of complete using up of Broken Hill Proprietary's reserves of iron ore; one Newcastle blast furnace would in vhat event have to close down . . Inability to deliver enough coal to South Australia would mean that the Whyalla blast furnace, ·already working below capacity, would have to stop altogether.6 LAB O U R The Seamen's Union

The wide powers of the Maritime Industry Commission have been noted; these covered arrangements to implement ,a 44�hour week for seamen, determine conditions of leave, preference in employment, war risk bonus payments, use of inexperienced labour, accommodation and catering and so on; later, maintenance of discipline on ships was added.7 One of its first tasks was to deal with bhe serious shortage of crews, by various relaxations of established rules, and by restrictions on the freedom of seamen and employees to terminate employment. QUalification for promotion were lowered. A captain who had made diligent . efforts to recruit a full crew could put to sea with as much as twenty per cent below his complement. To prevent men working for brief periods, ,a seaman was required to serve at least one month. On the other hand, to ensure a flow of experienced recruits, deck boys could not be discharged without the Commission's ,approval. At 1he end of 1 943 to retain a right (0 employment as a seaman, a man must serve at sea not less than 1 25 days in each six-monthly-peri04.8 On , the other hand the Commission was responsible for various gains to seamen. Introduction of a 44...,hour week for seamen, as a matter of government policy, was covered by some thirteen orders issued on 1 0th Maroh 1 942. The Commission took over from the Arbitration Court power to determine war risk bonuses, and by a series of orders varied these, the general effect being that for the remainder of the war seamen on ships proceeding outside Australian waters received la bonus of 50 per cent, those on voyages within tJhese waters from 25 to 33% per cent. There were provisions for maintenance and repatriation of crews of ships lost or ' Shipping Control Board meeting I May 1942 and papers presented to it. 7 National Security (Maritime Industry ) Regulations, Statutory Rules 1942, No. 68, 13 Feb. • Various Orders of the Commission dated 14 Jan, 6 May, 20 May, 24 Jun 1942; 2 Sep, 29 Dec 1943.

Today·s Armstrong

-MY COU NTRY, 'TIS OF TH EE !" •

Armstrong in Argus (Melbourne ) , 2 Apr 1943.

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disabled; and a variety of other improvements in the conditions under which seamen worked. Nevertheless the industry continued to be characterised by the indisci­ pline and hold-ups over petty disputes which were normal when the Com­ mission was established. Indeed these were primary factors behind its creation-refusal to sail, desertion, absence wivhout leave, refusal to obey commands, drunkenness and the like. Accordingly the Commission was given wide powers of discipline which included the power to exclude a man from employment as a seaman (whioh subjected him to call-up or to Manpower direction to other employment) . Penalties ranged through reprimands, fines, suspension, exclusion from the industry, the last being made automatic after three bad discharges.9 There was considerable im­ provement in discipline, but this is a comparative statement. In 1942 the Commission still had to deal wivh 1 88 cases of ship disputes. With the passing of the immediate Japanese threat to Australia the Seamen's Union became more intransigent, and only retreated, partially, in the face of strong action by the Commission firmly supported by the Prime Minister. One notable example in May 1 943 was the dispute over fines imposed on seamen of the Australian coastal steamer Canberra who refused to sail one man short-when the Seamen's Union member withdrew from the Commission, the Prime Minister supported the Commission's stand, and naval ratings manned the ship.1 From outside the Seamen's Union actively fought the Commission's decisions, and sought to have it replaced by a separate aubhority for Seamen's Union claims. But the Commission and the Government stood firm. In September 1 943 seamen refused to supply crews for ships at Newcastle; the ships sailed with naval crews. In December 1 943 the Prime Minister intervened directly in a strike over convoys at Melbourne which threatened to tie up all ships there. Temporarily, at least, the Union ceased its open opposition and in April its representative again attended meetings of the Commission.2 Stevedoring

That engagement of labour for wharf work was very much an industrial bargaining business until the establishment of the Stevedoring Industry Commission has already been noted in recording the creation of the Com­ mission. Employers selected their own labour; men selected their own jobs. Details varied from port to port. Thus in Melbourne, Brisbane, Adelaide, Newcastle 'and some Queensland ports entry to wharves in searoh of work was limited to those classified as first ,and second preference 9 Disciplinary powers given by Maritime Industry Regulations of 13

Feb 1942. Power to exclude expressed in Maritime Industry Commission Order No. 8 of 2 Mar 1942. In practice, the severity of these powers was blunted. For example, although a master was formally required to report on each seaman discharged, no action was taken if he declined to report so that automatic exclusion would not follow. 1 The Union representative withdrew on 2 June (the dispute began on 23 May) and did not again attend until April 1944. The Canberra sailed on 4 June 1943. 2 This summary account leaves out the frequent inter-union conflicts, notably those between Seamen's and Marine Stewards Unions, which effectively started because the latter were not given representation on the Commission.

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men; each class in turn could offer for work on a particular ship subject to being accepted by the stevedoring companies' foremen; if more labour was needed the choice could then extend to "no preference" men who were not admitted to the wharf.3 At Sydney, there was no order of preference. Under these arrangements many men, including those with small experience ,and only casual association with wharf work, could avoid call-up by claiming to be wharf labourers ; they could pick and choose which cargo they would work, and when they would work (night work, for example was more highly paid) . Partly prompted by scathing criticism from the Americans, and their evident determination to use their own troops if handling of cargo did not improve, there were a series of con­ ferences in early 1 942, the important one being the second.4 Succinctly two needs were reported : more effective organisation of labour and better handling equipment. Since the latter would take time, action should concentrate on the former by establishing a special authority to supervise wharf labour. The outcome was the Stevedoring Industry Commission in April 1 942. For the first two years it met, normally fortnightly, in Melbourne." Before its establishment ,a Waterside Employ­ ment Committee had been established in Melbourne in January; this was taken over by the Commission and similar committees created at other ports.6 These comprised equal representatives (three at larger ports ) of employers 'and workers under an independent chairman, and their function was to manage the use of waterside labour at eaoh port within the Commission's powers and directives. By June 1 942 almost all ports had such a committee in operation. Their first task was to establish a quota of men considered necessary for regular employment at the port and then to register approved appli­ cants (which provided an opportunity to eliminate the unwanted, both in number and quality) ; those retained became members of the Waterside Workers' Federation.7 There was a further reserve register of men in other occupations available if necessary for some wharf work. Employers were also registered. Initially free choice by employers among registered men and by men among jobs remained, but ship delays were so great that the Commission was forced to issue rules governing offer 'and acceptance of employment. The most important, in May, was that, initially in Melbourne and later 3 This "licensing" system had been provided for by the Transport Workers Act (No. 37 of 1928 ) . ' Att,:nded by representatives of the Shipping Control Board (Sir Owen Dixon) , British MmIstry of War Transport (Sir Thomas Gordon) , United States War Shipping Administration (c. E. Brown ) , Waterside Workers' Federation (1. Healy ) , which commissioned Dixon, Gordon and Healy to recommend action. Two other unions existed : the Fremantle Lumpers' Union, at that port only, later absorbed into the Waterside Workers' Federation; and the Permanent and Casual Wharf Labourers' Union, established during the 1928 Melbourne waterfront strike. It was prohibited from 2 Apr 1942 from accepting new members. Except at Fremantle the Waterside Workers' Federa­ tion was predominant. 5 From February 1944 its headquarters were at Sydney. 6 The January plan had contemplated committees at other ports. National Security (Waterside Employment) Regulations, Statutory Rules 1942, No. 19, 28 Jan. 7 Unless already members of Permanent and Casual Wharf Labourers' Union.

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elsewhere, workers were organised in gangs of seventeen men engaged as units; as the application of the system developed it became normal for gangs to be rostered to particular jobs without regard to preferences of men or employers.8 Other rules provided for round the clock working; for trying, with limited success, to restrict hours worked by men to 56 per week, ,and so on. When the Commission was 'established the Waterside Workers' Federa­ tion had a log of claims before the Arbitration Court, decisions on which were passed to the Commission which from then on was responsible for determining a constant flow of industrial issues. These ranged over mem­ bership and working of gangs; allowance for specially unattractive jobs ; unauthorised stoppages; use of unfit and disabled workers ; transfers of labour between ports and a variety of other issues. Muoh time was occu­ pied with application of the Commission's disciplinary code. Employers retained their right to dismiss individual men; the Commission had power to suspend a man or exclude him from the industry, but use of this power frequently resulted in confrontation with the Union and interruption to work. When the Americans first arrived early in 1 942 they used their own troops to load and unload key cargoes, and this led later to intermittent use of Australian troops on wharf work, in due course organised as Docks Operating Companies. Potential union hostility was blunted by the introduction of quotas of registered wharf-labourers, so that troops were normally used only when there was excess cargo to be handled, and by the provision, from May 1 942, that employers must pay for Service labour at award rates of pay. The effect of the Commission's activities was a transformation of the industry from a notoriously turbulent, ill-organised form of casual employ­ ment. In surrendering the right to free choice of labour and of time of working their ships, employers gained an organised and, on the whole, certain supply of labour. Workers lost the free ohoice of jobs and of whether to work or not, but gained greater security and continuity of employment, as well as the great improvement in the conditions and rewards of their work which flowed from the Commission's determination of matters previously the province of the Arbitration Court. To some extent these improvements followed simply from the removal of casual haphazard conditions of the stevedoring labour market; to some extent employers were prepared to agree to changes because in the short-run they were largely protected from their financial costs; but a major factor was the key role of J. HealyV of the Waterside Workers' Federation who dominated discussions of industrial issues at the Commission's meetings with skilful and well-based advocacy of the workers' claims. 8 Each gang contained at least one hatchman, two winch drivers and six hold workers. At some

smaller ports the gang system was not introduced or introduced incompletely . • J. Healy. Gen Sec Waterside Workers' Fedn of Aust 1937-61; Mbr Industrial Relations Council, Stevedoring Industry 1942-49. B. Manchester, UK, 22 Mar 1898. Died 13 Jul 1%1.

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CARGO CONTROL

The immediate ongm of the Central Cargo Control Committee was a report in April by A. C. Moore! of Import Procurement in the Depart­ ment of Trade and Customs, on the causes of congestion on the wharves, intensified as it had recently been by the discharging of cargoes from refugee ships and an increasing flow of Lend-Lease goods.2 His diagnosis traced the congestion to lack of centralised port control, inadequate wharf storage, inadequate land transport to and from wharves, inadequate warehousing away from wharves, insufficient stevedoring labour, poor cargo handling facilities. Land transport matters became the task of the Department of Transport, labour problems that of the Stevedoring Industry Commission ( under the Minister for Labour and National Service ) and cargo control the responsibility of a new body, the Central Cargo Control Committee (under the Minister for Trade and Customs ) .3 The difficulties inherent in this splitting of responsibility for different aspects of the same activity between three different bodies, eaoh associated with a different department, were accentuated by the membership of the Committee whose ten members included representatives ( in addition to a chairman and an executive member) of Trade and Customs, Army, Transport, the Central Wool Committee, the heavy oarrying industry and of the unions, but none of the shipping companies or of the Stevedoring Industry Commission, and only one of harbour authorities (to the mani­ fest disapproval of State governments, for harbours were a State matter) .4 In practice the Central Cargo Control Committee could only function in consultation with a variety of bodies-the Stevedoring Industry Com­ mission, Land Transport, United States War Transport authorities, the Australian Services, British Ministry of War Transport and harbour authorities, conferences with whom both at central and State level during 1 942 and 1 943 were a frequent and time-consuming way of securing co-ordinated action. The powers given to the Committee were, within its field, comprehen­ sive. It could direct the movement of goods to land from wharves and their storage; take possession of or build stores and warehouses ; acquire any necessary equipment. In practice these powers were exercised by persuasion and consultation not by the issue of legally binding orders , if 1 A.

C. Moore, CBE. ( l st AIF: 7 ALH.) Asst Compt-Gen Customs 1935-46; C'wealth Dir of Import Procurement 1941-46; Man-Dir Coca-Cola Bottling Co, Sydney, 1 946-54. B. Strath­ bogie, Vic, 1 Mar 1898. 2 Submitted to Cabinet on 14 Apr 1942. 3 Established by National Security (Cargo Control) Regulations, Statutory Rules 1942, No. 195, 23 Apr. • The shipping company omission was formal, not real. Indeed A. C. Moore complained that the representatives of various organisations on both the Central Committee and the State committees to which it delegated local control included too many from shipping interests. The complaints of the State harbour authorities were brushed aside in a letter from Minister for Trade and Customs to Prime Minister, 6 Jun, which made plain that Moore's concept was of decision-making being vested in the Central Committee and execution, where appro­ priate, dutifully carried out by State bodies.

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only because of the overlapping in all directions of the legal powers con­ ferred on the Committee with those of a multiplicity of other bodies.5 From the nature of the Committee's functions the major part of its work was in detailed day to day expediting of cargo movements. For this purpose early action included some general measures such as reduction in the number of separate cargo marks, and of small consignments, and improvements in t:he processing of shipping documents. Primarily in association with the Department of War Organisation of Industry priority rules for coastal cargo were developed, with the intention of eliminating the non-essential, and by �he prospect of delay discouraging goods of low priority. This was an issue of long standing. As early as April, the day before the Central Cargo Control Committee was formally created the Allied Consultative Shipping Council had resolved to establish priority committees at each main port to determine priority in berthing, loading and discharging of ships. By October such committees existed in Western Australia and Tasmania, but in other States the work was done by tariff committees mainly representing shipping companies; these committees did not however deal with priorities for individual commodities.6 There was a general reluctance 'among shipping authorities to become involved in t:his field. For those authorities which included representatives of shipping companies this is understandable. But the Department of Commerce, while priorities fell within its field, was also reluctant, and after the crea­ tion of a department of Shipping, its Director of Shipping, Sir Thomas Gordon, opposed accepting any responsibility, even limited willingness to participate in inter-departmental discussions to providing an observer, not a member.7 When the Depar�ment of War Organisation of Industry's general claim to be able to decide priorities was extended to questions of interstate cargoes, shipping authorities were ready to let it have both the responsibility and the abuse. 8 On another problem the Central Cargo Control Committee was much readier to act, perhaps because it was much more directly concerned with what members saw as their central task: speedy movement of whatever cargo was offering. The problem concerned improvement of port facilities 5 Illustrative of the divergent views

of the various bodies concerned with shipping was a con­ ference of the Central Cargo Control Committee and the Dept of War Organisation of Industry on 20 Aug 1942, at which an interim list of non-essential goods was agreed upon as a preliminary to issue of a shipping cargo priority list. The Central Cargo Control Com­ mittee took the occasion to challenge the Shipping Control Board's policy that non-priority cargo should be carried rather than have a ship sail with vacant space. Central Cargo Control Committee argued that the dominant consideration should be speed of turnaround, and only priority cargo should be carried. 6 Secretary, Dept of Commerce to Shipping Control Board, 7 Oct 1942. Sir Thomas Gordon to A. V. Smith, Secretary, Dept of Supply and Shipping, 1 1 Nov 1942. ' During 1942 the committee, brushing aside established authorities, acquired for conversion to heavy-lift floating cranes three large ferry vessels; acquired a number of lighters and tugs, including large lighters and pontoons for Townsville, mobile cranes, wharf trucks and other equipment. The friction with established port authorities became so acrimonious that one of the early actions of the new Directorate of Shipping was to remove this whole area of activities (which in any case went beyond the cargo-expediting function) to a specially created Port Equipment and Development Committee. S War Organisation of Industry, since it had asserted, and been conceded, some measure of authority in questions of priority in a number of fields, including land transport, could have been regarded as the logical authority, but the department's activities were somewhat remote from shipping, and its claim was conceded, less on grounds of rational allocation of functions than because other authorities did not want an unpopular activity, discharge of which was nevertheless essential to them.

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(for example at Townsville where heavy war traffic had been thrust upon its modest peacetime resources ) and of cargo handling equipment. Unfor­ tunately these were the responsibility of State harbour authorities, barely represented on the Central Cargo Control Committee, who felt that their expertise was being pushed aside, and that decisions were being taken which would ultimately leave them with permanent problems, particularly as much of existing port equipment had been removed to meet the pressing requests of the Australian and United States armed forces. Predictably, the multiplication of separate organisations, responsible to different departments, each dealing with a segment of the shipping problem, produced inefficiency, recriminations, and conflicting policies. Some of the difficulties were the obvious product of war. The size and tonnage of the Australian coastal fleet had been depleted by naval requisitioning, the sharp increase in Army demands for ships, losses by enemy action and temporary unavailability of damaged ships undergoing repair. In the rapidly changing situation of war in the Pacific, and as the Australian economy was remoulded, there was a greater volume of goods to be carried. But these were the problems for the solution of whioh these various administrative organisations had been created, and during the first half of 1 942, collectively, their performance was unfortunate. Each had its own sphere of responsibility and tended to remain witJhin it, if only because no formal machinery for co-ordination was provided, and indeed some of the leading figures actively opposed other than informal consultation on an ad hoc basis. Personal ambitions of some departments matched resis­ tance to loss of territory by others, and both encouraged fear by shipping interests, which were represented on every administrative body and were dominant on some, of comprehensive government control of shipping which might outlast the war. In this situation the easiest defence against criticism was to point to the failing or alleged failing of some other authority. Thus, for the decline in cargo carried on the east coast the Shipping Control B oard gave as a major reason the decline in effective use of ships, alleged to be forty per cent, caused by unsatisfactory convoy arrangements. The Navy retorted that the decline was much smaller, at its worst 22 per cent in June, reduced to 1 3 t per cent by August, and was in any case primarily caused by ships missing convoys because of crew trouble and slow cargo handling so that ships sailed part-loaded.9 The Coal Commissioner explained difficulty in moving coal from New South Wales to Victoria as being the result of slow unloading in Melbourne; this was in tum explained by the Stevedoring Industry Commission as the inevitable result of indiscipline and inefficiency of the wharf labourers-which passed responsibility to • There is no way of deciding who was right about the percentages, and it would hardly be

worthwhile to try in any case. Some loss was inevitable with convoying if only because the slowest ship determined the speed of all. But the only real improvement in convoying which could have helped would have been provision of more escort vessels, out of the question in 1942.

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the Maritime' Industry Commission and the unions. The Shipping Control Board devised a system of priorities for cargo, which worked badly for a number of months during 1 942, because, so it was claimed, too many different authorities were able effectively to determine priority in disregard of one another. The Shipping Control Board took the line that if priority cargo was not available, the space should be filled with whatever was offering. The Central Cargo Control Committee complained that this undermined its control; ships should sail part-loaded to save time; and there should not be encouragement of disregard of control by shippers who, with some persistence, could hope to find space at the last minute, meanwhile cluttering the wharves with non-priority cargo. It was alleged that United States vessels were persistentIy accepting cargo without regard to its priority rating, making a full loading the primary criterion. By contrast the Central Cargo Control Committee was accused of neglecting opportunities to make return shipments from Melbourne to Sydney by ships which had carried coal south. What matters after the event is not assessing the substance in these accusations. They are important as indicating some of the wide-ranging ' criticism of the way the uncoordinated system of controls was failing to cope with the demands on shipping because it was uncoordinated, and the natural reaction of an authority under fire to divert the attack by pointing ' more or less plausibly to the sins of another authority. Some of these issues came into focus at a conference in July 1942, convened primarily to seek ways of expediting the carriage of coal.1 To emphasise the importance of the matter Curtin opened it with a statement which indicated the way he at least would have wished the conference to go : "The Government wishes to have one person or authority to see that all shipping available to Australia and the allied nations operating in Australian waters is being put to the best and fullest use." Perhaps inevi­ tably much time was spent in complaints about the way this or that authority was at fault. The Minister for Supply, J. A. Beasley, responded by reiterating that what the various speakers were demonstrating was that in part the problem was organisational and that just as Sir Thomas Gordon was controller of overseas shipping, there should be a controller for coastal shipping. The conference adjourned with lukewarm support for the suggestion that Mr Justice Clyne,2 who had replaced Dixon as chair­ man of the Shipping Control Board, should be appointed such a controller. No direct action followed, although there was more evidence of indivi­ dual authorities seeking to relate their activities to those of other bodies. The Central Cargo Control Committee conferred with officers of War Organisation of Industry to discuss general ideas about cargo priorities, agreeing to prepare lists of goods regarded as non-essential, to be followed by a schedule of priorities for others.3 The Department of Commerce 1 Held in Canberra 31 Jul 1942. Present were Ministers for Supply and Development (Beasley) and Commerce (Scully) and representatives of other departments and shipping authorities. 2 Hon Sir Thomas Clyne. Judge, Federal Court of Bankruptcy 1942-67, Supreme Court of A.C.T. 1943-45. B. 1887. Died Apr 1967. • Conference on 20 Aug 1942.

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sought the support of Supply and Development in orgamsmg discussion between the chairman of the Shipping Control Board and General Blarney as Commander-in-Chief on efficient use of ships sought by the Army to carry cargoes to Port Moresby and Milne Bay. But more substantial moves were afoot through the Allied Supply Council, of which Beasley was chairman. There the dissatisfaction of Australian authorities and Beasley's views as to the organisational solution found support from the Americans who took the view that Aus­ tralia could not expect the United States to make ships available until it had put its own house in order and made more effective use of those it had. The Council endorsed a proposal for an inquiry into the facts by an officer from the Department of War Organisation of Industry and a United States investigator.4 A series of memoranda5 covered the investigations by the departmental officer. He traced the unduly slow turnaround of ships to the rate of unloading, to convoying, carriage of non-essential cargoes when space was available, to poor cargo handling facilities, and to the multiplicity of agencies dealing with these various matters.6 The lack of any statistical record in a form to guide policy-making was stressed, as was the low productivity of men on the wharves. The Navy was largely exonerated on the convoy issue; it was doing what it could with the available naval escorts.7 The memoranda had a gloomy story to tell of cargo handling on wharves. There was little discipline; some men deliberately fomented trouble; pillaging was rife ; supervision was bad because of lack of good foremen; amenities were poor. The introduction of a gang system and registration of workers had been intended to stabilise the numbers required but, it was suggested, replacement of casual rates by a weekly wage could substantially reduce labour needs-from 4,800 to 3,500 in the port of Sydney. The shipping companies were equally criticised for their attitude to labour, and for good measure, the Stevedoring Industry Com­ mission was characterised as a specialised industrial court of part-time members too remote from the day to day problems.8 The final report for the Allied Supply Council traversed much the same ground, but except by implication confined itself to recording the nature and source of failures to use the restricted supply of shipping to best advantage. But the implications were there, and readers could not fail to • Beasley, Supply and Development, to Scully, Commerce, 9 Sep 1942. The Allied Supply Council move was reinforced by letter from the United States Minister to Australia to Curtin 31 Aug 1942 stressing the need to speed up ship repair. (Estimates of ships awaiting urgent repairs throughout Australia at this time were 75,000 to 100,000 tons . ) 5 The officer seconded from War Organisation o f Industry was Murray Angus, who, since h e was then working for the Allied Supply Council, reported t o Supply and Development a s the department concerned. He kept the Secretary, A. V. Smith, informed of his investigations in a series of memoranda. Though several Americans were involved in the inquiry, the report was formally by Angus alone. 6 Memoranda 22 Sep 1942. The theme of multiplicity of agencies was enlarged in a letter to Lt-Col Kramer the same day. He was United States Army representative on the Allied Supply Standing Committee. 7 Memorandum of 25 Sep 1942. 8 Memorandum of 4 Oct 1942.

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draw the conclusion that effective solution required administrative re­ organisation and integration. For the first time a survey of the sorry position was systematically set out in a single document, to be seen by a range of senior Ministers -and public servants, and by American repre­ sentatives (the activities of whose own people did not escape unfavourable notice) . There might still be room for argument about the accuracy of particular details, and for defensive explanations from particular authori­ ties, but few of those who eventually had to consider the report could fail to be convinced.9 Meanwhile by Cabinet direction and despite rumblings from some of them, the Shipping Control Board, Land Transport Board, Stevedoring Industry Commission and Central Cargo Control Committee and other bodies were invited to consider whether their activities should be brought under one organisation or otherwise co-ordinated.1 The proceedings testi­ fied to the strength of separatist feeling among the various organisations, and, by implication, to' their oppositian to what they saw as the imperialist ambitions of J. A. Beasley, and A. V. Smith2 who, it was felt, wanted to add shipping to the already far-ranging territory of the Department of Supply. In varying terms spokesmen for every body represented (except Land Transpart ) condemned any substantial change in the present constellation af authorities, and while in general they gave lip service to "co-ordination" this, it was suggested, could be sufficiently achieved by using existing provisions for cansultation ( as in regulations for the Stevedoring Industry Commission and the Central Cargo Control Com­ mittee ) and by conferences of the bodies concerned with shipping which some thought ought to' be irregular informal meetings.3 The conference testified to the inability of participants to' face the main issues, the failure of the existing structure to function withaut a great deal of inefficiency, waste of shipping resources, and friction, but it also indicated the evident determination of seniar Ministers, no doubt pressed by Americans, to seek an administrative solution. The repart went to' the Allied Supply Council with an addendum from A. V. Smith cantaining clear-cut recommendations; that all existing agencies be combined under one authority controlled by a single executive, the choice af wham wauld • Thus Mr Justice Piper's comments to A. V. Smith on the report, explaining for example, that the Stevedoring Industry Commission did not have police powers to deal with pillaging. touched only on peripheral points.

Those who attended on 6 act were: Mr Justice Clyne (Shipping Control Board) , J. F. Murphy (Commerce ) , J. F. Brame, H. Sullivan (Shipping Control Board) , Mr Justice Piper (Stevedoring Industry Commission ) , Sir Herbert Gepp (Central Cargo Control Committee ) , Sir Harold Clapp, D . J. Howse (Land Transport Board ) , G . T . Chippindall (War arganisation of Industry ) . 2 A . S . V . Smith, CBE. Exec Mbr Contracts B d and Sec Principal Supply Officers Ctee 1 933-36; Chmn Contracts Bd 1939; Sec Dept of Supply and Shipping 1942-45; Dir Emmco Pty Ltd 1947-56. B. Melbourne 1893. Died 9 Feb 1971. • Notes of the conference (Dept of Supply, Shipping file C.I0 .2 ) . With the exception of Land Transport and War Organisation of Industry representatives, all were spokesmen for bodies under attack, defending their record and their independence, Chippindall (War Organisation of Industry) seems to have been swayed by opposition to a massive enlargement of the Department of Supply, but said little. Gepp of the Central Cargo Control Committee put into words the resentment of others that, it was believed, American pressure on Curtin and through the Supply Council lay behind the Government's attitude.

1

236

CRISIS IN SHIP PING

be critical, and that executive t o have adequate power and the full support of the Government in its exercise.4 With alacrity the Allied Supply Council added its own endorsement of these proposals, which it intended should go forthwibh to the Prime Minister, the War Cabinet, and other Ministers. The War Cabinet was equally prompt in decision and lost no time in transferring control of all ,agencies concerned with shipping to a renamed Department of Supply and Shipping.5 Nine days later Sir Thomas Gordon was appointed to the newly created post of Director of Shipping,S and reorganisation of shipping administration proceeded rapidly. Although formally there was a single department of Supply and Shipping, and contemporary organisation charts give an illusion of integra­ tion, the organisation adopted was more nearly that of two departments with a single Ministerial head, one headed by a Director of Supply, the other by a Director of Shipping. To Gordon's direct control as Director of Shipping were transferred all the existing bodies dealing with shipping,7 although in fact the Maritime Industry Commission as much because of the political issues in labour relations as because of the Commission's quasijudicial functions remained directly responsible to the Minister. The overseas shipping committee was abolished but otherwise, on the surface, all these bodies continued as before, as forecast by Gordon in an outline of his plans supplied to Beasley in November.s But their operation was nevertheless changed. These bodies were now all part of the same department responsible to the same director and thence to the same Minister. This alone was of decisive importance in changing attitudes and encouraging a willingness to communicate and co-operate which had often been markedly lacking. Gordon created a Central Secretariat of modest size and either he, a member of this secretariat or a representative attended meetings of the various adminis­ trative bodies taken over (and others soon to be created) . It was not perhaps the organisation chart that would have been drawn on a clean slate but under the war conditions of 1 942 the general line of approach was the only practicable one. The complex and wide-ranging problems of shipping meant that in any case, in the short-run, primary reliance for technical knowledge and expertise had to be placed on men drawn from the shipping companies, and only ill-feeling and disruption could have followed their replacement by others, drawn from the same sources to do • The addendum which, with the Angus report, became Agendum 32, Supplement 2, Allied Supply

Council meeting 13 Oct 1 942, was prepared by Smith, W. E. Dunk of the Treasury, Denby of the Lend-Lease Mission to Australia, and Lt-Col Kramer of United States Army Services of Supply. Almost as an afterthought the need for more ships was stressed.

5 Legally the main change was consummated in a brief amendment to

Shipping Control Regu­ lations, substituting "Supply and Shipping" for "Commerce" as the definition of "the Minister" which had the practical effect of transferring all shipping agencies previously responsible to Commerce. (Other amendments followed in respect of bodies not attached to Commerce. ) Statutory Rules 1942, No. 453, 20 Oct.

• War Cabinet Minute 2467, 29

Oct 1942. The minute speaks of "Controller" (as did earlier documents) but in the event the titll' used was "Director". 7 11y delegation to Gordon from Minister for Supply and Shipping dated 19 Nov 1942 of his powers and functions under amended Shipping Control, Maritime Industry, Stevedoring Industry, Shipping Requisition, Cargo Control, Shipment of Coal regulations.

8 Letter

of 6 Nov 1942.

CARGO C O N T ROL

237

much the same jobs in a formally more integrated structure. In any case previous failings had been those of the uncoordinated operation of separate bodies, not of persons. Indeed the chief achievements of the new Directorate in its first few months were embodied in an extension of the same type of structure. A British-American-Australian Shipping Committee composed of representa­ tives of the British Ministry of War Transport, the War Shipping Adminis­ tration, Shipping Control Board, United States and Australian Armies, Australian Navy and Air Force, came into formal existence in April 1943 . It provided the means for treating all shipping in Australian waters as one pool, so far as that could ever be possible, and for relating this pool to the total demands on it. British or American ships on passage around the Australian coast need no longer be the subject of ad hoc negotiations, but were for that time part of the total pool. Operational requirements of the Services had to be presented as part of the total demands on the pool with, as a result, more chance of being satisfied promptly, certainly with less friction. Supplementing this channel for high level international co-ordination of tonnage and the demands on it, a formal liaison with the Department of Transport was created, directed particularly to relating rail and sea transport which were both alternative carriers for some goods, and successive stages in the transport of others. So too a Tonnage Com­ mittee within the Shipping Control Board structure was set up to relate the operation of ships under the control of the Ship Chartering Committee and those of the Board. Even more promptly, on 26th January 1 943, an administrative solution was sought to the conflicts between the Central Cargo Control Committee and the various State port authorities over the demarcation of their func­ tions, a solution based on acknowledging that on the equipping and running of ports, the port authorities not only had claims to a decisive voice in what happened in their own ports but were the available experts in this field. Their position on the Cargo Control Committee was strengthened by increasing their membership by two, but even more important a Port Equipment and Development Committee, made up of members from Queensland, New South Wales, Victorian and South Australian port aut:horities, was recognised as the authority competent to advise the Department of Supply and Shipping on provision of additional wharf equipment and on port development generally. The other ohange in organisation in this early period of the new department was a revision of the role of the Ship Repair C ommittee which had been initiated by Gordon in July 1 942. Demands for repairs had become acute during 1 942, not only because of enemy action but also because operation of ships under war conditions-absence of lights, radio silence, convoys, operations to the north in unfamiliar reef-strewn waters -meant many accidental strandings and other damage. Carrying out of repairs was the executive responsibility of a Controller of Ship Repairs in the Department of Munitions who had to compete with the demands of new ship building. The committee could therefore have only advisory

238

CRISIS I N S H I P P I N G

functions, but Gordon now strengthened it by creating an Executive Committee which prepared detailed reports for the Repair Committee and by having the Controller of Ship Repairs attend meetings of that committee. By the beginning of 1 943 the effect of bringing together the various authorities concerned with shipping was reflected in the falling away of complaints and in greater confidence that the situation was under control. In part this was an illusion. Co-ordination of agencies hitherto responsible to several Ministers by creating an integrated if loosely articulated single structure resolved conflicts of ambitions and the irritations of divergent responsibilities. It was less easy to divert attention from an unsolved problem by attributing the difficulty to the deficiencies of another agency, and easier to see that the difficulty was a real one whioh might be soluble or might have to be lived with. These were steps forward, and undoubtedly contributed to the gradual improvement in tlhe efficient operation of the new structure. There was no dramatic improvement-without a large increase in number of vessels or a great reduction in demands for shipping there could not be-but there was smoother operation even if it is not open to quantitative measurement. Industrial relations on tJhe wharves continued to be turbulent; stocks of coal and iron ore at points of con­ sumption remained at precariously low levels; a major military demand or a serious hold-up in the flow of cargoes was still an ever-present possi­ bility. But Gordon could in January 1 943 feel justified in his qualified confidence. One of the factors in the generally more favourable picture by the beginning of 1 943 was the greater number of ships now available on the coast. At the outbreak of war there had been a coastal fleet of 23 1 vessels with a total gross tonnage of 434,327. At the end of January 1 943 there were 274 vessels totalling 532,482 gross tons after deducting losses by enemy action and marine risk. But these figures include ships under the control of the Australian and American forces, and those used solely in tlhe movement of military cargo. After deducting vessels temporarily out of action, those released to the United States, tonnage requisitioned by the Australian Services and engaged in shuttle service in northern areas, the balance available for the carriage of essential cargo was a meagre 1 1 4 vessels ( of which 68 were small intrastate ships) with a gross tonnage of 1 94,706. To these are to be added the intermittent contribution of ships controlled by British Ministry of War Transport when sailing between Australian ports. But direct war demands had made severe inroads on the availability of these ships for civilian cargoes. At the end of January 1 943 7 vessels were temporarily out of commission undergoing repair; 36 had been released to the Americans together with another 34 made available by the British Ministry of War Transport ; 40 vessels had been requisitioned by or were under the control of the Australian Services. Another 1 5 were engaged in shuttle services mainly in North Queensland carrying mainly Army stores,

CARGO CONTROL

239

but available to carry coal and some civilian cargoes, and a further 28 sailed between Queensland and Papua carrying mainly Service cargoes but with limited space for some civilian supplies. What was left for civilian coastal cargoes was 1 14 vessels, compared with 23 1 at the outbreak of war, with a gross tonnage of 1 94,706 compared with 434,327. Even with generous allowance for carriage of civilian goods on vessels controlled by or primarily serving the American and Australian forces, the carrying capacity of the coastal fleet under civilian control was at best half of what it had been, and munitions and other warlike cargoes were a major demand on that capacity. It was this whioh made local shipbuilding seem the obvious source of relief. Gordon, reviewing the situation in January 1 943, acknowledged the improvement in the situation compared with that six months earlier but was more concerned to stress the ways in which pressure on the available shipping might be expected to increase.9 Between April and December 1 942 British ships on coastal voyages had carried 487,000 tons, mainly coal, coke and iron ore, the nature of the cargo making the help even more important than the tonnage might suggest. But it seemed probable that in 1 943 less help would be available from this source. This was serious because in the weeks preceding his review it had proved impossible to maintain the flow of coal and iron ore as a result of ships being withdrawn at short notice for urgent military transport. The Coal Commissioner was calling for the movement of 70,000 tons of black coal each week from New South Wales to other States if collieries were not to be forced to close. At the obher end stocks continued to be pre­ cariously low (five to six weeks consumption in the importing States ) despite use of rail carriage of coal. General cargo was ,accumulating at Sydney, Melbourne and Adelaide awaiting transport to Perth or Brisbane. Relaxation of convoying could not be expected while the development of war to the north implied that there were likely to be more ships damaged by enemy action. Against this two newly built vessels would go into service and five additional vessels being released to Australia by the British Ministry of War Transport could be expected in about two months, little more than enough, according to Gordon, to offset gaps caused by damage or enemy action. His practical conclusion was that the situation demanded a further 30,000 to 50,000 tons capacity of a type capable of handling bulk cargoes ( coal and iron ore) and general cargo. With evident lack of hope about the outcome he advised further approaohes to Britain and the United States for more ships "if possible". If war developments put further strain on shipping in carrying personnel land supplies northward this could only be met by a severe cut in coastal services and government direction was needed as to what cargoes should then be treated as of lower priority. Speedier repairing of damaged ships was the quickest route to adding to available tonnage, and might be supplemented by local building of a • Letter

to Minister, 27 Jan 1943.

240

C R I S I S I N S HI P P I N G

standardised coastal vessel. The situation h e concluded was not desperate, but it was unpromising and could become worse suddenly. The prospects of other than marginal improvement were slight. If he believed, as h e claimed, that tonnage was now being operated efficiently, there was little choice as to the conclusion and little else in the way of remedial action he could urge. .

S H I P B U I LD I N G The basic policy decisions concerning wartime shipbuilding and the development of facilities had already been determined during

1 94 1 .1

With

Commonwealth financial aid expansion had been initiated at Mort's Dock and Cockatoo Dock in Sydney, Evans Deakin in Brisbane and at Williams­ town Dockyard, Melbourne; at Whyalla in South Australia, the other shipbuilding contractor, Broken Hill Proprietary Co. Ltd, financed its own development; early in 1 942, with financial help from the Australian Ship­ building Board, the shipbuilding establishment at Newcastle, New South Wales, was revived. ( The keel of its first vessel, the corvette Strahan was

laid late that year. ) When in March 1 94 1 the Shipbuilding Board had been established it was with a long-range programme of sixty "A" class · vessels to be built at the rate of twelve a year, to which was added a corvette programme, with higher priority, but limited to six. With the outbreak of war in the Pacific, the loss of the shipbuilding and repair resources of Hong Kong and Singapore greatly increased the demand on Australia as a base for repairs not only for the Australian fleet but also for United States, United Kingdom, Dutch and Free French naval units operating in the P acific. Initially the ohief impact of these new demands was seen as posing a choice of priorities between merchant and naval construction. In January

1 942 a review by the Ohief of Naval Construction and the Director of Shipbuilding had proposed that building of a further nine corvettes should

be endorsed, and that while construction could not be immediately begun, materials and components should be ordered. The War Cabinet deferred decision while awaiting a report from the ShipbUilding Board as to the effect of this proposal on the merchant ship programme.2 That report drew attention to the relatively low priority attached to shipbuilding which meant that, too often, machinery ordered for ship construction was diverted to projects of higher priority, while the familiar theme of shortage of skilled labour was stressed. But for the central question asked, the key answer was that there was only enough steel plate and sections for one merohant ship per month, and any serious increase in the corvette pro­ gramme would mean an equivalent decline in merchant shipping. Final approval of the additional corvettes was consequently withheld until November

1 942.3

But already by March 1 942 the centre of concern was the greatly increased demand for repair and maintenance. The Munitions report of that month

1 See Butlin.

War Economy 1939-1942. 1860, 5 Feb 1942. • War Cabinet Minute 2475. 2 War Cabinet Minute

241

SHIPBUILDING

stressed the extent to which construction of ships was being delayed by repair and maintenance of fighting vessels, which understandably took precedence over merohant shipbuilding. War Cabinet went so far as to give shipbuilding and repair priority for tool supply, but higher priority for naval over merchant construction was maintained. But by May repair work was so pressing that repair and maintenance were given priority over all construction.4 In the following months repair work became even more pressing as the Japanese commenced submarine attacks on shipping along the east coast; and the Shipbuilding Board was called upon to present plans for improving the speed of repair. The principal outcome was the appointment of a Controller of Repair under the Director of Shipbuilding to ensure that the two activities were co-ordinated and uhat repair work was handled urgently without unnecessarily disrupting con­ struction. LEGEND t:. Bombed or shelled and sunk. • • e o

Bombed or shelled and damaged . Torpedoed or mined but saved. Torpedoed and sunk. Mined or otherwise sunk by enemy odion.

MERCHANT SHIPPING CASUALTIES IN AUSTRALIAN TERRITO RIAL WATERS, RESULTING

&

FROM ENEMY ACTlON .

o

�

'

The repair problem was made more difficult by the lack of adequate docking facilities. Construction of the Captain Cook graving dock at Sydney had begun in December 1 940 at a time ,when there was no direct threat to Australia and Singapore seemed secure. The magnitude of the task meant that the dock was not completed in time to help with the period m greatest demand for repair, 1 942-43.5 Similarly the smaller • War Cabinet Minute • It was available,

2160.

however, for the British Pacific Fleet when it arrived in 1945.

242

C R I S I S I N S HI P P IN G

dock III Brisbane approved i n August 1 942, ahhough constructed at a remarkable rate, was not completed until June 1 944, too late for the main need. LEGEND Lost through wreckoge, foundering, being o,hore, aground or strand.d. .. Ashor., aground or Ifronded • but r.floated and laved o Collision and lunk . • Collision but loved . • Miscellaneous (fir., broken down, adrift or oth.rwiu dam aged),

6

OTHER MERCHANT SHIPPING CASUALTIES FROM 1940

TO DEC. 1945

At the end of October Engineer Rear-Admiral P. E. McNeil, Director of Shipbuilding, completed a report called for by Cabinet. His conclusion was that there was no case for further major construction plans for drydocks, slipways, and repair shops (except for some for small craft ) . For larger vessels new construction which was already under way would meet all needs provided s ome deficiencies in machine tools were remedied, and, above all, more skilled labour was available and was more effectively used. He estimated that nearly a thousand extra men were required, most of them for smaller ship repair firms. Although repairs were now being given priority over shipbuilding it was not practicable to stop completely all new construction at short notice for short periods.6 Others took up the theme stressing the incomplete use of available labour because of demar• A.

V. Smith to Gordon, 1 Feb 1 943, said that shipbuilding had become little more than a means of keeping together skilled employees to be deployed on repairs as required.

SHIPBUILDING

243

cation disputes between unions and resistance, especially by boilermakers, to effective dilution of skilled labour.7 Prompted by Gordon, Beasley initiated a conference on ship repairsB of representatives of the Shipping Control Board, the British Ministry of War Transport, the United States Army and the Department of Muni­ tions, whioh reviewed the sources of difficulty 'and delay already identified --dilution of labour, union demarcation issues, shortage of boilermakers and other tradesmen and the need for machine tools. The face to face discussions of common problems served a number of useful ends. The Americans (who had been complaining that of twenty-six larger vessels under their control they were constantly without eleven because repairs could not be done prompHy) were in future restrained from making independent arrangements for repairs. Difficulties with machine tools were ironed out. But labour dilution and other issues remained intractable. On one major issue Beasley and Gordon failed to persuade the conference -a proposal to establish within the Department of Supply and Shipping a single central au�hority for repairs which, since shipbuilding and repair were inextricably related, could only have meant extinction of the Ship­ building Board or its transfer from Munitions to Supply and Shipping. The compromise was the creation of Gordon's Executive Committee to prepare detailed reports for the Controller of Repairs on priorities in repair, as described earlier. In the following months there does seem to have been some improve­ ment. In December 1 942 repairs to 260 vessels (other than naval vessels ) totalling 97 1 ,098 tons were completed; by June 1 943 the tonnage repaired had risen to 1 ,298, 5 1 7 . Tonnage repaired is a crude measure since it takes no account of the nature of damage, but for what it is worth the figure continued to increase until well into 1 944, the decline thereafter reflecting the decline in damage as the war moved north from Australia. But the result was -achieved and maintained only at the continuing expense of new construction. Early in 1 943 new building work ceased at Cockatoo Dock, Sydney, and by mid- 1 943 only one vessel of the "A" class programme was in commission and one was being fitted out. The original programme of twelve a year, adopted in 1 94 1 , was probably even then of doubtful realism, but the pressure of naval -and merchant vessel repair ( about equal in the two classes) had made completion of the thirteen vessels actually ordered something to be achieved if and when demands for repair allowed. One attempt to cope with the shortage of materials, especially of sheet steel, was a modest programme for construction of timber ships. Wooden ship construction had been intermittently considered by the Department of Commerce during 1 940 and 1 94 1 and culminated in a Tariff Board report in June 1 94 1 . This report, written within the peacetime framework of 7 For

example, telegram from Gordon to Beasley, 10 Nov 1942; Makin to Beasley, 26 and 30 Nov; Beasley to Makin, 22 Oct and 16 Dec; Beasley to Gordon, 23 Jan 1943; Gordon to Smith, 27 Jan and reply 1 Feb .

• Held on 22 Oct 1942.

244

C R I S I S I N S H I P P I NG

policy on shipbuilding bounties, was not encouraging, but appears to have been the stimulus for la campaign from Tasmania 'and to a lesser extent from Western Australia for construction of small wooden vessels as a wartime measure. Some of the supporters seem to have believed that wooden ships would ease the special burdens on those States, heavily dependent on sea transport, imposed by wartime restrictions. Others were apparently inspired by the feeling that little wartime production was directed to Tasmania and Western Australia, and this political pressure seems in the end to have been decisive. Technical opinion was uniformly against the project. Suitable seasoned timber was not easily available, and what there was was in New South Wales rather than those two States. Wooden ships could not be used satisfactorily in tropical waters, while difficulties in the supply of timber and in provision of engines meant that only small ships ( 300 tons was accepted as the practical maximum) could be considered. Their principal use would be as lighters. In other use, 'and in particular carrying between Tasmania and the mainland, crew requirements in relation to carrying capacity would make them seriously inferior to steel ships. Nevertheless Tasmanian persistence and the political motive for pro­ viding some wartime activity there and in Western Australia won the day and in October 1 942 a successful proposal went to War Cabinet.9 This was based on optimistic assumptions (deriving ultimately from Tasmanian proposals to the Tariff Board in 1 940) that for a capital outlay of a mere £20,000 in Tasmania 'and £ 1 0,000 to £1 5,000 in Western Australia some thirty-two wooden vessels could be produced in two and a half years at a cost of £20,000 each.! The plan was for the Commonwealth to advance the capital costs, be responsible for engines and commit itself to pay £20,000 for each vessel, construction being handled by the State. Some modest success was eventually achieved in Western Australia but the Tasmanian programme made heavy weather. The Shipping Control Board was increasingly sceptical of the usefulness of the vessels in com­ mercial traffic (it eventually refused to accept the Western Australian ships on this ground ) and only the interest of the Army justified the continua­ tion of the programme. By March 1 944, to look ahead, Tasmania had completed only three vessels and had twelve more in various stages of construction. Capital works-buildings, slipways, etc.-were inadequate for the full programme ; construction costs were now estimated as of the order of £50,000. The Commonwealth took over the programme, at considerable cost, on the grounds that the only user interested in the vessels was the Army. (When war ended only thirteen of the planned thirty-two ships had been completed. ) A further demand on construction resources created by the n ature of war in the Pacific was for small craft of various types. Initially the chief source of demand was the United States forces, who began to place • War

Cabinet Agendum 405/42, 5 Oct; War Cabinet Minute 2142.

1 These figures were elaborated at conferences between Commonwealth and State representatives

on

17 Sep 1942 (Tasmania)

and 28 Sep

1942

(Western Australia) .

S HI P B U I L D I N G

245

substantial requisitions from November 1 942. Up to mid-1 943 these accounted for 5 ,672 craft out of a total of 6,644 ordered, although the Australian Army orders became important in the later part of 1 943. In the event much less than half of the craft ordered up to mid-1 943 were completed and handed over-2 ,4 1 6 of the 6,644 ordered. It was partly for this reason bhat a Small Craft Directorate in the Department of Munitions in September 1 943 took over responsibility for small craft from the Shipbuilding B oard which had its hands full with building larger ships and, by this time, with the more urgent tasks of repair. Small craft were technically a separable operation. They did not require dry docks or large slipways, nor massive equipment. They were suitable for construction by small contractors. When the Department of Supply and Shipping came into existence in October 1 942 there were thus two distinct and unrelated shipbuilding programmes. First the Tasmania-Western Australian wooden ship pro­ gramme was inspired by motives other than adding to coastal shipping. The vessels could supply s ome army and lighterage needs but would be of little use for coastal trade. Second the programme for "A" class cargo vessels of 9,000 tons had been adopted in the days before Pacific war when the need which dominated thinking was for vessels for overseas trade, and particularly for carrying exports. Achievement of that ambitious programme was well behind sohedule, but it had also become clear that the ships were not of the type urgently needed in 1 942. They were in practice general cargo vessels, not equipped to carry refrigerated cargo and too slow to be used for chilled as opposed to frozen foodstuffs. Their size meant that they would be usable in only a few ports and, as other authorities learned with s ome alarm, the Shipping Control Board planned to use the two expected to be available in the first half of 1 943 to carry iron ore and coal, for which the need was urgent but carriage of which could be expected to cause damage to ships designed for other purposes. Re-examination of the programme was prompted along several direc­ tions. The new department informed itself of the background and prob­ lems of shipbuilding by a series of surveys which raised questions about the lack of any co-ordinating authority for the various interests concerned in the programme and urged that the Shipping Control Board review it in the light of future requirements.2 Some of the shipping companies urged Makin in Munitions and Beasley in Supply and Shipping to plan a post­ war shipbuilding industry. The most influential move, however, was from Essington Lewis3 who urged that the whole range of naval and merchant shipbuilding and small craft construction be reviewed by a committee including a sufficient number of senior Ministers to ensure that its decisions would be virtually those of War Cabinet, its review to cover specifically the question of substituting 5 ,000 ton ships for some of the 2 The •

surveys were carried out by C. V. Gray of the Dept of Supply and Shipping. He made two reports : 30 Dec 1942 and 9 Mar 1943. Letter to Curtin, 4 Mar 1943.

24 6 planned

C R I S I S I N S HI P P I N G

9,000

ton "A" class vessels. Curtin took strong personal interest

in this approaoh and the conference which assembled in May

1 943

was

a powerful one.4 It rapidly arrived at a number of conclusions : that existing shipyard and engine manufacturing facilities should be accepted as 'adequate, and flexible enough to be adapted to vessels from 6,000 down to 1 ,000 tons; that the order of priority (within a general "Priority

1"

category ) should be naval repair, naval construction, merchant ship

repair, merohant ship construction, small craft; that additional labour be obtained by diversion from Munitions, from Allied Works, and by pressing ahead with dilution. � A new and revised building programme should be developed promptly by a sub-committee. That sub-committee6 reported on 2nd July recommending :

( 1 ) that ten only of the 9,000 ton "A" class vessels be built (in practice this had to be revised to the ordered thirteen for which it was found steel had already been fabricated) . (2) that as these were completed and yards freed for new work construction should begin of ten ships of 6,000 deadweight capacity, which it was estimated would take twenty months to complete; ten of 4,000 tons, capable of being pro­ duced slightly earlier; two of 2,000 tons, produced more quickly. ( 3 ) These vessels should be designed for the specific needs of coastal trade, be built as a government project, and handed over to the Department of Supply and Shipping for operation. (4) Repairs should continue to take precedence over new construction. Endorsed by the ministers who had attended the main conference these

proposals were approved by War Cabinet within a week.7

• Curtin, Chifiey, Makin, Beasley, Dedman from the Cabinet; Lewis, Dir-Gen Munitions, Sir Guy Royle, Chief of Naval Staff, F. P. Kneeshaw, chmn, Shipbuilding Board, Rear-Adm P. E. McNeil, dep chmn, Shipbuilding Board, Eng Cdr W. G. C. Butcher, Controller of Ship Repairs, Gordon, Dir of Shipping and A. V. Smith, Secty Dept of Supply and Shipping. 5 From the files of this period it is clear that greater union co-operation in dilution, overtime etc. was hoped for if there were a clear long-term construction plan which might be the foundation of a post-war shipbuilding development. • Lewis, McNeil, Gordon, 7 War Cabinet Agendum

Kneeshaw. 305/1943; War Cabinet Minute 2946, 9 Jul 1943.

CHAP T E R

10

LAND T R A N S P O R T

Department of Transport had been formally established in June T HE 1 94 1 , but discussions about organisation, in particular -of co-ordinating

Commonwealth and State authorities, were going on when war in the Pacific produced even greater problems.! The Defence Department's transport organisation had gone to the new Department. The regulations of 3rd December 1941 had provided for control of road and rail transport wit:h a Director of Transport and a Director of Road Transport and a Director of Rail Transport; there was to be a War Railways Committee.2 These administrative steps were carried much further in regulations of March 1 942.3 A Land Transport Board was created to exercise control over railway and road services; tJhe use of vehicles and their care, maintenance and l-ocation; the use of roads; and the carriage of passengers and goods by land generally. Two major com­ mittees were responsible for detailed investigation and policy formulation -the War Railways Committee and the War Road Transport Committee. 'Vhe executive powers of the Board were vested in a Director-General of Land Transp-ort, Sir Harold Clapp. This basic administrative structure was to exist largely unchanged for the rest of the war, with minor variations in 1 944 designed to reorientate the Department to post-war functions. The War Railways Committee was substantially the same as that in the December regulations--the Director-General of Land Transport, the Director of Rail Transport, D. J. Howse,4 as head of the Rail Directorate of the department, and the Commissioners of the different rail systems ( thus ensuring, among other things, State representation ) , an Army representative and from time to time the C-oal Commissioner, representa­ tives of the Australian Railways Union, and others invited for discussions to which they could bring specialised knowledge. This structure was well adapted for the collection of information and policy formulation, and for its subsequent implementation since that became primarily the function of the several railway commissioners. The problems of railway transport remained immense and complex, and the main burden of the greatly increased demand for other than purely local transport necessarily fell on the railways. But tJhis administrative structure was tailor-made for the situation. In the short run major expansion of railway capacity was ruled out for technical reasons-building a line or large quantities of rolling stock takes time-and the essential problems were those of increasing the 1 •

War Economy 1939-1942, pp. 424-5; and generally for 1941 in most of the matters discussed in the present chapter .

Butlin,

developments to the end of

Statutory Rules 1941, Nos. 278 and 279. Statutory Rules 1942, No. 149, 25 Mar. • D. J. Howse, Traffic Inspector NSW RIys 1 924; Special Traffic Officer to Commr for RIys 1930; Dir of Cwlth Rail Transport 1941-46; Chief Traffic Mgr NSW Rlys 1948-58. B. Winkfield, Berks, U.K., 8 Jun 1893. Died 8 Apr 1968.

a

248

LAND TRANSPORT

carrying capacity of existing lines and rolling stock, and restricting less essential traffic. Road traffic control was far more complex and there was no such simple solution for administrative structure. In each State there existed pre-war road transport authorities whose function had included especially licensing of vehicles and drivers, and control (restriction) of long-distance road transport to protect State railways from competition. Adapted from an Emergency Road Committee set up in December, the War Road Transport Committee comprised the Director-General of the Department of Transport, the Director of Road Transport;5 State representatives ( called, in this oapacity, directors of Emergency Road Transport) who were in Queensland the Commissioner for Main Roads, in New South Wales the Commissioner for Road Transport, in Victoria the Chairman of the Transport Registration Board, in South Australia, the Chairman of the Liquid Fuel Control Board, in Western Australia the Chairman of the Transport B oard and in Tasmania the Commissioner for Transport. There were Army representatives on the Committee and from time to time the Controller of Automotive Spare Parts and the Controller of Rubber. Within the basically Federal structure which was the obvious one, there had to be a great amount of delegation to "local advisory bodies", because more than 250,000 individually operated commercial vehicles as well as thousands of private cars were involved. There was great variation in the bodies chosen for this function, although in New South Wales and Victoria main reliance was on municipal or shire councils. The form and diversity of these arrangements largely derived from the hurried planning, immediately after the Japanese struck in Malaya, for evacuation from coastal towns and districts if raids or invasion should occur. In Queensland, for example, a register of some 2,000 cars, buses and trucks was made up, but it was soon realised that their total carrying capacity was only 1 8 ,000 persons, land any substantial movement of population from the coast would have to be by rail. Later, in early 1942, the Department of Transport was seeking lists of vehicles from local area authorities which would be required by air raid and other emergency organisations. It was apparent that the diversity of road transport and the multiplicity of hands in whioh control of vehicles lay demanded a highly decentralised system. Local advisory bodies were set up in each State; they had existed in Victoria in embryo since 1 939, used since then primarily for such control purposes as liquid fuel priorities. There municipal councils had provided the basis for planning, and by the end of 1 942 an advisory comI)1ittee on road transport existed in every local government area, 198 in all. New South Wales also operated through local councils, and by mid-1 942 had 1 70 committees. As the threat of invasion in Queensland appeared to grow in 1 942, 1 60 transport officers were nominated for emergency control of land transport. Plans for evacuation remained embryonic, however, simply because it • F. P. Mountjoy.

M I L I T ARY D E M A N D S O N R A I L S Y S T E M S

249

would have been impossible to achieve on any scale. Large numbers of people could not have been evacuated westwards in Queensland, nor could they have been housed or fed if transport had been available. But

the organisational ,arrangements developed under the threat of invasion were the obvious ones for local administration of controls for other

transport purposes. Just as the 1 942 search for alternative sources of rubber passed into the more relevant development of controls and restrictions on rubber usage, so planning for evacuation passed into a network of restrictions and rationing.6

M I L I T A R Y D E M A N D S ON R A I L SYSTEM S The railways were ill-adapted to the demands of the Pacific War. The most obvious defect was the differences in gauges whioh necessitated transhipment of passengers and freight between the systems.7 This was intensified because State jealousies and the desire to contain trade wi1Jhin State borders had led to railway systems which, most obviously in Vic­ toria and New South Wales, radiated from capital cities, with minimal border crossings.8 The Victorian, South Australian, New South Wales and Queensland systems were interlinked only at two points on each of the three borders involved. The Pacific war demanded vast movements of troops and supplies north-south, especially war supplies from the Adelaide, Melbourne and Sydney areas, and diversion of trains to reduce pressure on the direct capital-city connections was severely limited both by lack of border links and by the direction of o1Jher lines built to constrain move­ ment within State boundaries or at least not to facilitate interstate move­ ment. Many vital links were single track-the transcontinental line linking Perth with the east, the sole north-south line along the coast in Queens­ land, the key section between Cootamundra and Junee in New South Wales, a bottleneck for all movement between New South Wales and Victoria. Tracks were often of light construction, or with culverts and bridges not designed for heavy traffic or high speeds. Rolling stock was inadequate for war demands not only in quantity but in design-the great majority of goods trucks were lightly constructed four-wheel vehides. Signalling systems were mainly manual,

a factor in restricting train

speeds, it was estimated, to an average

( outside suburban areas )

1 5 miles per hour on 3 4 foot 8t inch systems.

foot

6

inch systems and

18

of

miles per hour on

On this railways system, struggling with its own deficiencies and short­ ages of manpower and coal, were thrust heavy and escalating demands. There were greatly increased troop movements, especially northward into Queensland, but also westward to Western Australia, and to a lesser extent north from Adelaide to the Northern Territory, although the railway 6

For convenience, on some topics this narrative glances ahead. to tl\e later years of the war. At the border between Victoria and New South Wales, in Adelaide or Port Pirie in South Australia, and either at the border or in Brisbane for movement between New South Wales and Queensland. • Queensland was formally an exception, with lines linked to other Queensland points, but as east-west routes they had limited relevance for war traffic which was primarily north-south. 7

250

LAND TRANSPORT

terminated at Alice Springs. Munitions and war supplies and, as well, normal civilian freight followed the same routes. Increasingly freight was diverted from coastal shipping, not only because ships were progressively requisitioned but because Japanese submarines intermittently operated in Queensland waters, and to a lesser extent farther south. Initial assessment of the problems served to define those which were to be continuing ones. l1he South Australian State railways and the Com­ monwealth Hne from Port Pirie to Alice Springs had urgent need of locomotives 'and rolling stock because the route north through central Australia was being used for urgent mass movement of troops and equip­ ment. 'Jlhe Army virtually took over the line for which little civilian use remained, and a modest amount of 3 foot 6 inch rolling stock was moved from Queensland and South Australia. The 5 foot 3 inch line from Victoria to link with the Commonwealth line at Port Pirie received additional rolling stock from Victoria. Both lines needed urgent improvement in coal and water facilities, additional crossing loops (they were single­ track lines) , telephone lines to speed service and s o on. South Australia needed more locomotives for lines leading from munition factories, better wharf facilities at Port Pirie. Transhipment facilities at break-of-gauge points were vital-Albury and Tocumwal on the New South Wales-Victoria border; Serviceton on the Victoria-South Australia border; Broken Hill, which provided an alterna­ tive route between New Soullh Wales and South Australia; at Brisbane and Wallangarra for Queensland traffic. Other matters which needed immediate attention were handling with inadequate special waggons coal and iron ore diverted from coastal shipping, additional locomotive service depots, cfOssing loops on single track lines, coal supplies and the like. There was further redistribution of rolling stock; for example the Commonwealth line Adelaide to Darwin borrowed Western Australian locomotives. There were continuing problems of financial accounting revolving round the principles on which State railways were to charge freights and fares for Commonwealth wartime traffic. The difference in gauges proved to be the most serious lasting problem, and it came into sharp focus at transhipment points. In South Australia a central point was Port Pirie where 3 foot 6 inch lines from Alice Springs and Broken HiIl as well as from the main State system joined the standard (4 foot 8t inch ) gauge lines from Western Australia and the 5 foot 3 inch line from Victoria. Goods going west far outweighed those coming east and, with limited rolling stock on the transcontinental line, accumulated at Port Pirie awaiting the return of trains from the west. Meanwhile the trucks in which they had arrived from the east were immobilised. Efforts were made to hold up shipment of civilian goods at the point of despatch in Victoria or New South Wales until trucks would be available but throughout 1 942 the problem continued; in September 1 942 the line west was closed to all civilian traffic so that delayed military traffic could have exclusive use, just as the Central Australian line had become an Army monopoly. A second South Australian bottleneck was at Serviceton,

M I L ITARY D E MANDS ON RAIL S Y S TE M S

251

where facilities adequate in peacetime were overstrained, and where a special problem arising from differences in gradient on the two sides of the border was that trains on eaoh side could include, at a maximum, unequal numbers of trucks. Traffic transhipped ,at Brisbane to go north into Queensland was a specially urgent problem, and in due course extensive improvements were undertaken though not completed in time to be of wartime value. Here the problem was less that of transhipment than the fact that the long haul north from Brisbane meant that frequently empty waggons did not return in time to avoid massive build up of goods awaiting transhipment. As a result at times idle loaded trains were 'held at stations as far as 100 miles south of Brisbane, or even held up at Albury because waggons required were still standing waiting to be unloaded at Brisbane. Manpower to tranship freight was always a problem. Aliens were assigned to the work, but goods still accumulated. In March 1942 the Army agreed to raise labour companies for the work; despite an Army limit imposed on this commitment in 1 943, as late as 1944 some 400 Army personnel were engaged at break-of�gauge stations transferring not only Army but civilian freight. Although by April 1 942 the Common­ wealth, South Australian and Tasmanian railways had obtained labour protection it was not until early 1 943 that the Manpower Directorate was prepared to declare all railway systems protected undertakings. In June 1 942 in an effort to assist the movement of war supplies from the south, movement of freight through Albury was restricted to goods shipped for the Departments of Defence, Munitions, and Aircraft Produc­ tion and other goods classified :as of first priority; civilian goods and foodstuffs such as potatoes and onions even if for the Services were routed through Tocumwal. A further move, linked with War Organisation of Industry rationalisation programmes was the prohibition of cross traffic in civilian goods-that is the shipment of similar competing goods in opposite directions across borders. Nonetheless during 1 942-43 the strain on the Queensland border cross­ ings and on Queensland railways was so severe that tlhe Army ( which had effective control of transport in northern Queensland for operational reasons ) proposed in the middle of 1 943 further reduction of civilian rail traffic into Queensland, already severely restricted since August 1 942. This led in July 1 943 to a confrontation between the Minister for Transport, G. Lawson,9 and the Queensland Railways Commissioner,! on the one hand, and Forde, Minister for the Army on the other. In essence their case was that ninety-five per cent of all rail traffic north of Brisbane was for the Army and the Allied Works Council ; the remaining civilian traffic, only five per cent, represented only attenuated supplies of items such as food and coal. Moreover, by pre-emptive purchasing the Army and the Americans in north Queensland had been responsible for • Hon.

G. Lawson . MHR, 1931-61; Min 1941-43. B. 1881. Died 26 Nov 1966. 'P. R. T. Wills.

for Transport

and Min

asstg the Postmaster-Genl

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M I L I T A R Y D E M AN D S O N R A I L S Y S T E M S

253

serious shortages of locally produced food there. It was argued that the Anny was itself responsible for saturating the single track line from Brisbane to Maryborough by failing to use shipping available for troop transport. The faults were not all those of the Army. For example ship­ ments from the United States were sent to inappropriate ports; tinplate required in Melbourne was sent on ships bound for Townsville; and American anny supplies required in north Queensland arrived in Mel­ bourne. The dispute was only settled by a direction from the Prime Minister in September 1 943 that a reasonable quota of space had to be reserved for goods sponsored by the Civilian Requirements Board which was charged with ensuring that only essential goods in essential quantities were approved. Nevertheless, continuing trouble was inherent in the border situation and was not fully resolved even by the establishment early in 1 944 of a special branch of the Transport Department to deal with all Commonwealth government shipments by rail. (Apart from its primary activity in expediting movement of goods, it found in the transhipment of goods at Albury and Tocumwal, instances of disregard of safety, such as explosives and inflammable goods put into damaged containers or "pro­ tected" by loose straw packing, practices which it never fully eliminated. ) The Queensland episode was only one illustration of the problems of relations between the Army and the Land Transport Board. After the outbreak of war in the Pacific the Army became the major user of rail­ ways, and pressure for greater Army control recurred more than once, even though the War Cabinet had already defined the line of demarcation : when active Service conditions developed in any part of Australia the Army should assume control over all public facilities; otherwise the Anny should not exercise control of railways or other transport anywhere in Australia.2 Even before this decision was given the Army had taken control of the road in the Northern Territory from Alice Springs to Larrimah and of the railway thence to Darwin. At the War Railways Committee meeting in May 1 942 and afterwards in approaches to the Director-General of Land Transport the Army sought "clarification" of the roles of the different departments to prevent overlapping, while General Blarney as Commander-in-Chief more directly asked in June that his demands for rail transport be given first, and where necessary (in Army judgment ) absolute and exclusive priority. Clapp stated that the Army always had absolute priority for transport of personnel and equipment, and cited the case of temporary closing of the transcontinental railway to all civilian traffic. He challenged the capacity of the Army to balance its own needs against those of civilians. The outcome was an agreement, embodied in a War Cabinet decision, that the Anny should have absolute preference in the transport of personnel and equipment but should not otherwise control rail transport outside operational areas.3 The Army, however, returned to the attack on the occasion in December 1 942 when areas in Western 2 War 3

Cabinet Minute 1982. War Cabinet Minute 2363.

254

LAND TRANSPORT

Australia were declared to b e military ·areas, t o be entered only with an Army permit. The Director-General of Land Transport was invited to agree that the control exercised in an emergency zone could be extended "to such 'an extent as the Commander-in-Chief thinks necessary . . . any act or thing requiring to be done elsewhere within the territory thereof so far as concerns the operation, maintenance or control of any public utility the continued operation of which is essential to that part or area", irres­ pective of any existing legislation. Clapp retorted to this bland request for an unspecified extension of army control by referring to the established demarcation, and by challeng­ ing the Army to declare a whole State an operational area, indicating his belief that the Army was not equipped to handle all transport including civilian, except within genuine operational areas. The Army wanted power, not responsibility, and there the matter rested. A constant source of friction between the Service departments, Muni­ tions, Aircraft Production and the railways was responsibility for damage and pilfering. Following the introduction of special freight rates for Commonwealth departments the Railways Commissioners decided in July 1 943 no longer to accept any risk on such goods. Pilfering was said to be causing large losses, and there were allegations of careless handling by railway staff. The issue of "not counted" receipts-an extension of the no-liability rule-later in 1 943 meant that the railway staff did not check departmental consignments. In October 1 943 the New South Wales Rail­ ways went further and withdrew oheckers from Alexandria, the chief Sydney loading point for defence traffic. The Army protested, pointing out that the railways would not accept any .army checks that might be made, but the railway reply was that checking must be dropped ·at all the principal loading points unless the Services would release experienced railway staff-calculated at 1 3 1-needed for this duty. The dispute con­ tinued to simmer. RESTRICTI O N S ON P A S S E N GERS AND F R E I G H T

The growth i n freight and passenger traffic brought with it, especially in 1 942, a series of restrictions aimed at giving priority to the more essential. These restrictions were primarily on interstate movement; for intrastate traffic the cruder instrument of reduced frequency of service usually sufficed. A major reason was that break-of-gauge problems produced one administrative advantage : goods had to be transhipped, passengers had to change trains, and a more or less automatic check was involved and, at vhat, at a few points only. Moreover the worst pressure was on the inade­ quate main interstate routes, so that it was sensible to concentrate control there. This approach, too, provided a us�ful demarcation line setting limits to an administrative task which would snowball unmanageably if the same detailed control were applied on intrastate traffic. From 1 st July 1 942 interstate express train services were limited to two trains each way daily on the Sydney-Brisbane and Sydney-Melbourne routes; one each way daily on the Melbourne-Adelaide route; and one each

R E S T R I C T I O N S O N P AS S E N G E R S A N D F R E IG H T

255

way linking Western Australia with the east. On the same day a system of permits for interstate travel became operative, permits issued on a priority system so that a person with a lower priority might be displaced from a particular train by someone with a higher priority.4 Inevitably a good deal of evasion developed, mainly by "border-hopping" (that is travel to a station on or near the border not subject to checking, then making one's way to a similar station on the otlher State system beyond the control station) , but also by illicit transfer of permits. In November the number of stations classified as "border" stations was increased to include all those convenient for this type of evasion, and random checking of personal identity cards5 as well as permits was undertaken to restrict transfer of permits. "Border-hopping" was never completely eliminated but was reduced to a scale ,at which it could largely be ignored. Perhaps too there was morale advantage in the general belief that while evasion was sufficiently difficult to ensure that evaders were not regarded as gaining unfair advantage, the really determined could always get through, an activity whioh was on that scale harmless. This system of control over interstate travel did not apply, of course, to organised travel by groups of service personnel, for which special trains were used. Such movements were large and could at times be a major strain on rail services. Thus the disembarkation of the 9th Division on its return from the Middle East in February 1 943 required thirty-one special trains to depart from Darling Harbour, a Sydney port terminal with limited train-holding facilities. The whole operation was achieved in twenty-four hours. Following restriction on passenger movement came restriction on inter­ state movement of freight. A Department of War Organisation of Industry order of 26th October 1 942 in effect listed goods which were regarded as of low priority and for interstate traffic in which a permit should be required. Such items as clothes hoists, jewellery, perfume, refrigerators, carpet sweepers, cars, wine and bird cages were included. While this order substantially reduced movement of goods across borders, it inevitably created much complaint, not always easy to answer, while production and intrastate transport of the goods concerned was permitted. Thus Richmond Brewery, in Melbourne, claimed it lost sixty per cent of its trade, which was extensively in New South Wales, particularly in southern districts, not offset by increased business in Victoria since the amount of New South Wales beer excluded was far less; it could argue plausibly that increased transport of Sydney beer over longer distances more than offset the reduction in carriage of its beer over the shorter haul from Melbourne. • Restriction of Interstate Passenger Transport Order No.

1. The priority order was: I . Defence personnel in uniform travelling on duty. 2. Persons on business of national importance associated with active defence requirements (for example. members of Parliament, departmental heads) . 3 . Persons on business of national importance indirectly associated with defence requirements. 4. Persons on essential civilian business indirectly associated with defence requirements. 5. Defence personnel on home leave; persons travelling for urgent and adequate private business reasons; persons having good reason (for example, death of near relative) . 6 . Persons returning home, with adequate reason for their travel. 7. Persons travelling in cases where special hardship would result by prohibition. 8. Defence personnel travelling on leave and paying own fare. • These had been introduced in March 1942 under Manpower Regulations.

256

LAND TRANSPORT

There was unintended difficulty also i n that insufficient manufactured goods reached Queensland especially when Service personnel stationed in the north drew heavily on local supplies. When protest brought awareness, such difficulties could be eased by greater flexibility in administration, and minor variations in detail were numerous. But this general system of control of both passenger and freight movement was maintained in its general form and in severity until the closing months of the war. By mid-1 944 the pressure of defence traffic, both for personnel and for freight, had fallen substantially, partly because the active war had moved north and ships were more vital than trains, but also because the armed services were being reduced and war produc­ tion tapered off. (The cynical could also note that when sleeping-car accommodation was eliminated there was a marked falling off in applica­ tions for permits. ) For some time, however, acute shortages of coal prevented relaxation of controls. In the early months of 1 945 the decline of defence traffic was so marked that trains were being operated incompletely occupied, and it was clear that substantially more people and more freight could be carried without any increased engine or train mileage and without increasing coal consumption. The States, concerned about railway revenue, pressed for relaxation and had s ome success. In April 1 945 travel priorities were reduced to five, and non-priority travel was permitted with the proviso that the ticket could not be bought more than a day ahead. It was also accepted that most of the freight now offering could be handled by the individual railway systems without the legal authority conferred by Commonwealth orders and regulations. More effective was a series of High Court decisions which found key restrictions to be in conflict with section 92 of the Constitution.6 Accordingly the Department of Transport scrutinised its various orders and directions and Howse reported that in the light of the Court decision, many would have small chance of survival if challenged, and he recom­ mended revocation. Among them were the April 1 942 prohibition on transport of breakfast cereals from New South Wales to Victoria, South Australia and Western Australia; one issued as late as April 1 945 banning transport of barley, maize, wheat and sorghum from Queensland; controls over transport of freight in lots exceeding one hundredweight (January 1 943 ) and others relating to transport of flowers, gas producers, livestock, meat, vegetables and shale oil. A large number of these orders was revoked during July, August and September 1 945. Such repeal was not without its difficulties because other controls sometimes depended upon transport restriction. Thus with a general shortage of meat it was feared that if live animals could be carried inter• One Dulcie Johnson

challenged the validity of the permit system in February 1945 and on appeal to the High Court the Commonwealth lost. A further judgment, Gratwick v. Johnson, reaffirmed that section 92 could override wartime transport controls even though the war had not yet ended. The Court was clearly of the opinion that, in the circumstances of 1945, the direct connection between the prosecution of the war and rail restrictions had shrunk to the point where section 92 should prevail increasingly.

R A I L WAY E QU I P M E N T A N D C O N S T R U C T I O N

257

state there would be a great demand for livestock for restocking and animals would be sent interstate in pursuit of the best price. The transport restrictions, too, had been used to hold livestock in the localities best placed to supply exports of meat to Britain and the needs of the Services. The Meat Controller in the Department of Commerce argued that trans­ port restrictions should be maintained so long as meat was rationed. It was decided nevertheless that this and other transport restrictions should go, leaving less formal individual arrangements between the Department of Transport and other authorities to cope with difficulties which might emerge.

R A ILWAY E Q U I P M EN T A N D C O N STRU CTI O N Each of the State railways continued in war its normal programme for construction of locomotives, freight trucks etc., as well as obligations to war needs. Thus flat-top waggons were converted to troop transport, and for the carriage of 'army vehicles in South Australia in 1942; other States modified freight trucks to carry heavy defence equipment and munitions ; passenger cars were adapted to give sleeping accommodation to troops travelling long distances. These programmes, together with non-railway work in their workshops (munitions components and the like) were by 1 942 straining capacity, and the Government welcomed the cancellation of an order to construct 84 'Iocomotives and 835 trucks for Iran.7 Export orders for railway equipment were not entertained again until 1 944 when Indian inquiries for locomotives initiated a dispute still unresolved when war ended. Clyde Engineering Company Limited in Sydney was anxious for the contract, because its munitions orders had fallen away. The Government opposed this, taking the line that all construction capacity would be required locally for the contemplated programme of standardis­ ing railway gauges. State Railways joined the opposition; Olyde Engineering plausibly alleged that State workshops had expanded equipment and capacity for which they wished to have preference in post-war orders. Truth in the matter is elusive; what it illustrates is the ,ambivalent attitude ' of both publi
''WHERE

IS

EVERYBODY?"

Armstrong in Argus (Melbourne) , 27 Jan 1943.

I N SEARCH O F POLICY

353

claimant departments within the defence structure ( including munitions, aircraft production, allied works, shipbuilding and ship repair) . But such a division of responsibility had little meaning in substance, for during the first half of 1 943 there was no clearly specified government policy. As the principal protagonist for the indirect war effort, the Manpower Directorate (with intermittent support of War Organisation of Industry) found itself, therefore, aligned against the combined strength of the Defence structure. Given the links which had been forged between the War Cabinet and the Defence Department since the outbreak of war, there were many ways available to Defence for avoiding or delaying the recommendations of the Manpower Directorate. It was due mainly to Wallace Wurth's persistence and stubborn refusal to be sidetracked, togetlher with the high quality of the Manpower Directorate's submissions, that tlhe War Commitments Committee survived the manpower showdown with an enhanced status as an instrument of policy formation. Wurth fashioned the committee into an agency of the Manpower Directorate. Although Curtin presided over several of the early meetings, the Director-General of Manpower became the permanent ohairman. He introduced all major initiatives, was respons­ ible for framing the bulk of recommendations, and was delegated the task of policing the War Cabinet decisions ,that were taken. Ultimately the committee's overt achievements were limited, but the degree of "balancing" of the war effort obtained was due largely to Wurth's efforts. The dimensions of the manpower shortage having been established, at least by those responsible for the civilian economy, the Director­ General of Manpower set out to reduce the official forecasts of labour requirements by the Services to the estimated supply of about 1 0,000 per month. This was to be aohieved, hopefully, by selling the concept of "manpower rationing". At the second meeting of the War Commitments Committee on 22nd February, Wurth insisted "there must be a planned system of rationing of manpower between the principal users, to ensure that our programmes of reinforcement and production may, in fact, be realised and are not paper programn'les which the simple arithmetic of the population can expose as impossible of attainment". "Manpower rationing" became the theme of most War Commitments Committee meet­ ings for the next six months, but behind the mild euphemism lay an important principle which had not yet been accepted by the defence group of departments. Every additional demand for labour at this stage meant inevitably the sacrifice of some other activity. In the absence of any central overview of manpower priorities, the creation of a new demand might lower rather than increase the country's contribution to the war effort. A much more fundamental principle was therefore involved than simply formalising the supply and demand equation. Nevertheless, even this exercise in arithmetic proved to be very difficult. At the third meeting of the War Commitments Committee on 1 6th April the manpower absorbing authorities presented reviews which had been requested the previous January. The events of the intervening three

. ....... --

-

--..--..;

" R ig hto ! B oys, get you r identity card s ready-we're from the M a n power ! " Dixon in

Smith's

Weekly (Sydney) , 26 Jun 1943.

I N S E AR C H

OF

POLICY

355

months had apparently made little impression. It is true that some pro­ grammes had been brought a little closer to reality. The Navy's projected intake had been cut in half to 500 per month , and under heavy pressure from several sources Munitions had been forced to give up about 2,000 per month ( although the revision made no allowance for orders from the United States forces ) . But the Army's programme involved a gross recruit­ ment of 1 0,000 per month (compared with about 1 5,000 previously ) , a figure necessary to provide for high wastage rates jn New Guinea and to contribute towards eliminating the deficiency on its war establishment. The Air Force figure had been reduced from 5, 700 to 4,500 per month (later raised to 5,000 ) , again to provide for establishment deficiency and wastage, and to proceed with expansion on a 45 squadron basis. In ,addi­ tion, the Allied Works Council's programme involved a further 20,552 men by 30th June, and Aircraft Production reported a need for 3,680 women and 3 ,300 men by the same date. The Department of Supply had been unable to make any reduction in its requirements. When tallied the total projected programme was still more than double the estimated labour supply of 1 0,000 per month. But Wurth was not yet in a position to force a direct confrontation. The War Comrmtments Committee knew that these figures were more or less out-of-date as they were presented, and were little more than "position papers" for the concurrent struggle within the Defence Committee. The War Commitments Comrmttee therefore side­ stepped the issue for the moment by recommending that the Defence Committee undertake a further review of the munitions programme. The April review, however, did precipitate firm action by War Cabinet to curb the uncontrolled bidding for labour by war production depart­ ments, a decision whioh was linked with the growing concern about the excessive delay in preparing a consolidated munitions programme and the unchecked growth of overseas assignment of weapons and ammunition. The parliamentary debate on war policy and the use of conscripts in the South-West Pacific Area4 emphasised that the Government's priorities for the war against Japan in 1 943 were to consolidate resources within Aus­ tralia and its territories so as to provide an adequate defence of the coastline, and to strengthen the mainland as a supply base for MacArthur's command. The maximum possible contribution to MacArthur's strike force would then be provided, but rmlitary contributions to other theatres could not be considered until the defence of the South-West Pacific Area had been secured. As the Prime Minister made plain on 3rd February: I consider it a fallacy to suggest that a small nation like Australia, confronted with the problem of defending a large continent with a small population, should be expected, when faced with a life and death struggle in its own region, to send forces to other theatres. . . . It is a plain fact that Australia's strength is not sufficient to meet all the contingencies of the military situation with which it may at any time be confronted, and the strength of the Allied Forces in the South-West Pacific Area is inadequate to provide for more than a holding strategy with limited offensive action.5 • •

Commonwealth Debates, Vol. 173, Commonwealth Debates, Vol. 173,

pp. 22ff, p. 268.

264ff.

356

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The same argument applied to the excessive export o f weapons and ammunition. Thus when the Defence Committee's proposals for overseas assignment of munitions for April and May ignored the new emphasis in war policy ( and were presented without the long awaited consolidation of munitions programmes ) , War Cabinet issued a rebuke in the most un­ compromising terms : Notwithstanding the repeated directions over a prolonged period, it does not appear to War Cabinet that the actions of the Defence Committee and the associated Departments, particularly the Department of the Army, indicate an adequate realisation of the importance and urgency of the following implications . . . the assignment [of weapons and ammunition] overseas: (i) The manpower situation; (ii) The grave delay in determining a firm basis for assignment of surplus produc­ tion in relation to a diversion of manpower and productive capacity to other urgent needs.6 War Cabinet reminded the Services that "the only important fields from whioh young and fit men can be recruited are war production and other essential industries", so that some reduction in munitions production is necessary merely to maintain the strength of the Forces. The minute continued, The only sound basis on which Defence Committee can operate is with the know­ ledge of what precisely is our surplus capacity after reviewing the manpower and material requirements . . . in relation to our resources. Instead of ascertaining this, it has pressed on assigning surpluses on the basis of present production. It was directed, therefore, that "future assignments should be related to the allocation of our resources in accordance with our own needs and priorities" . While this episode marked a turning point in the approach to submis­ sions by the manpower users, there was a considerable ( and to some extent inevitable ) lag in their ,appreciation of the new situation. The unrealistic April submissions on manpower needs of vhe Services and war production departments coincided with the report on the consolidated munitions programme by the Defence Committee. Details will be pursued later, but the report contributed little to the achievement of a "balanced war effort". Some programmes were reduced, such as the production of gun ammunition, but not to an extent which would allow high priority projects with the Munitions-Aircraft bloc to meet their labour needs.7 For the present, therefore, the bloc would continue as a net claimant on labour resources, ,but War Cabinet was clearly deeply dissatisfied and directed further urgent re-examination of the situation by the Defence Committee, the War Commitments Committee and General MacArthur.s At about the same time it was revealed that the Department of Munitions had been exceeding its authority by accepting orders before the receipt of Cabinet approval and irrespective of the manpower implications.9 In 6

War Cabinet Minute 2714, 23 Mar 1943. Cabinet Agendum 169/1943. 8 War Cabinet Minute 2771, 15 Apr 1943. • For example, the acceptance of an order to build small craft for the Americans at a cost of £10,000,000 which is "beyond our capacity to fulfil", War Cabinet Minute 2846, 14 May 1943. 7 War

I N SEARCH

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these circumstances a recommendation from ,the War Commitments Com­ mittee that, in future, any plans for expansion by the Services or war production departments should be subject to control by the Manpower Directorate fell on receptive ears. On 1 4th May War Cabinet ordered ubject to call-up. The additional labour needs of war production would be provided by increasing female employment by a net 2,000 per month or by reallocation of labour within the munitions group. But Wallace Wurth warned that this total limit of diversion "wiH require considerable adminis­ trative effort to attain" and that

The success of the scheme will clearly depend upon the acceptance of the principle that all special and emergency demands for manpower must be brought within these limits : it is a negation of the first principle of rationing to set a limit which excludes emergency demands and special drives for manpower. Although acceptance of the rationing principle and formula was an important step forward, the feature of the first half of 1 943 was the failure to integrate the requirements of the direct and indirect war efforts. Despite the endless reviews and the almost continuous work of several committees, the defence sector had been required merely to submit to some control over its daim on resources-a control determined primarily

by the eX'haustion of manpower in the prime age 'groups. In the absence of a full assessment of resource allocation, additional manpower had been diverted to the direct war effort, further commitments had been accepted (mainly the reciprocal aid for the United States forces) and, as a result, the war economy was more seriously unbalanced than at any previous stage. A summary prepared by the Commonwealth Statistician for June-July 1 9433 revealed that 50 per cent 'Of men in the 1 8 to 40 age group were enlisted in ,the Services, about the same proportion as in the United Kingdom and a significantly higher proportion than in Canada and the United States. Further, 47 per cent of the total male work force was engaged in direct war work, and that there was no reserve of males to be brought into employment except for schoolboys, the sick and disabled and those over 60 years of age. There remained, as before, a substantial reserve of unmarried women despite the partially successful efforts to accelerate female employment. But there were dear limits to the effective substitution of women for men, and even under emergency conditions the •

Commonwealth Bureau of Census and Statistics, Memorandum on Total Manpower, 7 Aug 1943.

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process had been fairly slow and was likely to be even slower with the greatly improved military outlook of mid- 1 943.

AUSTRALIAN MALE AND FEMALE EMPLOYMENT, 1939 AND 1943 (thousands) Males Females Sep 1939 Jun 1943 Sep 1939 Jun 1943 1. Defence Forces 45 694 14 2. Allied Works 48 3. Munitions bloc 91 39 11 106 4. Other war production 320 25

1,153

6. Civil manufacturing 7. Rural industries 8. Other employment

400 500 1 , 1 80

1 18 382 866

149 20 474

82 39 496

9. Total civil and indirect war (sub-total)

2,080

1 ,366

643

617

2,105

2,5 1 9

644

807

5. Direct war work (sub-total)

10. Total employment

190

Notes : The figures are unrevised. Row 1, including deaths, prisoners of war, missing, discharged unfit, but excludes ordinary discharges. Row 3, government and semi-government employment in munitions, aircraft produc­ tion and shipbuilding establishments and annexes. Row 4, primarily private munitions contractors and those employed directly by Allied governments. Figures are a rough approximation. Source : Commonwealth Bureau of Census and Statistics, Memorandum on Total Manpower, 7 Aug 1943, and as amended by Memorandum of 10 Jul 1944. With the advantage of hindsight it appears likely that the protracted delay in attempting to rectify the manpower situation was tJhe decisive factor which determined the shape of the economy for the remainder of the conflict, and also the effectiveness of preparations for post�war recon­ struction. As will be seen shortly, a concerted effort was made in October 1 943 to change the allocation of labour resources but little had been achieved by the end of the year. For the whole of 1 943, therefore, man­ power was deployed in a way consistent with the blockade conditions of early 1 942 but seriously out of step with the soheme of military and economic specialisation that had been developed by the United Kingdom and the United States ( and accepted in principle by Australia) for the final stages of the war in Europe and the Pacific. Although War Cabinet and the Prime Minister must share some of the responsibility for the unnecessarily prolonged period of overcommitment, it would be a serious oversimplification to suggest that high level govern­ ment policy was primarily at fault. As noted above, Curtin redefined policy priorities clearly, and with as muoh precision as security allowed,

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in the parliamentary debate on war policy as early as January 1 943. The message was repeated in February, and in mare detail at successive War Cabinet meetings. But the palicy directives were not fallawed up with the vigaur and imaginatian which the situatian warranted and the Gavernment demanded. The Defence Department and the Ohiefs of Staff reacted, at best, in a leisurely fashian to calls far rep arts and reviews, camplaining always af the camplexity of their task and the wastage invalved in hasty decisions. Far its part War Cabinet failed to' fallow up its initial directives in detail ar with the speed required. The vacuum permitted an unmitigated struggle far resaurces between the civilian and defence autharities. Ultimately the struggle was resalved anly after the exhaustian af supplies af manpawer and when a detailed decisian cauld be delayed nO' langer. Hawever, the avoidance of unpalatable decisians was only part of the stary. The indecision reflected, ·as well, the fact that Australia was a minar link in the chain af Allied cammand. Canberra was dependent an Landan and Washingtan far broad military and ecanamic strategy, and on General MacArthur for tactical initiative in the Sauth-West Pacific Area. Australia's particular difficulties were acknowledged, mainly by MacArthur; but they cauld nat weigh significantly in the development of high palicy. Thus, the Defence Cammittee ·and the War Cabinet were tam between ful­ filling the military role allatted by MacArthur and the ecanamic function canceived in Landan and Washingtan. Mare pasitive leadership might have resalved the dilemma, but the central problem was one of geagraphy : the lacatian of a majar supply base in a large area with small papulatian immediately adjacent to' a maiar war zone. TOWARDS

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N O' saaner had manpawer rationing been adapted than its details had become redundant. Expectatians that a rate of diversion of 1 0,000 men and 2,000 women per month could be maintained were saan disappointed, far during June 1 943 the tatal figure achieved was 9,053 and in July 8,270. Mare significant was the short-fall in male enlistment of one-third belaw the target. Female diversion was initially in excess of the planned figure, but in July alsO' declined sharply. Even the sceptics were now pre­ pared to' accept that the manpower pool had been exhausted, and that under existing policy the rate of male diversion would saan fall to' the net natural additian to' the warking papulatian (estimated at about 2,000 per manth ) . At the same time a serious disruptian o f civilian and indirect war supplies threatened unless urgent remedial actian was taken. The general supply outlook far 1 943-44 was much warse than it had been twelve manths previausly, and it appeared unlikely .that cantracts to supply food and materials to' the United Kingdom and the United States farces cauld be fulfilled withaut Dracanian cuts in civilian cansumption. The Minister far Cammerce and Agriculture argued in a series of submissians4 that • War

Cabinet Agendum 226/1943 and Full Cabinet Agendum 526.

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50,000 men sh'Ould be returned to rural industries t'O maintain and increase production, especially of dairy products, vegetables, eggs and meat; another 1 0,000 were required for food pr'Ocessing. Capital equipment in the rural sector had also deteriomted,5 while crop yields were being adversely affected by the shortage of fertilisers. Strategic minerals produc­ tion required 1 ,265 men urgently, the importance 'Of the need being accepted by War Cabinet in July when arrangements were made for the release of experienced miners frQm the Army.6 Output 'Of cl'Othing and textiles had also suffered, and it was estimated that an additional 9,000 workers (mainly women ) were required by the end 'Of the year to avoid a reduction in ·the ration. A long list 'Of other high priority labour requirements had been established, especially in rubber, timber, transport, hospitals and government service. The Manpower Directorate cut the urgent needs 'Of the rural sector to 1 5 ,000, but total high priority man­ power requirements were placed at between 40,000 and 50,000. Sacrifice of part of the war programme was therefore unavoidable. This was accepted implicitly by the War Cabinet in mid-July when the "principles which should govern tJhe extent and nature 'Of the Australian war effort" were laid d'Own in more detail than before.7 There was nothing basically new in the Prime Minister's statement. As before, emphasis was given to the need to concentrate the country's limited war potential in the SQuth-West Pacific Area and to limit the direct contribu­ tions to other theatres as far as possible, particularly by eliminating munitions exports and restricting the overseas ·activities of the Navy and Air Force. What was new was the War Cabinet's determination to see that its broad principles were translated into detailed and integrated decisions covering the breadth of the war effort. Previously such ex cathedra statements had been regarded in some quarters as little m'Ore than interesting "position papers", and the response had been piecemeal and incomplete. On this 'Occasion War Cabinet ordered a comprehensive review of military strength and deployment by the Defence Committee and of total manpower allocation by the War Commitments Committee. The Director-General of Manpower wasted no time in taking full advantage of the opportunity that had been presented to him. Over the next two months the War Commitments Committee met regularly at about fortnightly intervals to consider the well argued and fully documented submissions 'Of the Manpower Directorate. The ground rules were laid by Wurth in a paper on "Manpower Planning" presented to a meeting on 1 1 th August. Two key passages S'Ought to articulate the basis 'Of recent trends in Government decisions. First, the altered strategic situation with Japan now 'On the defensive and with adequate Allied forces in the Pacific required a change in direction "from an economy build up, of necessity, during 1 94 1 -42 for self-sufficiency in defence to a greater • By

War Cabinet Minute 2m2, 13 Jul 1943, the manufacture of agricultural machinery and food processing equipment was entrusted to the Department of Munitions and classified as a war project. • War Cabinet Minute 2m3, 13 Jul 1943. 7 War Cabinet Minute 2968, 1 3 Jul 1943; Agendum 3 1 1/1943.

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measure of international specialisation, with greater emphasis upon Aus­ tralia's role in supplying services and goods which, for geographic and economic reasons she is relatively better able to provide". Second and partly related to the first, Government policy was moving towards a strengthening of civilian labour supply for a variety of political and economic reasons, especially to contain inflation and allow the price stabilisation policy introduced the previous April to have some chance of success. Wurth argued that : The strain on civilian resources is reflected in rapidly rising costs, due largely to the fact that in many industries the remaining labour force is of relatively low quality, that discipline and efficiency have deteriorated under war conditions, and that labour costs have jumped upwards under extended hours of work. The situation could be alleviated if a large supply of efficient labour were provided for the production of consumers' goods and the maintenance of industries which have been seriously neglected.

Wurth concluded that important components of Government policy were in direct conflict. The limit of diversion to the direct war effort had been reached in mid- 1 943, and steps were now being taken to release men for important civilian work. Yet expansion of the Services as authorised was still far from complete. In particular, the shift from ground to air defence could not be achieved unless there was a planned depression of the Army coupled with compulsory recruitment of ground staff for the Air Force.s And nhe urgent need for 30,000 men for civilian work could not be achieved without a reduction in the strengtJh of the Services and/or Munitions.9 While the policy alternatives were clearly indicated, details for obtaining a balanced use of labour resources were left out of the paper.! Wurth was pl'Obably uncertain of the way his approach would be received, and of the amount of support that he would be able to command. The paper was, however, received much more pragmatically by the non-military members of the War Commitments Committee than evidently had been anticipated. Indeed, Theodore, Director-General of Allied Works, suggested (fairly enough) that Wurth's approach had been far too tentative and urged that the committee incorporate in its report to War Cabinet some stringent criticism of the Defence Committee's circum­ vention of Government manpower policy. Even Essington Lewis, whose Munitions Department had been in almost continual conflict with the man­ power authorities since the beginning of the year, was prepared to be realistic. Munitions, in particular, was fighting for self-preservation : in the absence of a strong thrust at ,the strength of 1Jhe Services the Munitions complex was in danger of bearing the brunt of the inevitable reduction in direct war manpower. The upshot of this new alignment within the War Commitments Committee was an unexpectedly vigorous direction to the • Shortly before War Cabinet reaffirmed its decision "in principle" of Mar

1942 to expand the Air Force to 72 squadrons. • The 30,000 men were needed mainly for rural industries, food processing, strategic minerals. clothing manufacture by the Department of Supply and the United States Services of Supply. 1 Wurth did however recommend the compulsory recruitment of women for the Service Auxiliaries, reassessment of supply requirements for the Services, and continued review and curtailment of non-essential production.

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Defence Committee which went well beyond Wurth's original proposal. The Chiefs of Staff were to examine the effect on the Services of a with­ drawal of 50,000 men ,and 1 ,500 women. The sting was in the sharp fall in the proposed enlistment rate, a rate which would have resulted in a net reduction in total enlistments of about 5,000 per month (assuming, with the Defence Committee , that wastage would average 7,000 men per month ) . Rubbing salt into the wound, the Defence Committee was also asked to furnish statements on its previous Cabinet submissions (and whether these had been approved) , and information on its current examination of munitions, works and other programmes (including American demands on Australian labour) "in so far as they affect the disposition or the availability of manpower resources". The War Commit­ ments Committee, hitherto the lesser influence on War Cabinet, had made a stmng bid to clip the wings of the military advisers. This placed the Chiefs of Staff in an extremely awkward position. The Allied offensive in the South-West and South Pacific Areas had only recently gathered momentum. The landing at Nassau Bay on 3 0th June had been followed by slow but steady progress against the Lae-Salamaua area, but the major attack against J apanese�eld Lae was still several weeks away. As always in New Guinea, casualties from the enemy, the terrain, climate and mosquitoes had been heavy and were likely to be heavier before Rabaul was taken. In July the War Cabinet had reaffirmed an expansion of the Air Force to 72 squadrons, and it had always been assumed (despite some downgrading of the Army's role) that the A.I.F. would play a significant offensive role alongside the Americans. But MacArthur was showing a distinct lack of interest in the Australians in his forward planning; a sharp reduction in military strength would reduce still further the Australian influence on the Commander-in-Chief. The Defence Committee had no difficulty in concluding, therefore, that the proposed allocations of manpower would be totally inadequate to meet the requirements of the Services to carry out the operations to which they are committed and thus unacceptable as a basis for recommendation to the Government.2

It was reiterated that a minimum of 9,500 men per month would be required to meet operational needs; 7,000 per month would "barely maintain" existing strength. The report on the total manpower situation that was presented to War Cabinet towards the end of September 1 943 contained some conces­ sions to the Defence Committee's views. The proposed withdrawal of direct war manpower was reduced to 40,000, and of these half were to come from the Army and half from Munitions. ( Originally it had been suggested that the Army should contribute two-thirds and Munitions one­ third. ) Further, it was recommended that a rate of Service enlistment be set at a maximum of 3 ,000 men and 2,000 women compared with the earlier proposal of 2,000 men and 1 ,500 women. But the most significant 2 Defence Committee Minute,

19 Aug 1943.

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concession was that the deadline for completing the withdrawals was extended from 3 1 st December to 30th June 1 944. From an administrative point of view some extension of the deadline was probably inevitable in view of the delay that had already occurred in completing the submission, but the period of nine months allowed for the adjustment was unneces­ sarily cautious and virtually ensured that overcommitment would continue as a major problem well into 1 944. Even then the Defence Committee was not satisfied. The report of the War Commitments Committee went to War Cabinet without a consensus and with two diametrically opposed sets of recommendations. As outlined above, the non-military members urged a modest phased reduction in the manpower 'component of the direct war effort in order to strengthen indirect war and civilian production, whereas the Chiefs of Staff reiterated their position that a minimum intake of 9,500 per month was essential to enable military obligations to be fulfilled. As phrased by Wurth, the Government was faced with a clear choice between the following alternatives :

(a) relieve the Services of responsibility for some of the commitments on which their estimates are based, and/ or (b) endorse a further regulation of the civilian economy, together with failure to a substantial extent to meet the British and Allied requirements [of food and materials J. 3 War Cabinet's decision on 1 st October4 represented in part a consolida­ tion and restatement of existing policy, and in part a tentative reappraisal of future objectives. The scheme of 40,000 special releases from the Army and the Munitions-Aircraft bloc was approved, as was the limitation on Service intake to 3 ,000 men and 2,000 women per month. Of these re­ leases, 1 5 ,000 were to be directed to food production (as had already been approved in principle ) ,5 up to 5,000 men and women to food processing, and the remainder to high priority requirements specified by the War Commitments Committee. Food production was also to be aided by accelerated use of prisoners of war, by a strengthening of the Morale Section of Food Control to help improve the fairly low level of industrial morale in food factories, and by an investigation of wage and other conditions in these factories. It was also suggested that the United States might be approached to take over food export contracts from Australia; and efforts were to be made to restrict American demands on food supplies under the Reciprocal Aid Agreement. However, these were regarded merely �s remedial measures to prevent deterioration in the level of civilian supply : there was no suggestion that ,the War Cabinet was prepared to sanction a reallocation of resources on the basis of increased international specialisation. Indeed, in approving the releases for food production , War Cabinet observed, equivocally, that

3 War Cabinet Agendum 379/1943 .

• War Cabinet Minute 3065, 1 Oct 1943 . •

War Cabinet Minute 2972, 13 Jul 1943.

TOWARDS R E GIONAL S P E CIALISATION

365

in the achievement of a balanced war effort, it is of vital importance to avoid the creation of a manpower problem in respect of the maintenance of the Forces similar to that which has occurred in food production. Furthermore, paramount reasons of high policy forbid too great a reduction of the fighting forces in favour of food production. And as the administrative arrangements were unfolded, it became evident that the transfer would be a slow process. Employers were required to nominate experienced rural workers to local War Agricultural Committees, and committees would then approach the Army. But before the Army could authorise a release, the Manpower Directorate was required · to submit a report. Any nominee could refuse to be disoharged.6 In other ways, tao, qualificatians were added which restricted the amaunt of manpawer reallocation that was likely to be achieved. Althaugh 20,000 men were ta be released from munitions industries, War Cabinet added the seemingly innacent proviso ,�hat the Director-General of Munitians could arrange to "set aff against tatal releases any additianal manpower required far new projects appraved by War Cabinet, to an amaunt agreed by the War Commitments Cammittee". As will be seen, this led ta endless argument between Manpower and Munitions about the meaning of "offsets" and the definitian of the "Munitians-Aircraft blac" which further limited the effectiveness of the special releases. In an ecanomic sense, therefare, the policy of aohieving a "balanced war effort" represented a slight shift in emphasis rather than a change in direction. Similarly, the military reassessment in the light af the manpawer releases produced no real change. Details are discussed elsewhere,7 but War Cabinet merely reiterated-althaugh on this accasian supported by specific directians-that military resources shauld be concentrated in �he South-West Pacific Area. As a matter of basic principle, it was stated further that

It is of vital importance to the future of Australia and her status at the peace table in regard to the settlement in the Pacific, that her military effort should be concentrated as far as possible in the Pacific and that it should be on a scale to guarantee her an effective voice in the peace settlement.S This dubiaus proposition meant, presumably, that the maximum passible affensive deployment shauld be maintained. War Cabinet had chosen a suit of the same calaur and style but one size smaller: it had ducked choosing between Wurth's clear-cut alternatives. In one way at least, hawever, the October review marked an important turning paint in the war. Explicit expression was given to the fact that the threat of invasion had passed which in turn sharpened thinking about the post-war warld. This was certainly not the intentian and Curtin warned repeatedly that no relaxatian in the war effart could be expected or shauld be anticipated. But the Government's own propaganda abaut Allied suc­ cess in New Guinea and New Britain, and the massive Russian assault Digest of Decisions and Announcements, No. 65, pp. 26-7. The Government and the People 1942-1945, pp. 301-3. • War Cabinet Minute 3065, 1 Oct 1943. •

7 See Hasluck,

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along the eastern front, undermined t o some extent the calls for more austerity and unrewarding grind. Post-war reconstruction had been an important element in policy since early in 1 943, but after October it grew to dominate most aspects of official and private thought. Ironically the October decisions offered no material means for tJhe translation of tJhought into action.

S CREENING FOR LABOU R The process of tuning the economy to an even higher pitch of mobilisa­ tion in 1 943 required modification of the existing techniques of manpower control and the introduction of several new ones. With the elimination of large pools of labour available for diversion to the war effort, more specific measures were necessary to search for the small number of men who hitherto had escaped the net; a combination of carrot and stick was employed to help break down tJhe formidable political and social barriers preventing a larger number of women entering the work force or enlisting in the Women's Auxiliaries. By the end of 1 942 the Schedule of Reserved Occupations had declined to comparatively minor importance as a means of extracting men for the Forces. Flexible use of the Schedule had yielded large groups of men for enlistment during the invasion crisis, but with the eXlhaustion of "bulk manpower" alternative teohniques of control assumed greater importance. Reservation continued, however, as an essential means of assisting the flow of women into the Women's Auxiliary Services. The first restrictions on female enlistment, introduced on 7th August 1 942, were replaced by a shortened list in April 1 943. Initially women in protected factories (including munitions establishments ) , government departments (including state and local government ) and those with professional and teohnical qualifications in short supply had been reserved; but the amended list excluded those in state and local government employment and restricted the reservation of factory employment to high priority work. The purpose was, of course, to accelerate the growth of the Women's Auxiliaries, for under the pressure of manpOWer shovtage some of the prejudice against women in the S ervices had fallen away. The R.A.A.F. in particular found that women were well suited for many ground staff functions. The number of women in the Services increased rapidly from about 20,000 in July 1 942 to 44,000 in June 1 943, but thereafter the rate of increase slowed appreciably and enlistments fell well short 'Of expectations. The War Commitments Committee urged repeatedly in 1 943 that young, single women be called up compulsorily, but War Cabinet ,rejected the sugges­ tion on political grounds and female enlistment remained voluntary throughout the war. By the end of 1943, therefore, reservation as applied to women had lost its strength as an instrument of policy ( as in the case of men a year earlier) . Similarly, the remaining instruments of contml available under the Manpower Regulations were nearing the limit of -their effective use by the end of 1 942. Restrictions on -the engagement of labour had been made

S C R E E N I N G F O R L A B OU R

367

virtually complete, while the number of protected undertakings exceeded 1 3 ,000. Protection had already immobilised a large proportion of the civilian work force, for employees were only permitted to leave protected undertakings with the written authority of the Director-General of Man­ power.9 As protection ensured that a firm could retain some proportion of its labour force, there was considerable pressure on the manpower authorities to extend protection in 1943. An important element of policy was that protection should be withheld until the maximum comb-out of labour had been achieved, and the increasingly rigorous examination of each new candidate for protection yielded small ,additional amounts of labour. By the end of 1 943 1 9,000 undertakings had been protected, a figure which increased only marginally in 1 944. But protection retained its value in 1 943 only in association with nhe introduction of the power to direct engaged labour. Authority to direct an unemployed person to accept employment was contained in the original Manpower Regulations of January 1 942,1 but the uHimate weapon at the disposal of the Government-the power to direct any person to engage in specified employment-was not inserted into the regulations until 29th January 1 943.2 Even then the step was taken with misgivings ( and with certain exemptions and the right of 'appeal ) , for direction was dangerously close to industrial conscription and was an acknowledged infringement of the right of personal ohoice of employment. The use of direction was however the only effective way of revitalising the system of manpower control to a degree which would permit further diversion to the direct war effort. The essential feature of the power was that it permitted individuals to be examined in detail, 'and hence the small remaining pockets of under­ utilised labour could be diverted to high priority work. Probably the most important effect of direction was that the substitution of women for men in factory employment was accelerated. Indeed, the power was introduced very largely to deal with the problem of female mobilisation, for the limits on the use of women were such that "bulk" methods were inappropriate and examination of individual cases was essential. From the outset the Manpower Directorate accepted that direction would have to be used sparingly, and that the effectiveness of the instrument lay in the threat rather than the execution. In early 1 943, therefore, an intensive publicity campaign was launohed to encourage voluntary transfer to essential employment with the reminder that direction would be exercised if necessary. Using civilian registration cards for information a large number of people were called upon to submit to interview at National Service Offices. In addition all single men 'aged over 45 and married men over 35 were sent questionnaires to bring their civilian registration cards up-to-date, as were single women aged between 1 8 and 45 who were not employed, and married women between 1 8 and 35 without children. Usually this type of pressure was sufficient. The • The same restriction applied to the dismissal of employees. 1 Regulation 2 Statutory

15 of Statutory Rules 1942, No. 34, 31 Jan. Rules 1943, No. 23.

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number of direction orders issued rarely exceeded 500 per month, and averaged 290 per month during 1 943.3 The new power could not be used to direct women into the Women's Auxiliary Services; nor did it apply to a member of the Services. Married women with dependants and other family responsibilities were exempt and, in general, other married women were not to be directed except in special circumstances. Young people could only be directed with the consent of their parents. Special provisions were made for those trans­ ferred away fvom home, such as the payment of fares and the supply of suitable accommodation. Special care was taken to ensure that, in the course of direction, industrial awards were not infringed.4 Even so appeals were fairly frequent. Between January 1 943 and July 1 944, 14 per cent of those directed lodged an appeal; more than half the appeals were upheld by the Director-General of Manpower.5 Armed with the power of direction and in association with the Depart­ ment of War Organisation of Industry, the Manpower Directorate em­ barked on a further rigorous comb out and rationalisation of industry. Attention was concentrated on those tertiary ,industries where there appeared to be labour reserves. The clerical staffs of banks and insurance firms were raked over, and by mid-1 943 a total of 500 bank branches had been closed. Male employment in banks had fallen from a pre-war figure of 63,000 to about 39,000 and, while it was believed that further men could be obtained, the physical quality of additional releases would be very low. The retail and wholesale trades were also examined with some success : between June 1 942 and June 1 943 about 20,000 persons had been released for war work in retail distribution alone. While further men could be obtained, this would mean the closure of 'a large number of small shops and seriously disrupt the trading arrangements in many localities. Similarly household deliver,ies had been rationalised by zoning and by restrictions imposed by the Land Transport Board; further man­ power could be obtained by virtually eliminating all household deliveries, but it was judged that the additional strain which this step would impose on domestic life would negate the original saving of labour because industrial absenteeism would rise and women would withdraw. from the work force or be reluctant to enter it. Health, education and other pro­ fessions had already been reduced severely by early 1943, and it was judged unwise to lower further the supply of health and other professional services. The story was similar in the case of other miscellaneous services -entertainment, sport, photography, watchmaking and electrical con­ tracting-except that the Department of War Organisation of Industry expected that a few technicians could be released by zoning the services of electrical contractors, mechanics and radio servicemen. • Wurth, Control of Manpower in Australia, p. 102 . • In general, the conditions associated with the use of direction were rigidly adhered to, although there was an isolated instance in Feb 1943 of boys under 18 being directed away from home for fruit picking. See Commonwealth Debates, Vol. 173, pp. 676-7. • Wurth, Control of Manpower in Australia, p. 101.

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Not only were the best efforts of the authorities yielding rapidly diminiS'hing returns ; in an increasing number of instances examination of an industry or occupation suggested that the imposition of further restric­ tions might lower rather than improve labour supply. One example relating to the employment of domestic servants was before Production Executive in May 1 943.6 Employment of full-time domestic servants had already been restricted to one per family without permit, but this still left about 8 0,000 engaged in what was regarded as low priority work and it appeared that the use of direction could be rewarding. But a survey by the Manpower Directorate soon revealed that little could in fact be achieved and the net effect might be damaging. Most of the women still engaged as domestic servants were over 45 years of age and lived with their employers and well away from centres of industrial employment. The removal of large numbers would create new housing difficulties and further disrupt rural life. Further, many s ervants were employed part­ time and additional restrictions would be difficult to police and be of doubtful value. Considerations of national morale imposed ,an additional constraint. Although the supply of some items and services was technically non­ essential, the psychological benefits of maintaining a reasonable proportion of normal supply were regarded as more important than maximising man­ power savings. The provision of modest production of beer and tobacco is the obvious illustration. A trivial although ,revealing one is provided by the attempt of the Manpower Directorate to withdraw labour from ladies' hairdressers and beauty parlours. A survey indicated that no more than a few hundred could be obtained unless permanent waving was eliminated. But fashion decreed tJhat waves were indispensable and Production Execu­ tive agreed. As described in Chapter 7, one furt:her ,possibility involved the "con­ centration of industry". On 3rd March Full Cabinet approved in principle a scheme of industrial concentration (with limited compensation) ,7 and by the middle of the year the Department of War Organisation of Industry had drawn up preliminary plans for the dosing down of plant involving some eighteen industrial sub-groups. But such a drastic step, initiated at the .end of 1 942 under different political conditions, had been overtaken by events. By the time detailed proposals were ready Full Cabinet was no longer in a receptive mood and concentration was quietly shelved. Less spectacular but more fruitful were the continuing efforts to improve labour productivity and ,the conditions of factory employment. Much had already been done in 1 9 4 1 and 1 942 to add to tJhe supply of skilled labour, particularly in the engineering trades, by means of trade dilution in conjunction with the Commonwealth Technical Training Scheme. In 1 943 dilution was extended further, the most significant change being the admission of women to the diluted engineering trades. 8 Production Executive Agendum 121/1943 and Supplement I, 19 May. Full Cabinet Agendum 429, 20 Jan 1943; considered 3 Mar. S Statutory Rules 1943, No. 143, 27 May.

•

7

370

R E AS S E S S I N G M A N P OW E R P R I O R I T I E S

Previously dilution had been reserved strictly for men, but the extreme shortage of male tradesmen in the industry eventually persuaded the engineering unions to relax slightly their male chauvinism.9 In fact, few women qualified as "added tradeswomen" and the relaxation was more of symbolic significance. Subsequently women were permitted to qualify as added boilermakers,l while the electrical trades dilution regulations introduced in February 1 944 contained no discrimination on the ground of sex.2 Shortly before, in November 1 943, dilution was extended to the shipbuilding and ship-repairing industries ( although, understandably, without a female provision) under an agreement with the Federated Shipwrights and Ship Constructors Association of Australia.3 A great deal of effort was put into the improvement of factory wo£king conditions, especially in munitions factories and :annexes. Many of the factories hastily built in 1 942 contained inadequate lighting and ventila­ tion, and existing factories had not been converted for night work. Mini­ mum lighting standards were laid down in July 1942,4 but the shortage of electricians and equipment restricted the rate of improvement. Despite attempts to enforce the regulations, poor industrial lighting was a cause for complaint throughout 1 943 encouraging absenteeism and discouraging the working of overtime.5 Similarly, indifferent canteen facilities in many munitions establishments discouraged many men and even more women from working the long hours that the Government required. The Industrial Welfare Division of the Department of Labour and National Service worked strenuously to rectify the position-and some improvements were made�but there were limits to the improvement of cooking standards by bureaucratic methods and the Department of Munitions was subject to the same food shortages as the rest of the community. However, rising industrial disruption more than negated the gains that were made in these directions. Initially the more serious problem was absenteeism. A survey by the Industrial Welfare Division over a six week period in July and August 1 942 estimated that absenteeism accounted for the loss of 7 per cent of male working time and 1 3 per cent of the time of women. Translated into the loss of factory manpower and on the assumption that the sample was representative of all factory employees, this was equivalent to the loss of 3 5 ,000 men and 27,000 women.6 Although no reliable figures were available for 1 943, it was generally believed that absenteeism had risen with the improvement in the ' However, the regulatioos included stringent provisions for maintaining the preference for men. An employer was prevented from dismissing, without the consent of the Local Dilution Committee, a male added tradesman while a female of the same classification was employed in the same establishment. Further, a female was required to agree to abandon her employ­ ment if and when a competent recognised tradesman or male added tradesman (of the same classification ) was available and offering for the job. 1 Statutory Rules 1943, No. 197, 16 Aug. • Statutory Rules 1944, No. 40, 23 Feb. • Statutory Rules 1943, No. 281, 19 Nov. • Statutory Rules 1942, No. 302, 8 Jul. 5 Largely for these reasons, daylight saving was introduced in all States except Western Aus­ tralia between 1 Jan and 29 Mar 1942; between 27 Sep 1 942 and 28 Mar 1943; and between 3 Oct 1943 and 26 Mar 1 944. Standard time was observed in the summer of 1944-45. 6 Full Cabinet Agendum 426, 26 Jan 1943.

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371

war situation, growing industrial fatigue and ,the rise o f female employ­ ment. But the survey also made clear that a high proportion of absence from work was unavoidable, due either to illness, industrial 'accidents or exceptional domestic difficulties. As for avoidable absence, regulations prohibiting absenteeism without due cause had been introduced in Octo­ ber 1 942,7 but little could be expected from the prosecution of a few laggards and large-scale enforcement was out of the question politically for any government, especially a Labour government. In any case a good deal of absence was due to the poor factory conditions mentioned previously, including inadequate on-the-job first aid and safety standards. Apart from a few mild rebukes from the Prime Minister and attempts to improve working conditions, the Government decided sensibly not to make a major issue of absenteeism. It judged, probably correctly, that a widespread publicity campaign against the practice accompanied by rigorous enforcement would achieve little and could have damaging effects on morale. In any case avoidable absenteeism does not appear to have been excessive (except in coal mining) , and may have been less than in other comparable wartime societies.8 Habitual offenders were prosecuted, but on the whole the matter was kept in the background. The major Government concession to the problem (which was also of wider political significance) was the decision to restore normal observance of public holidays and annual leave provisions of awards.9 Ward, Minister for Labour and National Service, argued vigorouslY, although with little supporting evidence, that the restrictions that had been imposed in 1 94 1 on public and annual holidays had been the major factor contributing to absenteeism and had been widely resented and "industrially disastrous". It is unlikely that Cabinet accepted the analysis, but the proposal did make good political sense. Apart from qualifications relating to vital defence industries, the restrictions were removed in October. Muoh stronger action was taken to deal with industrial disputes. In 1 942 the number of strikes and the amount of time lost had fallen to very low levels under the psychological impact of the invasion threat, and tlhe Government was prone to congratulate itself that it had achieved markedly better industrial relations than its United Australia-United Country Party predecessors. Early in 1 943 the incidence of strikes in­ creased markedly. In aggregate the amount of time lost was still negligible and for the whole of 1 943 was a fraction of that involved in the observ­ ance of a single public holiday. But what was damaging economically and politically was the rising number of disputes in key industries such as meat slaughtering and, of course, coal-mining. At a time when manpower resources were being screwed to the limit and when further restrictions were being imposed on civilian consumption, any disruption of direct or indirect war industries was seen as a threat to national security. 7 Statutory Rules 1942, No.

418,

1 Oct.

• A few rough comparisons were given by

E.

Announcements, No. 56, p. 3 . • Full Cabinet Agendum 493, 1 8 May 1943.

J. Ward on 16 Mar 1943, Digest of Decisions and

372

R E A S S E S S I N G M A N P O W E R P RI O R I T I E S

Hoping that the number of disputes could be contained by persuasion and a commonsense examination of specific complaints, the Government resisted repeated Opposition calls for use of the "big stick". By April and May, however, it had become evident that reason was not producing the desired results, and senior Ministers---especially the Prime Minister­ were showing increasing irritation with the seeming pettiness of most pit-head stoppages. Without warning and without having consulted the

W O RKI N G D AYS L O ST I N I N D U STRIAL D I SP U T E S 1 9 3 9 TO 1 9 45 ('000) All other Coalmining Total 1 939 1940 1941 1942 1 943 1944 1 945 Source : Labour

291 1,37 1 276 178 326 390 611

168 136 708 200 664 523 1,509

459 1,507 984 378 990 913 2, 120

Reports.

trade union, Curtin submitted to Full Cabinet on 1 8th May the most drastic anti-strike measure that could have been expected from a Labour Government.1 There is no record of dissent from the Prime Minister's proposed new regulations in Cabinet papers, and ,it is perhaps indicative that at the same meeting Cabinet considered a strongly worded minute from General Blamey complaining that heavy calls were being made on scarce Army labour as a result of constant waterside disputes, and sug­ gesting that an Army Docks Service be formed in the absence of sufficient civilian labour.2 The substance 'Of the plan was the withdrawal of the privileges attached to persons engaged in protected undertakings in the event of an "unlawful" strike or lockout. "Unlawful" meant a violation of any industrial code, custom or practice which led to an industrial disturbance.3 Those de­ classified in this way were, if eligible, to be called up for military service under the Defence A ct; those medically unfit or otherwise ineligible for call-up were to be directed to perform other w'Ork by the Manpower Directorate. For the purpose of examination of individual cases, the Commonwealth Investigation Branch was to be used to prepare reports. Technically the freedom to strike was retained, but the Government had come perilously close to abolition 'Of this right in relation to protected undertakings. Obviously such a power had to be used with restraint and great care, and the Prime Minister insisted that the executive authority be retained in his own hands. Immediately after the regulations were issued 1 Full Cabinet Agendum 499,

18 May, 1943.

• Full Cabinet Agendum 495.

• Digest of Decisions and Announcements, No. 59, pp. 39-40. • Statutory Rules 1943, No. 144.

373

SCRE ENING FOR LABOUR

on 27th May,4 the Prime Minister declared all coal mines protected under­ takings;5 soon afterwards the stevedoring industry was dealt with in the same way. This power, although theoretically far-reaching, was in practice a damp squib. As noted, declassification had to be used sparingly for political reasons. But an even more important restraining influence was the chronic shortage of labour. For almost two years workers in essential occupations had become accustomed to hearing about their indispensability and they were not now inclined to believe that they could be removed from their normal work so long as solidarity was maintained. This view proved to be correct. To be sure, declassification acted as a deterrent for a month or two and it was useful for removing a few persistent troublemakers. But it offered no solution for the longer term problems of industrial relations and by August and September strikes and stoppages, mainly in coal­ mining and on the waterfront, were more frequent than before. In Septem­ ber 1943 the Prime Minister extended his industrial authority over pro­ tected undertakings by amending regulations which enabled him to order directly a return to work or to fOl'bid a stoppage if one threatened.6 This was aimed specifically at coal-mining, for by this time the amount of time and production lost on the New South Wales northern fields outweighed all other industrial matters. Further discussion of industrial problems will, therefore, be considered in the particular context of the supply of coal.7 Early in 1943 special arrangements were necessary to strengthen the nursing staffs of civilian hospitals. Enlistments in the three nursing services had diverted many trained nurses away from these hospitals and others had been attracted away from nursing by the superior condi­ tions and wages available in other occupations. lu an attempt to stem the outflow hospitals were protected, progressively, during 1942, but the shortage persisted and more positive steps were found necessary. In Febru­ ary 1943 the engagement of all nurses and domestic staff of hospitals was controlled through National Service Offices and instructions were given prohibiting the engagement of nurses in occupations other than nursing, a prohibition supplemented by limited use of the power of direction. In March nurses were required to register with the Manpower Directorate under the various State Nurses Registration Acts, an order which was limited to civilian women under 60 years of age. In addition, hospitals and the Services were required to supply information about staff numbers. Complete information was therefore available by mid-April. The survey showed that of the 47,374 registrants, 5 5 per cent,were engaged as nurses, 41 per cent (mostly married women with dependants and women over 35 years of age) were not gainfully employed, and the remaining 4 per cent were engaged in other occupations.8 The data thus provided allowed pressure to be brought to bear on those employed outside the profession only a few mines had been protected because the separate system of control under the coal control regulations. • Statutory Rilles 1943, No. 231, 13 Sep. 7 See Chapter 16. 8 Wurth, Control of Manpower in Australia, p. 179. 5 Previously

industry

was

subject

to

a

374

R E A S S E S S I N G M A N P O W E R P RI O R I T I E S

and on younger women without dependants who were not gainfully em­ ployed. The response was quite good and for the remainder of 1 943 staff deficiencies in hospitals were kept within reasonable limits. In 1 944, however, the problem re-emerged. On this occasion no "reserves" were available to be exploited and the nursing Services were required to release women for civilian hospital employment.

R U R A L LA B O U R O R G A N I S A T I O N The rapid fall i n rural labour supply that occurred i n 1 942 and early 1 943 made necessary the imposition of a highly complex yet flexible and decentralised system of controls and special arrangements. As was seen in Chapter 8, the problems differed widely between regions but, broadly, the industries and areas most s eriously affected were those located in the proximity of munitions factories or other manufacturing employment where there was a strong wage incentive to switch employment; those relatively labour intensive industries such as dairying and vegetable­ growing which found difficulty in maintaining or increasing production in the face of strong competition for labour; and those industries which depended on a marked seasonal influx of labour. The fact that total farm output (in physical terms ) was maintained at about the pre-war level (except for the drought year 1 944-45 ) in the face of a thirty per cent cut in the male work force, a severe shortage of fertilisers, and deteriorat­ ing capital equipment is a tribute to the farming community and the manpower organisation.

RURAL INDUSTRIES : ESTIMATED MALE EMPLOYMENT 1 939-45 ('000) Owners, Permanent Temporary As at Total Relatives Employees Employees 3 1 Mar 494 102 292 100 1939 62 40 1 256 1 942 83 45 360 239 76 1943 55 385 255 1944 75 64 403 265 1 945 74 Note : Included in the number of temporary employees are 5,000 prisoners of war in 1 944, and 9,600 in 1 945. Source : Production Bulletins. The provision of an adequate seasonal work force required the highest degree of organising skill. A number of rural industries required large numbers of temporary workers to shear sheep, cut cane ,and pick fruit and other activities mainly associated with harvesting. Before the war there were more than 1 00,000 men ( and a few women) engaged in tlhese tasks but after Pearl Harbour the number of these workers fell dramatically. As indicated in the table, the seasonal labour force fell by more than on�half between 1941 and 1 943, a much more pronounced decline than in the other two categories. Further, the seasonal component was much

R U R A L L A B OU R O R G A N I S A T I O N

375

more difficult to replace, containing as it did a high proportion of skilled workers such as shearers, wool classers, cooks and cane cutters. The development of an organisation for the provision of sufficient labour for shearing was determined largely by regional and climatic pat­ terns. In Western Australia and Queensland no special arrangements. were necessary : flock numbers were not particularly high and most shearing was performed by permanent station hands and local town dwellers. In Queensland, moreover, shearing was not restricted to a few weeks of the year, so that seasonal bottlenecks in labour supply could be avoided if necessary. However, in New South Wales, Victoria, Tasmania and the eastern runs of South Australia, shearing timetables were closely linked with climatic conditions and long established practice. Beginning in the north in July, the season reached a peak in the western plains of New South Wales and Victoria in August and September, and concluded in the high tableland districts, southern Victoria and Tasmania, in October and November. Throughout the five-months season there was a large move­ ment of shearing workers, generally from north to 'south (or from the plains to the tableland districts) . About 40,000 workers were normally involved-20,000 shearers, and 20,000 ancillaries suah as wool rollers, classers, piece pickers, tar boys, cooks and contractors. Some lived on grazing properties or in nearby towns, but most lived in capital cities or the more closely settled farming districts making necessary a major move­ ment of workers during the seasonal peak. By 1 942 it had become clear that special arrangements would be necessary to ensure a full clip. Fortunately, a reasonable amount of elasticity was available in the shearing timetable and more effective use could be made of available labour ;by extending the season and smoothing regional peak demands. By arrangement with the Graziers' Federal Council, regulations had been introduced in May 1 9429 which defined eleven shearing zones in New South Wales, Victoria and Tasmania and set down the period during which shearing was permitted. The regulations applied to flock sheep only; special classes of sheep such as stud rams and ewes, and small flocks of under 1 ,000 sheep were exempt. The intention was, simply, to commence shearing earlier in the north-west and west, and extend the season in the south and on the high country. For example, in the north-west shearing was to be completed by 1 st August; in New England and Monaro in New South Wales operations were delayed until after 28th September, on the Great Dividing Range in southern New South Wales and northern Victoria until 30th November, and in south-eastern Victoria until 28th December. In 1942 the zoning system had worked reasonably well and there had been no real difficulty in completing the season's work according to sohedule. The regulations were applied flexibly: oommittees of advice established in Sydney and Melbourne arranged for exemption when, for example, the proposed shearing date coincided with lambing. But with the deterioration of the manpower position in 1 943 special steps were • Statutory Rules 1942, No. 216, 7

May.

376

R E A S S E S S I N G M A N P OW E R P R I O RI T I E S

necessary t o maintain the existing shearing labour force. A register of shearing workers was created and arrangements were made with the Army and the Allied Works Council to release experienced men when required. Shearing workers normally engaged in protected undertakings were also to be released and then allowed to return. Additional zones were defined and South Australia brought within tihe scheme. Even so considerable difficulty was experienced in obtaining sufficient skilled labour at the peak of the New South Wales season. Most shearing was in fact completed but with a major disruption of the planned sequence. Part of the difficulty was the exemption of flocks of under 1 ,000 sheep. A number of contractors were inclined to break sequence in order to work these small sheds, a practice which delayed the whole programme and caused some stock losses when later sheds were forced to shear ewes heavy with lamb (or even after lambing) . In 1 944, therefore, small flocks were included in the scheme and, with the improved labour supply, no further difficulties were experienced. The comparatively simple techniques of zoning and staggering were inappropriate for use on the sugar cane fields. Although cutting and crushing extended from June to December, there was little elasticity in ,the optimum cutting period and the peak seasonal requirements of most mills roughly coincided. A further complication was that a proportion of the 1 5 ,000 seasonal workers normally employed in the industry were Italians who had been interned since 1 9 4 1 or who had left the growing districts. In part compensation was the high concentration of Army personnel and Allied Works Council employees adjacent to many growing areas. It was therefore possible to replace a proportion of the Italians by a system of special temporary releases. In 1 942 a full complement of workers had been found by this method and the use of a Sugar Workers' Register; but in the following season, despite strenuous efforts of the Deputy Director-General of Manpower in Queensland to keep tabs on sugar workers, there was a marked short-fall in labour supply. In 1 943-44 raw sugar production fell to 524,000 tons compared with 650,000 tons the previous season and a Production Executive target of 600,000 tons. An indifferent season, shortage of nitrate of soda and the withdrawal of mechanical equipment by the Allied Works Council contributed to the decline, but the fall in the quantity-and the quality-of seasonal sugar workers was mainly responsible. As a result of the very poor crop in 1943-44 Production Executive ordered the release of 1 0,000 tons held in emergency stocks, the cessation of sugar exports by ballast back-loading to the United States and a cut in defence orders. The sugar industry was accorded No. 1 priority for all fertilisers. For the 1 944 season War Cabinet ordered the release of 1 ,000 experienced cutters from the Army and/or the Civil Construc­ tional Corps in addition to the young soldiers who had been made available in 1 943. As many as possible were also to be released by the Civil Aliens Corps and from such other high priority work as the con-

RURAL

LABOUR ORGANISATION

377

struction of the Mount Isa railway. Tractors impressed from the industry by the Allied Works Council were as far as possible to be returned, at least temporarily.1 Together with the tight control over civilian cane-cutters by means of the Sugar Workers' Register, these special expedients helped lift production in 1 944-45 to 670,000 tons-sufficient to meet the domestic ration, add to reserve stocks and provide a small amount for export. The experience of sugar in 1 943 reflected not only the general manpower crisis but also the self-defeating nature of the defence over-commitment. For the industry was rescued very largely by a forced reduction in the effective strength of the Army and the Civil Constructional Corps. Other seasonal labour difficulties were created by the substantial expansion of output of vegetables, fruit, rice, cotton, flax and other crops. Labour organisation was necessarily decentralised, and the Man­ power Directorate worked closely with District War Agricultural Com­ mittees and the Department of Commerce and Agriculture. The main centres of this type of seasonal labour demand were in the central west of New South Wales around Orange and Dubbo, the Murrumbidgee Irriga­ tion Area, the Goulburn Valley in Victoria and, to a less extent, the Dawson Valley in Queensland. In the Leeton area in New South Wales, for example, several thousand additional workers were required in the 1 943-44 season to pick fruit, harvest rice, and staff the large dehydration plant. Local labour sources were inadequate despite the call-up for inter­ view of unoccupied women in the area, and it was necessary to resort to volunteers from the Young Soldiers Pool, shearers, university students and senior school pupils. Special buses and trains were arranged, and many younger people were accommodated by billet. In general, the many ad hoc arrangements that were found necessary worked remarkably well and powers of direction were rarely invoked. Some crop losses were sus­ tained, particularly in the intensive fruit-growing districts of the Goulburn Valley where several hundred pickers and processors were required on very short notice depending on seasonal conditions. But those "hidden" reserves of labour and effort were usually equal to the task.2 These especial efforts of workers and administrators would, however, have been much less effective without the capable contributions of the Australian Women's Land Army and Italian prisoners of war. Both groups were engaged in permanent and seasonal rural tasks and helped in small but important ways to moderate the worst effects of the rural manpower crisis. As described in Chapter 8, the Women's Land Army was formed on a modest scale in July 1 9423 and reached a peak of about 4,000 permanent 1 War Cabinet Minute

3553, 23 May 1 944; Agendum 277/1944. further details of seasonal labour administration, see Wurth, Control of Manpower in Australia, Chs. 10-11. 3 The army was established formally by Full Cabinet on 16 Jan 1943 (Agendum 413 ) , but this merely confirmed action taken by the Minister for Labour and National Service. Also Full Cabinet Agendum 374, 19 Oct 1942.

2 For

378

R E A S S E S S I N G M A N P OW E R P R I O RI T I E S

and auxiliary members in the 1 943-44 harvest season. Against competition from industry, the growth of the Army was initially slow, and there was also some opposition or indifference to the use of Land Army members. Some farmers believed that women would not be worth the prescribed rates of pay; some country wives were unenthusiastic for a variety of reasons, including the extra work that might be involved. Accommodation was a further concern. In January 1 943 it was found necessary to strengthen the organisation by laying down in detail (in the form of a charter) minimum rates of pay and other oonditions.4 MemberSihip was confined to those not already engaged in rural work, and the established strength was set at 6,000 members. District rates of pay were to prevail ( as before) with a minimum of 50s per week without keep or 3 0s with keep. Training establishments were also set up in a number of States, with emphasis on animal care and management, vegetable growing, dairy practice and the use of farm implements. In other ways, too, efforts were made during 1 943 to make the Land Army more attractive, including the formation of welfare committees and nhe extension of Australian Comforts Fund facilities to members. Although the number recruited failed to reach expectations, small groups of tbese remarkable women were to be found throughout farming communities tending pigs and poultry, growing vegetables, harvesting flax, picking fruit and in a host of other activities. As well as those permanently employed on farms temporary camps of Women's Land Army Auxiliary members were established at seasonal peak times. For example, seven camps accommodating 240 young women were set up in the Dawson Valley for the harvesting of the cotton crop, while at the height of the 1 943 harvesting season in New South Wales 69 camps were operating (with up to 300 women in a single camp ) .5 In a number of the smaller and labour intensive rural industries, these women played an important part in helping to maintain production; they also assisted those changes which were according women a more varied role in society. As will be discussed later, the Commonwealth's post..war immigration programme had its origins in the defence and economic implications of the manpower crisis of 1943. Coherent thoughts on long-term population policy were still some way off, but tbe genesis of the actual programme was to be found in the importation of about 1 2,000 Italian prisoners of war (mainly from India) in 1 943 and 1 944 for work in ruml industries. Considerations involved in the decision to use prisoners of war for rural work were the availability of suitable prisoners, the usefulness of the men in employment on unfamiliar work, security, and the limitations im­ posed by the Geneva Convention. During 1 942 comparatively few prisoners were available to the Government and in any case the security risk appeared to be too high. But by the end of the year, when the dimensions of the manpower shortage were revealed, an inter-departmental committee was formed to examine the possibilities. In April 1 943 the • Full Cabinet Agendum 418, 16 Jan 1943. Control of Manpower in Australia, p. 209.

• Wurth,

RURAL

LAB OUR ORGANISATION

379

committee reported that selected prisoners might be employed in rural industries in groups of not more than three per farm, and the War Cabinet endorsed a proposal to bring Italian prisoners of war to the country for this purpose subject to the standard safeguards about health, hygiene, security and rates of pay.6 A b asic feature of the scheme was that prisoners were not to be guarded, for if guards were )leeded the manpower advantages would be negated. For this reason there was no serious consideration given to the import of German or Japanese prisoners of war. The Italian prisoner of war immigration programme proved its value before long. Most of the Italians were willing workers, and the Directorate of Prisoners of War found little difficulty in maintaining discipline. There were of course language difficulties; few prisoners were experienced rural workers and for this reason, and because some precautions were needed, they required a high level of supervision. But there was no shortage of demand for their services. In May War Cabinet approved the transfer of up to 10,000 prisoners from India of which 5,000 were to be landed as soon as possible.7 Dairy farmers, fruit and vegetable growers and wheat farmers were particularly anxious to obtain men in this way. Initially camps were established in the comparatively "safe" States of Victoria and South Australia, but by 1 944 prisoners of war were employed throughout the country. Security limitations were even relaxed to a point which allowed large groups of men ranging in number from 50 to 250 on government or large private projects ( so long as only one employer was involved) such as rice-growing, firewood production, and vegetable and vegetable seed production. By the end of 1 943 it was estimated that 1 5,000 to 20,000 prisoners could be absorbed readily. However, following the capitulation of Italy in September 1 943 and her declaration of war against Germany, fewer prisoners were available and transfers were suspended in June 1 944. ( Those already in Australia continued to be employed as prisoners of war for the duration. ) By contrast, the contribution of aliens and internees to the rural labour supply was negligible. Efforts were made, especially in 1 943, to use these groups as productively as possible, but the continuing problems of deliberate and unavoidable inefficiency, sickness, and the disinclination of employers to use the labour that was offered were not solved effectively. In 1 942 those aliens not already performing essential work were drafted into an Aliens Civil Auxiliary Service, an organisation similar to but separated from the Civil Constructional Corps, under the control of the Director-General of Allied Works. The Auxiliary Service was engaged mainly on construction works, oharcoal burning, firewood cutting, and salt harvesting. But the disciplinary powers that applied to the Auxiliary Service were found to he inadequate for this unwilling body of workers, and in May 1 943 powers of control were strengthened and the Service 6 Prisoners were paid at the rate of 1s 3d per day. Employers paid the Directorate of Prisoners

of War £1 per week for each prisoner and provided keep. The Directorate's surplus was used to defray medical, welfare and administrative costs. 7 War Cabinet Minute 2841, 14 May 1943.

3 80

R E A S S E S S I N G M A N P OW E R P R I O R I T I E S

transformed into the Civil Aliens COrpS.8 The Corps performed some useful harvest work, especially in Western Australia, and 400 members were released to help with the 1 943-44 sugar harvest. But the contribution of aliens, and of those internees released conditionally towards the end of the war, remained marginal.

T H E MAN P O W E R R ELEASE T AN G L E Although the special seasonal labour arrangements for rural industries were in the circumstances reasonably effective, they left untouched the more fundamental manpower problems in suoh industries as dairying, pig-raising, vegetable-growing and sugar-cane production. Serious diffi­ culties had also emerged by the end of 1 943 in obtaining labour for food processing and packing, and the supply of materials for making cases. Any improvement in civilian food and other supplies, ,and in the objective of greater international specialisation of war production, depended on the success of the manpower release scheme authorised by War Cabinet on 1 st October 1 943. It will be recalled that under the special release scheme 40,000 men were to be withdrawn from the direct war effort by June 1 944, 20,000 each from the Army and the Munitions bloc. Most of these releases were to be directed to rural production and a special effort was to be made to obtain former dairy farmers from the Army. At the s ame time the principle of manpower rationing by which the intake into the Services was limited to 3 ,000 men and 2,000 women per month was to continue. The War Commitments Committee was to supervise the scheme and report on progress periodically. The first report was to cover the period to the end of December 1 943. This report, prepared as an interim statement in mid-December9 and with complete figures in mid-February,! confirmed the disturbing trend of events in 1 943 : that in important respects War Cabinet had lost control of the direction of the Australian war effort. Despite in October the most explicit review of war policy that had yet been attempted, sections of the administration had chosen either to ignore the directives or to interpret policy in their own fashion. In one ,sense the least serious aspect of the situation was that little progress had been made in securing the 40,000 special releases. More damaging were the undercurrents of distrust and calculated misunderstanding that pervaded relations between the Departments of Munitions and Aircraft Production, the Manpower Directorate , the Defence Committee and through to the War Cabinet. It has not been the practice in these volumes to highlight internal differences between departments, differences which are an inevitable and necessary part of policy formation. By the end of 1 943, however, relations had deteriorated to such an extent, and the consequences were so far-reaching, that the matter needs to be discussed in some detail. 8 Statutory

Rules 1943, No.

108, 3 May. 17 Dec. 1 War Cabinet Agendum 80/1944, 19 Feb. o War Cabinet Agendum 520/1943,

T H E M A N P OW E R R E L E A S E T AN G L E

381

These remarks do not apply to the Army. The release of 20,000 men was no more agreeable to the Army than to Munitions, · but the military authorities swallowed hard and played the game more or less according to the rule book. The arrangement for effecting releases was that specific recommendations were to come from District War Agricultural Commit­ tees to the Manpower Directorate and, if endorsed, were transmitted to the Army for final decision. Of the 1 1 ,704 recommendations submitted by Manpower, 4,004 had been approved by the Army by the end of Decem­ ber 1 943, 4,072 were rejected and the remainder were pending. In addi­ tion, 1 , 1 67 "B" Class men had been discharged for high priority civilian work, in part to oompensate for the slightly above-quota intake of men into the Army for the three months period.2 'J1here had been irritating delays created by the approval procedure, and the Army's rejection rate appeared to be unnecessarily high. In particular, the number of dairy farmers released was disappointingly low and the Manpower Directorate found it difficult to believe that so many dairy farmers had found their way into key positions. (The Directorate probably underestimated the resis­ tance of many farmers to return to the poor conditions and drudgery of the farm. ) But it was generally accepted that the selection procedure was necessary to avoid disruption of military operations, and the number of releases suggested that the target could be reached. However, what had been happening in the Departments of Munitions and Aircraft Production was not at all clear, and the information that was made available only served to confuse the issues. As recounted earlier, War Cabinet had specified in October that the following arrangements would apply to the Munitions releases : ( 1 ) that the releases were to be effected by the bloc itself and not by Manpower; ( 2 ) that "offsets" against the 20,000 were to be allowed if and when War Cabinet authorised new projects; and ( 3 ) that 1 5,000 releases were to be earmarked for food pro­ duction and that all efforts were to be made to release experienced rural workers as a first priority.3 It should be noted, also, that War Cabinet had ordered a further Defence Committee review of projects in the light of altered strategic considerations, but that the full review had not been completed by December. No detailed figures were available for the December meeting of the War Commitments Committee on the progress ( if any) that had been made, although Munitions representatives claimed that 1 7 ,000 men would be released by the due date. But this figure included more than 1 3 ,000 "offsets". Some of these, such as 1 ,200 for production of agricultural machinery, had been authorised, and the use of labour to manufacture such machinery was in practice a diversion to the indirect war effort. The largest · item-7,000 for new American projectg,...h ..., ad not, however, received War Commitments Committee approval. Indeed, these projects had been accepted by Munitions before the orders th ad been endorsed by War Cabinet and even when Cabinet did endorse them it was only on 2 War •

Commitments Committee Minutes, meetings 11, 17 Jan 1944. War Cabinet Minute 3065, 1 Oct 1943.

3 82

REASSESSING MANPOWER P RIORITIES

condition that the manpower release scheme would not b e affected.4 Another 6,300 men were required for new Australian projects (including production of agricultural equipment) , so that new war production activities-mainly servicing of aircraft, ship repairs, production of radio and signal equipment, and manufacture of small craft-would absorb most of the labour made available by the depression of the gun and ammunition programmes. But these figures were not all that they seemed to be. First, the projected "release" of 1 7 ,000 men by June 1 944 proved to be a bogus figure which had been derived by estimating the amount of labour that would be saved as a result of the cuts in financial authorisation for munitions expenditure made by the Defence Committee in mid- 1 943. What was not explained in December, and was revealed only after a Manpower audit of the figures several weeks later, was that the bulk of these financial cuts contained no labour component : the projects concerned had not been commenced, so that the estimated reduction in employment was based on calculations of the amount of labour that would have been employed had all approved projects been allowed to flourish.5 Second, the 1 3,300 "offsets" claimed by the Department of Munitions ( except for those engaged in producing agricultural machinery) represented a negation of the policy of reducing direct war production. Leaving aside 'the tangle of fact and fiction, the central point that emerges from the December debacle is t-l II: tti

Vl

Artillery 25-pound Howitzer 70 24-pound Short 2-pounder AT. 80 6-pounder AT. 40 mm Bofors AA. 40 3.7-inch AA 24 Guns and mortars: Owen sub-machine 2,000 Austen sub-machine 2,000 Rifles, .303-inch 16,000 3-inch mortars 200 Ammunition, . artillery: 500,000 25-pounder H.E. 200,000 40 mm AA. 75,000 3.7-inch AA. Small arms ammunition: 60 m. .303-inch ball 9 mm ball - Owen and Austen 1 5 m. Ammunition - mortar and grenades: 3-inch mortar H.E. 250,000 Grenades No. 36 - hand, rifle 120,000 Mines: Mines AT. 60,000

>-l � c:: Cl Cl t""

45 3 19 78 10 16

9 21 10 31 14 4

20

10

Discontinue Discontinue

20 30 20

10 30 10

Discontinue 10 Discontinue

2,322 1 ,633 12,717 104

1 ,541 1,659 16,420 11

2,000 2,000 16,000 80

1 ,000 2,000 16,000 Nil

500 500 8,000 40

� 0 t::::) c::

295,610 13,424 20,924

273,578 38,408 1 8,907

250,000 160,000 16,000

120,000 100,000 8,000

3(}-50,000 100,000 8,000

0 Z

27.2 m. 7.2 m.

20.5 m. 5.9 m.

40.0 m. 1 3.0 m.

40.0 m. 1 3.0 m.

20.0 m. 1 0.0 m.

141,846 121,244

68,608 7 1 ,178

1 90,000 120,000

100,000 100,000

150,000 120,000

5 1 ,685

48,983

60,000

60,000

15,000

Source: War Cabinet Agenda 169/ 1943 Supplement 1 ; and 439/ 1943 Supplement 1.

tti

'!j

0 � "tl

(') >-l ....

(')

0 Z >-l � 0 t""

w 1.0 -...l

398

MUNITIO N S IN RETREAT

effDrt D n the basis D f each pDrtion D f the Empire undertaking the prDduc­ tiDn best suited to its industrial capacity and geographical IDcatiDn. The DverprDductiDn Df munitiDns Dn an Empire basis was acknDwledged; in an effDrt to' ratiDnalise capacity the CDuncil propDsed, abrasively, that "The heaviest cuts in programme will be taken by the United KingdDm and Canada, whO' can mDst easily adjust their programmes and require maximum relief Dn labDur and materials."2 In other wDrds, Australia was seen as a supply base fDr the United KingdDm in the latter stages Df the Dffensive against Japan. In more detail, Australia wDuld be the Dnly portiDn Df the Empire manufacturing 3 .7-inch guns, and wDuld be the primary supplier of 25-pDunder ammunitiDn. MunitiDns reacted enthusi­ astically3 but the Defence CDmmittee, CDnsciDus Df MacArthur's shadDw, dismissed the plan as a straw in the wind. The cDnclusiDn was that programmes wDuld be related to' Australia's interests (which included SUpPDrt fDr the United States ) , nDt to' thDse Df the United KingdDm.4 CDnfirmatiDn Df the stringent cDntrDI of munitiDns assignment Dutside the SDuth-West Pacific Area Dpened the way fDr yet anDther revisiDn of the programmes. On this occasiDn the Services Equipment CDmmittee, the sub-cDmmittee Df the Defence CDmmittee which was respDnsible fDr the detailed wDrk, was in a better pDsitiDn to' assess the equipment needs fDr the Pacific Dffensive due to' be launched in September. Jungle war­ fare required a switch in emphasis frDm the heavier gun equipment to' small arms-rifles, machine-guns, mDrtars and grenades-and to' mobile anti-aircraft equipment. StDcks Df these were sufficiently high to' permit reductiDns in planned productiDn, but DUtpUt Df SDme ammunitiDn items, such as 3-inch mDrtar, grenades, and 9 mm ball fDr the Owen and Austen, wDuld need to' be increased. Overall, hDwever, this further re­ appraisal Df munitiDns requirements knDwn as the August review was easily the mDst realistic Df 1 943 and marked the first seriDus effDrt by the Services to' curb their demands. The August review fDrmed an integral part of the plan Df 1 st OctDber to' rebalance the war effDrt by the release Df 40,000 men-20,000 from munitiDns-by June 1 944. But implementatiDn was held up pending cDmpletiDn Df a MunitiDns feasibility study. The repDrt, Drdered in July fDr the end Df September, was nDt ready fDr cDnsideratiDn with the Defence CDmmittee's recommendations in mid-OctDber. Details were finalised Dn 30th NDvember Dnly after the interventiDn Df the Prime Minister. There were SDme eXDnerating circumstances : in view Df the decisiDn to' favDur factDries in the cDuntry and in the smaller States, detailed reprDgramming Df ammunitiDn filling was required; attentiDn alsO' had to' be given to the manpDwer and hDUSing situatiDn in each Df the manufacturing areas. But the primary reaSDn fDr the delay Df fDur and 2

Cable, 8 Jun 1943; considered by War Cabinet, 13 Jul 1943. Jensen, Secretary of Munitions, drafted War Cabinet Agendum 268/1943 on the basis of full acceptance of the Eastern Group Supply Council figures, but this was subsequently withdrawn. • From Jensen's private notes on the discussion of War Cabinet Agendum 268/1943, Supple­ ment 1. 3

T H E S T RUGG L E F O R P R O D U C T I O N C O N T R O L

399

a half months was simply lack of interest in manpower saving and rationalisation. To the end of 1 943 the men of Munitions were pre­ occupied with the business of production and anything which interposed was an irritating distraction. Jensen, Secretary of Munitions, writing years after the event, reflected accurately the current mood of the Department when he described a letter from the Prime Minister complaining about surplus production of gun ammunition as an "interruption" to "the conduct of a huge business such as was the Munitions Organisation of 1 943".5 The plan for contraction, when finally approved on 8th December,6 provided for the bulk of the reduction to fall on private contractors. As far as possible work formerly performed by contractors would be taken over by government factories, thus releasing resources for conversion to civilian production. In addition, the policy of assisting the less populated States and country areas was re-endorsed to the extent that the govern­ ment factories which were to be converted to alternative uses were located in Queensland, New South Wales and Victoria. Thus, the ammunition factory at Rocklea, Queensland, was already in process of conversion by the Department of Aircraft Production, for aero-engine reconditioning; Tamworth, New South Wales, had been made available to the Depart­ ment of Commerce and Agriculture for food dehydration; Katoomba and Young, New South Wales, and Stawell, Victoria, were converted for clothing and textile manufacture.7 When these changes were complete the number of munitions factories would fall from a 1 943 peak of 47 to 4 1 . However, the August review would not in the view of the Minister for Munitions permit the release of 20,000 men by June 1 944 as directed by the War Cabinet. The most that could be made available was about 1 7,500, but even this figure was unlikely to be reached because it made no allowance for the diversion from within the Munitions bloc to "abso­ lute priority" work on small marine craft construction, aircraft production, ship repair, and manufacture of radio location equipment. Further, much of the labour employed by Munitions was unsuitable, because of age or physical condition, for active service or arduous employment.8 This forecast was vigorously disputed by the Manpower Directorate, as recounted in the previous chapter, but was at least consistent with the pattern of manpower release by Munitions since April 1 943. Output and employment had reached a peak in that month, but the April review was slow to take effect. Employment fell more rapidly after June although not as quickly as had been expected. As shown in the table, total employment fell between March and November by 1 8,000-1 2,000 men and 6,000 women-but against this the number in aircraft pro­ duction rose by over 6,000, in ship construction and repair by over 5

From Jensen's rough draft of the history of Munitions, pages not numbered. War Cabinet Minute 3204, 8 Dec 1943; Agendum 439/1943, Supplement 1 . 7 A proposed ammunition factory a t Swan Hill, Victoria, was abandoned. 8 War Cabinet Agendum 439/1943, Supplement 1 . 6

400

MUNITIONS I N R E T REAT

500, and employment construction. .

was

also

expanding

in

small

marine

craft

The slow contraction of the first few months was understandable. As Munitions was fond of reminding the Manpower Directorate, there was an inevitable lag in a decision such as this becoming effective. In addition Munitions had to contend with the loss to the Services of a large proportion of its young men and the introduction of more women and older men. There was validity, then, in the argument that during the course of 1943 labour productivity tended to fall, a trend reinforced by the easing of psychological pressure. But there was also substance in the Director-General of Manpower's repeated allegations that pro­ duction of some items had been continued for the sake of retaining labour; that actual labour requirements were exaggerated; and that the decline in efficiency was much less pronounced than Munitions claimed. When the need arose Lewis and Jensen exploited the fact that the April review remained the authorised basis for munitions production until December; when challenged by the Prime Minister or the Director­ General of Manpower, about overproduction or inadequate labour releases, they retorted either that the War Cabinet had yet to approve a variation in target figures or tliat laymen knew nothing of the technical matters involved. Many of the countless disputes of 1 943 arose because of the division of manpower responsibilities between the Directors-General of Manpower and Munitions. Manpower had control of civilian labour allocation and, after the acceptance of manpower rationing in May 1 943, over global allocations for Munitions and the Services. Detailed allocation within Munitions was Lewis's responsibility, a task which became increasingly important as labour for new projects had t o be provided from within the bloc. But difficulties arose in May and June 1 943 when the Manpower Directorate, convinced that insufficient labour was being released by Munitions, attempted to sift and direct munition workers. The issue was complicated by uncertainty about the standing of men employed by contractors and sub-contractors-were they within the province of Munitions or of Manpower? After a series of stiff exchanges, the issue was resolved by drawing a distinction between government factories ( including annexes ) and private contractors. Lewis would control the former and Wurth the latter. But definition of the boundary did not solve the problem or end the disputes. Manpower's tactics were undoubtedly irritating for those preoccupied with the business of production, but on the basic issue its view was correct-in 1 943 as towards the end of 1 942 Munitions was of its own volition and by Cabinet direction attempt­ ing too much.

RESTRUCTURING

P R OD U C TI O N

Associated with the gradual depression o f production o f most o f the standard items of munitions hardware in 1 943 was continued addition to the range of manufacturing activity. Development of the

aircraft

RESTRUCTURING P RODUCTION

401

production programme was the main example, but will be treated separately in the next section. Another large additional responsibility was the manufacture of small craft and landing equipment for the island­ hopping campaigns of 1 944-45. In addition, many other projects, for example automotive spare parts, internal combustion engines, refrigerators and agricultural implements, were initiated or expanded. All too fre­ quently, however, contracts were accepted to maintain production units at a so-called operational level of efficiency in case of emergency. The argument for retention was presented most forcefully when female labour was involved, for women were alleged to have few alternative employ­ ment opportunities. The absorption of labour in new projects was one of the main reasons for the continued munitions over-commitment through 1 943 and early 1 944.

EMPLOYMENT IN MUNITIONS FACTORIES AND ANNEXES, 1 943 Factories Annexes Men Women Total Women Men 31 31 30 30 30

Dec Mar Jun Sep Nov

1 942 1943 1 943 1 943 1 943

32,550 3 3,928 32,2 1 0 30,082 27,598

20,360 22,8 1 2 22,548 20, 175 1 8,862

1 6,266 16,502 1 3 ,885 1 1 ,967 1 0,820

5,196 6,018 5,388 4,785 3,906

74,372 79,260 74,03 1 67,009 6 1 , 1 86

Note : The figures refer to government factories and annexes only, and makes no allowance for the large number employed, full and part-time, by private con­ tractors. Munitions made a rough estimate of employment by contractors based on value of output and pay-roll statistics, and these suggest the orders of magnitude involved: Apr 1 943 Jun 1 943 Sep 1 943 77,000 80,350 68,400 The Gun Ammunition Production Directorate was the first to be affected by the cut-back, and one of the -first to undertake supplementary projects. The directorate was reorganised in March 1 943 in anticipation of the general production review, for an increasing number of Service orders were nearing completion and new ones were being placed on a greatly reduced scale. A new activity from the beginning of 1 943 was the co-ordination of automotive spark plug production, a responsibility previously of the Department of Supply. Production ' was lagging badly and back orders, mainly for the Services, exceeded 1 ,000,000. Munitions succeeded in lifting output from 50,000 to between 60,000 and 70,000 per week and by 1944-45 all Service needs and most civilian require­ ments were being met, including those for tractors and heavy earth­ moving equipment. Small quantities were also exported. The attempt to diversify into more complex automotive parts-gears, voltage regulators, wheels�was less successful because quantity production of standardised components could not be achieved. A much larger new enterprise was the manufacture of bright nuts and bolts for the Services and United States forces. Hitherto nuts and

402

MUNITIONS

IN

RETREAT

bolts had been manufactured b y hand-forging methods, and spares for Australian and American equipment were in short supply. With the depression of the gun ammunition programme equipment for the manu­ facture of fuses was rendered idle, but could be used for the automatic machining of nuts and bolts which left a highly polished or "bright" finish. Initial orders for 2 1 ,000,000 nuts and 1 4,000,000 bolts were sufficient to require nine annexes to support the work of government factories for two years . The orders proved to be excessive, although the project was still an important part of the directorate's activity in 1 945 -mainly to keep the fuse-making machinery in working order. Refrigerators for Service and urgent civilian requirements were trans­ ferred from the Ordnance Production Directorate to Gun Ammunition in August 1 943, again to help use available manufacturing capacity. Service requirements were completed in July 1 944. Thereafter production was continued on the basis of orders placed by the Contracts Board. In all, about 30,000 complete units were manufactured, although this was not sufficient to meet the backlog of demand. The main constraint was the manufacture of fractional horse-power electric motors. Before the war the bulk of these were imported, but in 1940 and 1 94 1 Crompton Parkinson ( Australia) Pty Ltd followed by Emmco Pty Ltd developed Australian manufacturing capability for about one-half of domestic requirements. Shortages of wire, bearings and other materials prevented further import replacement. Diversification in the Ordnance Production Directorate was undertaken under different circumstances. Productive capacity was still heavily com­ mitted throughout 1 943 in the manufacture of weapons; the August review was unlikely to release labour and equipment until well into 1 944. Nevertheless, the erosion of rural manpower had been so extensive and the food outlook was now so serious that urgent measures had to be taken to obtain resources for the manufacture of agricultural machinery. On 1 3th July War Cabinet declared food a "munition of war" and responsibility for the production of agricultural machinery was transferred from the Department of Commerce and Agriculture to the Department of Munitions.9 The task before the directorate was formidable. Mechanisation of Australian farming up to the outbreak of war had been extremely lop­ sided. Large-scale mechanisation had been confined to cereal, hay and sugar growers; over fifty per cent of farmers in these industries used tractors , and the use of modern cultivators and harvesters was extensive . On the other hand, mechanisation of dairy farms, mixed farms, orchards and poultry farms was low; on small vegetable farms-and small farms predominated-it was negligible. Adequate skill and capacity existed for the manufacture of large ploughs, harrows, seed drills and harvesters, but ,there was little knowledge about potato diggers, incubators, brooders, milking machines, spray outfits, onion rakes and the host of light equip• War Cabinet Minute 2972, 13 Iu! 1943; Agendum 226/1943.

403

R E S T R U C T U R I N G P RO D U C T I O N

ment required for the improvement of efficiency on dairy farms, orchards and mixed farms. Production of all types of machinery was required urgently, but more particularly the small implements and machines for non-cereal food production. Special arrangements were necessary to induce manufacturers to under­ take the required new production. Because of uncertainty of demand, the Department of Commerce and Agriculture guaranteed to purchase any unsold stock , thus providing manufacturers insurance against loss. The engineering expertise of the Ordnance Production Directorate was also made freely available. But the programme for 1 943-44 made heavy weather, mainly because of labour shortage. Most established agricultural machinery firms were still deeply involved in the production of weapons and were unable to reconvert quickly. An estimate submitted to the Production Executive in February 1 9 44 indicated that firms were short of 2,000 skilled workers even though agricultural machinery had been given highest priority by the War Cabinet,! Two firms sponsored to make spray pumps were also engaged on the manufacture of internal combustion engines and were unable to spare the labour or equipment. Materials supply was also a problem : for example sheet metal for knapsack sprays, and ball bearings for the rotary dusters. Adding to the labour problem was the inexperience of farmers in using and maintaining their implements. Manufacturing firms traditionally maintained their own extension services, but this became an unusually heavy burden with the introduction of new methods and unfamiliar machinery-particularly when technical experts were diverted to act as agricultural advisers. A suggestion that War Agricultural Committees should assume this function was sensibly rejected, for com­ mittees had no more technical knowledge than farmers.2 For these reasons output in 1 943-44 at £3,900,000 failed to reach the approved target, and the story is similar the following year even though output increased to £4,250,000. 3 Special authorisations for export which were granted to meet urgent needs of the United Kingdom and South Africa further diminished domestic supply; some compensation was received, however, in the form of an increased allocation of Lend­ Lease tractors for 1944 and 1945. The position had certainly improved a little by the end of the war, but the Government's earlier declaration of agricultural machinery as a "munition of war" had by that time a hollow ring. Manufacture of radio and signalling equipment for the Services was by no means a new activity but full development of the programme was not achieved until 1 943. In the early stages there was confusion about whether certain lines of equipment should be made and whether British or American 1

standards

should

be

adopted.

A

solid

core of

Production Executive Agendum 19/1944. Production Executive Agendum 19/1944, Supplement 3 . • Productive Executive Agendum 62/1945. By contrast. the average value of production in the two pre-war years was, in 1 944-45 prices, £7,600,000. 2

404

M UNITIONS I N R ET REAT

technical knowledge was available i n Australia through the three leading manufacturers, Amalgamated Wireless (Australasia) Ltd, Philips Elec­ trical Industries of Australia Pty Ltd, and Standard Telephones and Cables Pty Ltd. These three were capable of adapting to high perform­ ance manufacture in wartime, but the world-wide shortage of such materials as tungsten wire and molybdenum strip and of precision measuring equipment such as cathode ray oscilloscopes and wavemeters, retarded the production programme. The supply position had become more serious after Pearl Harbour and, moreover, overseas manufacturers were reluctant to divulge trade secrets and threaten post-war trade prospects. In September 1 942, for example, the High Commissioner in London reported the results of his attempt to obtain technical details of one process: "Understand tungsten wire technique is closely guarded trade secret. All main English and American manufacturers are financially interested directly or through associates (in a consortium ) which has planned manufacture after the war. Understand proposal of Broken Hill Proprietary Co. Ltd unfavourably received . . . ". Further, the programme had been originally planned with the intention of using Australian trans­ mitters and receivers alongside British equipment in North Africa and substantial design changes had been necessary to fit in with American specifications in 1 94 1 -42. Coupled with the very rapid wartime technical changes in electronics, this additional uncertainty placed the more sophis­ ticated parts of the programme under a cloud. Nevertheless the decision to press ahead with a fully-fledged programme had been taken in mid-1 942 at a time when overseas component supply was at its lowest level and a quest for self-sufficiency appeared to be the only alternative. Local scientists had made progress in making most of the scarce materials, particularly tungsten wire, molybdenum wire and sheet, tantalum wire, fine gauge nickel tubing and a wide variety of special radio valves.4 Organisation of production had been tidied up with the creation in July 1 942 of a separate Directorate of Radio and Signal Supplies under Lieut-Colonel S. O. Jones5 with the object of rationalising the activities of private contractors. Production of radar, radio frequency communication and non-radio-signal equipment was undertaken by the directorate, but production by the directorate was essentially a secondary function. On the basis of the scientific progress that had been made, the plan was to lift total production from an annual rate of £4,000,000 in 1 942 to at least £6,000,000 in 1 943 . At the beginning of 1 943 a very wide range of equipment was in production and on order in three basic groups : first, radar based on British design and developed in Australia during 1 942 by the Postmaster­ General's Department and the Radiophysics Division of the Council for Scientific • •

and

Industrial

Research,

primarily

shore-defence

and

air-

For details, especially on technical matters, covering this and other projects, see Mellor, The Role of Science and Industry. Sir Samuel Jones. Engr Br PMG Dept 1 927-39; comd AIF Signals in UK 1940-41 ; Dir Radio and Signal Supplies 1942-45 ; Tech Mgr Philips Electrical Ind of Aust 1945-50, Tech Dir 1950-6 1 ; Mang Dir Standard Telephones and Cables 1961-69. B. Frankston, Vic, 20 Aug 1905.

R E S T R U C T UR I N G P R O D U C T IO N

405

warning units, microwave detectors, air-to-surface-vessel equipment and searchlight control systems; second, army signalling equipment such as field telephones, switchboards, heliographs, signalling lamps, Fullerphones and microphones; and third, radio receivers and transmitters from small single-man units and walkie-talkie sets to heavy 300 to 500 watt long range transmitters and sophisticated units for aircraft communication. The range required by the Services was already large and continued to grow in 1 943 and 1 944. No sooner had production been proved for one instrument than substantial improvements were required; or, worse, the equipment had become obsolete. Rapid and unpredictable technological change is a familiar electronics problem, but was exaggerated in 1 943 by the different specifications imposed by the three Services, sections within each Service, and by the Americans. This was in part a heritage of the pre-1 942 system where each Service sought its own contractor for its own requirements; any serious subsequent attempt to standardise was stoutly resisted. Thus, in the first half of 1 943 improvement in the supply of valve­ making materials, from local sources and through Lend-Lease, offered some hope that the backlog of orders for radio equipment would be overtaken. At the same time the Directorate of Radio and Signal Supplies was confronted with the new and technically difficult problem of tropic proofing. There was little previous experience of the required technique, and the cost in scientific manpower proved to be heavy. Army speci­ fications were extremely stringent and the equipment was required, as always, in a hurry. Tropic proofing was, of course, essential for the island campaigns, and highly satisfactory methods of protection were devised.6 But all too frequently intolerable burdens ,were imposed on contractors, as described in April 1 944 :

A new type of Army telephone on which development commenced early last year reached the point about the middle of the year when production could commence. Tooling was almost complete and the production lines were planned. However, before production commenced, the Army decided that the telephone should be proofed against tropical conditions and it is only in the last few weeks that the tropically proofed ' prototype has been accepted. 7 Towards the end of 1 944 the Army discovered that thunderstorms in the tropics were more frequent than elsewhere and again specifications were altered. During 1944 the pattern of Army orders shifted to lighter, more power­ ful transmitters and receivers as experience of jungle warfare showed the importance of mobility. Retooling and further investment of scientific manpower were required. Pleas for moderation went unheard and in November 1 944 the Director-General of Munitions was moved to record that:

The policy of demanding authorities is now tending rapidly and inexorably towards the use of lighter weight equipment and equipment incorporating components of 6 Mellor, 7 Report

The Role of Science and Industry, Ch. 24. No. 45 of the Director-Generai of Munitions to War Cabinet, Apr 1944, p. 34.

406

MUNITIONS IN RETREAT

much higher quality than have been available i n the past, and while they have demonstrated their preparedness to give way to some extent where a compromise is essential, nevertheless their Design Directorates and Inspection Divisions are applying intense pressure . . . in every instance where there is any possibility of their policy being advanced.8 Orders by the United States Army Services of Supply added to the pressure; indeed the Australians and Americans entered into a form of re-equipment competition, with the Australians following closely the American quest for higher power, lower weight and, eventually, minia­ turisation. Whereas American reciprocal aid requests for general munitions fell sharply in the second half of 1 944, the demand for radio and signals equipment continued at a high level-reflecting shortage of components in the United States.9 The Radio and Signals Supplies Directorate made slow progress, therefore, in meeting the backlog of orders. Output continued to rise until the end of 1 944 but outstanding orders were still high in March 1 945, as shown by the following figures : !

Mar Sep Mar Sep Mar Sep

1 943 1 943 1944 1 944 1 945 1945

Annual rate of production (£'000 ) 4,932 5,088 5,412 8,443 4,992 3,470

Value of equipment on order (£'000) 6,372 7,01 9 6,525 5,987 5,900 5,570

Number of projects in hand 178 185 185 172 153 136

In 1 9 4 5 the directorate received large orders for radio sets for Service amenity halls, a demand which conflicted directly with the policy of relaxing control over the purchase of receivers for domestic purposes. The prolonged manpower commitment in the Directorate of Radio and Signal Supplies was due in part to the persistent problem of materials supply and the very necessary re-equipment programme of 1 94 3 ; but also to the inordinate demands of the Services for the very latest and best at a late stage of the war. The Manpower Directorate exercised some restraining influence in 1 944-45, but the special circumstances of radio and signals supply in 1 943 effectively shielded the directorate from the manpower axe. The Americans were heavily involved in the rapid growth in 1 943 and 1 944 of small marine craft construction. Soon after the main American force arrived, demands had been received for a wide variety of landing craft, maintenance craft, harbour and coastal patrol vessels, barges, tugs, floating wharves and docks. Some of the requirement was • Report

No. 53 of the Director-General of Munitions to War Cabinet, Dec 1944, pp. 17-18. A breakdown of orders by originating authorities is not available on a continuous basis, but in Sep 1943 outstanding orders were held in the following proportions : R.A.N. 5 per cent, Australian Army 36 per cent, R.A.A.F. 25 per cent, United States forces 26 per cent, others (mainly Eastern Group Supply Council and New Zealand) 8 per cent. 1 From monthly reports of the Director-General of Munitions. •

R E S T R U C T UR I N G P R O D U C T I O N

407

met by requisitioned local craft, but these were of limited value because of lack of standardisation, small average size and lack of power. As preparations for the Pacific offensive gathered momentum, requirements extended in range and increased in amount, for there were few deep­ water harbours in forward areas and the prevalence of reefs restricted the use of large ocean vessels. As recorded in an earlier chapter the construction programme in 1 942 had been entrusted to the Australian Shipbuilding Board.2 It was agreed with the Americans that the Board would arrange for the construction of hulls and undertake final assembly while the Americans would provide marine engines under Lend-Lease ( supplemented as required by Aus­ tralian production ) . The arrangement proved to be abortive from the outset as the Board was in no position to extend further its range of activities. The evacuation from Malaya, Java and Guadalcanal had imposed a heavy strain on shipyards, materials and skilled labour for repair work; the large shipbuilding programme was also taxing. Capacity for construction of small craft was limited and scattered widely along the east coast of the mainland and in Tasmania. The task of co-ordinating these small yards and preparing standard designs made very slow progress. Further, the marine engines promised by the Americans did not arrive for, according to the official explanation, all supplies available in the United States were required for European, African and Mediterranean theatres.3 By October 1 94 3 , when the programme was reorganised and placed under the control of the Director-General of Munitions, only 3 , 6 1 9 craft out of an original order of 8,876 ( 7, 839 for United States forces ) had been delivered. The Directorate of Small Craft Construction, which gathered together the fragments of the programme, was itself a composite creation. The Director, F. T. Merrett,4 had been chief technical assistant to Essington Lewis and had experience in the factory equipment section of the Direc­ torate of Machine Tools and Gauges. As the task of equipping factories was virtually complete, the opportunity was taken to merge this section with Small Craft to form a general purpose organisation.5 Recruitment of experienced engineers was, as always, a difficult task, but Merrett was fortunate in being able to obtain men from the tank programme when the Armoured Fighting Vehicle Directorate was disbanded. Tanks provided, as well, the basic organisation for the Sydney section of Small Craft Construction ; the other main branch was in Melbourne. As with radio and signal equipment, tanks and a range of ordnance, design changes proved to be a continual source of frustration and delay. Design approval was the responsibility of a design panel of the Small 2

War Cabinet Minute 2390, 21 Sep 1942. 3 The United States also agreed to supply propeller shafts, propellers, anchors, chain cables, navigation instruments and other items, but these did not arrive except in "negligible quantities" . • F. T. Merrett. Chief Eng, Aust Iron and Steel Ltd from 1923; Chief Tech Asst to Dir-Gen of Munitions 1940-45; Dir of Small Craft Construction 1943-45; Dep Chnm Secondary Industries Commn 1944. B. Auburn, Vic, 13 Nov 1 890. Died 1 Mar 1950. 5 Late in 1944 the directorate assumed responsibility for production of railway equipment (with the exception of the Garratt locomotive) for the Eastern Group Supply Council.

408

MUNITIONS I N RE TREAT

Marine Craft Sub-Committee o f the Defence Committee,6 but standardisa­ tion of designs for the three Services and the United States proved to be an impossible task. For example, the United States authorities required extensive changes to the 1 20-foot ocean-going lighter. They disliked the twin rudder arrangement and the steering. When a single rudder was sub­ stituted performance was not improved until special fins were fitted underneath the stem. The exhaust was diverted from the funnel through cabins which then became too hot. The 75-foot tug turned out to be a different vessel from the one designed by the Australian Shipbuilding Board because the Americans argued that the original tug was unstable. The 66-foot trawler was similarly redesigned to install fore and aft rather than diagonal planking. Undoubtedly some of the changes were necessary; a few reflected plain errors by the Design Office; but to Australian eyes the changes insisted on by American. inspectors rarely improved perform­ ance and most were a matter of individual preference. Specification changes were by no means the sole province of the Americans. A wrangle between the RAN. and the RAAF. On the one side and the Army on the other over the electrical equipment to be installed in 45-foot and 66-foot vessels illustrated the absurd lengths to which a trivial matter could be pushed, and the cost in time and man­ power. The Australian Shipbuilding Board had been working on uniform design for electrical installations and these had been accepted by the Americans, although not by the Australian Services who requested changes. The matter was allowed to slide because the Americans received first priority in production. In the meantime the R.AN. and R.AAF. had let contracts direct to boatbuilders, so that production proceeded while an attempt was made to establish common electrical specifications. A meeting in June 1 944 failed to resolve the issue. The RAN. and R.AA.F. insisted on 24-volt equipment ( standard for them since before the war ) , while the Army was equally determined to have 32-volt for the Hercules engines fitted to its vessels. The meeting failed to resolve this issue-and another concerned with the choice of a suitable auxiliary power unit-and the two sides went their separate ways. At this distance it is difficult to judge the dispute, but there was clearly no interest in compromise for the sake of economy. A further familiar complication was the intense competition for skilled labour

and

materials

at

the

time

the

construction

programme

was

gathering momentum. Coachwood-ply and maple were in short supply because of aircraft production requirements. Shipwrights, boilermakers and welders were scarce because of the higher priority of ship repair. The registration of carpenters as shipwrights under the Shipwright Trade Dilution Regulations alleviated the position to some degree, but boiler­ makers resisted dilution. In an effort to dodge the skilled labour and job demarcation problem, large orders were placed for certain craft with 6

Established by Defence Committee Minute, 7 May 1943, to co-ordinate the small craft requirements of the three Australian Services, the U.S.A.S.O.S., the Central Cargo Control Committee and the Allied Works Council.

R E S T R U C T U R I N G P RO D U C T I O N

409

large manufacturing companies such as General Motors-Holden's and Ford Motor Company. This resulted in a marked acceleration in output of completed craft, components and spare parts. At the Ford Manufac­ turing Co., Geelong and Brisbane, welding was reduced from a skilled to a practically unskilled trade, and it was found possible to use women for some operations. The only real difficulty was that motor-body builders were paid at lower rates than shipwrights, and to prevent an industrial dispute the Minister for Munitions agreed late in 1 944 to place no further orders with General Motors-Holden's. But orders in hand were more than sufficient to meet wartime needs.7 From the outset the story of marine engine installation was an unhappy one of uncertain supply and production failure. As noted earlier, promised American supplies were not forthcoming in 1 943, and attention turned to Australian sources. Attempts were made to adapt automobile engines, but installation was difficult and performance indifferent. A wide variety of auxiliary power units were manufactured and used on light vessels. The heavy Ruston and Hornsby diesel engine was manufactured by Charles Ruwolt Pty Ltd and the Ordnance factory at Maribyrnong, for the 300-ton wooden cargo vessel, although the first two deliveries were not made until January 1 945 . However, the most significant development was intended to be the manufacture of 500 Gray marine diesel engines . The decision was taken at a time when there appeared to be no hope for deliveries from the United States.s Diesel was preferred to petrol because of the lower fire risk and the contract was awarded to General Motors-Holden's because the parent company controlled production of the Gray in the United States and the Australian firm had produced satis­ factorily the Gypsy Major aircraft engine. The order was placed in July 1 943 ; by the end of June 1945 nearly £300,000 had been spent but there had been no deliveries. Technical difficulties covered the full range -hardening crankshafts, casting the cylinder head and block, liners and pistons, thinning piston rings, etc. Small Craft Construction decided, eventually, to complete 500 incorporating parts from the diesel developed for the tank, but delivery did not take place until after the end of the war. Fortunately American engines arrived in modest quantities in 1 944, but engine supply was so tight that a comprehensive system of pooling was found necessary. The decision to build the Gray was fully justified in view of the vagaries of Lend-Lease and the proven capacity of General Motors-Holden's. But in familiar fashion the project was allowed to drift on well after the real need for it had passed. Particular failure should not disguise, however, the positive achieve­ ment of small craft construction. The achievement was, simply, that the formidable problems of labour and materials were overcome by a com­ bination of persistence and improvisation. New vessels were designed A number of other important annexes were switched to small craft construction in 1944, including Charles Ruwolt Pty Ltd (originally 2S-pounder) , Coote and Jorgensen Pty Ltd (originally drive units for tanks) , Sonnerdale Pty Ltd (originally gears for tanks) , and Slazengers (Aust. ) Pty Ltd (originally for barges and then specifically for small craft) . 8 War Cabinet Minute 2798, 30 Apr 1943. £1 ,000,000 was authorised for the project.

7

410

MUNITIONS IN RE TREAT

and built, ranging from the 1 20-foot ocean-going lighter and the 75-foot steel diesel tug to 60-foot flat top barges, 27-foot powered surf boats and a wide range of assorted dinghys and pontoons. American requirements in the Pacific were supplied mainly by Australia; in terms of number about three-quarters of production was in response to United States orders. By December 1 945, 34, 1 9 1 vessels had been launched, mainly in 1944 and the first half of 1 945. Many of these were of course of simple design and construction, and included 2 1 ,300 steel pontoons. But the manpower cost was high. Rough estimates indicate that male employment rose from about 1 8,000 in March 1 943 to over 20,000 in mid-1 944, and there were still 1 2,000 employed on V-J Day. By 1 944 Small Craft Construction was the most expensive directorate in terms of labour and, with Radio and Signal Supplies and Aircraft Production, a major cause of continued manpower shortage.

A I R C R A F T P R O D UCTI O N An inevitable fact of modem warfare is that the sophisticated weaponry developed for one conflict has usually more military relevance for the next one. This is particularly true of aircraft, and is true also of Australia's attempt to achieve self-sufficiency in aircraft production in the last two and a half years of the war. At the beginning of 1 943 the Government initiated a search for the third generation of military aircraft for construction in Australia. The first generation-the Wirraway, Wackett Trainer and Tiger Moth-had performed invaluable service in training pilots and air crew but had not equipped the R.A.A.F. with a locally-made strike force. The second generation-the Beaufort, Beaufighter and Boomerang-made some progress towards meeting the keenly felt need for Australian-made bombers and fighters in 1 942 and 1 943. But the Beaufort, despite its qualities, lacked the range and carrying capacity required by the R.A.A.F. ; the Beaufighter would not come into production until the end of 1 943 and in any case was a heavy fighter-bomber unsuitable for interception of the Japanese Zero; the Boomerang was already obsolete by 1 943. An aircraft production mission was appointed in December 1 942 under the leadership of Daniel McVey, Secretary of the Department of Aircraft Production,9 to select aircraft of proven overseas design for local manu­ facture and to recommend the most suitable types of low and high altitude fighter aircraft and a long-range heavy bomber. The intention was to increase as far as possible self-sufficiency in the production of high­ performance aircraft and to upgrade the R.A.A.F.'s strike capacity. Both types of aircraft were to be in production in time to contribute to the latter part of the war. After extensive examination of design development in the United States and the United Kingdom, the mission preferred the high altitude • Other members of the mission were Group Captain W. S. Armstrong and Wing Commander J. P. Ryland (both R.A.A.F. ) . L. J. Wackett (Manager. Commonwealth Aircraft Corporation ) . and D . E. Callinan (of the Beaufort Division. Department of Aircraft Production) .

AIRCRAFT P RODUCT ION

41 1

fighter Mustang P-5 1 -D fitted with Rolls Royce Merlin 61 engines to the Spitfire Mark VIII. Although the Spitfire was slightly superior in climb and manoeuvrability, the Mustang had the edge in speed and dive. The decisive factor was, however, that the Mustang was a new ai rcraft capable of extensive design development whereas the Spitfire was near the end of its life in this sense. Of British design manufactured by North American Aviation Incorporated (California ) , the Mustang was regarded as clearly superior to the Zero and the War Cabinet had no hesitation in accepting the mission's recommendation.1 An initial order for 350 aircraft was placed with Commonwealth Aircraft Corporation Pty Ltd to equip one operational training unit and six squadrons by October 1945. Merlin engines were to be imported, however, for the time involved in developing capacity for the production of engines of this class would have added a year or more to the delivery schedule. Any dependence on overseas supply rankled, but Sir Stafford Cripps, Minister of Aircraft Production in the United Kingdom, had assured the mission that Australia would receive high priority in Merlin allocation.2 Before the mission left Australia the Air Board impressed on its members that the greatest need was for a heavy bomber capable of deep seaward reconnaissance which could be produced at an early date. The Beaufort programme had been extended in J anuary 1 943 to a total of 700 mainly to keep manufacturing capacity intact, but production of this number would exceed R.A.A.F. requirements. The mission's two heavy bomber candidates were the Liberator and the Lancaster. With a range in excess of 2,000 miles carrying a heavy load of bombs and capable of further development, the Lancaster was the mission's clear choice. But engine supply was again a problem. The Lancaster manufactured in Britain by A. V. Roe and Company was fitted with Merlin engines of higher capability than the 6 1 Series and local delivery certainly could not be arranged by early 1 945, the required date for completion of the first Australian Lancaster. But the Air Board had set its heart on complete independence from overseas supply, more so than in the case of the Mustang. The mission therefore suggested modification of the Lancaster for the use of Pratt and Whitney 2800 Series engines which were within the manufacturing capacity of Commonwealth Aircraft Corporation at Fishermen's Bend, Victoria.3 Reaching a firm decision on the Lancaster proved to be a protracted process, and involved an important issue of aircraft production policy. Hitherto Australia had devoted its limited capacity to light and medium aircraft. This had enabled economy to be achieved in the use of tools and jigs and also in the use of scientific manpower for the development of 1

War Cabinet Minute 2771, 15 Apr 1943. The mission was unable to recommend a low altitude fighter for Australian construction, for the three possibilities-the Tempest II, Curtis P-60 and C.A.C. CA-15-were in the prototype stage and did not qualify as being of proven design and capability. 3 The 1830 engines were being manufactured at the time by Commonwealth Aircraft Corporation and only a moderate amount of retooling was required for the 2800 Series. Thus, even though Sir Stafford Cripps subsequently offered an adequate supply of Merlin en gines, the decision in mid-1943 was to press ahead with local production of the Pratt and Whitney 2800 Series. 2

412

MUNITIONS IN RETREAT

airframe and engine construction. Location of light aircraft construction in the South-West Pacific with service and repair facilities had helped to achieve a degree of regional specialisation, and had conserved shipping space. But the production of a heavy bomber fell outside these principles. With its enormous requirement in man-hours, Australia could not hope to achieve economies of scale or make full use of the heavy investment in tools and jigs. Further, large aircraft could be flown direct from the United States or the United Kingdom. General MacArthur made good sense, therefore, in opposing the project : My opinion concerning the manufacture in Australia of large aircraft which could readily be flown to the South-West Pacific Area . . . [is] that concentration on the manufacture of small aircraft . . . can make a more timely and valuable contribution towards successful completion of the war than could the manufacture of a much smaller number of larger aircraft which could be procured from the United Kingdom or the United States where they are being manufactured at a tremendous saving in man hours over any possible programme here.4 MacArthur's objection was largely negated by the strong support received for the project from the United Kingdom. The British Ministry of Aircraft Production promised every assistance in creating capacity and even offered a gift of one Lancaster on condition that the project went ahead, for Australia was seen as an important service and repair base for Royal Air Force heavy aircraft in the final stage of the war. Torn between British and American interests, and oversensitive to the extreme advocacy of the Ministers for Air and Aircraft Production about the value of maintaining the full range of productive capacity for post-war purposes, the War Cabinet compromised in a way that side-stepped the basic issue. Instead of a programme for 1 00 Lancasters as originally proposed, the construction of 50 was approved (to be completed by September 1946 ) .5 The programme would merely establish manufacturing capacity. With the decision delayed until November 1 943, the Australian Lancaster could not have any effect on the outcome of the war even on the most pessi­ mistic forecast of its length. As the Prime Minister explained to the Advisory War Council, the post-war future of the aircraft industry was the determining factor.6 But no consideration had been given to the economic possibilities of heavy aircraft production after the war, or whether scarce resources could have been devoted more profitably to specialisation

on

light

aircraft

production.

The

Government

merely

swallowed both the Air Board's mystical notion of "operational auto­ nomy" and the Department of Aircraft Production's insistence that all productive capacity had to be kept intact after the war irrespective of economic or military requirements . The Lancaster decision was followed by acceptance o f a proposal to build Rolls Royce Merlin engines at Lidcombe, New South Wales. Air­ craft Production's argument was in substance identical: 4

•

War Cabinet Agendum 284/1943, Supplement 1, 22 Oct. War Cabinet Minute 3156, 1 1 Nov 1943 . War Council Minute, 11 Nov 1943.

• Advisory

the twin-row

A I R C R A F T P R ODU C T IO N

413

Wasp programme a t Fishermen's Bend and Lidcombe would probably be completed by the end of 1 944, and unless additional orders were placed forthwith skilled staff would be lost to the industry and the great effort in building engine manufacturing capacity and a measure of national self-sufficiency would be dissipated. Further, the Mustang, Lancaster and Mosquito, the basis of production for 1944 onwards, were designed for use with the Merlin. The proposal, as accepted by the War Cabinet in November 1 943, was to convert progressively the Lidcombe factory to Merlin engine production, beginning with spare parts and then to com­ plete engines by the end of 1 945-an optimistic forecast in view of unfamiliarity with the in-line liquid-cooled Merlin as opposed to the air­ cooled radial Wasp. Manufacture of the Wasp was to be concentrated at Fishermen's Bend for remaining requirements and replacement parts. The War Cabinet's support was conditional on the project not interfering with the release of 20,000 men from the Munitions-Aircraft bloc, a condition which subsequently was to prove an embarrassment. 7 Maintenance of the work force and manufacturing capacity of the aircraft industry for post-war purposes remained the dominant theme of policy for the rest of the war. The claims of Aircraft Production were treated far more tenderly than similar submissions by Munitions. Cer­ tainly the industry had the makings of a good case. It was frequently stressed that skilled workers were more difficult to assemble and train than for most types of munitions, and that the time taken to establish capacity was longer. But the argument was presented indiscriminately : the Department of Aircraft Production's extreme nationalism was not re-examined in the light of changing circumstances, and the manpower cost was usually disregarded. Thus the Boomerang programme was extended in September 1 943 merely to retain labour for the Mustang project which was still tooling.s The 50 additional Boomerangs were not needed as was fully accepted at the time and most were added to the stockpile. Similarly, the Beaufighter order was increased by 1 00 in September 1 944 in the expectation that the current programme would be completed before the Department's Beaufort Division was ready for the Lancaster.9 And then in December 1 944 the War Cabinet was persuaded to press ahead with the development of the C.A. 1 5 interceptor fighter.1 In this instance the case was stronger. The prototype of the C.A. 1 5 designed by Commonwealth Aircraft Corporation and the Council for Scientific and Industrial Researoh, Division of Aeronautics, had shown distinct promise and was the type of aircraft that the country could conceivably produce itself or license for overseas production after the war. At the end of 1 944 only 65 men were employed on the project.2 The expansion of production in 1 943 and 1 944 imposed heavy new demands on a large number of specialist annexes and sub-contractors. 7

War Cabinet Cabinet • War Cabinet 1 War Cabinet 8 War

Minute Minute Minute Minute

3 178, 3018, 3793, 3925,

24 Nov 1943; Agendum 459/1943. 6 Sep 1943; Agendum 328/1943. 1 8 Sep 1944; Agendum 187/1944, Supplement 1 . 7 Dec 1944; Agendum 544/1944.

414

M UNITIONS I N R ETREAT

One of the most important was the propeller annexe operated by De Havilland Aircraft Pty Ltd at Alexandria, New South Wales. Built originally to meet the needs of the Wirraway and the Beaufort, the annexe was extended by the addition of a new factory in 1943 to produce the full-feathered type of propeller to Hamilton Standard design. Delay in the delivery of Lend-Lease machine tools retarded production, but in 1 944 output was more than adequate to meet the requirements of new aircraft and replacements. New propellers were also built in 1 944-45 for the Mosquito and Mustang of metal and wood construction; the local experimentation with wood met with limited success, however. Through 1 943 and 1944 the annexe employed about 1 ,000 men and women.

AIRCRAFf PRODUCTION, 1 941-42 to 1 944-45 Total 1939 to 31 Aug Number 1 941-42 1 942-43 1943-44 1944-45 1945 Ordered AIRCRAFT Beaufort Beaufighter Lancaster-Lincoln Lancaster-Tudor Wirraway Wackett Trainer Boomerang Mustang Tiger Moth DH.84 Dragon Mosquito

76

320 1 87 508

285

1 05 66 87

312 3

27 281

700 329

30

60

102

43 4 35

6

82

717 200 250 18 1070 87 1 15

ENGINES 223 74 Twin Row Wasp 343 152 32 85 Single Row Wasp 315 230 460 Gypsy Major Merlin Note : Excludes 2 C.A.C. Bombers and 8 gliders. Source: Departmental history of Aircraft Production.

228

870 680 1 300

700 450 61 12 870 200 250 350 1070 87 370 870 680 1 300 100

Similarly, expansion was necessary at the hydraulic landing gear annexe operated by National Motor Springs Pty Ltd at Alexandria, which used improvised machine tools for most of the war and developed capacity towards the end of 1 942 for the manufacture of retractable landing gear. Shortage of gun turrets and armaments from overseas led to the con­ struction of a gun turret annexe at Fairfield, Victoria. Built initially to arm the Beaufort, production switched in 1 944 to mountings, bomb and torpedo release equipment, selector valves and a wider range of other attachments for the Beaufighter. At the end of the war the annexe had in hand production of Boulton and Paul turrets, undercarriage support beams and hydraulic components for the Lancaster. Airframe components 2

Production of the Wackett C.A . l l bomber, which had shown much less potential, was aban­ doned in Sep 1944.

AIRCRAFT P RODUCTION

415

were pressed by General Motors-Holden's, Woodville, South Australia, and by Richards Industries Ltd, Mile End, South Australia. Instrument manufacture was undertaken by Amalgamated Wireless (Australasia) Ltd, Sydney, while instrument maintenance was largely the responsibility of a special annexe established for the government by Australian National Airways Ltd, Victoria. To complete the picture mention should also be made of the aero-electrics annexe of Technico Ltd, Marrickville, New South Wales, for production of engine accessory equipment such as starters, generators, ignition harness and ignition switches; and the heavy forge annexe established beside the »,orks of the Australian Aluminium Company, Granville, New South Wales, for the production of heavy forgings for propeller blades and hubs, and engine crankcases. Superimposed on the work of aircraft construction was in many ways the more important task of service and repair for the R.A.A.F. and the United States Army Air Force. Before Pearl Harbour a policy had been adopted of using the available facilities of civil aviation companies on a decentralised basis, but with the outbreak of the Pacific war and the arrival of the U.S.A.A.F. in February 1 942 these were inadequate. During 1 942 capacity had been extended rapidly in three categories : by the construction of new hangars for airframe repair; by the establish­ ment of special engine overhaul workshops; and by equipping general machine shops. For security reasons the original intention was to locate repair centres in country areas as well as in the main coastal cities, but this had been abandoned in 1 942 in order to make effective use of scarce tools and skilled labour. Consequently, repair and overhaul capacity was concentrated in Brisbane, Sydney and Melbourne, with support from Adelaide and Perth. The volume of work for the Americans grew so rapidly in 1 943 that special capacity was created. Additions were made to the Lidcombe factory to service Pratt and Whitney engines ; airframe unit and engine overhaul facilities were established at Archerfield, Queensland; special plant and equipment was installed by General Motors-Holden's, Brisbane, for overhaul of the Allison engine; and the munitions factory at Rocklea, Queensland, was converted for general engine overhaul at the end of 1 942, as noted earlier. The Rocklea conversion was the largest under­ taking on behalf of the Americans in the aircraft maintenance field. General Motors-Holden's and Ford combined to transform the small arms ammunition factory in a manner suitable for engine overhaul, and a special test centre was built outside the metropolitan area. The large number of workers moved into the area made necessary the construction of special hostels and canteen facilities, and a bus service was provided by the Maintenance Division of the Department of Aircraft Production. The Americans as usual grossly overstated their requirements. In June 1 943 the U.S.A.A.F. estimated that it would require capacity for the service of 1 ,950 engines per month by early 1 944. The figure was suffi­ ciently divorced from reality for the War Cabinet to reduce it by two-

416

M UNITIONS I N RE T REAT

thirds : planned capacity was t o b e built up steadily t o 7 1 5 engines per month by June 1 944.3 Even this reduced figure, which was not fully attained, proved to be more than adequate. In March 1 945, when the War Cabinet received an overdue report on the total value of service supplied as reciprocal aid to the United States,4 demands received amounted to £ 1 1 ,339,000 of which £4, 1 00,000 had been provided. Most of the difference was cancelled as no longer needed. Nevertheless, the Americans were largely responsible for the very heavy labour commitment in aircraft maintenance. From a figure of 900 at the beginning of 1 942, employment reached a peak of 1 2,080 in May 1 944. With the withdrawal of the Americans from mid- 1 944, employment fell rapidly and was down to 5,245 in February 1 945, most now covering the service of R.A.A.F. aircraft. In total the aircraft industry continued to absorb resources until June 1 944 when it employed more labour than munitions production. Indeed, as Munitions released men those of any quality were snapped up by Aircraft Production. There was only slow contraction of the industry in 1 944-45 ; labour was released by those supplying spare parts, and engaged in production under the Maintenance Division; but the main production sections generally retained the greater part of their labour.

EMPLOYMENT IN AIRCRAFT PRODUCTION AND SERVICE, 1 942-45 As per cent of Munitions-Aircraft Total employment bloc employment June 1942 26,820 June 1 943 34.8 39,564 June 1 944 5 1 .0 44,102 June 1945 3 1,3 1 8 54.3 Note: Excludes employment by sub-contractors. and employment in shipbuilding and small craft construction. In terms of adding to the local source of air power for World War II, the dividends from the third generation programme were modest. Delivery of the first Mustang, planned for the end of 1 944, was delayed until May 1 945 ; by 3 1 st August 1 945 only 1 8 had been delivered out of a total order for 350. No Lancaster had been delivered by the end of the war, although in fairness it should be added ( as noted earlier) that this aircraft was ordered primarily for post-war purposes. Indeed, the Lan­ caster had undergone significant design modifications and the Australian version of the bomber (like the British) was renamed Lincoln. A military transport version had also been developed with the name of Tudor. With the development of the Tudor the Department of Aircraft Production had its mind fixed on the potentialities of post-war civil aviation. In • War Cabinet Agendum 216/ 1943 and Supplement 1 . War Cabinet Agendum 108/1945.

•

AIRCRAFT P RODUCTION

417

March 1 945 an attempt was made t o persuade War Cabinet t o increase the order for the Lincoln from 50 to 1 00 and to place an order for 24 Tudors for delivery during 1947, a submission which drew the reprimand that "proposals should be related t o the planning of the war against Japan".5 In July the War Cabinet accepted a modified proposal to increase the order for Lincolns to 61 and to place an order for 1 2 Tudors so as t o maintain nucleus capacity for post-war defence.6 A simultaneous proposal to build 6 Tudor Mark II for use by Qantas on the Sydney-London service was deferred.7 The first Lincoln was flown in March 1 946. Production of the Mosquito was subject to much more serious delay, and in the end made little contribution to the wartime strength of the R.A.A.F. The Mosquito was a highly versatile long-range day fighter, whioh could be used as a single- or two-seater bomber, fighter, path­ finder, photographic reconaissance machine and as a transport. The order was placed in September 1 942 with De Havilland to follow the Tiger Moth programme which had been terminated. The size of the order was changed frequently, but in March 1 943 the Department of Air advised that it required delivery of 50 by December 1 943, a production rate rising to 35 per month by September 1 944 and a cumulative total of 720 by October 1 945. De Havilland advised at the time that it would have no difficulty in meeting this ambitious schedule. The production story was an unhappy combination of over-optimism, delays in the delivery of Lend-Lease tools and jigs, shortage of materials and skilled labour, unexpected technical difficulties and poor manage­ ment. The airframe was of wooden construction and apparently simple design-the only one of its type built during the war-and this encouraged De Havilland to believe that there would be few technical difficulties,8 an assessment which proved to be wide of the mark. A complete set of machine tools was not assembled until well into 1 943, a consignment of jigs for the main fuselage having been lost at sea at the end of 1 942. Initially the Mosquito had a comparatively low priority and the best labour was directed to other projects, which made necessary a long period of training of semi-skilled workers. Construction of the wooden frame of Australian coachwood-ply of indifferent quality proved to be an exacting and labour intensive task, and the supply of wood­ workers was inadequate. Exceptional difficulty was experienced in the manufacture of wings by General Motors-Holden's at Pagewood, New South Wales ; a large proportion of the first batch was found to be defective. The first Australian-made Mosquito was flown in July 1 943, but extensive modifications were necessary and the first delivery to the R.A.A.F. was not made until March 1 944. But production was restricted in the early months to two or three per month. In August 1 944 De 5

War Cabinet Minute 41 10, 20 Mar 1945.

6 War Cabinet Minute 4301, 11 Jul 1945; Agendum 48 1/1945.

7

8

War Cabinet Minute 4302, 11 Jui 1945. For details see Mellor, The Role 0/ Science and Industry,

pp. 414-19.

418

MUNITIONS IN RETREAT

Havilland lodged a claim for 700 additional workers to step-up produc­ tion, a claim which sprang from inefficiency on the shop floor at Banks­ town rather than from serious labour shortage. Examination by the Department of Aircraft Production yielded the verdict that there was no possibility of De Havilland usefully absorbing additional men ( except for a small number with special qualifications ) , and that what was required was a factory reorganisation to use existing labour effectively.9 Production improved slowly thereafter, but for 1 944-45 averaged a mere seven aircraft per month of which first deliveries continued to be of uncertain airworthiness. Thus, the fighter re-equipment programme based on the Mosquito and Mustang was attained to a limited degree only, before the end of the war. By July 1 945 Air Board's requirements had, fortunately, been scaled down from an original 720 to a firm order for 370,1 of which 1 1 5 had been delivered by the end of August 1 945 (more than half in the months of July and August ) . In short, the lofty notions of self-sufficiency for the R.A.A.F. came to very little, and in 1945 American aircraft were supplied in quantity to meet Australian operational requirements. The most successful part of the production programme continued to be the Beaufort-Beaufighter project. The Beaufort was phased out gradually in 1 944 and the Beau­ fighter phased in without delay, for the specifications of the two aircraft were close and tools, jigs and labour were interchangeable. Full produc­ tion was achieved rapidly after August 1 944 when the Beaufort Division was devoted exclusively to the Beaufighter. By the end of August 1 945 329 Beaufighter aircraft had been delivered out of an order for 450. But the situation was overtaken by the abrupt end to the war: after its initial delays the Mustang project on V-J Day was in full swing; the Mosquito project showed signs that its major difficulties had been over­ come. The Lancaster-Lincoln undertaking, however, rep:1ained a monu­ ment to extravagant ambition and a piecemeal approach to production policy. Even in 1 945 a moment's reflection should have indicated that Australia could not hope to compete in price or quality with the large international civil aircraft manufacturers. Despite the efforts of the Departments of Air and Aircraft Production to retain a substantial industry after the war, and the heavy investment in manpower, the War Cabinet's emphasis in November 1 945 was on the winding up of projects. No more than lip service was paid to the principle of nucleus production. The decisions were :

1 . Lincoln and Tudor. Complete orders for 61 and 12 respectively, but limit production to 3 per month. Production of Merlin engines to coniinue until order for 100 completed. 2. Beaufighter. Terminate on completion of 364 [which meant almost immediately]. 3. Mustang. Continue at the current rate until 250 completed (about April 1946 ) , then one per week. Project t o terminate about October 1 949. 9 1

War Cabinet Agendum 272/1944 and Supplement 1. War Cabinet Minute 2%1, 9 Jul 1943; Agendum 215/1943 and Supplement 1 .

DISMANTLING T H E ARSE NAL

419

4. Mosquito. Reduce order from 370 to 209, production to proceed o n a reduced basis until January 1 947. 5. Wirraway. Terminate on completion of the remaining 35 on order.2 In November 1 946 the Department of Aircraft Production was absorbed by Munitions, separate identity being restricted to the establishment of a Board of Aircraft Factory Administration. At its last meeting in January 1 946 the War Cabinet declared :

It is of paramount importance that any arrangements made with inter-governmental agreement for the participation of overseas interests in Australian aircraft produc­ tion should not restrict in any way the Commonwealth's control of production resources established within Australia nor should any such arrangement be construed directly or indirectly as a commitment which qualified the sovereign control by the Australian Government of its defence and external affairs policies.3 The words were the industry's requiem.

D I S M ANTLING T H E ARSENAL A s we have seen, the adoption i n December 1 943 o f the August review of munitions production did not lead to an early contraction of pro­ grammes. The review was of Australian Service requirements only; no allowance had been made for the rapidly escalating demands of the United States forces. Nor was there any attempt to integrate Australian and American requirements in a way that would have made meaningful the attempt of October 1 943 to rationalise resource allocation. As re­ counted in the previous chapter, the omission, coupled with the willing­ ness of the Department of Munitions to accede to excessive American requisitions, largely negated the attempt to redress the manpower im­ balance. Contributing also was acceptance by War Cabinet of the system of " offsets" against scheduled manpower releases from the Munitions bloc, so that by June 1 944 about 9,000 men had in fact been released against the planned target of 20,000. The confusion over the determination of munitions production policy in 1 943 did, however, lead to the creation of more effective machinery to relate actual Australian Service requirements to production pro­ grammes. Much of the over-expansion and subsequent lethargy towards elimination of the surplus had been due to the failure of the producer and consumer to communicate constructively. The blanket order on Munitions in 1 942 to produce more of everything as rapidly as possible was understandable and indeed justified, but the procrastination of both the Defence Committee and the Department of Munitions in 1 943 was difficult to excuse. Preparation of the comprehensive August review and the Department of Munitions report on the mechanics were merely the first steps in the achievement of adequate control and information. Thus, in November 1 943 the War Cabinet redefined the Defence Committee's responsibility for the determination of the Munitions programme which had the effect of placing the committee in control of Service requirements 2

War Cabinet Minute 4551,

• War Cabinet Minute 4621 ,

13 Nov 1945; Agendum 500/1945. 19 Jan 1946.

420

M UNITIONS IN RETREAT

and the production programme, with alterations in requirements-to be notified at least every six months-translated directly into altered production schedules. Detailed requirements were to be prepared by each Service, but the Defence Committee was to ensure that each statement represented actual requirements and was accompanied by full details of the basis of provisioning. Further, requirements in excess of current programmes were to be shown; orders placed were to be limited strictly to the quantities required at the date of ordering; and orders in excess of requirements were to be cancelled promptly.4 The Defence Committee's power was of course subject to the ultimate authority of the War Cabinet, while the War Commitments Committee was to examine the manpower implications of all revisions. But the new rules provided scope for more effective integration of production and consumption. Standardisation of procedure led to the preparation of regular six­ monthly reviews in February and August until the end of the war, the first of which was for February 1 944. The cost of regularity was that the reviews were necessarily based on obsolete assumptions about the Order of B attle. Thus the first review was based on the Order of B attle as at August 1 943 and no account was taken of the 20,000 men reduction ordered in October. But the benefits outweighed the costs, because the full details of planned requirements, current stock and expected surpluses that were provided on the basis of twelve months forward planning made possible more detailed control of production than had been the case previously. In February 1 944 it was revealed, for example, that very heavy stocks of most ammunition items were held and that stocks would still be high in a year's time. In p articular, many types of cartridges were in gross oversupply. A few estimates of stocks that would be held on 3 1 st January 1 945 were : 5

Cartridges, IS-pounder Cartridges, 2-pounder armour piercing Cartridges, Polsten Cartridges, Small Arms .303 Tracer .303 Ball .450 Grenades

757,000 682,000 6,500,000 1 0,000,000 3,900,000 24,000,000 395,000

In addition, smaller quantities of rifles, Bren gun magazines, optical munitions and small electrical appliances would be held. Additional requirements were mainly in the category of spare parts for weapons, especially for the 3 .7-inch anti-aircraft, the 25-pounder, 2-inch mortar, and the MG Besa 7.92 mm and for small arms. A few ammunition components were required in large additional quantities, especially 40 mm shell, 1 5 5 mm shell and 1 7-pounder cartridges; but the only notable listing for additional artillery equipment was for 209 25-pounder units. With the adoption of the routine procedure for the review of the munitions programme, Munitions ceased to be a subject of detailed •

5

War Cabinet Minute 31 19, 3 Nov 1943. War Cabinet Agendum 34/1943, Supplement 2.

42 1

DISMANTLING T H E ARSE NAL

scrutiny by the War Cabinet. Even the important questions of the disposal of government factories, . maintenance of nucleus production, and the future of industrial decentralisation received scant attention at the highest level. Departmental officials were left to work out details for themselves on an ad hoc basis. The characters of the two departments also changed during 1 944 : the will for survival, such a prominent feature of 1 943 and of the submissions of the Department of Aircraft Production, appears to have lost strength. A number of the prominent entrepreneurs who had been instrumental in the growth of 1 942 had left for greener pastures and had been replaced by professional administrators. L. J. Hartnett, Director of Ordnance Production, spent more time with General Motors­ Holden's as Managing Director, a job he held concurrently with his Munitions appointment; H. V. Mirls,6 Director of Gun Ammunition, resigned at the end of 1 943 to accept a post with Australian Consolidated Industries Ltd ; the Director-General of Munitions and of Aircraft Pro­ duction, Essington Lewis, remained until 1 945 but was not interested in the task of presiding over a diminishing empire and gave more of his energy to Aircraft Production. There were claims, too, that morale was low in factories and workers were preoccupied with finding alternative j obs.

REDUCTION IN MUNITIONS EMPLOYMENT, 1 943-45 Employment Peak: Decrease Iun 1945 month Peak: Employment per Men Women Total cent Men Women Total 1 943 9,543 New South Wales Sep Apr 15,68 1 Victoria May 1 , 1 3 3 Queensland 6,947 Apr South Australia 875 Western Australia Oct Dec. 511 Tasmania Total

Apr-Dec

7,884 17,427 8,846 24,527 2,798 1 ,665 5,086 12,033 1,335 2,2 10 1, 187 676

34,690 25,492

60, 182

4,509 2,372 8,052 2,967 50 9 2,646 1,706 585 737 93 17 16,087

7,656

6,881 1 1,019 59 4,352 1 ,322 1 10

60.5 55.1 97.9 63.8 40.2 90.7

23,743

60.6

Note: Excludes employment by contractors and sub-contractors and small , craft construction. The heavy reduction in Queensland was due to the transfer of the Rocklea small arms factory to the Department of Aircraft Production. Nevertheless, contraction was comparatively slow in 1 944. Production for the Americans continued at a high level during the first half of the year, and then for economic reasons was allowed to continue until semi­ finished components were utilised. An additional complication was the uncertainty about post�war policy. The general assumption was that nucleus capacity should be retained, and that the nucleus should be restricted to government factories. The size of the nucleus depended, however, on the projected level of post-war defence forces, and in 1944 such questions could not be answered. Therefore employment fell in a •

H. V. Mirls. Aust Consolidated Industries 1922-56: Dir Gun Ammunition Dept of Munitions 1941-44; Sales Manager Masonite Corp (Aust) 1955. B. Melbourne 25 Jan 1901.

422

MUNITIONS IN RETREAT

leisurely fashion and capacity i n government factories was kept working at a moderate level even though output was added to the stockpile. The attempt to clarify post-war policy in 1 945 met with limited success. A proposal by the Minister for Munitions in February 1 945 to retain a sub­ stantial post-war munitions industry was deferred,7 and then in May the Defence Committee advised that stocks were so high that post-war defence forces could be supplied for a number of years without any need for new production. Nucleus production was endorsed in principle, but without any clarification of what this might mean in practice.8 The Department of Munitions had in fact been too successful, and there was comparatively little interest by either the Army or the War Cabinet in maintaining a sizeable industry. The emphasis of all discussion was on tapering off production as quickly as was consistent with achieving a smooth transfer from war to civilian employment. The need to provide labour for reconstruction of the civilian economy was now the prime consideration of policy. At the end of the Pacific war Production Executive laid down the following general principles for the cessation of war production, including the activities of government munition factories. War contracts were only to be continued to avoid heavy compensation payments arising out of the operation of "break" clauses, to afford time for the reconversion of industry, to avoid serious unemployment, and to permit the completion of partially finished goods. Only in exceptional circumstances were new orders to be placed, and only when materials and labour were not required elsewhere. Any continuation of war production was limited to two months beyond Service requirements.9 In reaching this firm decision to reduce as far as possible as quickly as possible, the Govern­ ment was concerned not only with the problem of civilian labour supply but also with the effect on post-war employment of the disposal of surplus war materials. In the end-of-war haste to dismantle the arsenal, little attention was paid to the wartime dream of decentralised munitions production after the war. The story of factory and machine tool disposal belongs to post­ war reconstruction and the work of the Secondary Industries Commission and will be considered in Chapter 24. Briefly, the dominant consideration in retention was size and economic efficiency; all the feeder factories were closed as munitions establishments and those that were retained were the two ammunition factories at Footscray, Victoria, and Finsbury, South Australia, the ordnance and explosives complex at Maribyrnong, Victoria, the ordnance factories at Bendigo and Echuca, Victoria, the explosives factories at Mulwala, New South Wales, and Salisbury, South Australia, and the small arms factory at Lithgow, New South Wales. As before the war, munitions productive capacity was concentrated in Victoria with support from New South Wales and South Australia; the small establish7

War Cabinet Minute 4059, 27 Feb 1945; Agendum 8/1945. War Cabinet Minute 4197, 28 May 1945; Agendum 187/1945. • Production Executive Agendum 90/1945. 8

D I S M A N T L I N G T H E AR S E N A L

423

ments in Western Australia, Tasmania and Queensland were either leased or sold to private industry. The Department of Munitions was amalgamated with the Department of Supply and Shipping in April 1 948 to form the Department of Supply and Development.

C HA P T E R 1 6 S U P P LY I N T H E F I N A L P H A S E

A

CKNOWLEDGEMENT in 1 943 of the over-commitment of resources

and the need for greater attention to essential civilian needs affected the Department of Supply and Shipping and its agencies as much as the Department of Munitions. For most of 1 942 complete attention had been given to the procurement of materials for war production; only incidentally were civilian needs taken into account. First moves towards greater attention to civilian requirements were taken at the end of 1 942, as recorded in Chapter 4. In 1 943 tJhe change in emphasis was made more explicit and more formal. This did not mean that there was any lessening of control over essential and strategic materials. Nor did it mean that there was any overall improvement in supply. On the contrary, the formal admission of civilian needs as a legitimate claimant on limited resources involved at the same time tighter overall control and more flexible administration. It also involved deeper penetration by the Department of Supply into the organi­ sation of production in an effort to overcome specific shortages. By the end of the war the Department would be transformed from the Government procurement agency of 1 939 into a loosely articulated mUlti-purpose organisation which embraced commodity production, procurement, alloca­ tion and distribution.1

Non-munitions supply in the final phase of the war was determined by such factors as manpower allocation (including changes in the effective­ ness of labour) , the availability of shipping and of imports, coal produc­ tion, and changes in the scope of Lend-Lease. These variables interacted in unpredictable ways. At the beginning of 1 943, for example, a shortage of copper developed because imports were blocked by shipping restrictions and because of the loss of labour. But by the end of the year when strenuous efforts had been made to bolster the mining work force at Mount Jsa, Queensland, and elsewhere, increased domestic output had become un­ necessary because of improved shipping between Africa and Australia. Examples

of the opposite kind were, however, more commo n.

The

increasingly narrow definition of items eligible for Lend-Lease fell most heavily on civilian goods and on capital equipment which might have been used to augment civilian supply. Essential materials such as rubber, cotton yam, and softwoods were in more limited supply at the end of the war than at any earlier stage. The fall in coal production after 1 942 lowered the efficiency of labour generally, and created in 1 944-45 new shortages of steel and associated goods. In general therefore Australia was to experience the common end-of-war materials supply exhaustion, although her difficulties cannot be compared with those countries which had formed theatres of war. 1

As with Chapter 4, the writing of this chapter has been severely handicapped by wholesale destruction of records.

T H E D I R E C T O R A T E OF S U P P L Y THE D I R E C T O R AT E O F

425

SUPPLY

Further reorganisation of the Department of Supply o n 1 s t July 1 943 was partly continuation of a well established administrative pattern, and partly recognition of the new importance attaohed to civilian requirements. The changes were made at the time 0'f the transfer of the Division of Defence Foodstuffs t0' the Department 0'f Commerce ( see Chapters 8 and 1 8 ) . Foll0'wing the precedent 0'f shipping in October 1 942 (Chapter 9 ) , two new directorates were established which concentrated authority over maj0'r areas of the department's responsibility. Creation of the Directorate of Supply brought together vhe Contract B0'ard and administration of the routine commodity controls. As ex:plained by Beasley, Minister for Supply and Shipping, the new directorate would be "responsible not only for the procurement of war supplies but also for the planning and control of production of both military and civilian requireJ:llents".2 F. A. O'Connor3 became Direct0'r 0'f Supply and retained his position as chairman of the Central Contract Board. The advantage of the new arrangement was that the Director of Supply was in an improved position to allocate available supplies between competing uses, to establish and enforce priorities, and to intervene in production if and when required. The second change was the establishment of the Directorate O'f Clothing and Textiles under G. A. Davis. As its name implied, all the clothing and textiles sections in the department were combined. The directorate was divided into Defence and Civilian Requirements Divisions, although the distinction between the twO' was not in practice so clearly drawn. The remaining supply functions 0'f the department were not brought under these umbrellas usually because special problems were associated with the commodity in question and separate arrangements had been made for its administration. Control and production of strategic minerals remained with the Minerals Production Directorate established at the beginning of 1 942. Coal, a commodity which had only formal connection with the Department of Supply, was handled successively by the Coal Commission and the Coal Commissioner. Petroleum products, flax and fibres were handled by existing organisations.

Contracts Contract arrangements were the heart of the Supply organisation. The financial framework of such arrangements had been laid down before Pearl Harbour and it is necessary in this section to glance back to 1 94 1 and 1 942.4 There were broadly two categories o f contract arrangements : one relating to munitions annexes and the other to private "outside" con­ tractors. In the case of annexes detailed practice varied widely, but as a rule the annexe operator provided the building and the land adjacent to his main undertaking; the Commonwealth supplied the machinery and 2 Digest 0/ Decisions and Announcements, No. 61, p . 4. 3 F. A. O'Connor, CBE. Seety Contact Bd 1936-39; Chmn Contract Bd 1941-46; Dir of Supply 1943-46; Secty Dept Supply and Shipping 1946; Secty Dept of Supply 1953-59. B. Leongatha, Vict, 13 Oct 1 894. med 16 Apr 1972. 'See Butlin, War Economy 1939-1942, pp. 304-11.

426

SUPPLY IN THE FINAL PHASE

other equipment. The Government frequently assisted in other ways too, suoh as providing or arranging short-term credit for the purchase of raw materials. In approved cases long-term capital might also be made avail­ able to assist in the construction of a building. In these cases the Govern­ ment preferred to construct on its own land but this was not always feasible. For his services the annexe operator was usually paid at the rate of four per cent added to the cost of production. Occasionally the company provided its services without charge tQ the Government or accepted a fixed management fee. But the most common remuneration was four per cent on cost. The standard contract with outside firms was also based on "cost-plus" . The expression covered, however, four distinct types o f contract. The simplest and most common was cost plus a .fixed percentage fee. Normally the contractor received a margin of 2t per cent on raw materials and payments to sub-contractors, and 7 t per cent on labour and overhead costs. Alternatively he received 4 per cent on total costs, a method which produced a similar overall rate of profit. A small number of contracts were based on cost plus profit fixed in money terms, and fewer still used the target pricing method. In an effort to encourage cost saving and alter the nature of the profit incentive, target price contracts attempted to estimate costs as accurately as possible after a trial rperiod. With the addition of an agreed margin of profit, a maximum price was established; any saving was shared between the Government and 'contractor on the basis of a sliding-scale formula.5 'J1he last method was cost-plus with maximum price. In this instance the final price was not to exceed the agreed maximum, but any unanticipated reduction in costs which indicated that above normal profit would be earned was to lead to an appropriate reduction in the maximum price. Although this method was regarded by many as the best available arrangement, it was not widely used until late in the war. Well before Pearl Harbour there had been much criticism of the standard cost-pIus-percentage contract. The most common cause for com­ plaint in 1 9 4 1 was that excessive profits were being earned, and that contractors had no incentive to economise. Added to this was the point, of particular importance in 1 942 and 1 943, that contractors were encour­ aged to increase their use of scarce labour and materials. As early as May 1 9 4 1 the Manpower and Resources Survey Committee had recommended the phasing out of cost-pIus-percentage and target price contracts in favour of fixed price contracts, but the report was not considered by the War Cabinet until September 1 942.6 Such delay continued to be the pattern. Other investigations were initiated, covering much the s ame ground as had already been explored; reports were submitted unfavourable to the continuation of cost-pIus-percentage, but consideration of reports 5

Details varied, but the most common practice was that on the first 10 per cent of saving the contractor received 20 per cent and the Government 80 per cent; on savings between 10 and 15 per cent the shares were 33 1/3 and 66 2/3 respectively; on savings in excess of 15 per cent the shares were 50 per cent each. 6 War Cabinet Agendum 215/1941, Supplement 6; War Cabinet Minute 2374, 8 Sep 1942.

T H E D I R E C T O R A T E OF S U P P L Y

427

was delayed pending examination of teohnical detail leading ultimately to a further enquiry. Thus, after about a year's research, the Joint Committee on War Expenditure produced two reports on the contract system, the first in December 1 94 1 on cost-plus in generaF and the second in May 1 942 on annexe contracts.s Apart from the now inevitable criticism of cost-plus-percentage, the committee mentioned the desirability of an additional and more detailed investigation. This was inaccurately por­ trayed as its main recommendation, and in September 1 942 the War Cabinet appointed a Contracts Advisory Panel to go into the matter once again.9 In the meantime the Minister for Home Security had conducted his own investigation, as had also an ad hoc inter-departmental committee. In a confidential supplement to its report on annexe contracts, the all-party Joint Committee on War Expenditure provided a number of specific instances of what it regarded as excessive payments to contractors. The committee was moved to do so because of the claim by E. V. Nixon, Director of Finance in the Department of Munitions, that "excessive" profits had not been made. It cited, for example, the case of a contract for the manufacture of 4.5-inch howitzer shell let to a prominent inter­ national manufacturer of agricultural machinery. Remuneration was based on a fixed fee per unit, and the s etting of a target price. The fee was set at 1 s. 9d. per unit and the target price at £1 2s. 6d. (excluding materials ) . Production in the first half of 1 94 1 was 1 2 1 ,074 shells at a cost of 1 1 s. 1 .59d. per unit (excluding materials) , resulting in a remuneration of £1 0,594 plus a share in the cost saving-£ 1 3 ,763-for a gross profit in the half-year of £24,357, or approximately 1 1 per cent on the cost of materials or a far higher rate of return on capital employed.1 In the view of the committee this instance and other suoh examples contrasted sharply with the practice of some contractors in providing their services free of charge or at a nominal fee; it was also anomalous in view of the fact that the Government had provided most of the plant and machinery and that very little risk was involved. Few wartime contracts were as lucrative as this one, but the example illustrated the central and continuing problem of oontract policy : how to devise standard contract terms which were fair and reasonable to both the Government and contractor under conditions of highly unpredictable and variable costs. For the manufacture of items not previously made in Aus­ tralia, average cost could not be determined with any precision even after a trial period; nor could the rate of fall in average costs be anticipated as output expanded. With the rapid growth in output of standard munitions items in 1 94 1 and 1 942, large cost savings were achieved as in the case of the 4.5-inch howitzer shell. The Government considered, justifiably, that 7

Joint Committee on War Expenditure, Second Progress Report, "Cost-Plus" Contract System - Interim Report, 17 Dec 1941. Parliamentary Paper No. 67. 8 Joint Committee on War Expenditure, Fourth Progress Report, "Cost-Plus Contract System - Annexe Contracts, 7 May 1942. Parliamentary Paper F.3233. • War Cabinet Agendum 215/1941, Supplement 6. The report of the Manpower and Resources Survey Committee was considered at the same time as the two reports of the Joint Committee on War Expenditure. The chairman of the Panel was R. D. Elliott. 1 Memorandum to the Prime Minister, 13 May 1942.

428

S U P P L Y IN T H E F I N A L P HA S E

i t should receive the full benefit of these s avings. The maximum price soheme appeared to be the best adapted to achieve this result, but for the Contract Board and the Department of Munitions the system favoured by the "outside" advisers had one serious deficiency : it was not sufficiently flexible to encourage contractors to undertake the technologically sophis­ ticated new work which was required urgently, because the imposition of a maximum price could result in production at a loss. Thus the Department of Munitions strenuously opposed any general change from cost-plus­ percentage whioh had proved its value in providing the requisite incentive. Some changes were made as a result of the spate of enquiries in 1 94 1 . After a detailed departmental examination, contracts with General Motors­ Holden's and Ford Motor Company for the manufacture of Army motor vehicles were changed to a maximum pricing basis to eliminate the high profits that had been earned. (Manufacture of the more technologically complex Army requirements was no longer, at the end of 1 94 1 , experi­ mental . ) But cost-plus-percentage remained the norm. Any ohange in 1 942 was precluded, additionally, by the Japanese threat. Discussions of the appropriate level of profits and the use of resources in munitions manufacture were swamped by the urgent need to greatly expand the range of production and produce more of everytJhing. Contractors found themselves, therefore, in an even more favourable position than before. Profits were rising, partly because of inflation, partly because of greater output, and partly because cost claims could not be checked adequately. The shortage of cost accountants had already pro­ duced a serious cost-checking backlog in 1 941 ; the backlog became much greater in 1 942. Further, munitions contractors were favoured in the allocation of labour and materials. By contrast, the profits of civilian manufacturers were squeezed by the operation of price control, by ration­ alisation, and by the wivhdrawal of labour and materials. The pronounced shift of relative profitability in favour of munitions manufacturers en­ couraged the swift transfer of resources to the war economy. In 1 942 this was all important. With growth in the scale of production after Pearl Harbour, modifica­ tions were made in the method of financial assistance to the contractors who were not operating annexes. The objective was to remove any financial difficulties which might impede the delivery of goods. These difficulties usually centred on the provision of working capital to finance accumulation of raw material stocks, make progress payments to sub:­ contractors, or meet the wage bill. In many instances all that was required was accelerated processing of progress payments, together with relaxation of the rules governing authorisation of such payments. Further, the Treasury agreed that the Department of Supply might of its own initiative advance up to £5,000. For loans in excess of this amount, Treasury approval was required after investigation and recommendation by Supply and on condition that other sources of finance had been exhausted. The loan could either be provided by the Common�ealth direct or by the

THE DIRECTORAT E O F SUPPLY

429

Commonwealth Bank with a Government guarantee. Beasley, Minister for Supply, objected to the involvement of his department as a financial investigating body, and urged that in the emergency conditions the resources of the private trading banks for overdrafts and financial investi­ gation be used to supplement those of the Government and the Common­ wealth Bank. But Chifiey was having no extension of the Government guarantee to the private banks.2 In principle, this method of financial assistance was merely a development of the practices of 1 940 and 1 94 1 . But the codification of May 1 942 eased the conditions for the supply of working capital and made finance available with greater speed. Few if any contractors were faced subsequently with serious short-term liquidity problems. When the Contracts Advisory Panel commenced work .in February 1 943 it found that there had been a number of changes in contracts practice. In the three main manufacturing States there had been some shift away from cost-plus-percentage. In South Australia the local Board of Area Manage­ ment had been moving progressively towards target pricing, claiming that very good results-and substantial cost saving---'had been achieved. Boards of Area Management in Melbourne and Sydney preferred maximum pricingl although profit percentages were around 7-! per cent in Melbourne and 1 0 per cent in Sydney. Melbourne had also gone further in the control of sub-contractor profit margins, albeit with some difficulty. Contractors had clearly exerted strong pressure on the Board in Sydney, for it was claimed that the higher profit margin was necessary to induce firms to undertake work. In addition it was claimed that there had been strong resistance to fixed price contracts-the method favoured by the panel­ and insufficient cost data to permit the use of this method. While there was some advantage in allowing boards to adapt standard practice to suit local conditions, the panel was not convinced that manu­ facturing conditions in the three areas differed sufficiently to prevent the achievement of reasonable uniformity. Its first report completed in June 1 943 recommended that practice converge on no more than three methods, with a clear priority for fixed prices. The panel argued that at this stage of the war, with most contractors having ample experience of repetitive munitions manufacture, costs should be capable of prediction with tolerable accuracy. Fixed price contracts were favoured because the maximum incentive was given to reduce costs ; the method avoided the irritating profit-sharing procedures inherent in the target price system, and also the extensive amount of cost checking involved in maximum pricing. However, to sugar the pill the panel advocated the inclusion of a simple "rise and fall" clause to cover variations in the price of labour and materials. The panel suggested that target pricing could be used occasion­ ally for routine manufacturing with constant review of actual costs, but that there should be a definite move away from cost-plus-percentage. The 2

The Treasury argument rested on the technical point that the National Security (Guarantee) Regulations only permitted government guarantee of Commonwealth Bank loans.

430

S U P P L Y IN T H E F I N A L P H A S E

panel urged that the method should only b e used in specified circumstances : when there was a need for non-repetitive and exploratory work (for example aero-engine reconditioning and ship repair) , when there was a need to use untrained labour, where there existed a marked lack of com­ petition, or reason to doubt the fairness of quoted prices. In cost-plus work the panel recommended a fixed amount of remuneration wherever possible; otherwise it believed that profit should be based on a 2t per cent margin on materials and 7! per cent on wages (with adjustment depending on the amount of capital supplied by the Government ) . In short, the official scale that had reappeared in "Standard Conditions of Contracts" since 1 94 1 was endorsed. Consideration of the panel's report by the War Cabinet was delayed until November 1 943 while production departments examined the implica­ tions. There was little outright opposition but a measure of passive resistance. What became clear was that departments and the Contract Board would interpret the recommendations in their own way and initiate change when it suited them. The understandable ,reaction was that each authority knew its own business best, and that �here was little advantage to be gained from standardisation for its own sake. The War Cabinet dutifully endorsed most of the panel's recommendations,3 but there is little evidence of any marked change in practice.4 Cost�plus-percentage con­ tracts were almost certainly less common in the last two years of war, but there was no marked shift from maximum pricing to fixed price contracts. In any case the change in official policy came too late to have much impact. With the sharp curtailment of munitions production from early 1 944, the opportunity for revision of contract policy was restricted. Many of the new contracts let in the final eighteen months of war were in such fields as aircraft manufacture, aero-engine reconditioning, small craft manufacture, and radio and signals equipment where there was a stronger case for the use of cost�plus-percentage. As in so many other instances , policy had been overtaken by events. Indirect evidence of the limited change in contract procedure is pro­ vided by the mounting problem of cost checking. Any significant move away from cost-plus and maximum pricing should have reduced the work of costing branohes. In November 1 943 it was estimated by the Treasury that of the 1 8,000 cost investigations current, 1 0,000 were in arrears. By the end of August 1 945 the number of outstanding investigations totalled 1 5,720. Termination of contracts had added to the burden, but the continu­ ing problem reflected the predominance of contracts requiring detailed cost checks. Sporadic attempts were made to reduce the problem. The Contracts Advisory Panel proposed some centralisation of cost investiga­ tion, a proposal actively supported by the Prices Commissioner who saw the Prices Branch as the c�ordinating authority. The Prices Branch was called in from time to time to help settle disputes between contractors and purchasing departments but not as a rule for routine investigations. Given 3

War Cabinet Minute 3171, 24 Nov 1943; Agendum 479/1943. • Details of new contracts let by type were not compiled.

THE DIRECTORAT E

OF

SUPPLY

43 1

the persistent shortages of cost investigators, the burden was somewhat reduced from 1 944 onwards in the only possible way : by reducing the amount of checking actually done. Increasingly the checking of small contracts was waived, and for larger contracts the certificates of firms' own auditors were accepted as sufficient evidence. Even so delays which pre­ vented final settlement of accounts were such that in 1 945 the Treasurer complained that firms were being hindered in reconverting to civilian production because of the amount of working capital locked up. The panel's second report of April 1 944 on this occasion dealing with Government annexes made even less impact than its first report. Most of its recommendations were confined to housekeeping matters. Thus, it drew attention to the fact that in a few instances no formal agreement had been signed with annexe operators after a lapse of two years or more, and urged that all outstanding agreements be completed without delay. 5 It suggested that wherever possible annexes consist of extensions which would be built at the operator's expense and would ultimately be required

by him. If this were not possible, annexes should be built by the Govern­ ment and on government-owned land. The panel disapproved of the prac­ tice of granting the operator an option to buy a government-erected structure. Practice had already moved in this direction, but the main point is that at this stage the recommendations were far too late to have any impact. In its own eyes the most important change proposed by the panel was in the method of remunerating operators. As noted earlier, the pre­ vailing rough and ready practice was to allow as profit an addition of four per cent on production costs. As the panel pointed out, this yielded substantial variations in the profit rate as measured by the amount of operators' own capital used in annexes. Routine and labour intensive procedures, and those using large quantities of expensive materials, were more handsomely rewarded than specialised and capital intensive con­ tracts. The panel noted that since the early war years there had been a trend away from four per cent on costs towards payment of a fixed management fee "determined arbitrarily as a fair payment for the applica­ tion to the work of the annexe of the operator's technical knowledge, organising capacity and experience in the field", and that sometimes payment was based on a combination of management and unit fees. The panel conduded, however, that

the custom of allowing, more or less automatically, 4 per cent on cost continued far too long without review and that, as a result, the amounts paid to various operators do not give comparative equity, and in some cases provide an excessive return to the operator. The panel's objective was to standardise the method of remuneration and reduce slightly the rate of payment. But tlhe desired solution was demon5

In the haste to expand capacity in 1941 and 1942, many annexes had been built on the basis of a verbal undertaking. Subsequent negotiations had been allowed to drag on without reach­ ing finality, partly because it suited the operator not to be tied down and partly because of some laxity by the Directorate of Finance, Department of Munitions. In self-defence the Director of Finance was quick to point out that delay had on occasions allowed the Govern­ ment to secure better terms for itself. In general, however, the claim must be discounted.

432

S U P P L Y IN T H E F I N A L P H A S E

strably impractical. It consisted of a fixed management fee (£500 per annum while the annexe was working) , plus a rate of return of 3 per cent on total capital employed (government land, buildings and plant) for an annexe valued below £ 1 00,000, the rate falling progressively to 2 per cent when total capital reached £ 1 ,000,000 or more. In addition, a depreciation rate of 8 per cent was proposed for operator-owned capital. Despite having an accountant 'among its members, the panel did not appear to appreciate that its formula offered no solution. At the best of times capital is difficult enough to measure even with an acceptable definition. Under war condi­ tions with private and public capital inextricably combined and with an acute shortage of qualified accountants, the task was virtually impossible. And even if �he modifications had been within reaoh, it would have been of doubtful benefit to the war economy and created new inequalities. When a monetary incentive was deemed to be appropriate, the obvious course was to reward production rather than capital ; and when a direct monetary incentive was less important, payment of a fixed management fee was more consistent with the aims of wartime economic policy. The Contract Board had been moving sporadically and incompletely in this direction. At the end of the war there were still glaring inconsistencies, by no means all of them within the capacity of the Government to remove. But modification was at least in the right direction. The general impression of lassitude in the definition of policy and some administrative permissiveness in the application of contracts pro­ cedures should not obscure the fact that the rules were applied more rigidly and consistently from 1 94 3 onwards. While hard evidence is elusive, the records that have survived convey the distinct impression that exploita­ tion of the war economy by contractors was much less common in the years 1 943-45 than in 1940-42. After the turning point of early 1 943 the profitability of defence production was by post-war standards fairly low. A rate of 1 0 or 1 1 per cent on book valuation of capital employed was regarded as excessive; the policy objective of the Victorian and South Australian Boards of Area Management was to keep the rate near to 5 per cent, an objective which appears to have achieved fair success. In New South Wales 1 0 per cent was accepted much more readily. In o�her ways, too, administration was tightened in the latter part of the war. One example will illustrate the nature of the changes that were attempted and the problem of effective enforcement in the context of business representation on Boards of Area Management. Until fairly late in the war there had been very little attempt to control the costs and other conditions of munitions sub-contractors. The principal contractor was allowed to arrange his own sub-contracting and exercise cost control in his own way. The Contract Board was understandably reluctant to inter­ fere except in a general way with the myriad of highly technical sub­ contracting arrangements, and for the most part the laissez-faire attitude was not abused. But it was an obvious source of weakness. In 1 944 the Victorian Board attempted to extend its standard controls to sub-

T H E D IR E C T OR A T E O F S U P P L Y

433

contractors mainly by asking principal contractors to submit their larger outside orders for prior approval. At the same time the board was attempting to switch from cost-plus to maximum or fixed price contracts. On both counts the board met the stiff opposition of one of its members, Charles Ruwolt,6 also head of the large engineering co-ordinating con­ tractor of the same name. In the end Ruwolt refused to accept the super­ vision of his own sub-contracting as laid down by the board believing, unfairly, that his firm had been singled out for special treatment. In so doing he weakened the attempt to control sub-contracting in Victoria. At this late stage Ruwolt's attitude was of little consequence. But the point is that, given the limited competition in many areas of Australian manu­ facturing and the need to use the available business talent in wartime administration, there were clear limitations to the exercise of supervision of commercial practices. Profitability may have been kept within reasonable limits, but the business influence within Munitions ensured that the bureaucrats were kept at bay. The Board of Business Administration, formed in November 1 939 to overview the business and procurement practices of the Defence Depart­ ment,7 continued to perform invaluable service during the Pacific war under the ohairmanship of Sir George Pearce. The effectiveness of the Board was sharply curtailed in 1 942 as considerations of efficiency and cost-effectiveness were overwhelmed by the urgency of full mobilisation, but in 1 943 its old authority was gradually restored. As before Pearl Harbour, the Board busied itself with an infinite variety of commercial arrangements affecting the Services, particularly the leasing of buildings and equipment. Towards the end of the war the emphasis shifted to the scale of Service ordering in relation to stocks held, and in many instances orders were reduced or cancelled in the light of the stock position. In August 1 945, for example, a Department of Air order for mosquito netting to the value of £67,000 was cancelled when the Board pointed out that the Army held surplus stocks. In the final report on its wartime activities the Board estimated that it had saved £6,542,501 since December 1 939,8 a figure which makes no allowance for indirect savings through improved efficiency. When policy on the termination of war contracts emerged towards the end of the war the decisions that were taken reflected a rough balance between reconstruction objectives and financial prudence. Prior to the latter part of 1 944 production departments had terminated contracts in their own way as the need arose and without central oversight. There were no established principles for the payment of compensation. The question of compensation was kept in the background either by •

C. Ruwolt. Managing Director Charles Ruwolt Pty Ltd; mbr Vict Bd Area Managt, Dept of Munitions. B. Mt Gambier, S.A. Died 4 Nov 1946. 7 Butlin, War Economy 1939-1942, pp. 211-13. • "Monthly Report of the Board of Business Administration - August 1945", Commonwealth Records System AS7!, W4!/S299, Part II.

434

S U P P L Y IN T H E F IN A L P H A S E

allowing existing contracts to run their course (even when the item was no longer needed ) or by the placement of new orders with the firm whose existing contract had become redundant. However, the beginning of industrial demobilisation in 1 944 required a more systematic approach. By November the Treasury had won acceptance for standard termination conditions. These involved the insertion of a "break clause" in existing contracts which enabled the Government to cancel agreements on the pay­ ment of "fair and reasonable" compensation. The following rules were laid down to help determine what was a "fair and reasonable" claim. Claims for loss of profit were to be allowed only to the extent that profit could be claimed for work actually performed : no compensation for loss of profit was to be allowed on the unexpired portion of the contract. The only exception was when a firm would be seriously disadvantaged finan­ cially by the non-payment of profit on which it had been counting, the desire being to avoid post-war disemployment. Similarly, no compensation was to be paid on capital losses for such assets as buildings and equipment unless these assets were purchased specifically for Commonwealth con­ tracts . Progress compensation payments were permitted without prior Treasury approval so as to accelerate reconversion to peacetime produc­ tion. In short, industry was to be compensated on a cost-plus basis but not for contract cancellation as such unless industrial reconstruction would be seriously impaired. The same principles were applied at the end of the war when the War Cabinet instructed that all war contracts should be terminated as quickly as was consistent with the maintenance of full employment.9 With the Director of Supply as chairman, an inter-departmental committee on the "termination of war production" was appointed to expedite the determina­ tion of detailed policy. As most firms were anxious to switoh to peacetime production and re-establish themselves in the market, contracting depart­ ments usually found little difficulty in terminating agreements and finalising settlement-a procedure which was aided by the devolution of authority to individual departments, by the practice of aocepting the statements of responsible officers of companies (or their auditors ) about the cost of work in progress, and by the moderate generosity of the Government in paying compensation.! By the end of 1 945 most contracts had been liquidated. The inter-departmental oommittee reported that of the three large contracting departments only Aircraft Production had a large number of oontracts outstanding and that most of these related to the supply of replacement parts.2

Commodity Controls Control of most essential materials had been established by early 1 94 3 ; subsequent changes were limited and normally followed further deteriora• 1

2

War Cabinet Agendum 348/1945; Minute 4351, 17 Aug 1945. As part of the terms for compensation payments, departments were authorised to make progress compensation payments up to 80 per cent of a firm's claim so as to facilitate the flow of funds for reconversion. Full Cabinet Agendum 1056.

T H E D I R E C T O RA T E O F S U P P LY

435

tion in supplies of particular commodities. Rubber was a clear example. Supplies deteriorated rapidly in 1 943 and 1 944 which provoked a drastic reduction in non-military usage and consideration of proposals for the manufacture of synthetic rubber. Controls were also tightened over brushware, leather, jute, sisal and automotive spare parts . But between 1 943 and 1 945 the Directorate of Supply administered most commodity controls as a matter of routine with the qualification that more sympa­ thetic consideration was given whenever possible to meeting minimum civilian needs. With the loss of Malaya and the Netherlands East Indies to the Japanese, consumption of rubber goods had been reduced by one-half in 1 942. As indicated in earlier discussion of the problems of land transport, this was achieved by severe rationing to civilians, encouraging recapping and retreading of motor vehicle tyres and by severely limiting the range of rubber goods manufactured. The Allies' crude rubber stocks continued to fall heavily so that new restrictions were necessary in Australia in August 1943. Distribution of tyres was tightened by integration of controls exercised by the Controller of Rubber, Land Transport and Liquid Fuel, and by active encouragement of the pooling of civilian motor transport. The purohase of tyres for any other than the highest priority civilian need was prohibited; a permit was required for purchase of any other rubber goods.3 Recapping and retreading was restricted to high priority users only.4 By the end of 1 943 the rubber shortage had become a more severe limitation on private motoring than petrol rationing and many more motorists were forced to store their cars for the remainder of the war. ( The illicit trade in petrol coupons was thereby enhanced. ) With the further decline in rubber stocks held by the Allies in 1 944, the Combined Raw Materials Board pressed for rapid conversion from natural to synthetic rubber. This was of more than wartime significance, for it was anticipated that it would be many years before Malaya and the Netherlands East Indies could restore their pre-war capacity. In Australia experimentation in the use of synthetic materials had been undertaken by the Council for Scientific and Industrial Research and the rubber companies in 1 943, and a small pilot plant had been in production since the beginning of 1 944. A technical mission visited the United States in mid-1 944 to gain further information, and on its return set about helping to prepare a plan for the progressive introduction of synthetic materials. In November 1 944 the War Cabinet endorsed a programme of conversion to synthetic rubber using materials imported from North America which was designed to reduce Australian crude rubber consumption by 55 per cent by the end of 1 945.5 But the technology of synthetic rubber produc­ tion was still in its infancy and was more labour intensive than processing of the natural materia1.6 There was therefore considerable delay in 3

Control of Rubber (Distribution of Motor Tyres and Motor Tubes) Order, 2 Aug 1943. Control of Rubber Order (No. 8 ) , 2 Aug 1943. 5 War Cabinet Minute, 21 Nov 1944, on Agendum 531/1944. • See Mellor, The Role of Science and Industry, p. 136. •

" N ever m i n d a b o ut my hat a nd coat-wo u ld y o u please c h e c k these i n ?" Dixon in Smith's Weekly (Sydney ) , 11 Sep 1943.

T H E D IR E C T O RA T E O F S U P P L Y

437

providing the necessary manpower and in installing the new plant and equipment obtained from abroad. By the end of the war conversion to synthetic materials had made some progress, but the main impact of the programme was in relief of the shortage immediately after the war.7 In March 1 944 the extension of control already established over brush­ ware8 was an example of the intensification of restrictions to yield a more rational allocation of scarce materials between civilian and military uses. Previously natural bristles and toothbrush handles were the only materials subject to formal control; substitutes such as nylon and horsehair were controlled only by mutual agreement with the trade. But heavy military demand in 1 943 and the continued shortage of natural bristles ( obtained mainly from China) made necessary control of all bristle materials s o as to secure minimum supplies for civilians. Further, encouragement was given to the production of broom millet in the period 1 943-46 by setting a production target of 1 ,000 tons a year and by an incre as e in price. Because of poor seasons the production target was not reached until 1 946,

but brushware control was able to arrange for the import of substitute materials to meet civilian requirements. A further illustration of the intervention of the Department of Supply to ease civilian shortage is provided by the introduction of utensils control in December 1 943.9 Heavy purohases by the Services in 1 942 and 1 943 had denuded retail supplies, so control was taken over production and distribution of holloware, dairy utensils, cutlery and crockery (plasticware was added later ) . A Controller of Utensils was appointed.1 The control exercised an overview of Service purchases, and managed to arrange manpower and materials for a moderate increase in production. But the main relief came from sponsorship of large imports of cutlery and crockery from Britain in 1 945, and by the end of the war the worst of the utensils shortage was over. Tight control of most other major commodities was necessary until the end of the war and in some instances well beyond. In 1 944 Jute Con­ trol was faced witJh the imposition of quotas by the Combined Raw Materials Board, although the allocation to Australia was sufficient to meet essential needs. From April 1 943 jute prices were stabilised by the payment of import subsidies under the Price Stabilisation Scheme ( see Chapter 1 9 ) . Supplies of jute were at their lowest point in 1 946 and it was necessary to continue the Government buying plan through the early post-war years. Similarly, tight control of such fibres as sisal, manila and coir yam was necessary until 1 947. Control of canvasware was introduced in December 1 9432 for the same reason and at the same time as utensils control : a substantial increase in productive capacity was necessary to 7

The last of the rubber control orders was removed in Dec 1946, rather earlier than had been anticipated. Control of Brushware (Consolidating) Order, 17 Mar 1 944, following Production Executive Decision 402, 23 Nov 1 943. • Utensils (Miscellaneous) Order, 7 Dec 1943. 1 N . K. B. Keysor, Managing Director of Metters Pty Ltd, a large manufacturer of metal utensils. 2 Control of Canvasware Order, 7 Dec 1 943. 8

438

SUP P L Y IN T H E F I N A L P H A S E

meet the heavy Service demand for tents, webbing, kit bags , haversacks, etc. Under the direction of the Controller of Canvasware,3 capacity was expanded considerably by making use of sewing machines and female labour which had been employed previously in the production of rubber goods, toys, sporting equipment and leatherware. Demand by the Services for canvasware had proved considerably greater than might have been expected because the product deteriorated much more rapidly in the tropics. Other controls such as those over leathergoods, tinplate and auto­ motive spare parts remained substantially unchanged for the remainder of the war.

CLOTHIN G AND TEXTILES Formation of the Directorate of Clothing and Textiles o n 1 st July 1 943 was of significance on several counts. As noted earlier, all the cloth­ ing functions of the Department of Supply were brought within the overview of a single Director, G. A. Davis; the department now accepted explicitly responsibility for production to meet both military and civilian requirements ; there was to be a new emphasis on 'Overcoming civilian shortages and accordingly more active intervention in production; the number of departments and agencies interested in aspects of clothing was reduced with consequently improved prospects for co�ordination. With the demise of the Australian Clothing Council, shortly after the establishment of the Directorate of Clothing and Textiles, inter�epartmental collabora­ tion was maintained through the Prices Stabilisation-Clothing and Tex­ tiles Committee and Clothing Trades Manpower Advisory Committees. The Department of War Organisation of Industry progressively reduced its involvement with clothing; the remaining styling orders were trans� ferred to the Department of Supply at the end of 1 944. The directorate faced a very difficult supply position. Military demand, while lower than the peak of 1 942, was still insistent. In 1 943 as a whole the Services and the Americans absorbed about sixty per cent of worsted, blanket and rug production and a higher share of cotton production. While all sectors of the industry had expanded rapidly in the first four years of war, total output was on the point of decline in mid-1 94 3 . There were several reasons for the turnround but the overstrain of manpower was the most important. The industry relied heavily on women, and on rates of wages about one-half those of men. In the overfull employment of 1 943 and 1 944, clothing and textiles lost labour to better paid and often more congenial work. Further, clothing and textiles shared in the general post­ crisis decline in productive efficiency, and there was a marked decline in the length of the working week despite an official attempt to restore the 96-hour fortnight of 1 942. Finally, there was a chronic shortage of imported materials, notably cotton yarn and cloth. By 1 944 cotton had become so scarce that factories were forced to work well below capacity or switch to the production of woollens or worsteds. Decentralisation was seen as one solution to the shortage of female 3 Ivor Evans, Managing Director of Evans Evans Pty Ltd, of Melbourne, was appointed.

CL OTHING AND T E X T I L E S

439

labour. Following the precedent of munitions pmduction, clothing fac­ tories were established in the larger country towns, mainly in New South Wales and Victoria, to make use of remaining groups of underemployed women and girls. The Department of Supply estimated that in June 1 943 there were some 1 0,000 sewing machines idle because of labour shortages. It was a comparatively simple matter to relocate these machines in the country, and in the course of 1 943 factories were established in Wollon­ gong, Goulburn, Junee, Cootamundra, Newcastle and Moss Vale (New South Wales ) , and in Benalla, Sale, Ararat, Eaglehawk and Ballarat (Victoria) .4 All these factories were established by private enterprise but with the assistance of Supply; most became branch factories to the main concern in Sydney or Melbourne. Country factories normally were set up for the civilian made-up clo�hing trade. Manufacture of military clothing and textiles remained in metropolitan or established regional centres such as Geelong (Victoria) . Decentralisation did help to ease the labour supply bottleneck in 1 943 and the early part of 1 944. But the dearth of cotton materials restricted the value of branch factories thereafter ; in 1 945 most were under sentence because of the resumption of imports from Britain. The cotton supply problem was of two kinds. First and most obviously, there had been a drastic cut in imports of raw cotton, yarn, cloth and piece goods. Imports from Britain were unreliable and down to a trickle. The enforced switch to India as major source of supply did nothing to improve reliability and caused a sharp reduction in the quality of imports. The United States supplied raw cotton through Lend-Lease, and occasionally

quantities of specialised fabric for military purposes ( for example rot­ proofed cotton duck for the tropics ) . But as Lend-Lease was increasingly related to specific military needs in 1 943 was available for diversion to civilian civilian cotton-goods consumption was pre-war level. Second, there was a sharp reduction

and 1 944, little American cotton production. In 1 943 and 1 944 down to about one-third of its in quality. Australian mills did

not weave fine fabric and before the war material of this quality was obtained from abroad. With the wartime shift from the United Kingdom to India as the major overseas source of supply of piece-goods, high quality goods virtually disappeared from the market. Non-standard items were also scarce, and there were constant complaints about the shortage

of baby wear and children's wear. Elastic materials for use in association

with cottons were almost unprocurable. ( One result was a reduction in supplies of women's corsets, foundation garments, and swim wear. ) In short, civilians had to make do with a limited range of poor quality cotton clothing until the end of the war. More imports were available from the United Kingdom in 1 945, but the Control of Cotton Materials Order was not revoked until 28th May 1 946. By contrast there was no overall shortage of woven woollen and worsted materials for either military or civilian requirements. Mill capacity was • This is not intended to be an exhaustive list.

440

SUPPLY IN THE FINAL PHASE

able t o meet a high proportion of requirements before the war, and wool in all grades was in adequate supply. In October 1 943 it was estimated that production of woollen and worsted materials for civilian requirements was at an annual rate of 3 5,000,000 square yards compared with the Rationing Commission's need for 26,000,000 square yards a year and pre-'war con­ sumption of about 3 1 ,000,000 square yards a year.5 Some ohildren's items were in short supply, but the overall position was good, stocks of standard items suoh as work shirts, trousers, pyjamas and underwear were accumu­ lating, and exports of blankets to the Eastern Group Supply Council were being made.

CLOTHING AND TEXTILES 1 938-39 Cotton Spinning and Weaving: 33 Factories Employment 3,589 979 Output (£'000 current) Woollens and Tweed: Factories 90 Employment 1 9,608 4,79 1 Output ( £'000 current) Hosiery and Knitteds : 313 Factories 18,159 Employment 3,809 Output (£'000 current) Tailoring and Clothing : 1,177 Factories 26,499 Employment 4,8 12 Output ( £'000 current) Source: Commonwealth Year Book, No.

1942-43

1943-44

1944-45

1 945-46

69 7,868 2,548

70 7,908 3,412

74 7,667 3,362

78 7,253 3,227

1 18 26,436 10,075

1 16 24,858 9.3 19

122 23,095 8,861

1 14 2 1 ,536 8,951

326 1 5,654 5,332

341 16,017 5,730

363 16,69 1 5,727

376 17,091 5,865

1,101 26,043 6,557 37.

1 , 160 25,872 7,248

1,268 28,108 8,067

1 ,420 3 0,047 8,88 1

Adequacy of supply prompted pressure from the clothing trade for relaxation of controls in the form of an increase in the range of styles and an improvement in quality. A standard complaint was that mills were restricted to the production of single-,weft cloth because the manufacturing process was less labour intensive than for double-weft cloth. Production Executive was invited to relax this restriction in October 1 943 but the matter was deferred because of the manpower implications. But in July 1 944 approval was given for the use of one-sixth of mill capacity for the production of double-weft cloth, and in March 1 945 the proportion was increased to one-quarter. All restrictions were removed in October 1 945 in line with the general relaxation of controls on clothing manufactures. The removal of these controls did not lead, however, to early multiplica­ tion of styles ,and increase in the range of qualities. As noted by the Controller of Woollen Materials6 in August 1 945, there had been little 5 Production

6

R. J.

Executive Agendum 17/1942, Supplement 2, 28 Oct

Vicars.

1943.

441

C L O T H I N G A N D T E X TI L E S

need for the exercise of controls since 1 943.7 Manufacturers were severely constrained in the range and quality of their output by manpower shortage, and adhered to labour-saving practices of ,their own volition. In the final phase of the war, therefore, the Manpower Directorate ,and the Prices Branch exercised more influence than the Department of Supply over woollens 'and worsteds and other branches of the trade. The Knitted Wear Order of May 1 942 had been designed to encourage mass production of permitted styles. Manufacture of fancy knitted fabrics and elaborately patterned garments in limited quantities was highly labour intensive, so substantial manpower economies were expected from stan­ dardisation. In some categories operation of the control resulted in a reduction of ninety per cent in the number of styles produced. Thus, in the case of knitted outerwear there were prohibitions on jacquard pattern, stripes and colours; only four fabrics could be used in the making of cardigans and pullovers; pockets were not permitted on pullovers; cardi­ gans were not made for boys and girls with chest measurements up to thirty inches. In the case of underwear, there were prohibitions on the use of motifs, embroidery and tucking. In describing the regulation of brassiere production, one official who must remain nameless declared solemnly : There is a restriction on the manufacture of vests and slips with a brassiere top (other than slips having an opera top) . Brassiere tops were a feature of the higher grade rayon garment. They are better fitting, but are not considered necessary.

There were controls on the size of bloomers, the number of buttons and suspenders per garment, and on the use of elastic materials. These controls did save large amounts of labour. As indicated in the table, output was appreciably higher in 1 943-44 than before the war even after allowing for price changes and despite a twelve per cent reduction in employment. But they did cause much irritation. As in the case of woollens and worsteds from 1 943 on, output of knitted goods was sufficient to meet the civilian ration and defence needs. In addition large quantities of standard goods were supplied to the Ameri­ cans and the Eastern Group Supply Council, including 1 3,500,000 pairs of socks for India. There were of course shortages of some items, and quality was lower than before the war. One item in very short supply in 1 943 was infants' shawls, in part because of an unexpected rise in the birth rate.8 Underwear in large sizes was also scarce; overall, however, supplies were sufficiently good and manpower control sufficiently rigorous for comparatively early relaxation of the control. In September 1 944 the range of permitted sizes and styles was increased. There was further relaxation in July 1 945, and effective abandonment of control in October.s Throughout 1 945, however, manufacturers took little notice of the letter of the law and revocation of control had become ,a formality. 7 Memorandum by Controller of Woollens to Director of Supply, 7 Aug 8 Production Executive Agendum 77/1943,

22 Jun. • Control of Knitted Goods Order, No. 3, 2 Oct 1945.

1945.

H E 'S T E L L I N G S A N T A C L A U S . Hallett in Smith's Weekly (Sydney) , 2 Dec 1944

COAL

443

COAL Even before the outbreak of the Pacific war the coal-mining industry had received more attention from the Government than most other indus­ tries. A prolonged strike of miners in 1 940 had reduced stocks of coal to a dangerously low level ; the productive capacity of the mines and the attitude of the men were not such as to allow stocks to be rebuilt to a level which would provide insUl'ance against an enemy attack. In February 1 94 1 a Commonwealth Coal Board had been established for the purpose of rationalising distribution, especially the use of coastal shipping. But distri­ bution was only part of the problem : in August 1 94 1 a Coal Commis­ sioner, N. R. Mighell, had been appointed; in February 1 942 the single Commissioner had been replaced by the Commonwealth Coal Commission headed by Mighell with extensive power to control "the production, treat­ ment, handling, supply, distribution, storage, marketing and use of coal". Meanwhile, special arbitration and conciliation machinery had been estab­ lished under Judge E. A. Drake-Brockman in an effort to improve industrial relations. This took the form of a Central Reference Board supported by Local Reference Boards . Thus, the machinery for central control of the industry had been established before the end of 1 94 1 ; in most other industries this was attempted only after the fall of Singapore.! War with Japan placed the industry in an even more vital p osition than it had been before. The expanded munitions programme depended ultimately on coal. So, too, did the railways, coastal shipping and many other essential services. War in the Pacific made vital the accumulation of adequate stocks of coal at strategic points throughout the country. No government whatever its source of political power could tolerate, in these circumstances, any avoidable interruption to the working of the mines. In short, a dramatic improvement in industrial discipline was expected ; as part of the price the Government was willing to accept improvements in rates of pay and working conditions to a degree which would have been resisted if sought in other industries. Thus, in 1 942, policy represented material concessions in exchange for effeotive s urrender of the right to strike. Measured by the number of working days lost as a result of strikes, there was a substantial improvement in industrial discipline in the industry

in 1 942. The 'amount of lost production was lower than at any time since the middle nineteen thirties; the average number of days worked per man per year increased markedly; total coal output was a record; stocks were rebuilt by the end of the year to a moderately safe level of about seven weeks' consumption. From the point of view of 'war production these were the important facts, the details of ,which are elaborated in the accompanying tables. But there was an important qualification to this appearance of industrial tranquility. The number of separate industrial disputes in coal-mining rose from 362 in 1 93 9 to 395 in 1 94 1 , ,and then to 447 in 1 942. A great 1 See Butlin,

War Economy 1939-1942,

PP . 408-25.

444

SUPPLY IN T H E FINAL PHASE

majority of the disputes i n 1 942 were very short : o n average the men involved were on strike for 1 .6 days compared with an average of 8 .2 days in 1 940. Many of the disputes lasted less than a day 'and caused little loss of output. At any other time the Government would have discounted the rise in the number of stoppages and emphasised the rise in output and productivity. But in 1 942 the large number of separate stoppages received a disproportionate amount of publicity; a popular view was that these strikes were intended to sabotage the war effort. It is this which explains the apparent anomaly of a Labour government introducing and using penal provisions against coal miners 'at a time of unusual industrial quiescence.

BLACK COAL PRODUCTION, STOCKS AND EMPLOYMENT Output per Production man-year EmployStocks Other States (tons ) ('000 tons) ment ('000 tons) Total N.S.W. 1939 1942 1 943 1 944 1 945 1946 Source :

1 1 ,196 12,206 1 1 ,474 1 1 ,043 10,176 1 1 ,186

2,339 2,744 2,690 2,694 2,6 17 2,700

1 3,535 14,950 14,164 1 3 ,737 1 2,793 13,886

n.a. 2,064 1,308 921 602 706

Second A nnual Report of the Joint Coal Board,

21,125 2 1 ,774 22,068 22,194 22,233 22,335 1 950.

640.7 686.6 64 1.8 619.0 575.4 62 1.7

In January 1 942 the first tentative step was taken. January was usually

a bad mon�h for stoppages and absenteeism. In 1 942 the men sought accelerated introduction of an 'already agreed miners' pension scheme. The coal control regulations were promptly amended2 to allow the Miners' Federation or any other employee organisation to expel from membership any member who refused a union direction to return to work. The obvious

intention was to strengthen Miners' Federation control of its members, but formally the Federation already had extensive disciplinary power and the force of legal sanction was unlikely to alter the widespread defiance of union direction by the militants. The same amending regulations pro­ hibited colliery owners from closing mines without the permission of the Coal Commissioner. More significant were the "disciplinary regulations" of April 1 942 whioh empowered the Commission, which by now had replaced the Commis­ sioner, to deal with any persons who failed or refused to work without reasonable cause by directing that they be called up for military or labour service.3 This step was not taken in response to 'any specific industrial flare-up. Stoppages continued but they were at a low point in March and April. Rather, the regulations were more in the nature of a reaction to the uninterrupted southward march of the Japanese. In these grim weeks there was need for absolute discipline to be enforced by the most stringent penalty. 2 Statutory Rules •

1942, No. 10. 9 Jan.

Statutory Rules 1942. No. 168. 14 Apr.

445

COAL

These regulations were intended to act as a deterrent, and to be used only as a last resort. But they did not offer 'any solution to underlying problems, and a Labour government was unlikely to be able or willing to use them except under emergency conditions. Thus in May 1 942 at a time of some increase in the number of stoppages, there was a distinct shift away from the emphasis on penal sanctions. At the end of that month the Prime Minister called a conference in Canberra of representatives of colliery proprietors and mining unions for the purpose of achieving agree­ ment as to how best to obtain full and continuous production. Under Curtin's skilful ohairmanship the outcome was substantial agreement by both sides on 'a set of rules and procedures ( the "Canberra Code" ) for preventing and settling disputes. The "Canberra Code" has been described as the first voluntary agreement between unions and management for the avoidance of industrial disputes in the history of the industry.4 The agreed procedure was simple. At each colliery a committee was to be formed comprising three management and two union delegates for the purpose of discussing any industrial matter. Decisions of the committee were not to be binding, but if the matter in dispute could not be settled by the com­ mittee it was to be referred to higher union and management authorities and from there, if still unresolved, to the appropriate Reference Board.

BLACK COAL MINING : INDICATORS OF INDUSTRIAL RELATIONS Output lost because of strikes Industrial Working in N.S.W. Disputes ('000 tons) No. days lost 291,067 1939 1,275 362 447 745 177,565 1942 326,23 1 550 1943 1,040 1,335 389,582 1944 660 61 1,3 1 2 693 1 945 1 ,875 684 350,366 1 946 893 Note: The estimates of output lost because of strikes in New South Wales are those of the Joint Coal Board. They differ substantually from those made by C. G. W. Davidson in his "Report on the Coal-Mining Industry", Vol. 1, Parlia­ mentary Paper No. 5 1 , March 1 946. The Davidson estimates are too high but the Joint Coal Board figures should be interpreted with caution. Source: Labour Reports and unpublished papers of the Joint Coal Board. The decision of that board was to be binding, and no stoppage of work was to take place until this procedure had been exhausted. Most of the emphasis was on conciliation and on on-the-spot settlement of disputes ; arbitration was intended to be a last resort. The code was a sensible and flexible arrangement that might have been effective in its purpose if organisational deficiencies had been a major oause of poor industrial relations in the industry. But the causes of conflict were more deep-seated. • C.

G. W. Davidson, "Report on Mar 1946, para. 46.

the Coal-Mining

Industry",

Parliamentary Paper No.

51,

446

SUP P L Y IN T H E FINAL PHASE

The object o f the "Canberra Code" was to reduce the incidence of stoppages so as to allow production to exceed 1 5,000,000 tons per year for the remainder of the war. For a time it appeared as though this target would be reached. The "disciplinary regulations" were tightened in July by making it an offence for any mine worker to "counsel, procure, urge, incite or encourage" any other miner to stop work, although it was made a legitimate defence in any prosecution that the executive of a union had authorised these activities.5 A number of prosecutions were launched in the Maitland and Newcastle areas, and for the remainder of 1 942 stop­ pages were at a low level. But in 1 943 there was a steady rise in the number of stoppages, and in the amount of time lost because of strikes and absenteeism . Total output and output per man fell, although at first these reductions were not of major proportions. By the winter months coal production had become a major political issue and was to remain so for the remainder of the war and beyond.6 The industry became the subject of endless inquiries, confer­ ences, parliamentary debates, press and other propaganda and, inevitably, national security regulations. While it was widely acknowledged that the industry's problems were complex and unlikely to be resolved by S'hort­ run expedients, the issues were normally presented in simplistic terms. Those of anti-labour persuasion described the miners and their leaders as undisciplined, irresponsible, capricious and either Communist or subject to Communist influence ; the miners, for their part, charged colliery­ owners with being the worst type of capitalist exploiters and inclined to Fascism. Miners sought nationalisation of the industry. In the growing controversy all attention was focused on the inadequacies of production. Even the Government gave exclusive attention to produc­ tion problems in one form or another. This has obscured the fact that the "coal crisis" of mid-1 943 was the product of rapid growth in demand as well as of a fall in supply. In the year to mid-1 943 the demand for black coal had increased by about 1 ,000,000 tons or fifteen per cent to about 1 5 ,500,000 tons. This growth had been due largely to the impact on the railways of the build-up of troop movements, and to the expansion of munitions production. On the unreal assumptions of the complete absence of industrial stoppages of all types 'and elimination of all avoidable absenteeism, total production could have reaohed 1 6,000,000 tons in 1943.7 But on more realistic assumptions maximum capacity was in the vicinity of 1 5,000,000, the figure envisaged at the time of the "Canberra Code" conference and about the level of actual production in the record year 1 942. As demand for coal was well in excess of maximum feasible production by mid-1 943, portion of the "coal crisis" can be explained in terms of the general over-commitment of resources. 5 Statutory Rules 1942, No.

328, 25 Jul. It was also made an offence to "spread false or mis­ leading reports . . . with respect to lock-outs, strikes, or stoppages of work, at any coal mine". Prosecutions were to be launched in the Commonwealth Arbitration Court.

S 7

See Hasluck, The Government and the People 1939-1942, pp. 388ff.

This estimate of maximum technical capacity in 1943 was obtained as follows: actual produc­ tion 14, 164,000 tons, plus amount lost by strikes 1,040,000 tons, plus amount lost by avoidable absenteeism 860,000 tons; total 16,064,000 tons.

COAL

447

Nevertheless, the popular version is largely correct : the coal shortage was due mostly to the failure of the industry to operate at maximum feasible capacity. In 1 943 the industry operated at 94 per cent of feasible capacity, in 1 944 at 92 per cent, and in 1 945 at 85 per cent. Most of the short-fall in these years was due to strikes and avoidable absenteeism, but it should be noted that coal-mining had features in common with other industries which tended to lower production in the final phase of the war. While cynics claimed that coal-miners enjoyed a disproportionate 'amount of leisure time, fatigue was a problem in this industry as elsewhere. Further, fatigue was aggravated by extremely poor working conditions. Labour efficiency was also affected by an increase in the average age of miners. While the total mining work force increased slightly, young men withdrew from the industry in 1 94 1 'and 1 942 and were replaced by older men many of whom had been unable to obtain work during the economic depression of the early nineteen thirties. Also in common with other industries, the stock of capital equipment had deteriorated during the war. An examination of the reasons for the growth of industrial turbulence lies outside the scope of this volume.8 But we should note that the war presented miners with unique circumstances ; in no previous period was the demand for their labour so great that every individual miner was able to feel indispensable. In the inter-war years there had been little continuity of work, and industrial relations had been poisoned during the great strike of 1 929-30 and the subsequent collapse in demand for labour which allowed colliery proprietors to ride roughshod over awards and agreements. Like the waterside workers whose role will be discussed in a later chapter, the coal miners were intent on taking full advantage of their new-found industrial strength particularly as their bargaining advantage was not expected to last much beyond the end of the war. Broadly the men accepted the national emergency argument in 1 942, but ,thereafter pursued direct action at a rate which accelerated in proportion to the improvement in the military situation. To be sure, a high proportion of the disputes appeared to be irrational and purposeless as when the introduction of butter rationing precipitated a round of stoppages. Much disruption was caused by intra-union rivalry, by real and imagined safety issues, by the political activities of self-styled Communists and other habitual exploiters of dissatisfaction. It was the seemingly trivial nature of so many of the disputes which roused the press to frenzy, and provoked the indignant reaction of the Government and the rest of the community. But most of the disputes were linked by one psychological route or another to resent­ ments which had been accumulated over generations and whioh now, almost for the first time, could be given unfettered expression with near impunity. In these circumstances pressure for higher wages and better conditions was likely to be liberally punctuated with acts of industrial vandalism as well as of cupidity. 8 See Alan Walker,

Coaltown: a Social Survey of Cessnock ( 1 945 ) , and, for a contrary view, on the Coal-mining Industry". Parliamentary Paper No. 5 1 ,

C. G. W. Davidson. "Report Mar 1946, Vol. I , Section 3 .

448

SUPPLY IN THE FINAL PHASE

The severe shortage o f coal which developed in the winter o f 1 943 was aggravated by shipping problems. There was no significant improve­ ment in the coastal shipping position until the end of 1 943. Victoria and South Australia were the two States most heavily dependent on imports of coal from Newcastle and, with New South Wales, these States were the centres of munitions production. By May coal stocks throughout Aus­ tralia were falling steadily, 'and in June and July stocks continued to fall at an accelerating pace. By mid-July the estimates were that stocks were equivalent overall to five and a half weeks' consumption; in Victoria the figure was three and a half weeks and any further disruption to pro­ duction and/or shipping would lead to wholesale shutdown of industry. The Coal Commission had in hand a campaign for increased production, but by mid-August it was forced to conclude that the scope for increased output had been exhausted unless there was a rise in the labour force of the mines. There seemed to be no alternative to rationing. For a time rationing was resisted on the grounds that it would be an admission of defeat at the hands of militant coal-miners land might encourage further industrial action. This might have contained an element of truth but the Coal Commission had no room to manoeuvre. Consumption was still too high and was continuing to rise. By mid-5eptember stocks in Victoria were down to less than a fortnight's consumption, a fall aggravated by a shipping strike at Newcastle. Victoria was forced to impose its own rationing on railways and gas production, although at this stage the savings were only 2,000 to 3 ,000 tons per week. This was followed swiftly by action at the national level which en­ visaged more drastic cuts in consumption. On 6th October the Production Executive appointed a Fuel Co-ordination Committee "to consider admin­ istrative arrangements necessary to co-ordinate the use of all fuels in the event of an emergency".9 Before the committee a few days later, Mighell, chairman of the Coal Commission, estimated that current consumption was ahead of production by about 20,000 tons per week and urged an immediate cut in consumption of 40,000 tons-the additional 20,000 tons to allow stooks to be rebuilt to a satisfactory level. He proposed that the railways (with the exception of Queensland) effect a saving of 1 2,500 tons or twenty-five per cent ) , that industry reduce consumption by 1 2,500 tons or

12t per cent (with the Department of War Organisation of

Industry advising on essentiality ) , that usage for external lighting be reduced by 1 ,000 tons, and that a technical committee be appointed to lower consumption for electricity and gas manufacture by 5,000 tons. These savings were to be associated with a general economy campaign, including the setting up of "fuel watchers" in industry, which would, hopefully, lead to additional economies of 9,000 tons a week. The Cabinet accepted the rationing proposals, established a Cabinet sub-committee to overview the coal situation,l made the Fuel Co9 Production Executive Minute 376, 1 This

6 Oct 1943, on Agendum 97/1943.

sub- t""

50

Note: Statistical discrepancy due to rounding. Excluded from approvals are mortgages and charges as the amounts involved after 1 94 1 were negligible. Statistics of refusals represent cases for which consent was refused by the Commonwealth Treasury without submission to the Capital Issues Advisory Committee. Refusals by the Committee were not compiled. Source : Papers of the Capital Issues Advisory Committee.

VI

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4,300 400 200 1,500

100 2,700 14,500 5,000 1 ,600 500

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5 ,800 400 200 2,350

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M A N P OW E R B U D G E T I N G

689

the war against Japan and ( more doubtfully) for Australia's post-war trade prospeots. But to achieve a balanced manpower budget, housing and exports had to be reduced substantially along with allocations for trans­ port, hospital staff, general civilian supplies and government departments. In other words, the war had to go on : fighting and eating had to come before reconstruotion. In presenting the Pl'Oduction Executive's report to the War Oabinet on this unsatisfactory state of affairs, Dedman pointed out that the budget had been balanced by means of the following reduc­ tions in recommended allocations : (a) 20 per cent cut in the planned expansion of the housing programme; ( b ) 40 per cent cut in the expansion of exports (in the field of Munitions and Supply) proposed by the Export Committee, chiefly for Netherlands East Indies; ( c ) elimination of United States prefabrication programme, and progressive reduc­ tion in supplies of building materials to United States forces, including 40 per cent cut in United States timber supplies ( other than for foodstuffs cases) ; (d) failure to accelerate merchant and naval shipbuilding programmes; ( e ) arrangements for United States forces to ship direct from U.S.A. larger supplies of canned and other processed foods (to be considered by Food Executive) ; (f) 70 per cent cut in personnel demands by Commonwealth and State Govern­ ment Departments; (g) 30 per cent cut in expansion of miscellaneous civilian supplies proposed by Civilian Requirements Board.5

The Production Executive acknowledged that the allocations for recon­ struction were inadequate and that there was now little prospect of creating sufficient house-building capacity to achieve a construction rate of 50,000 in the first post-war year ( accepted as a minimum planning requirement) . It was acknowledged also that it had not been possible "to make adequate provision for the essential needs of the civilian population and for other non-military purposes on standards .appropriate to the present stage 'Of the war". Nor could any labour be reserved for the possible needs of any British forces stationed in Australia. But as the number of special releases from the Services had been set at 45,000 men, the War Cabinet had no alternative than to accept the substance of the manpower budget. As usual, qualifications were inserted in the recom­ mendations dealing with cuts in supplies to the United States forces which allowed MacArthur room to argue for some restoration in the event of "urgent operational necessity". Also toned down were directions to the Army and Air Force to accept Manpower Directorate requests for with­ drawal of men for approved purposes.s But the figures remained intacU Following completion 'Of the manpower budget, Wallace Wurth retired as Director-General 'Of Manpower and was succeeded by William Funnell. 8 5 War

Cabinet Agendum 473/1944, 21 Sep. (Italics in original.) example, War Cabinet inserted "to the greatest extent practicable" after "should" in adopting the following recommendation: "That the 45,000 men directed to be released from the Services by War Cabinet should all be . . . personnel nominated or approved by the Director-General of Manpower." 7 War CabInet Minutes 3808 and 3851, 27 Sep and 18 'Oct 1 944. B W. Funnell, ISD. Ch Staff Supt NSW Rlys 1 932-42; Asst Dir-Gen Manpower 1942-44; Dir-Gen 1944-46; Secly Dept Lab and Nat Serv 1946-51 ; Chmn C'weaIth Hostels Ltd from 1951. B. Goulburn, NSW, 8 Jun 1891.

• For

690

R E C O N S T R U C T I O N - T H E M A N P OW E R D IM E N S I O N

Dedman, Minister for War Organisation of Industry, assumed the chair­ manship of the War Commitments Committee. These changes coincided approximately with changes in the function ,and status of the War Com­ mitments Committee. Wurth probably recognised that his role as devil's advocate within the defence hierarchy had ended, and that the tasks of the Manpower Directorate would be more of a routine administrative charac­ ter. A solution to the manpower problem was, of course, a long way off, but the needs of civilian industry had been established and some progress had been made towards rebalancing the war effort. From mid-1 944 the work of the War Commitments Committee merged progressively with that of the Production Executive and the Department of Post-War Recon­ struction. Indeed, the committee met in formal session on only three further occasions after the completion of the manpower budget. Detailed advice on manpower allocations continued to be provided by the Industrial Sub-Committee, but the formulation of policy recommendations fell to the Production Executive. A representative of Post-War Reconstruction was added to the permanent nucleus of the Industrial Sub-Committee and Coombs became a member of the War Commitments Committee. Although the manpower budget for 1 944-45 represented in several senses the high-water wark of wartime economic planning, one crucial assumption on which the details were based was that the manpower regula­ tions would retain their effectiveness and that the structure of the work force could be moulded as it had been in 1 942 and most of 1 943. This assumption was no longer tenable as the war entered its sixth year and the final outcome was no longer in doubt. Allowances were made in the budget for non-effective Service releases and a drift into low priority work, and adjustments were made for declining work force participation rates. But, in general, public servants overestimated their capacity to enforce the man­ power controls and, as beforre, underestimated the psychological impact of the approaching end to the war. Nominally, the release of men from direct war activities in the second half of 1 944 was well in line with the planning targets. Direct and indirect employment for the United States forces fell more rapidly than had been expected and this made up for most of the deficiency caused by the failure of the Department of Supply and Shipping to release men and by the unexpectedly sharp decline in the male work force. But a very high proportion of the routine discharges from the Services were found to be non-effective, which meant that for medical m other reasons they could not be directed to important civilian employment. A few of the special Service releases were in the same category, as were some of those made available by contraction of United States requirements and war produc­ tion programmes. As shown in the summary of labour supply and absorption for the half-year July to December 1 944, the Manpower Directorate was unable to supply the approved labour needs of key post­ war reconstruction sectors to anything like the extent tha,t had been envisaged (with the important exception of food production) . The main

M A N P OW E R B U D G E T I N G

69 1

casualties were building and exports. In the half-year, building and con­ struction received one-third of its allocation for the year while exports received nothing. Instead, men moved into occupations which were physically less taxing and which did not rate a mention in the manpower budget : mainly general civilian manufacturing, CDmmerce, finance, enter­ tainment and personal services. The Manpower Directorate's ability to' plug these holes in the budget was limited. In practice the power of direction could not be used against those discharged for medical reasons or those who had completed a substantial period of enlistment; and for political reasons the power had to be used against civilians even more sparingly. Even control of the engagement of labour was proving less effective and becoming more difficult to pDlice. Under the right conditions persuasion was the most effective instrument Df control, but these condi­ tions no longer existed. The performance of the female labour supply was even more disap­ pointing: only 1 ,000 women were added to the labour pool compared with an estimate for the whole of 1944-45 Df 1 0,000. Further, a high proportion of those released from the Services and war production were found to be non-effective, and it was even more difficult to use the power of direction against women. A major reason fOT the failure to induce women into the work force was the rise in the marriage rate, a trend which was likely to continue through 1 945 . The War Commitments Com­ mittee concluded in January 1 945 that no significant effective supplies of women were likely to be fDrthcoming during 1 945 for industrial pur­ poses and that the replacement of men by women had come to' an end. Unless the Government was prepared to introduce much more rigorous control of females, additional women workers could be obtained only by releases from the Services. But this would merely increase Service require­ ments of men and there was no guarantee, under existing policy, that those women who had volunteered for enlistment could in practice be directed to high priority jobs, particularly in the clothing industry. The implications were clear: there was likely to be continued severe pressure on military clothing supply and on the domestic clothing ration. Faced with these bleak facts, the Pmduction Executive could either revise the manpDwer budget ( and significantly scale down reconstruction programmes) or persuade the Prime Minister to reduce still further the military commitment. Led by Dedman, the Industrial Sub-Committee, the War Commitments CDmmittee and the Production Executive worked intensively during December 1944 and January 1 945 to secure the release of an additional 40,000 men as early as possible. In a strongly worded letter to Curtin, Dedman cDncluded that (a) It is impossible to achieve even the allocations to June 1945 already approved by War Cabinet, because the estimates of available supplies of labour on which these allocations were based are not being realised, since experience in the second half of 1944 shows that the total pool of labour is now, for the first time during the war, declining rather than expanding, and that it is necessary to make greater allowance than was previously made for supplies of labour that are non-effective for high priority purposes. . . .

0\ \0 N

LABOUR SUPPLY AND ABSORPTION, JULY TO DECEMBER, 1944 ('000) Absorption

Supply Item 1. 2. 3. 4.

Net change i n labour pool Routine service discharges Special service releases Releases from Australian services production: (a) Munitions (�) Aircraft production 5. Releases from U.S. production and employment: (a) Munitions (b) Aircraft production (c) Supply (d) Direct employment 6 . Releases from Allied Works Council

Sub-total Supply in practice non-effective Total (high priority)

Men Women -5 25 18

1 5

2 2

2 5

1 2

4

2

6

59

13

-12 47

-5 8

Item I . Service recruitment 2. Shipbuilding and repair 3 . Food: (a) Rural industry (b) Ancillary industry ( c) Processing (d) Agricultural machinery 4. Building: (a) Private (b) Public (c) Materials, fittings, etc. 5. Export 6. Transport 7 . Public utilities 8. Health, hospitals 9. Government departments 10. Civilian manufacturing n.e.i. I I . Commerce, finance 1 2. Entertainment, personal services 1 3 . Professional 14. Coal mining

Sub-total Absorption in low priority work Total (high priority)

Source: Report of the Industrial Sub-Committee of War Commitments Committee, Jan 1945.

Men 15

Women 3

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MANP OWER BUDGETING

693

(b) It is considered that important requirements for making good arrears of main­ tenance (e.g. in transport, public utilities) , which it was previously hoped might be further postponed, cannot now be allowed to accumulate for more than a very brief period without grave risk of the breakdown of services essential both to the war and civilian economies. (c) Not only is it impossible to achieve the existing approved allocations to June 1945, but no improvement can be effected in the second half of 1945, unless further special releases from the Services are directed, because all additional effective supplies of labour which are estimated to become available in the second half of 1945 will be used up or offset by continued Service recruitment at the present approved rates; thus, important additional requirements arising in the second half of the year, such as that of the continued expansion of the housing programme, cannot be met at all without further Service releases.\) The story was by now rather stille . There were those outside civilian administration who believed that the manpower authorities were crying wolf and that the case had been overstated. "Gaps" in labour requirements had become a permanent feature of the scene and were common to all fully-mobilised war economies. Further, the threatened breakdown of the civilian economy had not eventuated, or at least not to any marked extent. The defence hierarchy maintained, therefore, that these "gaps", while unfortunate, were part of the price that had to be paid for an appropriate def.ence deployment. The country was after all at war and defence require­ ments must receive first priority. As a counter to this line of argument, the Industrial Sub-Committee attempted to place the labour problem in its proper perspective : the fact that requirements for male labour totalling 45,000 men in the first half of 1945 cannot be met does not mean necessarily that there will be any general breakdown of the economic system; but it does mean that Australia must continue through the fifth year of the war on the basis of civilian austerity, and on the basis of only very limited provision for the restoration of key industries and activities (including housing) upon which the Government's plans for post-war re-employment and reconstruction depend.l As seen by the sub-committee, the choice before the Government was between a degree of military adventurism (in the form of an Australian expeditionary force under MacArthur's command ) which was unlikely to be of much military significance, and preparations for the avoidance of heavy unemployment after demobilisation. The argument in favour of a more drastic immediate shift to civilian employment rested less on the possibility of breakdown in the supply of goods and services than on the fear of post�war unemployment. The matter was complicated, however, by growing public criticism of the Army's role in the final campaigns. In the second half of 1944 there had been few press reports of action involving the Australians, and MacArthur's communiques rarely mentioned them. With the ,announce­ ment of the second round of the special release soheme, conclusions were • Dedman to Curtin, 1 Feb 1 945, copy attached to Production Executive Agendum 14/1945, 17 Feb. 1 Report of Industrial Sub-Committee of War Commitments Committee to Production Executive, 16 Feb 1945.

694

R E C O N S T R U C T I O N-T H E M A N P O W E R D I M E N SI O N

being drawn at home and abroad that the Australian forces were with­ drawing from active engagement. There were allegations, too, that the morale of the troops had suffered and that they were poorly equipped for the tasks allotted them.2 Lack of news made it more difficult to maintain public interest at home and to resist pressure for relaxation of austerity. While many of the complaints were wide of the mark, the most effective rebuttal would come from the use of the 7th and 9th Divisions in forward operations ,against Japan. Since late in 1 944 MacArthur's plans had included the use of two Australian divisions in this way, although details had not been settled; but any further reduction in the strength of the forces would undermine these plans. The Army claimed that if another 40,000 men were released, it would be possible to attach only one division to MacArthur's expeditionary force; the Army's approved strength of six divisions and two armoured brigades was already well below establish­ ment. Although most members of the Government were, by now, sympa­ theti:: to the claims of civilian industry and preoccupied with the problems of reconstruction, the War Cabinet on 9th February avoided a clear choice between the military and civilian sectors. The War Cabinet accepted that the war effort was "still in a state of disequilibrium", but "as the Commander-in-Chief S.W.P.A. has made his operational plans on the basis of the Commonwealth military contribution being the remaining strength of the Australian Forces, it was decided that it was impossible to make further reductions at 1!his stage".3 The Prime Minister was to determine if in fact MacArthur intended to use Australian troops as planned and further consideration was to be given to the matter when these plans were clarified. MacArthur's reply came before the War Cabinet on 20th March : "In categorical reply to your basic question, I would state that my plans contemplate the use of all of the Australian Forces now ,assigned to the S.W.P.A."4 Further consideration of the strength of the forces was deferred until after the completion of the next phase of operations. The War Cabinet was prepared, however, to strengthen the hand of the Manpower Directorate in effecting Service releases. On average about forty per cent of Manpower's recommendations for release had been rejected, with the Air Force (partly for technical reasons) rejecting more than the Army. To help ensure that the quota of special releases was filled, the War Cabinet accepted a War Commitments Committee recommendation that seventy-five per cent of Manpower's reoommendations should be approved. In the case of the limited numbers of men required urgently for timber­ cutting and the manufacture of rubber, wet batteries, steel sheets and wire, the approval rate should, if necessary, be ninety per cent.5 The necessary revision of the manpower budget following War Cabinet's decision of 9th February involved further pruning of reoonstruction details see Hasluck, The Government and the People 1942-1945, The Final Campaigns (1963 ) , in the Army series of this history. 3 War Cabinet Minute 4044. • War Cabinet Minute 4116; Agendum 1 15/19'45. 6 War Cabinet Minute 4046, 9 Feb 1945; Agendum 54/1945. 2 For

pp. 565-82; G.

Long,

695

M A N P O W E R B UDG E T I N G

programmes.6 'the additional reason was that new high priority require­ ments had emerged since the preparation of the budget, mainly for maintenance and the continued servicing of the war economy. Men were required to cut railway sleepers for the repair of tracks which threatened to become unusable; the critical shortage ·of tyres imposed new require­ ments for highly skilled men for the manufacture of synthetic rubber to help keep essential transport moving; additional young and fit waterside workers had to be found to expedite the tum-round of ships. Extra require­ ments under these headings were a modest 2,260 men, but the types of men needed were in very short supply : skilled teohnicians for the rubber industry and fit, young men for timber-cutting and the wharves. For the first half of 1 945 , net labour supply was estimated at 66,000 men7 compared with 7 1 ,000 that would have been needed for the original budget. Allocations, together with revised estimates of minimum require­ ments, were as follows :8 Allocations Direct war: Service recruitment Aircraft production Shipbuilding and repair Royal Navy Forces Indirect war and basic civilian requirements: Food Timber Clothing and basic materials Transport Public utilities Health, hospitals Government departments Civilian manufacturing

Requirements

1 8,000 500 2,000 6,000

1 8,000 500 6,000 6,000

5,500 2,000 2,000 3,500 1 ,500 500 1 ,500 2,000

1 0,500 3,500 6,500 6,000 2,500 500 3,000 8,000

Post-war reconstruction: Building Planning reconstruction Export

15,000 2,000 4,000

23,000 9,000 8,000

Totals

66,000

1 1 1 ,000

The deficit of 45,000 men was now larger than it had been in September 1 944 which meant that reconstruction programmes had to be reduoed drastically. The reduced manpower available for reconstruction was, in effect, concentrated on one sector--'building and oonstruction. But even if these amendments proved to be realistic, housing would receive 5,400 fewer men in 1944-45 than had been provided for originally. Other pro­ grammes were dealt with more severely. Allocation for the export of munitions and essential supply items to the Netherlands East Indies was • The

Industrial Sub-Committee had already estimated labour supply and drawn up proposed allocations on the basis of various assumptions about the War Cabinet's decision, so that recommended allocations were ready a week after 9 Feb. 7 Made up as follows : 25,000 from routine Service releases, 27,000 from special releases (the remainder of the 45,000) , and 3 1 ,000 from reduction of war production for Australian and United States Services, making a gross supply of 83,000. Deductions were 5,000 for the estimated fall in the labour pool, and 12,000 non·effectives for high priority purposes.

8 Report of the Industrial

Sub-Committee to Production Executive,

16 Feb 1945.

696

R E C O N S T R U C T IO N - T H E M A N P O W E R D I M E N SI O N

cut in half, while the programme for the conversion and expansion of manufacturing industries (to provide post-war employment opportunities ) was reduced to insignificance. In January the Director-General of Post­ War Reconstruction outlined a plan for the expansion of manufacturing involving a total of 26,500 men over a period. The Full Oabinet approved in principle the diversion of 9,000 for this purpose by 30th June 1945.9 As shown, the Industrial Sub-Committee reduced the allocation to a nominal 2,000.1 The Industrial Sub-Committee warned that these allocations, whioh were approved by the War Cabinet on 27th February,2 would not be realised unless certain conditions were adhered to strictly. The conditions included the continued enforcement of Manpower Regulations and the maintenance of commodity controls. But the most important conditions were first, the avoidance of "absorption" of labour in war production departments by reducing hours of work and, second, the development of an adequate organisation to ensure that highly skilled people were diverted to key jobs in preparation for reconstruction. The fall in labour input as a 'result of a decline in the length of the working week was already threatening to become a serious problem. The estimate of labour supply depended to an important degree on 30,000 men being made avaHable from war production, but this number would not be reached unless there was a reversal of the trend from a forty-eight to a forty-four hour week. At the end of February the Full Cabinet instructed 'all Com­ monwealth authorities to maintain the maximum hours of work consistent with "health and efficiency", 3 but at this stage of the war the task was almost impossible. Just as difficult was the second condition which required the close co-operation of the Manpower Directorate, production departments, the Army and Air Force. The diversion of thousands of skilled and semi­ skilled technicians and tradesmen into high priority work within civilian industry obviously required intensive organis,ation to ensme that a balanced labour force was created. Aggregate labour supply was only part of the reconstruction problem; equally important was the reassembly in key industries of the whole spectrum of skills. The wartime annihila­ tion of the domestic home-building industry posed particular difficulties, for former building workers had been scattered £ar and wide. Unless key people were located in sufficient numbers and their release planned in an orderly manner, the surviving parts of the reconstruction plan would fall to the ground. In the event, these warnings proved to be no more than straws in the wind. On past experience it was pel1haps too muoh to expect decisions taken in February to have had much influence on the course of events • Full Cabinet Minute 76S, 18 Jan 1945.

1 For reasons

mentioned above, no attempt was made to revise the female component of the budget. In effect, the female budget was scrapped. • War Cabinet Minute 4063. • Full Cabinet Minute 800, 26 Feb 1945.

69 7

MANPOWER BUDGETING

between Maroh and June : the Government had yet to appreciate the importance of advance preparation and notification. When the Industrial Sub-Committee reviewed the progress of manpower planning in June 1 945, high priority placements were found to be well short of allocations. Despite material depression of war contracts, a substantial proportion of labour which theoretioally had been released had remained in its former employment, working shorter houl's, and/or working for the civilian market in low priority activities. The general civilian manufactur­ ing supply position, as a result, had improved considerably, but the high priority needs of other fields had not been s atisfied. This was aggravated by the accelerated drift into white collar service industries, and the con­ tinued net fall in the work force. Further, routine discharges from the Services were about 6,000 below the estimate as the Army and Air Force employed every available means to protect their ranks. The most unsatisfactory feature of manpower developments in the first half of 1 945 was the flagrant defiance by the Army and Air Force of the War Cabinet's ruling on special Service releases. The Manpower Directorate's recommendations were to be approved to an average extent of seventy-five per cent; for certain very high priority requirements the proportion of approvals was to rise to a minimum of ninety per cent. Manpower recommendations since 1 st September 1 944 were brought within this ruling. It had not been necessary to enforce the seventy-five per cent rule because total releases from the Army were up to schedule and the Air Force was only a little behind. But the ninety per cent rule had become a sham. In June the War Cabinet was presented with the following figures which summarised the position to 1st May : 4 Recommendations submitted since 1 Sep 1944

Released or approved for release

Percentage released

Army: Timber Rubber Wet batteries Wire and steel sheets

3,035 570 139 362

1,181 227 63 1 27

38.9 39.8 45.3 35.1

Sub-total

4, 1 06

1,589

38.9

Air Force : Timber Rubber Wet batteries

407 1 08 12

275 55 6

67.6 50.9 50.0

Sub-total

527

336

63.8

4,633

1 ,934

4 1 .7

Total

The Services concerned contended that nominated men were operationally engaged, or otherwise required for reinforcement or employment in the particular trade within the Service. In short, the men had become too • War Cabinet Agendum 273/1945, 2 1 Jun.

"

\io\tJ Ol{) HE. Grr IHAT JoB !)

,

"" ..-

R E H A B I L I TAT I O N News Item:-Twenty choice jobs at lavatory cleaning, bottle collecting, sanitary and garbage carting offered to returned soldiers by Queensland Manpower Rehabilitation Section. Hallett in Smith's Weekly (Sydney) 17 Feb 1945.

M A N P OW E R B U D G E T I N G

699

valuable to lose. An associated weakness of the scheme was the system of nomination by the Manpower Directorate. Appropriate when first intro­ duced in 1 943 for rural manpower purposes, the system was cumbersome and no longer suitable under 1 945 conditions of semi-demobilisation and wide-mnging preparation for reconstruction. The Army 'and Air Force had a legitimate complaint that many of the nominations would, if approved, have disrupted key segments of military operations, although this does not excuse the blank refusal to co-operate. A more sensible arrangement, and one proposed for the second half of 1 945, would have been the specifica­ tion by Manpower of the total number of releases required in oertain categories leaving some flexibility to the Army and Air Force to substitute in agreed cases. Of course, success would have depended on Service co-operation. Even after the defeat of Germany, ,smouldering resentment of the speoial release soheme , particularly of the ninety per cent rule, continued. The result of the short�fall in labour supply was that most reconstruc­ ing programmes were lagging badly. Labour for housing and building materials was fifty per cent below the already greatly reduced allocation; export production had received about one-third of the men allotted; there had been virtually no improvement in the already critical situation in timber, rubber, wet batteries, steel sheets and wire, largely because of the failure of the ninety per cent plan. Men for naval ship repair had been supplied to the extent of one�uarter of the allocation, while the railways and stevedoring were behind schedule to a similar degree. 5 Ironioally, the only high priority part of the economy with sufficient labour was the rural sector. By mid- 1 945 the scheme for the restoration of rural manpower had been in progress for almost two years, and ultim­ ately had been successful in returning a high proportion of enlisted farmers to the land. As early as January 1 945 the Standing Committee on Rural Manpowerll noted that the number of nominations for special Service release had declined and that, apart from special difficulties in the provi­ sion of seasonal labour for cane-cuttling, the rural labour crisis had passed.7 In addition to the success of the release scheme and the gwwing efficiency of Italian prisoners of war, the main reason was the very dry conditions of 1 944-45 whioh reduced the demand for agricultural labour and the requirements of food processing factories. In part, therefore, the improvement was artificial; in other ways rural industries were in poor shape for the transition to the post-war world. There had been no improve­ ment in the supply of labour for the manufacture of ,agrioulturru machinery : tractors, harvesting and cultivating machinery and fencing materials con­ tinued in very short supply. Similarly, superphosphate was very scarce, less 5

Report of Industrial Sub-Committee to Production Executive, 13 Jun 1945.

• This

inter-departmental committee was established at the beginning of 1943 to advise the Manpower Directorate on the best use of available rural manpower. Membership fluctuated but normally comprised the Director of Rural Manpower, Manpower Directorate (chairman ) , Director-General of Agriculture, Deputy Director of Agricultural Resources, Director of Agricultural Organisation. Federal Executive Officer of District War Agricultural Committees, Liaison Officer between Manpower Directorate and Controller-General of Food, and a repre­ sentative of the Commonwealth Statistician.

7 Minutes of the 22nd meeting of the Standing Committee on Rural Manpower,

8 Jan 1945.

700

R E C O N S T R U C T I O N-T H E M A N P O W E R D I M E N SI O N

because of the shortage of phosphate rock than because o f labour shortage in Australian treatment plants. Following Germany's surrender on 7th May, to take effect midnight 8th-9th, the War Cabinet on the advice of the Advisory War Council acted firmly to release additional men for the civilian economy and to limit existing and future defence commitments. On 3 1 st May the release of at least 50,000 additional men from the Army and Air Force was approved for the second half of 1 945 with the familiar objective of restoring "a proper balance between the direct military effort and its industrial basis appropriate to the present and immediate prospective stage of the war". 8 At the same time men with over five yeal1s war service ( and with opera­ tional service overseas) were given the option of taking their discharge. The operational strength of the Army was to be reduced to three divisions accompanied by a proportional reduction in the size of the Air Force.9 A tough line was taken on commitments for the Allies, for it was now accepted as imperative to guard against the escalation of new obligations given the expected build-up of forces in the South-West Pacific Area for the final thrust against Japan. No facilities were to be provided for the training and maintenance of Portuguese troops in Australia for the liberation of Timor; the Production Executive was to examine in detail the proposal to station Netherlands forces in Australia; the Americans were urged to accelerate the release of facilities under their control in favour of the British to avoid the need for new construction to accommo­ date the Royal Navy.1 In the same vein, the War Cabinet in July dug its heels in over a request by the Royal Navy for an additional works pro­ gramme, arguing that existing facilities should be used and that it was not prepared to delay any further the reconstruction housing programme.2 On Churchill's assumption that the war against Japan would last for eighteen months after the defeat of Germany, another manpower budget was prepared for the second half of 1 945.3 The War Cabinet raised the target figure for special releases to 64,000, and laid down progressive totals to be achieved month by month.4 The budget was adopted on 28th June, for the first time before the beginning of the planning period. Also for the first time reconstruction was at the top of the list of priorities. But the first atomic bomb was dropped on Hiroshima on 6th August; the offensive against Japan ceased on the 15th (V-J Day ) ; and on the 1 7th the War Cabinet ordered the beginning of general demobilisation. The determination in mid-1 945 to achieve positive progress with reconstruction preparations had come too late. 8 War Cabinet Minute 4220, 31 May 1945. • War Cabinet Minute 4237, 5 Jun 1 945. 1 War Cabinet Minute 4223, 31 May 1945. Cabinet Minute 4328, 11 Jul 1 945. 2 War 3 On this occasion the Industrial Sub-Committee was far more cautious in its estimation of supply and allocation of labour, and emphasised that all estimates were subject to a wide margin of error. Further, adequate provision was made for the first time for non-effectives and other manpower leakages. This was in marked contrast with previous attempts at man­ power estimation which were framed in terms of the maximum that was likely to be achieved. • War Cabinet Minute 4291, 28 Jun 1945.

POPULATION

70 1

There was no delay in repealing the bulk of the Manpower Regulations. The regulations had become thoroughly unpopular, and the Government was well aware of the political cost of any delay. The power to direct labour and the requirement of civilian registration was abolished on 1 7th August, and about one-half the 22,000 protected undertalcings were "de-protected" at the same time. The remaining 1 1 ,000 were "de-protected" in October, and reservation was also dropped. Because of continuing labour shortage in the first post-war months, restrictions on the engage­ ment of labour continued in force until early 1 946.5 The Director-General of Manpower remained in office until the controls had been removed, but most of the administrative work involved in the orderly removal of restrictions was undertaken by the newly established Commonwealth Employment Service. Similarly, there was no undue delay in the dispersal of men and women from the fighting forces. As discussed eIsewhere, the War Cabinet had approved the general principles which should govern demobilisation in June 1 944.6 The maximum rate of dispersal was set at 3,000 per day, a figure determined by the capacity to conduct pre-discharge medical examinations. Priority for discharge was determined by a system which allotted points on the basis of length of service, age at enlistment, and marital status. Discharge began in October 1 945 and by the end of June 1 946 was eighty per cent complete; dispersal of the remainder was com­ pleted by 1 5 th February 1 947. Between August 1 945 and February 1 947 the strength of the Services had fallen from 598,300 to 60, 1 3 3 . Demobili­ sation was conducted quickly and efficiently, and there was little of the avoidable delay which had been such an unhappy feature of dispersal after the war of 1 9 14-1 8 . For various reasons, such as disablement and admis­ sion to the Commonwealth Reconstruction Training Soheme, many who were demobilised did not immediately seek civilian employment. Many of those who did were required to replace women 'and older men who had discontinued emp�oyment at the end of the war. Nevertheless in the two years between the Occupational Survey of June 1 945 and the Census of June 1 947, civilian employment increased by a Isubstantial 45 1 ,700 or by 1 7 . 1 per cent without any significant addition to the number unem­ ployed. This reflected above all the enormous back�log in the demand for labour. P O PULATIO N

Despite the apprehension ,about post-war employment prospects, the foundations were laid during the war for the resumption of large-scale immigration as soo� as possible after the completion of demobilisation and re-employment. The fact that immigration policy was taking shape in 1 943 and 1 944, at a time of continued gloom ,about post-war economic prospects, is testimony to the strength of the Australian faith in develop­ ment through population growth; it also bears witness to the contemporary 5 The

and

last element of manpower control, the engagement of women between the ages of 1 8 years, was removed on 3 0 Apr 1946.

45

• Hasluck, The Government and the People 1942-1945, pp. 612-17.

702

RE CONSTRUCT ION-THE

M A N P O W E R D I M E N SI O N

notion that defence of the country would be more effective with a popula­ tion well in excess of the 7,300,000 of 1 943. Concern about population growth was sharpened by the decline in the rate of natural increase since the nineteen�h century. In the years immediately before the war of 1 9 1 4- 1 8 Australia had experienced one of the highest rates of natural increase in the western world at around 1 7 per thousand, but this had declined sharply to a low point of 7 per thousand in 1 934. By 1 944 the rate had risen to almost 1 1 . 5 per thousand, but contemporary forecasts were that the wartime rise would not be sustained and that after the war fertility would be barely above replace­ ment level,7 Apart from military and economic considerations, suoh a situation if allowed to eventuate was regarded as morally indefensible given Australia's "wide open spaces". In 1 942 a number of politicians spoke in emotional terms about the need for an increase in population to 20,000,000 in fifteen to twenty years. As L. F. Giblin pointed out in a paper for the Financial and Economic Committee, an increase to 20,000,000 in fifteen years implied a rate of population growth of six per cent per annum, the arrival of about 1 1 ,000,000 immigrants within this period, and a substantial reduction in consumption to allow for the con­ struction of housing, schools, and urban facilities to provide for such an unprecedented rate of population increase.8 Giblin suggested tentatively that the most that could be reasonably expected was the restoration of the rate of natural increase to one per cent per annum, and an immigra­ tion rate of about one per cent of population. These estimates were based on rough figuring and were not intended to form the basis of policy. But it was not long before two per cent per annum was accepted as the official post-war population growth objective. Active consideration was initiated, however, by the United Kingdom Government. In April 1 943 the Secretary of State for the Dominions asked whether the Australian Government would be willing to resume Empire settlement after the war.9 The immediate point of the British request was to be able to satisfy the desire of those ex-service men and women who wished to emigrate to a Dominion after demobiIisation. The Dominions Office indicated that the United Kingdom would grant free passage to those people and �heir dependants who wished to migrate. At the same time the general question of post-war migration was raised, and an indication was given that the United Kingdom would participate in the cost of any agreed scheme. But a warning was given that future migrants would expect to receive a higher standard of settlement assistance than had been available in the past, and that those from the United Kingdom who had qualified for social insurance benefits would expect immediate admission to the corresponding local soheme. The Australian response was enthusiastic. All those involved accepted without question that large-scale immigration should be resumed after 7 See Report of the National Health and Medical Research Council, Population Trends and Policies ( 1 948 ) . 8 Financial and Economic Committee, paper 43a. • Dominions Office Despatch No. 24, Apr 1943.

1944; and W. D. Borrie,

POPULATION

703

the war. The question was not whether the British invitation should be accepted, but the extent to whioh the door should be opened. The United Kingdom had also been affiicted by a decline in fertility, and the Depart­ ment of the Interior concluded regretfully that British migrants would not be as plentiful as in the past. The conclusion was that substantial "white alien" immigration would be required, and that ways of easing the entry of these people to Australia should be considered. ! In October 1943 the Full Cabinet appointed an inter-departmental Committee on Migration Policy.2 The committee was instructed to prepare information on such matters as the absorptive capacity of domestic secondary industries, the assistance to be given to British immigrants, and the administrative machinery to be established in London to deal with applications. By implication the decision endorsed vhe principle of large-scale British immigration; the question of alien immigration was deferred. Policy details for migration from the United Kingdom were set down by the Full Cabinet in May 1 944 for use by Curtin at the Commonwealth Prime Ministers' Conference in London.3 A few minor changes were made subsequently, but this remained the basis of the formal United Kingdom-Australian migration agreement announced in Maroh 1 946. The more important decisions were ( i ) acceptance of the United Kingdom Government's offer of free passage for medically fit British ex-service men and women and their dependants who wished to migrate to Australia, (ii) creation of an assisted passage scheme for other British people to the extent that no approved applicant would be required to pay more than £10 sterling for their passage, the cost to be shared equally between the United Kingdom and Australia, (iii) establishment of machinery in the United Kingdom and elsewhere for the administration of the schemes, including the issue of information about employment opportunities, (iv) development of co-operation with the States and voluntary organisa­ tions for the "reception, placement and after-care" of all British migrants, and (v) exploration of the question of reciprocity in the area of social security benefits. At the same time Cabinet endorsed a recommendation by the inter-departmental committee in favour of treating Maltese in the same way as other British immigrants so long as they had a working knowledge of English.4 It sensibly rejected a propos al by the Freeland League for Jewish Territorial Colonisation to establish an exclusive Jewish settlement in the Kimberleys, Western Australia.5

1 Before

the war the Government required intending alien immigrants to possess a landing permit in addition to the normal visa. Further, nominated aliens were required to hold at least £50 of landing money, and those without a guarantor to hold at least £200. These were stringent entry requirements, particularly in the nineteen thirties.

Full Cabinet decision, 20 Oct 1943 on Agendum 538. The committee comprised representatives of the Departments of the Treasury, Post-War Reconstruction, External Affairs, Interior, Social Services, an.d the Repatriation Commission. S Full Cabinet decision, 1 May 1944, on Agendum 538A. 2

• The subject of Maltese migration was submitted for early decision because the matter was expected to be raised at the Prime Ministers' Conference, and because there had been discrimi­ nation against Maltese on the grounds of colour before the war. Maltese were brought within the free and assisted passage schemes by Full Cabinet decision, 2 Feb 1945, on Agendum 538E. • For an ancedotal account of the efforts of Dr I. N. Steinberg to obtain approval for the settlement, see A. A. Calwell, Be Just and Fear Not ( 1 972 ) , Ch. 13.

704

R E C O N S T R U C T IO N - T H E M A N P O W E R D I M E N SI O N

Adding to these decisions, approval was given in November 1 9446 for acceptance of British and European "child migrants"-usually orphans and o�hers who had been separated from their parents� The intention was to collaborate with British and European governments, and bodies such as U.N.R.R.A., for the immigration of an average of 17,000 children a year during the early post-war years. Alien children between the ages of six and twelve, and British children between the -ages of six and fourteen, were to be assisted by means of passage and maintenance. Before the war the Government had been involved in a small child migration scheme; the decision represented an enlargement of this humanitarian work. It was also believed that this was an effective way of increasing the fertility rate in the future. The Government was much more cautious in its approaoh to the sensitive matter of white alien immigration. The inter-departmental committee completed its report on this subject in January 1 944.7 It reiterated a previous conclusion that the United Kingdom would not be able to supply migrants in sufficient numbers to fulfil Australia's population growth objective, and added that there would also be insuffi­ cient available from the countries of north-western Europe. The committee concluded: So great is Australia's need for population that it cannot afford to be too exclusive as to categories to be regarded as eligible for admission, . . . the Commonwealth should be prepared to accept any white aliens who are considered likely to assimi­ late and contribute satisfactorily to economic development, and against whom there are no objections on the grounds of health, character or (while the ban is in force) enemy alien nationality.

Thus, southern and eastern European countries were expected to provide the main source of supply. But Italy, Rumania, Bulgaria and Hungary were members of the Axis; Poland, Czechoslovakia and Yugoslavia were under Nazi rule. Alien migration policy could not be defined at this stage, and in November 1 944 Cabinet appointed a sub-committee to keep the subject under review.s Despite the uncertainty about white alien migration, post-war immigra­ tion policy had taken shape by the end of 1 944. The Government was firmly committed to the resumption of large-scale immigration as soon as possible after the war, preferably from the United Kingdom and north­ western Europe but also from southern and eastern Europe if this became necessary as appeared likely. There had not been muoh thinking about the desired rate of population growth or about the appropriate ,rate of immigration. But it was a widely held assumption by ministers and officials that Australia should aim to double her population by the end of the century. The only quantitative merit in this aim was that it appeared to be within reach given a moderately successful immigration programme . • Full Cabinet decision,

26 Nov 1944, on Agendum 538C.

7 Full Cabinet Agendum 538B.

• Full Cabinet decision, 10 Nov 1944.

P OPULATION

705

This implied an immigration target of about 60,000 a year.9 It was not possible to determine in advance whether this number could in practice be absorbed without endangering employment stability, and the Govern­ ment had opted for a step-by-step approach. First priority would be given to �he absorption of ex-servicemen and former munitions workers, and to acceptance of a limited number of British ex-servicemen demobilised in Australia, political refugees and ohild migrants. Next in importance were British ex-servicemen and civilians required to travel from the United Kingdom. It was expected that shipping difficulties would be encountered immediately after the war, and this would allow time to assess the absorptive capacity of secondary industry. The lowest ranking was allotted to European aliens within which was contained a further ranking which sloped downwards from north-western to south-eastern Europe. Additional time was available to consider the required level of this type of immigration because many of the traditional emigrant countries were members of or affiliated with the Axis. Migration from these countries could not commence until after the conclusion of a formal peace treaty. The importance attached to the immigration programme was given formal expression by the creation of the Department of Immigration on 1 3 th July 1 945 . The Minister for Information, A. A. Calwell, was ohosen to head the new department. Calwell continued to hold the Information portfolio. The linking of Immigration and Information was of more than passing significance. Calwell had been consulted on immigration matters and was a member of the Cabinet sub-committee on white alien migration because it was accepted from the outset that pUblicity would be a vital element in the programme. Indeed, the largest task before the new depart­ ment was to convince the people, particularly trade unionists, that a high rate of immigration was consistent with the preservation of full employ­ ment. Calwell had also to overcome the entrenched Australian suspicion of foreigners. He set about this task with skill and imagination, but it should not be forgotten that Calwell's success was due largely to the labour shortage which persisted for the remainder of the nineteen forties. The Ministerial statement of August 1 945 on post-war population policyl amalgamated the various assumptions and decisions of 1 943 and 1 944. The population growth target was set at 1 40,000 or two per cent per annum to be achieved about equally by natural increase and by immi­ gration. Thus Giblin's maximum feasible rate had been accepted as the long-term objective. The immigration programme of 70,000 a year would not be realised for several years, however, because of shipping difficulties . This would allow time for absorptive capacity to be determined by trial and error, and for immigration from non-British countries to be phased in gradually. Calwell was vague in his statement about the likely extent of foreign immigration, but he did make clear that the programme would have a new dimension. In practice, little time was lost in broadening the • This figure was given by the inter-departmental Committee on Migration Policy in its report on "White Alien Immigration", Jan 1944. 1 Commonwealth Debates, Vol. 184, pp. 4911-15.

706

R E C O N S T RU C T I O N-T H E

M A N P OW E R D I M E N S I O N

immigration base. Suoh was the demand for labour i n 1 946 and 1947 that the wartime fear of an early depression was soon dissipated. In 1946 Calwell toured the United Kingdom and the Continent in search of potential migrants. In December 1 946 the Government approved an agreement with nhe Netherlands Emigration Foundation to bring Dutch farmers to Australia. In March 1 948 peace treaties were concluded with Italy, Rumania, Bulgaria and Hungary which opened the way for admis­ sion of nationals of these countries. In September 1 949 approval was given for acceptance of nominated migrants from Germany and Austria. Immigration increased from 3 1 ,765 in 1947 to 1 67,727 in 1 949. The marriage of full employment and rapid population growth had been consummated.

CHAP T E R 2 3 RE C O N S TRUC T I O N-THE FEDERAL D I MENS I ON

A

NUMBER of key proposals for the creation of greater economic security and equality after the war depended for their successful introduction on close oollaboration between Federal and State govern­ ments. In such fields as "national" public works, regional planning, housing, education and rural development, the constitutional authority resided with the States. In a few instances suoh as reconstruction training and soldier settlement the States were willing to co-operate, usually because the Commonwealth accepted a major share of the financial responsibility. But in others the Government was inclined to assume unrealistically that �he States would accept Commonwealth leadership "in the national interest", while for their part the States were intent primarily on reasserting their oonstitutional identity which had been sub­ merged during the war. Commonwealth-State negotiation was not without useful result, but resurgent federalism took a heavy toll of reconstruction planning. N A T I O N AL W O R K S

Of all the proposals which involved Commonwealth-State collaboration, the Government attached greatest importance to the creation of a National Works Council. C ommonwealth authority over national works was sought in the 1 944 referendum because of the relationship between wor�s expenditure and the maintenance of high employment. The White Paper on Full Employment in Australia envisaged, it will be recalled, the use of public works to prevent the growth of unemployment. Public works were divided into two categories : high priority long-term projects which would be initiated independently of employment conditions; and lower priority projects, usually of a short-term nature, which could be commenced quickly when needed to generate additional employment. Both categories were to be under the control of the National Works Council, but it was the second-the works "reservoir"-whioh was to supply the underpinning for full employment. The idea had originated with the Reconstruction Division of the Department of Labour and National Service as early as 1 9 4 1 . At the first meeting of the Development Co-ordinating Committee on 20th November of that year a special sub-committee representative of those Commonwealth departments concerned with works was instructed to pre­ pare a schedule of projects whioh could be initiated after the war to cushion the impact of demobilisation. From the outset the scheme was intended to supplement the normal investment programme authorised by the Loan Council so as to provide a general stimulus to the private sector rather than absorb ex-servicemen directly. But inherent in the proposal were constitutional and administrative problems of some delicacy. First, works expenditure had been virtually an exclusive preserve of the States subject only to borrowing authorisation

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by the Loan Council. After the change of government i n 1 94 1 , the Commonwealth envisaged that it would play a larger part in financing "national development". Yet the co-operation of the States was still vital, failing a constitutional amendment. Following the imposition of uniform taxation, however, the States were likely to view with the utmost suspi­ cion any further bid by the Commonwealth for greater control in the financial field. Second, if the "reservoir" was to serve its purpose adequate administrative machinery had to be developed to initiate projects of an appropriate scale with a minimum of delay. Further, the machinery would have to discriminate between States and within States, for the scheme was intended to mop up regional as well as national unemployment. One possibility was to extend the functions of the Loan Council. The Council's Co-ordinator-General of Works, Sir Harry Brown, had developed wartime machinery for restricting the capital expenditure of the States whioh could be adapted to administer the "reservoir". Alternatively a separate Commonwealth-State authority could be established entirely independent of the Loan Council. When the subject was revived by the Reconstruction Division in mid1 942, the Curtin Government preferred the creation of a separate authority. vhe Prime Minister supported the formation of a national works commission, partly to underscore the importance of the task and partly to separate financial control from determination of the volume of employ­ ment to be created. Beyond this little progress was made in blueprinting an institution within the framework of Commonwealth-State collaboration. The Department of Post-War Reconstruction emphasised at the beginning of 1 943 the importance of preparing a priority listing of fully-engineered works, but was inclined to assume that appropriate machinery could be devised somehow. However there was a firm conviction that the major share of the responsibility for deciding the timing and volume of works should fall on the Commonwealth. Prevention of unemployment was accepted as a national obligation and the commission's decisions were to be based on national criteria. The Government also had a vague idea that the wartime system of works co-ordination could become a permanent feature. Thus, Curtin and Chifley were vague about the details when they outlined the need for a national works organisation at the Premiers' Conference on 1 4th July 1 943. To some extent the vagueness was deliberate. By not presenting the idea as a fait accompli, they hoped that the Premiers would arrive at an acceptable s olution of their own volition. The Government's hopes were pinned on the willingness of the States to CD-operate. NaIve as the assumption proved to be, the Commonwealth was convinced that nO' State would refuse to co-operate in an arrangement which was regarded as the main safeguard against mass unemployment. At the conference the Minister for Post-War Reconstruction suggested simply that a central authority be established immediately to receive lists of projects from state, IDeal and municipal authorities as well as from

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709

the Commonwealth itself. Each project would then be allocated a priority. Those approved for incorporation in the plan were to be returned for completion of detailed engineering work. Predictably, non-Labor Party Premiers were convinced that this was a device to abrogate the au�hority of �he States. In fact, of course, the proposal was merely intended to ensure that advance preparations were made and to enable some pressure to be brought to bear on the States and other authorities. Once the priority system had been established, it was hoped that there would be general adherence to it. But the unavoidable weakness was that �he States were not bound to accept any priority rating or Commonwealth representation as to timing. On the assurance that the States were not bound, the Premiers accepted the formation of a National Works Council. The composition was the same as the Premiers' Conference with the Prime Minister as chairman. As the States were not prepared to delegate to the Co-ordinator-General of Works sole responsibility for determining priority ratings, a 'cumbersome procedure was adopted to smooth ruffled feathers. Once States had vetted their own Hsts they were to be sent to the Prime Minister, who would then send them to Sir Harry Brown as Co-ordinator-General. Sir Harry would consult with the six State Co-ordinators to prepare a consolidated list for recommendation to the National Works Council. The list would show not only the Co-ordinators' priorities but also those claimed by the States. After any modifications by the council, the lists would then become recom­ mendations to governments.1 For a time the procedure worked reasonably well. At the council's first meeting in January 1944 �he Co-ordinator-General was appointed Co-ordinator-General of the National Works Council (with administrative staff drawn from Post-War Reconstruction) , thus maintaining a dose link with the Loan Council.2 The authority and respect which Brown commanded helped facilitate the inward flow of projects and the allocation of priorities. In association with the State Co-ordinators, a standardised form was prepared designed to show among other things the amount of employment that was likely to be generated. Because of wartime defer­ ment of capital and maintenance expenditure of public works there was no shortage of proposals, but the bulk of projects were allocated an "A" priority by sponsoring auuhorities, and Brown expressed some concern in his first report that the structure of the "reservoir" was likely to become unbalanced.3 By mid-1 944 classified proposals received amounted to an estimated labour content of 6,060,000 man-weeks ; of these proposals 56 per cent were classified priority "A", 3 1 per cent priority "B", and 1 3 per cent priority "C".4 Because of the shortage of teohnical staff only 1 "Proceedings of the Conference of Commonwealth and State Ministers", Melbourne,

14-15 Jul (mimeographed), pp. 1-35. Harry Brown resigned as Co-ordinator-General of Works on 22nd Aug 1945 and was replaced by C. A. Hoy. • First report of the Co-ordinator-General of Works to the National Works Council, 17 Jan 1944. • Second report of the Co-ordinator-General of Works to the National Works Council, 21 Aug 1944. 1943

2 Sir

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about 4 0 per cent of projects had been engineered t o the point ready for tenders to be called. The proportion was not increased by the end of the war or in the early post-war years. Even so a ,reasonable reserve stock had been accumulated fairly quickly. Some of the unresolved procedural matters were clarified during the three wartime meetings of the council. At the Premiers' Conference in July 1 943 the C-ommonwealth had been deliberately vague about finance. The Premiers were of course hopeful that the Federal Government would meet a proportion of the cost. Indeed, from time to time Chifley dangled

the carrot of Commonwealth assistance to encourage bhe States to toe the line. Specifically, he was fond of using the expression "national works" in two distinct ways. When encouraging the States to co-operate, the works "reservoir" was referred to as the "national works programme" ;

but when the Premiers had their hands held out the definition of national works was narrowed to large interstate or defence projects for which the Commonwealth was entirely or largely responsible. When pressed the Government made plain that in ordinary circumstances finance would be secured in the usual way-from revenue, trust funds, or through the Loan Council. With the financial reserves of the States expected to be in a healthy condition at the end of the war, Chifley in his dual ministerial capacity was careful to avoid any post-war commitment. Reading between the lines , however, it seemed reasonably clear that the Commonwealth would not hesitate to assist financially if heavy unemployment threatened. The manner in which investment criteria were determined is a more elusive subject. Even though some Post-War Reconstruction officials had been anxious to create a central works authority ,capable of influencing investment allocations on a national scale,5 the Constitution erected an effective barrier. But Commonwealth ambitions in this area were usually close to the surface. Thus, an early attempt was made to use the National Works Council's machinery to dissuade the States from investing heavily in commercially untried rural industries. Before irrigation and land settle­ ment sohemes were initiated, the States were urged to consult the proposed Commonwealth Bureau of Agricultural Economics on marketing prospects with the implication that Commonwealth financial assistance would be more readily forthcoming if the advice was followed. A clearer example

is the strong pressure that was exerted on all authorities not to initiate low priority works which would tend to draw men and materials away

from housing construction. Indeed, in the early post-war years as much of the council's time was spent on this task as on the maintenance of the works "reservoir". The management of investment resources in this way was only possible, however, beoause of the consensus in favour of the housing programme. In other circumstances moral suasion was rarely successful. • The

idea canvassed at ministerial level within Post-War Reconstruction in March-April 1943 was that a national works commission be established solely as a Commonwealth body which would be responsible, not only for preparing the "reservoir", but also for planning a national investment programme. The commission was to be constituted under National Security Regu­ lations on lines similar to the Rural Reconstruction Commission.

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Fortunately it was not necessary after the war to use the "reservoir" for employment absorption, and the main weakness in the council's maohinery-the inability to influence directly the timing or regional distribution of works expenditure-was not exposed. Every effort was made at the Commonwealth level to sustain enthusiasm for the "reservoir" in the early post-war years, and to improve the proportion of fully­ engineered projects. At the end of uhe war the value of works "in stock" amounted to £249,060,000, a figure which was reasonably well maintained for a number of years. But by 1947 interest was declining and by the early 'fifties the Na:tional Works Council and the idea of national public invest­ ment planning had become a dead letter, a casualty of the attainment of full employment and of the federal system. The Council's contribution to the early stages of reconstruction, how­ ever, should not be dismissed. Forward planning of public investment was an important innovation. It permitted a more systematic examination of proposed projects than had been possible previously, and the "reservoir" was a useful safety net. Further, advanced preparations assisted the fairly rapid transfer of resources to high priority post-war works, and influence was exerted on the composition of expenditure in favour of the housing programme. To be sure, the council's machinery was cumbersome and incomplete, but its demise left a conspicuous gap in the instruments of public economic organisation. While in one sense cutting across the efforts of the Na:tional Works Council, one major project received vigorous support by the Common­ wealth-standardisation of railway gauges. It was a hardy perennial. A royal commission in 1921 had recommended standardisation, and there had been further talk in 1 936, but nothing was done on either occasion. The matter was revived early in 1 944 because of Army frustration with the waste of time and effort in constant reloading. For defence reasons the Minister for the Army recommended urgent consideration be given to standardisation of a limited number of important connections : Kalgoorlie and Fremantle, Western Australia; Port Pirie, South Australia and Broken Hill, New South Wales ; and the long link between Bourke, New South Wales and Mount Isa, Queensland, via western Queensland and then to the coast at Townsville. (This was intended to provide an alternative to the vulnerable Queensland coastal line . ) Ward reacted enthusiastically largely because of the employment possibilities. Full Cabinet was also receptive for a mixture of defence and employment reasons. Sir Harold Clapp was appointed to report on the extent of conversion that should be undertaken and the possibility of constructing new standard (4 foot

8-!- inch ) gauge lines.6 When completed in April 1 945 Clapp's report was more ambitious than had been anticipated. First priority was given, as expected, to the completion of the standard gauge transcontinental linkage from Sydney 6 Full

Cabinet Agendum 629; meeting 14 Mar 1944.

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to Fremantle by the construction, alongside the existing line, of an inde­ pendent 4 foot 8 t inoh gauge line from Kalgoorlie to Fremantle, and by conversion of the Port Pirie to Broken Hill line (including acquisition of the Silverton Tramway Company's private line ) . The Director-General of Land Transport also accepted the military and development argument in favour of the long inland connection between Bourke and Townsville via Cunnamulia, Charleville, Longreach -and Winton; and another such line from Dajarra, Queensland, via the Barkly Tableland to Birdum, Northern Territory, to link up with the north-south route. Further, he proposed the conversion of the entire 5 foot 3 inch gauge in Victoria and South Australia, and the modernisation of the main existing routes, and upgrading of locomotives and rolling stock. The whole programme was expected to be completed in about eleven years at a cost of around £77 ,000,000. Paramount in all cases were strategic considerations based on current war experience. Despite the scale of Clapp's scheme, the Cabinet's enthusiasm was undiminished and the whole programme was adopted for commencement as soon as possible after the end of the war.7 The only rider was that resources were not to be drawn away from housing. As far as can be determined, the project was not submitted to the National Works Council, and l'he mounting evidence of ohronic shortage of labour and materials (including railway sleepers ) was -largely ignored. Further, scant attention was given to the reasonable claim of state Ministers for Transport that priority should be given to refurbishing exising dilapidated systems. The decision was taken in a vacuum. Fanciful, too, was the adoption of the 1921 formula for sharing costs : one-fifth by the Commonwealth, and four-fifths by the States distributed between them on a per capita basis. Admittedly this was an opening gambit for 'the Premiers' Conference of August 1 945, and in the event the Government was prepared to contribute one�half. The conference referred the proposal to a Commonwealth-State committee,8 and at a further conference in May 1 946 the Commonwealth failed to reach agreement with Queensland and Western Australia about the distribution of cost. Even though the exclusion of these two States destroyed much of the defence significance of the ,project, the Government decided to go ahead with New South Wales, Victoria and South Australia on a fifty-fifty basis. The Railway Standardisation Agreement A ct was passed by Parlia­ ment in August 1 946 but it was many years before the first major result­ a standard gauge connection between Sydney and Melbourne-was achieved. REGIONAL PLANNING

The preparation of a post-war plan of public works through the National Works Council was not restricted to the accumulation of an adequate stock of projects. An additional planning objective was the 7

Full Cabinet Agenda 629B and

• Proceedings of the

Aug 1945.

C; meetings 17 Apr and 2 Jul 1945 . Conference of Commonwealth and State Ministers,

Canberra. 20 to 23

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PLANNING

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classification Df works on a regional basis s o a s to' ensure that works were sufficiently dispersed geographically to enable a uniformly high level Df employment to' be maintained throughDUt the country. The emphasis on regional full employment was not only impDrtant for its own sake. It meshed with a number of other policy Dbjectives such as decentralisation, population growth, the promotion of water conservation, and the control of land settlement schemes. Moreover, the need for the "balanced" regional development Df the continent had been a deep Australian convic­ tion ever since the arrival of the First Fleet. In the nineteen forties the conviction was sharpened because regionalism was fashionable internation­ ally, and because of the fear of a renewed "yellow" invasion from the north. The Department of Post-War Reconstruction, however, was uneasy about becoming invDlved. The subject was clearly one for the States, and the sceptics had little difficulty in revealing the slender intellectual content Df the literature on regionalism. Nevertheless, the advocates were able to exploit Chifley's tenderness for new ideas, and the relationships between industrial decentralisation, town planning, and regional policy. A Division of Regional Planning was formed within Post-War Reconstruction during October 1 944. The division had few clearly defined functions, and only a handful of staff. It was to be concerned with the compilation of resources surveys, analysis of specific regional proposals, and preparation of development plans (in association with other departments) for areas such as northern Australia for which the Government had a special responsi­ bility. In practice its most useful role was in helping representatives of the States to get together to discuss matters of common interest, and in acting as umpire when interstate disputes arose. Conferences of regional planning liaison officers were held under Commonwealth auspices in October 1 943 and April 1945. �he first of these led to a series of resolutions adopted �by the Premiers' Conference in October 1 944. These were intended to encourage the States to proceed with the definition of boundaries, and to relate decentralisation and administrative units to these boundaries; to supply planning information to the Government; to promote formation of regional advisory bodies; and to undertake comprehensive resources surveys of important regions.9 Most of the States had already established planning authorities, and were engaged in drawing lines on maps; but resources surveys were handicapped by the familiar manpower problem. At the Commonwealth level the interest in resources development was a factor in the creation of the Bureau of Mineral Resources, Geology and Geophysics, under Dr H. G. Raggatt! in 1 946; and in the conduct of land use surveys by the Council for Scientific and Industrial Researoh immediately after the war. But these were the first tentative steps in 'long-term projects. The wartime • Proceedings of the Conference of Commonwealth and State Min/sters, Canberra, 3 to 5 Oct 1

1944. Sir Harold Raggatt, CBE. C'wealth Geol Adviser 1940-51 ; Dept Supply and Bur Min Resources 1942-51 ; Secty Dept Nat Develpt 1951-65; Dep1Y Chmn Aust Atomic Energy Comm 1957-65; Consult Geol to BHP Co from 1965. B. North Sydney, 25 Jan 1900.

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exchange of information was useful t o the Secondary Industries Commis­ sion, the National Works Council, the Manpower Directorate and its successor the Commonwealth Employment Service. However, the strongest impression is that in the nineteen forties the exchange of regional planning information led to the creation of filing cabinet fodder. The promotion of interstate collaboration was occasionally more rewarding. The outstanding example was the agreement eventually achieved for tighter control of Murray River waters. The Government's involvement derived from the 1 9 1 5 River Murray Agreement between the Commonwealth, New South Wales, Victoria, and South Australia for development of the irrigation potential of the Murray Valley. The Murray and its tributaries had already been locked at numerous points, and under discussion in 1 944 was further development inoluding a proposal by New South Wales to raise the wall of the Hume Weir to enlarge storage capacity from 1 ,250,000 to 2,000,000 acre feet. Federal financial assistance was invited. As the proposal had implications for war service land settlement, post-war works and regional planning, the Government sought to impose more rigorous control of the catohment area and of irrigation waters than had been possible through the Murray River Waters Commission. In substance the Commonwealth's claim was that New South Wales had not exercised adequate control over the catohment area. Excessive tree felling and burning had been permitted which had led to silting of the lake and the river. The scheme outlined to the States in 1945 brought together several strands of reconstruction policy. As a condition of Commonwealth financial assistance, the Government insisted that there should be an adequate survey of land use and potential markets so as to justify the production expansion whioh the increased availability of water would make possible. Further, control should be vested in a reconstituted authority with specific powers conferred on it by the four participating governments, and provision should be made for the election of local representatives to the authority. The Government envisaged that decisions of the authority should only be upset by a resolution passed by both houses of any of the four parliaments. Finance would be made available by the four on an agreed basis, but the au�hority was to have power to impose taxation within the region if it wished to accelerate the rate of development. In this way Post-War Reconstruction believed that Murray Valley development could be based on sound economic principles, and at the same time an element of regional control and independence would be obtained. Initially progress was blocked by New South Wales and Victoria who objected to Commonwealth interference and the partial surrender of autonomy. Nevertheless, surveys were carried out in 1 947 and 1 948 and the verdict was favourable for the completion of the Hume Dam. Agree­ ment was reaohed in October 1 948 for the formation of a River Murray Commission to replace the old authority. The commission was not given

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all the power sought for it by the Commonwealth, but New South Wales and Victoria agreed to report annually on the condition of the reservoir and to take any special action recommended by the commission as a condition of the work proceeding with Commonwealth money. Most of the other plans for regional development ran into more intractable difficulties. J1he most ambitious of these was the abortive attempt to collaborate with Queensland and Western Australia in the development of northern Australia. Following speeohes by the Prime Minister in 1 944 and 1 945 emphasising the defence importance of t:he area, a Northern Australian Development Committee representative of the three governments was formed at the end of 1 945. The committee produced within its first few meetings a standard list of the disabilities of the tropical north, and Queensland and Western Australia reached the conclusion that in view of their loss of income taxation powers the Commonwealth would have to find the bulk of the capital for any agreed programme. In view of the current strain on Commonwealth resources, northern Australian development quickly sank to a low order of priority. In a different category was a Western Australian proposal first mooted in 1 944 to dam additional water in the Darling Range for supply to country towns and farming regions of the south-west of the State. No interstate matter was involved; the State was interested in financial assis­ tance from the Commonwealth. As with other Western Australian proposals suoh as the Ord River irrigation scheme, information supplied by the State was vague and t:he project had not been adequately researohed.2 By 1 947 Commonwealt:h intervention had resulted in a substantial overhaul of the details and the adoption of a much more modest project. The Snowy Mountains hydro-electric and irrigation scheme was in its formative stages at the end of the war, but the story of the negotiations whioh Ied to agreement in 1 949 falls outside the scope of this volume. As these examples illustrate, the Division of Regional Planning was unable to make any real progress in its specified area of responsibility. It could prod and encourage the States, but only in circumstances of direct Federal involvement could it make an impact. By the early post-war years the character of the division had changed. Of necessity its centre of interest had shifted to the promotion and examination of "national" works in association with other departments and the National Works Council. The division thus provided the nucleus for the post-war Department of National Development. H OU S I N G

A major part of the national works programme was intended to be a comprehensive soheme for the construction of public and private housing. The Government was acutely aware of the huge back-log of housing caused 2 For

example, Western Australia had not considered the possibility of a number of rivers in the catchment area turning salty. Salt was also to appear later in the Murray River irrigation scheme with disastrous effect.

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by the abnormally low level o f building i n the 'thirties and the almost complete cessation of civilian construction since 1 9 4 1 , a problem which would be magnified after the war by demobilisation, a bulge in the marriage rate, and the resumption of large-scale immigration. There was concern, too, about the extent of sub-standard housing, and a desire to improve the quality of housing available to low--income families. The first step was the appointment of the Commonwealth Housing Commission in April 1 943 with L. P. D. O'Connor3 as chairman4• Appointed as a commission of inquiry and attached to the Department of Post-War Reconstruction, the commission's terms of reference were brief and all embracing : to inquire into and report on the present housing position in Australia; and the housing requirements of Australia during the post-war period. These instructions were intended to lead ,the commission to prepare a national housing plan; the problem of Commonwealth-State collaboration was at this stage of secondary concern. The commission presented interim reports ,in October 1 943 and March 1 944, and a comprehensive final report in August 1944. Reflecting the utopian optimism of the early stage of post-war planning, the final report covered a very wide field and envisaged the creation of a Commonwealth Planning Authority which would be concerned not simply with housing but the whole field of post-war planning including primary and secondary industries, national works, "the general economic structure of the com­ munity", regional and town planning, and the co-ordination of the work of State governments.5 Within its own sphere the report concentrated on the size of the housing shortage, the post-war programme of construction, public provision of housing for low-income families, regional and town planning, land acquisition, building standards, slum clearance, and com­ munity facilities ( especially for new housing areas) . The commission based its work on the assumption that "a dwelling of good standard and equipment is not only the need but the right of every citizen-whether the dwelling is to be rented or purchased, no tenant or purchaser should be exploited by excessive profit". As high-income families were able to make their own financial arrangements and middle-income families were reasonably well served by banks and building societies, the commission concentrated on the needs of low-income groups. The report's many recommendations were not supported by closely reasoned argument, but the document was an imaginative expression of contemporary egalitarian and urban planning ideals. Most of the proposals, however, were beyond the Government's constitutional and financial capacity. Because of the need for early decision, the Housing Commission's first interim report had most influence on initial planning. Main recom­ mendations were divided into two groups : a suggested building programme on the basis of rough estimates of the size of the building shortage, and P. D. O'Connor. Mgr State Advances Corp Brisbane 1933-43 ; Chmn C'wealth Housing Comm 1943-44; Dep Dir Housing; Dir Dept Works and Housing from 1944. B. Murtoa, Vic., 11 Apr 1890. • Other members were J. S. Gawler, C. V. Howard, Mrs. M. M. Ryan, and A. V. Thompson; secretary Mrs M. W. Phillips. Executive Officer was W. R. Bunning. • Paras 190-7 and 204-6 of the Final Report.

• L.

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proposals for housing subsidies for low-income families. While acknow­ ledging statistical deficiencies, the commission estimated the stock of housing at 1 ,800,000 dwelling units ( inclusive of about 1 00,000 sub­ standard units ) , and a "shortage" of about 300,000 units by January 1 945 (inclusive of replacement of sub-standard homes ) .6 The commission suggested early commencement of an "immediate relief" or wartime pro­ gramme on a scale as large as resources would permit, an "immediate post-war programme" with a target of 50,000 dwelling units completed or under construction by the end of the first post-war year, and a "long-term programme" with a target of 80,000 units by the third post-war year.7 Of the 50,000 units for the first post-war year, 30,000 were to be built under government sponsorship for low-income families. The rent of these houses and flats was to be subsidised by the Commonwealth by means of special purpose grants to State governments, and for this purpose ( and to assist general planning) the commission recommended the setting up of a permanent Commonwealth housing authority. A subsidiary proposal, the establishment of an experimental building station to help improve construction techniques, was endorsed by the Full Cabinet in March 1 944.8 In accepting the urgency and magnitude of the task, the Full Cabinet responded with a minimum of delay. In October 1 943 authority was given for the initiation of the first phase of the commission's plan, the wartime programme intended to reduce the housing backlog before the end of the war.9 In December Cabinet "accepted the principle of financial assistance by the Commonwealth to State, local and other approved authorities to assist the provision of suitable housing for those on low incomes and/or with large families".1 This was intended to cover the public sector compo­ nent of the immediate post-war and the long-term programmes, and involved negotiations with the States for a Commonwealth-State housing agreement. This functional separation of the wartime and post-war parts of the scheme, dictated as it was by constitutional considerations, led to early confusion and failure by some of the States (partly because of Commonwealth reticence) to appreciate the link between the wartime and post-war phases. With its command of manpower and material resources, the Commonwealth Government accepted primary responsibility for the wartime phase, although it chose sensibly to work through State agencies. But after the war Commonwealth power would be limited, and housing was a cherished preserve of the States. The Government hoped to be able to exert as much influence as possible through the imposition of condi­ tions on financial assistance, but accepted that the initiative lay with the States. Despite this administrative complexity, however, the wartime and post-war phases were conceived as a unity. 6

"Dwelling unit" was not clearly defined by the commission but appears to have included separate houses normally occupied by one family, and fiats; the treatment of hostels, boarding houses and hotels is unclear. ' Because of the uncertain scale of post-war immigration, these estimates excluded any allowance for immigration. S Full Cabinet meeting, 14 Mar 1944, on Agendum 565B. • Full Cabinet meeting, 20 Oct 1943, on Agendum 553. 1 Full Cabinet meeting, 7 Dec 1943, on Agendum 565.

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Initiation of the wartime phase at the end of 1 943, the Commonwealth's first venture into home building outside its special responsibilities for defence and repatriation, involved an elaboration of the bureaucratic structure. For the time being administration remained with the Department of Labour and National Service to which was added a War Housing Division. A Cabinet sub-committee2 was appointed to determine policy details with the aid of a newly established inter-departmental committee. The Commonwealth War Workers Housing Trust was reconstituted as the Commonwealth War Housing Trust to enable the trust to broaden its range of activities. The Production Executive considered the recommenda­ tions of the Cabinet sub�committee, and provided manpower allocations for housing within the context of the manpower budget. But these changes did not ensure the release of men and materials from construction for war purposes, priorities for which were controlled by the Works Priorities Sub�ommittee and the Defence Committee. Arrangements were made to submit building proposals to these authorities via the Department of War Organisation of Industry, but experience had shown that there would be little change in priorities without detailed Cabinet intervention. From the outset, therefore, the wartime programme was handicapped by adminis­ trative unwieldiness and the absence of a clear structure of priorities for war and non-war housing. For these reasons, and because of inadequate communication and co-operation between the Commonwealth and the States, the programme lagged badly. Targets were adjusted quarterly but for 1 944 as a whole 4,465 government-sponsored houses were planned to be completed or under construction. In addition, War Organisation of Industry issued 3,296 permits for the building of private homes, making a total approved programme of 7,761 houses. By the end of January 1945 805 houses had been completed and 2,970 were under construction, or 50 per cent of the approved programme; but of the government-sponsored target only 39 per cent was achieved.3 For 1 945 the target was raised to 14,800 houses of which one-half were to be government-sponsored, although the Produc­ tion Executive was under no illusions that the figure drew more from faith than reality. The problems facing the building industry were easily identified and had been under notice for many months. The importance attaohed to civilian housing by 'the Full Cabinet and the Production Executive was inconsistent with the Defence Committee's priority rating for home construction, meaning that insufficient labour and materials were being released from direct war construction. In addition, the Govern­ ment had not given sufficient notice of its plans to State housing authori­ ties, and for their part the States did not accept the same degree of urgency as the Commonwealth. On 4th June 1 945 the Full Cabinet approved an upgrading of housing's priority rating so that it would be second only to the "most urgent Service projects", and the Prime Minister 2 3

Comprising Ministers for Post-War Reconstruction. Labour and National Service, War Organi­ sation of Industry, Repatriation and War Service Homes, and the Attorney-General. Production Executive Agendum 122/1943 and Supplements.

719

HOUSING

made clear t o the States the magnitude of the planned programme and urged that development work be undertaken without delay.4 In July the Department of Works assumed the housing functions which had been split between Labour and National Service, Post-War Reconstruction, the Prices Branch and the War Service Homes Commission, and was restyled the Department of Works and Housing. But these changes came far too late to have any influence on the war housing programme, 'and in 1 945 the back-log was judged to be at least as great as in 1943. Nevertheless, a start had been made. In terms of the number of dwellings completed, building activity had been increased from the wartime nadir in 1 943 of 7! per cent of the 1939 figure to 27! per cent in 1 945. For the post-war housing programme the Government had three main objectives. First and most obviously, the attainment of as high a rate of construction as possible. Second, the direction of available capital funds to the building of rented accommodation for low-income families by means of government-sponsored construction, and the supply of this accommoda­ tion to these families at a rent whioh they could afford. Third, retention by the Commonwealth of overall direction of the government-sponsored programme. In addition there was a long list of subsidiary objectives, including the setting of a uniform national housing standard, the clearance of slums, the development of integrated town planning, the control of land prices, urban decentralisation, and the upgrading of the teohnology of the building industry. But these were of lesser consequence than the desire to see the basic wage-earner well housed and placed in a financial position which would enable him to own his own home eventually. The Commonwealth had no intention, however, of seeking direct control. Housing was not included in the reconstruction referendum, and financial incentive was chosen as the method of inducing the States to adhere to national policy. Initially the Government sought to deal directly with housing and other regional authorities, but the States objected and the idea was abandoned. The draft housing agreement approved by the Full Cabinet in December 1 943,5 and submitted to the Premiers the following month,6 clearly designated State governments as principals. The substance of the draft agreement was that the Commonwealth would raise loan funds and advance money to the States at cost (that is the long-term bond rate) . The loans were to be repaid over the amortisation period of the asset. Housing was to be of two types-rented accommoda­ tion and homes to be made available for purchase. The Government considered the rental housing component the most important part of the scheme, and much of the subsequent discussion centred on the method of offering rent subsidies. The proposal was that low-income tenants be offered a rental rebate equal to the difference between the "economic rent" • Full 5 Full

Cabinet Agendum 553C Cabinet Agendum 565; meeting

• Proceedings

Jan 1944.

7 Dec 1943. of the Conference of Commonwealth and State Ministers,

Canberra. 25

to

27

720

R ECONSTRUCTION-THE

F EDERAL DIMENSION

and one-fifth of family income equal t o the basic wage. I n other words, the amount of �he rebate would be adjusted according to a sliding scale, and would disappear when one-fifth of family income was able to cover "economic rent".7 The home purchase component was less specific. It allowed State housing authorities to build an agreed number of houses for sale. Minimum deposits were to be determined by State law, and otherwise be in accord with capacity to pay. The rate of interest to be charged was to be limited to one per cent above the rate charged by the Common­ wealth to the States. An important condition was that houses could only be resold to the housing authority. Losses incurred as a result of rent rebates were to be shared three-fifths by the Commonwealth and two-fifths by the States. While the States were to act as principals, the Commonwealth sought detailed administrative control over the scheme : most matters of substance were to' be made subject to agreement by Commonwealth and State officials. The first condition was that the States should have "adequate legislation" to cover slum clearance and town planning as well as the rental and home purchase parts of the scheme. Second, minimum and maximum housing standards were to be agreed by the Commonwealth and States, a subject which became a matter of sustained controversy. Third, the details of new housing developments such as site and sub­ divisiDn plans, the types of dwellings, estimates of cost, and estimates of "economic rent", were to be made the subject Df agreement between officials of the various governments. Finally, the CommDnwealth deter­ mined the scale of new construction through its control over the volume of loan raising, and sought influence Dver the distributiDn of building between and within States. These cDnditions and the system of rental rebates were bound to produce a sharp reactiDn from the States. Whether such stipulations were justified or not raises time-honoured questiDns about the nature of Australian federalism, notably the extent of CommDnwealth responsibility for the development of national eCDnomic and social standards. This is not the place to consider these issues. But the Labour Government's view was that the Commonwealth had a dear obligation to beoome involved directly in the improvement Df housing conditions because the war had played a large part in aggravating the problem, and also because housing was such an important element in living standards. Thus housing, with employment and social services, was placed in a special category fDr which there had to be a natiDnal approach and a narrDwing of differences between and within States. There is little value in a detailed record of the twO' years Df negotia­ tions which produced the Commonwealth-State HDusing Agreement Df November 1 945. But an Dutline of the main issues is necessary to explain the mDdifications made to the Government's Driginal draft. 7

"Economic rent" was not defined at this stage, but was intended to mean the full cost of supplying the accommodation. It did not mean the current market price. Family income was defined as the whole of the breadwinner's income, two-thirds of the wife's income, and one­ third of each child's income up to a maximum of 30s. per week (the income of children up to lOs. per week to be disregarded ) .

HOUSING

721

A s expressed forcefully by the Premier o f South Australia, T . Playford,8 the predictable opening gambit of the majority of States was to accept the Commonwealth's financial assistance but not its supervision. As a modification of the Government's scheme, the States argued for loans with the rate of interest reduced below the long-term bond ra:te of 3t per cent whioh would have enabled them to obtain cheap money which they could use for housing in their own ways. 11he proposal had a certain attraction in that it avoided the irksome business of applying the means test to low-income families, but it was plainly unacceptable to Curtin and Chifley : a few States had a commendable record in providing housing for those in need but most did not. The rental rebate provisions were among the few original provisions of the scheme to survive the Premiers' onslaught. Most other aspects of the Housing Commission's conception of a national housing policy were sacrificed on the altar of State rights. The Premiers rejected the Commonwealth's attempt to supervise in detail the geographical distribution of new home building under the scheme. The most the States would concede was to consult the Commonwealth on the broad distribution between urban and rural building. The Government's hope for supervision of such details as site plans, design and costs was also abandoned. The draft agreement of January 1 944 laid down that construction should conform to minimum and maximum standards. The minimum was to be as set down by the individual States, and there was no argument about this provision. But there was no obvious solution to the definition of a maximum standard. The Government insisted that the total cost of any dwelling should not exceed a certain amount, so as to avoid extravagance, a principle whioh was accepted with reluctance by the States. Because of wide differences in costs between States, and between metropolitan and rural areas, and because of uncertainty about the trend in post-war prices, upper cost limits could not be specified. The most that could be done was to agree to a periodic revision of maximum costs. The Commonwealth itself contributed to dilution of the original scheme. Shortly before the Premiers' Conference of August 1 945 where final details were settled, the Prime Minister announced the Government's intention to abandon the home�purchase provisions. This meant simply that the Commonwealth would not share in any loss arising from State activity in the construction of new houses for sale to low-income families. The reasons, as stated, were that the States were unlikely to suffer losses of any significance, and that facilities provided by the States for home­ purchase were already adequate.9 An additional reason, not openly expressed, was the obstruction of the States. The upshot was that the Commonwealth and State Housing Agreement rested solely on rental subsidy to be offered to low-income families. This was of importance for increasing the availability of housing for those in 8

Hon Sir Thomas Playford. GCMG. MHA SA 1933-68; Premier, Treasurer and Minister for Immigration 1938-65. B. Norton's Summit, SA, 5 Jul 1896. • Proceedings of the Conference of Commonwealth and State Ministers, Canberra, 20 to 23 Aug 1945.

"Haven't you got 0 NE empty house ?

We haven't

had a decent haunt for five years ! " Dixon In Smith's Weekly (Sydney) 6 Oct 1945.

HOUSING

723

greatest need. Under the agreement advances were made by the Common­ wealth to the States for the construction of low-cost rental accommodation, and an opportunity was offered to tenants to purchase the houses they had been renting.1 But the agreement fell far short of the national housing policy envisaged in 1 944, although it was a modest step towards over­ coming the total housing shortage. Indeed, the concept of a national approaoh to the housing problem had coHapsed : the net result of the two years of negotiations was that the major initiative reverted to the States and private enterprise. This was reinforced by the failure of governments to reaoh agreement on the post-war control of building materials.2 At the Premiers' Conference in August 1 945 the States objected to continued central control of building materials and the Commonwealth forthwith abandoned most of its wartime restrictions and its priorities system. This is not the occasion to pursue the history of the building programme after the war: the persistence of an acute housing shortage for many years is well known, hardly surprising in view of the low level of construction in the 'thirties and 'forties, the resurgence in the marriage rate and fertility, and the adoption of an ambitious immigration programme. Nevertheless, the restoration of the industry was initially more rapid than this general view might suggest. In 1 945 the Government planned for the commence­ ment of 24,000 houses in 1 945-46, and this target was slightly exceeded. For 1 946-47 the commencement rate was set at 42,000 houses and 47,243 were in fact started. The target for 1 947-48 was 50,000 compared with actual commencement of 5 3 , 1 94. To be sure, houses took muoh longer to complete in these early post-war years than before the war, but by 1948 the pre-war level of activity had been restored. This may not have been nearly enough, but in view of the dislocation of the industry during the war, the ohronic shortage of materials, and the opposition to recon­ struction training by building trades unions, the rate of restoration was a considerable achievement. But the public housing programme fell well below expectations. The hope had been that the government-sponsored scheme would account for one-half of all houses built, but between April 1 944 and June 1 948 Housing Agreement homes only represented 1 7 per cent of total completions. The general explanation appears to have been that the States did not have the determination, the funds or sufficient control of materials to compete against the overwhelming demand of the private sector. In particular the early abandonment of comprehensive building materials control and the substantial relaxation of capital issues control were the undoing of the public housing programme and the ambi­ tion to redistribute housing in favour of those most in need. Constitutional limitations and the zealous protection of State rights were plainly an important part of the explanation of the collapse of the national approaoh to post-war housing. But this is not the whole story. The idealism 1

The agreement was ultimately signed by all States, but South Australia did not operate under its provisions. While the agreement was not completed until Nov 1945, its terms were applied as from Apr 1944. • The matter is discussed In more detail In Ch. 25.

724

R E C O N S T R U C T I O N- T H E F E D E R A L D I M E N S I O N

e�pressed by the Housing Commission and official statements notwith­ standing, housing was not at the top of the Government's list of priorities. By the end of the war heavy additional financial commitments had been accepted for repatriation, reconstruction training, national works, and war service land settlement. There existed an unbreakable political obligation to increase the range and scale of social services; for equally compelling reasons direct taxation had to be reduced. The future of uniform taxation was still uncertain. In this context a large-scale assault on the housing problem appeared beyond the Commonwealbh's capacity. Therefore, as the States insisted that housing was their responsibility, Curtin and Chifley were not unwilling to agree. T R A I N I N G A N D E D U CATI O N I n preparation for the considerable human and economic problems associated with conversion to a peacetime society, the Commonwealth extended its involvement in education. In April 1 943 the War Cabinet appointed a Commonwealth Reconstruction Training Committee3 to advise on the professional and vocational training needs of discharged members of the armed forces in three broad categories : university-type education;4 other types of training, mainly technical and rural; and prob­ lem cases to be handled through the Repatriation Commission. The general purpose of the proposed scheme was to provide training and retraining opportunities for those members of the forces whose education had been interrupted by enlistment, and for those who for a variety of reasons would benefit from partial or complete retraining. The scheme aimed to provide not only personal rehabilitation but also a broadly-based upgrading of the community's educational attainment and an increase in the supply of skilled labour for post-war economic expansion (particularly in the building industry and allied trades ) . Wartime experience had demonstrated that technical training facilities had not kept pace with pre-war industrial growth, and during 1 943 and 1 944 the Department of Post-War Reconstruction emphasised repeatedly the urgent need for an upgrading and expansion of these facilities. Implementation of the scheme proved to be more complex than was at first envisaged. One ever present complication was the constitutional limitation which prevented direct Commonwealth involvement in educa­ tion. A few planners urged in 1 943 that the Government should make a bid for power over education in the forthcoming referendum, but the suggestion received little active support.5 It was necessary, therefore, to work on the basis of Commonwealth-State co-operation through the formation of Regional Reconstruction Training Committees, the Com­ monwealth's responsibility being limited, basically, to the provision of financial assistance. The Government was therefore dependent on State 3

War Cabinet Minute 2755, 14 Apr. In addition to standard degree courses, "university-type" training included nursing, teacher training and certain theological courses. 5 Of course, the 1944 referendum sought power for "the reinstatement and advancement" of ex-servicemen. •

TRAINING AND EDUCATION

725

and private organisations to provide most of the necessary facilities. For the most part there was no difficulty with this arrangement, and for the purposes of reconstruction training the State organisations became depart­ ments of the Commonwealth. Further, the facilities used by the Depart­ ments of Munitions and Aircraft Production in the Commonwealth Tech­ nical Training Scheme were made available, and in other ways the Commonwealth added directly to the supply of a wide range of educa­ tional buildings and equipment. But the Government was always conscious that its commitment was for a limited period and purpose, and this restricted the scope of post-war planning of education. Of more immediate practical concern was the vexed question of "eligibility" and "suitability" for the scheme. In 1943 vhe proposal pos­ sessed an innocent simplicity : ex-service men and women, and a few others such as members of the Red Cross closely associated with the fighting forces, whose studies had not commenced on enlistment or had been interrupted by the war, would be assisted to complete their training. But simplicity vanished when the details were being drafted. First, the Reconstruction Training Committee was understandably reluctant to draw too finely the terms and conditions of "eligibility" until the demand for reconstruction training could be estimated with some degree of confidence, and while the war continued and releases from the Services were minimal there was no practical way of improving the figures. Second, the work of the Regional Committees in organising the technical schools and in-service training arrangements was handicapped by the absence of reasonably authoritative estimates of likely demand. Gradually "Canberra figures" emerged towards the end of the war and these were generally accepted as the basis for the creation of facilities, but for reasons that will be discussed shortly these figures were little more than of academic interest. Nevertheless , the scheme commenced in a small way at the beginning of 1 944 with practice well ahead of policy. An early start was necessary to provide opportunities for the rising number of demobilised men and women expected in 1 944, and to shift some of the burden away from the post-demobilisation bulge in trainee applications. A prompt start also enabled continuous use to be made of the training facilities of the Com­ monwealth Technical Training Scheme. By the end of the war the skill rating of 1 1 9,6 1 2 workers had been upgraded by a large number of courses ranging from eight to twenty-four weeks, most of them for the purposes of munitions and aircraft production; but with the rundown in the munitions programme from 1 944, training annexes, equipment and some instructors were available for transfer to reconstruction training. The continuity which this provided,6 and the knowledge gained in wartime administration by the Universities Commission and the Army Education Service, established a solid foundation for the much larger and more complex task of reconstruction training. further important element of continuity was the appointment of the Director of Technical Training, E. P. Eltham, as the Director of the Industrial Training Division of the Department of Labour and National Service and as a member of the central Reconstruction Training Committee.

6A

726

R E C O N S T R U C T I O N- T H E F E D E R A L D I M E N S I O N

B y the end of 1944 most o f the basic principles had emerged and these were incorported in the Re-establishment and Employment A ct.7 AI�hough a great deal of effort was devoted by the planners to the definition of "eligibility" and "suitability", the rules were eventually cast in such a way that very few ex-servicemen with a serious interest in obtaining professional and technical qualifications were excluded. Age and length of service were the most important constraints. Formally the scheme was restricted to those who had enlisted before their twenty-first birthday and who had served for at least six months before honourable discharge, but even these conditions were applied flexibly. The other requirements-there were thirteen in all for university-type training­ were designed to allow the selection authorities the maximum amount of discretion. If, for example, an applicant was able to show that his training had been interrupted by the war, he could be selected by demonstrating the requisite ability which meant, in the case of universities, matriculation. Qualification for technical-type training was necessarily even less specific, and depended on an overall assessment or[ Service history, educational attainment and occupational history. The scheme was extended to Aus­ tralian merchant seamen, canteen personnel on H.M.A. ships, and mem­ bers of the Women's Land Army incapacitated by war service and unable to return to pre-war occupations.8 Those who were already qualified and merely wished to change or improve tbeir qualifications were formally excluded, but many of these were able to gain selection by arguing that the war had adversely affected their prospects for employment under conditions similar to those that existed at the time of enlistment. The financial assistance granted to trainees was generous and was designed to encourage maximum participation in the scheme. Living allowances paid to full-time trainees ranged fmm £3 5s. per week for a single man to £5 5s. per week for a married man with two or more dependent children. The higher figure was therefore in excess of the average (six capital cities) basic wage in mid-1946 of £4 17s. and only thirteen per cent below average male weekly earnings. Female allowances were, comparatively, more generous, for women living away from their parents were paid the 'same as men including the allowance for depen­ dants. Part-time allowances varied depending on the length of training required, but £60 per trainee was the maximum allowable. Full-time technical-type trainees were supported until they reached what was judged to be a forty per cent proficiency level (usually from three to twelve months after commencement) , after whioh they were placed in employ­ ment for further on-the-job training at ,full award rates. The Government reimbursed the employer for the amount of wages paid in excess of estimated proficiency until 1 00 per cent proficiency had been attained. A heavy demand for training was therefore ensured, but it was much more difficult to provide buildings, equipment and staff in sufficient quantities to cover the full range of courses envisaged. As noted, the use 7

No. 11 8 Widows

of 1945. of members of the forces were

also

eligible provided that they had not remarried.

TRAINING AND EDUCATION

727

of munitions technical training annexes helped to overcome the accom­ modation shortage for certain types of training in some areas, but there were limits to the usefulness of this type of structure and equipment. Re-erection of Army buildings also helped in a limited way. But what was found necessary and finally accepted by the Commonwealth was direct financial assistance to universities and technical colleges for a swift up­ grading of their capital and staffing resources. This step was taken, how­ ever, with some hesitation because of the possible long-term policy implications, and this was manifest in the formulae devised to provide for additional university buildings. Through the Universities Commission-the administering au�hority for university-type training-the Government accepted the financial obligation for the additional buildings required to house reconstruction trainees, but temporary buildings were to remain the property of the Commonwealth and permanent buildings were financed subject to reimbursement of depreciated value on termination of the scheme. Additional plant and equipment were financed under similar con­ ditions. However, full additional teaching costs were met by the Govern­ ment, and estimated administrative costs also attracted subsidies. In special circumstances more extensive assistance was granted as in the case of finance for the development of Higher Teohnical Training Colleges at Geelong, Melbourne and Sydney.9 Despite severe shortages of accommodation, equipment and staff, the post-war programme of university-type training commenced with less dis­ ruption than might have been expected. The number of students enrolled in degree and diploma courses more than doubled from 10,940 to 22,73 8 between 1 944 and 1 946, two-thirds of the increase being accounted for by reconstruction trainees. Clearly the scheme, together with the continuation of financial aid to students, opened the possibility of university education to a completely new group of people and in s o doing helped to revolu­ tionise the post-war character of Australian universities. The comparatively easy transition was due largely to the work of the Universities Commis­ sion.I Under the guidance of its chairman, Professor R. C. Mills, the commission had established a sound working relationship with the uni­ versities through the administration since 1 943 of financial aid to students. In a series of meetings on reconstruction between Mills and the Vice­ Chancellors during 1 943 and 1 944, the commission had been able to establish the needs of the universities and encourage constructive thought about how, with limited resources, the universities could deal with a rapid growth in numbers. Mills' main task at this stage was educational : to allay fears about post-war prospects and to convince his fellow academics that a complete change in the order of magnitude was possible and desirable. One solution favoured by a few Vice-Chancellors, the imposition of quotas, was soon dismissed as offering no solution. Quotas were politically unacceptable to the Commonwealth, and probably against the long-term • 1

Full Cabinet Agendum 825 and 825A, 16 Mar and 17 Jul 1945. This decision was part of a broad strategy for the post-war development of wool-growing and the woollen textiles industry. The wartime Universities Commission had no connection with the Australian Universities Commission established by the Menzies Government in 1959.

728

R E C O N S T R U C T I O N-T H E

F E D E R A L D IM E N S I O N

interests o f the universities themselves. I n the end universities were per­ suaded to reduce slightly their entrance requirements for trainees, but the concessions that were granted were not intended to pave the way for easy qualifications. They were designed to avoid the need to re-examine those who had demonstrated the requisite ability. In general university standards UNIVERSITY-TYPE RECONSTRUCTION TRAINEES

Reconstruction Trainees: Degree courses Other

1945

1946

1947

1948

1949

982 1 39

6,789 1 ,730

9,677 1 ,504

1 0, 1 82 1,367

8,300 1 ,05 1

1,121

8,519

1 1,181

1 1 ,549

9,3 5 1

Total University students: Degree courses Diploma courses

1 1,953 1 ,472

19,969 2,769

23,548 3 , 1 35

25,857 3 ,267

25,230 3 , 1 55

Total

1 3,425

22,738

26,683

29, 1 24

28,385

8.4

37.5

4 1 .9

39.7

32.9

Total

Commonwealth Reconstruction Training Scheme/Total students ( % )

Source : Commonwealth Year Books. were fairly well maintained and there was little of the "give-away" of qualifications which was such an unfortunate feature of the scheme which had followed the war of 1 9 14- 1 8 . On the whole universities probably benefited from reconstruction training expenditure despite the squeeze. In 1 945 they were near the bottom of State governments' order of priorities for capital works expenditure : Commonwealth involvement at least enabled the supply of facilities to keep pace more or less with the demand; and in the longer term the initial participation of the Commonwealth Government brought more substantial benefits. Technical-type training institutions and trainees were not as fortunate, and the vocational p art of the soheme fell well short of expectations in the early post-war years. Shortage of finance, buildings and equipment was only one and not the most important of the constraints. More fundamental was the pre-war underdevelopment of technical colleges and the prefer­ ence for ad hoc on-the-job instruction, an inheritance which left a maze of training institutions and authorities with widely differing standards and facilities. Further, the administration of this part of the soheme left much to be desired with the separation of decision-making from the policy division which resulted in confusion and uncertainty. Finally, trade unions were deeply suspicious of a scheme designed to increase rapidly the supply of skilled labour. The unions' opposition coupled with the Commonwealth Government's tenderness towards them meant that even the limited capacity that was available remained heavily under­ utilised in the early years.

TRAINING AND EDUCATION

729

Responsibility for technical-type and rural training was divided between the Department of Post-War Reconstruction and the Department of Labour and National Service. The former determined the number of trainees in the various categories in relation to the planned expansion of housing and secondary industries. A decision was taken at the outset to decentralise administration, so that Regional Committees were established in each State and these committees in tum created a large number of professional, industrial and rural sub-committees made up of employer and employee representatives of particular trades and a member of the Regional Committee. Selection and allocation of trainees was the responsi­ bility of this committee structure whioh thereby exercised control over demand. But the task of liaison with the technical sohools and agricultural colleges about training capacity, the need for new buildings and equip­ ment, and the tool kits which were to be supplied to trainees, fell to the Division of Industrial Training of the Department of Labour and National Service. Communication between the two authorities was less than ade­ quate, and the Division of Industrial Training complained repeatedly that the information it received from the Commonwealth Reconstruction Training Committee was likely to be either inadequate or amended at short notice. An integrated organisation dealing with both demand and supply would have alleviated much of the delay and uncertainty. Such administrative shortcomings were only a small part of a much wider problem of implementation, manifest in the long delay between discharge and commencement of training. Before demobilisation most servicemen were assisted in the transition to civilian life by a pro­ gramme of general education conducted by the Army Education Ser­ vice. At this stage some information about reconstruction training was made available, although lack of sufficiently detailed information was a common complaint. The first delay occurred after the submission of applications for training. Sub-committees and regional committees hesi­ tated to approve many applications in the absence of authoritative target figures from Canberra, and a great deal of confusion was generated by the large number of conflicting estimates that were compiled-particularly for the host of small part-time courses. But the longest and most serious delay occurred between acceptance and commencement. Delays of six months were usual and twelve months' delay was common. The contrast between university-type and technical-type training is dearly illustrated in the table, which shows that by July 1 946 8 2 per cent of selected full­ time university-type trainees were receiving instruction but the com­ parable figure for technical trainees was only 47 per cent (including those placed without prior traiQing) . For part-time trainees the contrast is even sharper. Some delay was of course to be expected : no training authority however well programmed could have handled the flood of applications received at the beginning of 1 946. But the main reason for the delay was the refusal of trade unions to accept the target figures proposed by the Commonwealth Reconstruction Training Committee.

730

R E C O N S T R U C T I O N-T H E

F EDE RAL DIM E N S I O N

STAGE REACHED OF COMMONWEALTH RECONSTRUCTION TRAINEES AS AT 26 JULY 1946 Stage

University-type Full-time Part-time

16,422 Applications 632 Rejected 1 1 ,554 Selected 9,444 Commenced Placed (without prior training) nla Withdrawn ( after commencement) 602 322 Completed 8,5 1 0 In training nla Placed after training

8,425 91 6,434 5,175 nla 333 186 4,656 nla

Technical-type Full-time Part-time 62,527 3,535 40,77 1 1 6,08 1 1 ,977 758 2,386 1 2,937 2,082

1 05,009 1,610 83,181 25,856 nla 861 3 19 24,676 nla

Note: nla = not available. Source: Report of Committee of Review on the Commonwealth Reconstruction Training Scheme, to Director, Re-establishment Division, Department of Post-War Reconstruction, 7 Nov 1946. Unions in the building industry provided the main opposition. At the end of the war it was estimated that eighty per cent of the additional vocationally-trained labour required for post-war economic expansion was needed by the building and furniture trades, and as a matter of policy trainees were encouraged to take up these trades. Indeed, among the most popular courses were carpentry and joinery, cabinet making, painting, plumbing, bricklaying and plastering, although there was some resistance

to the last three trades because of the heavier nature of the work.2 A large proportion of the total training target was therefore allocated to these courses, and the central committee provided capacity for the training of

32,850 ex�servicemen by the end of June 1 947. In view of the shortage of building materials and tools, the trade unions considered this a highly inflated figure which would lead to an oversupply of tradesmen. Much of the delay in beginning training was due to pressure exerted by employee representatives on industrial sub-committees. In May 1 946 unions were successful in persuading the Government to cut its planning target in half despite the fact that requirements as originally estimated were regarded as conservative. Even then union pressure continued : training capacity was not fully utilised, the number in actual training fell well below the reduced target of May 1946, and as the supply of materials to the industry improved a severe shortage of labour developed. At the end of 1 946,

E. P. Elt!ham, Director of Industrial Training, summarised the position as follows : Number agreed to be trained for twelve months ended 30 June 1947 Completed basic training and placed in employment Number in training (and awaiting placement) Training capacity (including accommodation nearing completion)

1 6,425 4,476 5,689 8,339

• Other popular courses were applied art, commerce, wool classing, boot repairing, hairdressing

and dressmaking. By Nov 1946 there were courses available.

200

full-time and 330 part-time technical-type

731

TRAINING AND EDUCATION

TECHNICAL-TYPE RECONSTRUCTION TRAINEES, 1945-48

Number in training Full-time Part-time

As at 22 20 30 20 30

June 1945 November November November November

1945 1946 1947 1948

1 ,3 3 8 2,643 19,038 22,248 1 6,569

5 ,988 1 1 ,545 72, 1 80 1 20,9 1 9 1 38,745

Number completed training (cumulative totals) Full-time Part-time 202 685 8,725 27,804 4 1 ,836

86 209 1 ,569 7,086 17, 172

Note: Includes those not taking correspondence courses but excludes rural trainees. Source: Unpublished Reports of Industrial Training Division, Department of Labour and National Service.

An assessment of reconstruction training lies beyond the scope of this volume, but it is clear that the contribution of technical-type training was much less than was judged to be desirable in 1 944 and 1 945. Part-time courses were particularly unproductive ( as indicated in the table) with a high incidence of non-completion in the minimum time. Indeed, most failed to finish their training and in the circumstances this was not alto­ gether surprising. More serious from the point of view of the supply of skilled labour was the short-fall in the full-time training target. It was predicted in

1945 that at least 80,000 to 90,000 additional skilled

tradesmen would be required from the training scheme, but by the end of

1949 only about sixty per cent of the minimum target had been achieved. While reconstruction training was the largest and most conspicuous Commonwealth contribution to education at the end of the war and in the early post-war years, the foundations were laid at the same time for what proved to be a more enduring Federal involvement in the field. By 1945 there was near unanimity that more resources should be devoted to educa­ tion and research in the post-war world, a reaction to the extreme shortage of highly skilled manpower that had been so acute in 1 942 and 1943. Again, however, the Commonwealth was reluctant to establish a commit­ ment within the ambit of the States' responsibility, and the issue emerged in terms of administrative necessity rather than of general principles. Of immediate concern at the end of

1 944 was the future of the

Universities Commission. Established in 1 942 under the National Security

Act to administer a scheme of financial assistance to a limited number of university students and to advise on manpower reservation in the universities, continuation of the commission after the war was necessary to provide the machinery for the administration of university-type recon­ struction training. Legislation to constitute the commission as a peacetime body was a routine matter, but consideration of the commission's future raised the general question of Commonwealth assistance in the field of

732

R E C O N S T R U C T I O N- T H E

F ED ERAL DIM ENSION

education outside reconstruction training and in particular direct Federal assistance to university students. It will be financial assistance was introduced to ensure as far as reserved students were able to complete their studies.3

the future of recalled that possible tJh at Although it

originated as an aspect of manpower policy, the financial assistance scheme coincided with the Labor Party's approach to social policy and, as Dedman emphasised in his first submission to the Full Cabinet on the subject in November 1 944, "no Labour Government would wish to see the scheme lapse and allow the position to revert to the pre-war state of affairs, where family income largely determined who should receive university educa­ tion".4 The Cabinet accepted the principle involved, but in doing so initiated a more comprehensive review (by means of an inter-departmental committee of the appropriate nature and form) of extended Common­ wealth educational responsibility. In a series of reports spanning 1 945 and 1 946, the committee stopped well short of advocating a national approach to education policy and instead submitted a number of ad hoc recommendations most of which were designed to limit the Commonwealth's long-term financial commit­ ment. First, the Universities Commission would be continued for the currency of the reconstruction training scheme, but the commission's func­ tions were to be largely administrative and not concerned with policy questions.5 Second, financial aid to university students would be continued, but only for five years after the war. The Commonwealth envisaged this as an interim measure pending agreement between the Federal and State governments on the longer term implications of financial assistance.6 Third, to provide a permanent nucleus of Commonwealth authority, the Education Act of 1945 provided for the establishment of the Common­ wealth Office of Education to perform an advisory function and to establish links with state and overseas governments, and such international bodies as United Nations Educational, Scientific and Cultural Organisation (UNESCO ) . Fourth, research work was to be assisted in two ways. A modest increase in researoh grants was approved, rising progressively from £40,000 in 1944-45 to £ 1 27,000 in 1 948-49. Allocation was to be supervised by the Commonwealth Research Grants Committee within the Commonwealth Office of Education. Ultimately more important, the Government at the end of 1 945 approved the formation of an Australian National University in Canberra primarily for the purpose of researoh and post-graduate training.7 3

After 1942 the original scheme of financial assistance was modified in two minor ways. First, the scope of the scheme was extended to include engineering, architecture and science courses in those few technical colleges which were judged to offer diplomas approximately equivalent in standard to university degrees. In each case extension followed a review by the Manpower Directorate of the market for those qualified in these ways. Second, the means test was Iiberalised slightly in early 1945. • Full Cabinet Agendum 757, 24 Nov 1944. The commission was in fact wound up in 1950 with the completion of the reconstruction training scheme. 6 The number of students to be assisted in 1946 was set at 729, a figure obtained by averaging the number of first year students assisted in the three years 1943-45. Financial assistance was continued by the Menzies Government in 1951 by means of the Commonwealth Scholarship Scheme. 7 The Australian National University Act was passed in 1946.

6

SOLDI E R S E T T L E M E N T AND RURAL INDUSTRIES

733

A s i n the case of housing and rural reconstruction, this circumscribed approaoh reflected the limitations imposed by the Constitution and the uncertain future of Federal finances. Despite the many genuine expressions of high principle about the need for a nationally co-ordinated policy with greater Commonwealth involvement,8 education beyond the immediate tasks of reconstruction training remained low on the list of priorities. While the war initiated important changes in policy and considerably enlarged the Commonwealth's involvement in education, the change in approaoh to long-term needs was much less marked. S OL D I E R

S E TT L E M EN T

AND

R U RA L

I ND US T R I E S

In the first half of 1 942 the outlook for many rural industries appeared bleak. Producers were still suffering from the disastrous slump in prices of the 'thirties. Markets had been lost because of the outbreak of war and the severe shortage of shipping. Essential materials suoh as fertilisers were in short supply, and the more labour intensive industries were already feeling the effects of the exodus of labour from the land. Forecasts were that primary products would be faced with the same sort of price instability as in the interwar years. These were the underlying reasons for the Treasurer's recommendation to Full Cabinet in May 1 942 for the appointment of a Rural Reconstruc­ tion Commission to investigate post-war problems of primary industries. But there was an important additional reason. As after the war of 1 9 14-1 8 , there was expected to be strong political pressure for the settlement of ex-servicemen on the land. The experienr.e of soldier settlement between the wars had been disastrous, and the Government was determined to benefit from the mistakes of the past. One obvious lesson was that a soldier settlement policy had to be prepared well in advance, so the commission was to give high priority to the development of such a policy. Full Cabinet approved the appointment of a Rural Reconstruction Commission,9 but the commission was not formally constituted until 25th February 1 943 . Like the Housing Commission it was established as a board of inquiry with terms of reference so broad as to enable it to investigate all aspects of the wartime rural economy and post-war rehabilitation of primary industries. In practice its investigations were restricted to post-war reconstruction. The commission was appointed under the chairmanship of F. J. S. Wise,! Minister for Lands and Agricul­ ture in Western Australia, while the most influential member was S. M. Wadham,2 Professor of Agriculture at the University of Melbourne.s 8 For example, Commonwealth Debates, Vol. 184, pp. 4249 ff. • FuII Cabinet Decision 22 May 1942. 1 Han F. J. S. Wise. Agric Dept WA 1929-33; MLA WA 1933-51. Min Lands and Agric 1939-45; Prem and Treas 1945-47; Chmn C'weaIth Rural Reconstn Comm; Admin North Terr 1951-56; MLC WA 1956-71; Min Ind Develpt Loc Govt and Town PIg 1958-59. B. Ipswich, Qld, 30 May 1897. • Sir Samuel Wadham. (RE Sigs 1914-19.) Prof of Agric Univ Melb 1926-56; Royal Comm on Wheat Industry 1934-36; C'wealth Nutrition Ctee 1937; C'wealth Rural Reconstn Comm 1943-46. B. Ealing, UK, 31 Oct 1891. 3 Other members were J. F. Murphy and C. R. Lambert; secretary R. W. Brownie, executive officer P. R. Judd.

734

R E C O N S T R U C T I O N- T H E F E D E R A L D I M E N S I O N

From the outset the commission took a broad view of its responsi­ bilities. "Rural reconstruction" was taken to mean not merely the problems of transition during the first few post-war years, but also the long-term development of the rural economy and living conditions in rural areas. The commission's detailed and lengthy collection of evidence in all States in the style of a royal commission was designed to present a package of wide ranging policies for the improvement of farming efficiency, intensifi­ cation of land settlement, stabilisation of farm incomes, and improvement in the standard of living and conditions of work in rural areas. The under­ lying objective was to make possible an increase in total population without lowering national living standards. The emphasis on 'long-term development had its advantages : the immediate tasks of reconstruction could not be separated easily from long-run policy goals, particularly in a sector of the economy where change was unlikely to be rapid. At the same time the commission did not give sufficient attention to immediate tasks. Many of its recommendations had an academic flavour and passed over the problem of divided responsibility between the Commonwealth and States, thus enabling governments to avoid specific decisions. In the main, the outcome of four years' work and the preparation of ten reports,4 of which the final ones were completed in 1 946, was that develop­ ment of a 'long�term rural policy was diverted to the Never Never land of departmental consideration and Commonwealth-State collaboration. These remarks do not apply to the preparation of a land settlement policy for returned servicemen. The report on this subject was completed quickly and emphasised concrete policy considerations. Guiding principles were determined after an analysis of the reasons for the failure of the

1 9 14-18 war scheme. These were, briefly, that expectations about the continuation of high wartime prices had been exaggerated which had led to an over-optimistic view of the prospects for further land settlement; large tracts of Crown and other land had been sub-divided without ade­ quate consideration of its productive value or suitability for closer settle­ ment; selection of men had been haphazard and there had been insufficient pre-disoharge training; and, most critical of all, land had been transferred at inflated prices, resulting in overcapitalisation of soldier settlement farms and the imposition of a crushing burden of indebtedness under conditions of falling commodity prices in the 'twenties. A further weakness had been the unsatisfactory division of responsibility between the Commonwealth and the States. In the words of the commission : The outstanding point in connection with the Commonwealth-State relations was that, although all States sought to make the Commonwealth a party to all losses, the Commonwealth had no voice in, and no means of protecting itself under, schemes which were devised by the States and which the States jealously guarded as being their sole prerogative.5 • The reports with dates of presentation were: 1-"A General Rural Survey", 17 Jan 1944; 2-"Settlement and Employment of Returnec\ Men on the Land", 18 Jan 1944; 3-"Land Utilisation and Farm Settlement", 30 Jun 1944; 4--"Financial and Economic Reconstruction of Farms", 28 Aug 1944; 5-"Rural Credit", 28 Feb 1945; 6--"Farming Efficiency and Costs, and factors relating thereto", 1 1 Apr 1945; 7-"Rural Amenities", 18 May 1945; 8-"Irrigation, Water Conservation and Land Drainage", 1 1 Dec 1945; 9-"Rural Land Tenure and Valua­ tion", 20 Jun 1946; 100"Commercial Policy in Relation to Agriculture", 7 Aug 1946 . • Para 134 of Report.

S O L D I E R S E T T L E M E N T A N D R U RA L I N D U S T R I E S

735

Accordingly the commission laid down basic principles for the guidance of the new soheme. These were that only those with adequate qualifica­ tions and experience, and those willing to undergo a period of intensive training including on-farm employment, should be eligible for selection. Not much importance was attached to pre-discharge training, but the commission stressed that the success of the scheme would depend heavily on the quality of those selected and on post-selection training procedures. Equally important was the selection of suitable areas for' sub-division. Selection of land was to include a full assessment of market prospects for any new types of production, a detailed s oils survey for irrigation projects and large-scale sub-division , and examination of the availability of social amenities in the area. Farms were to be of sufficient size to enable a reasonable living to be extracted and to enable diversification without

sacrifice of income prospects. Detailed attention was given by the commis­ sion to the valuation of land acquired for settlement for the purpose of payment of compensation. It proposed that all land be purohased at prices ruling on 1 st September 1 939. Irrespective of these prices, however, land was to be transferred to settlers "at a fair value, having regard to the productive capacity when fully improved, with due allowance for the cost of further improvement necessary to bring the farm to full improvement".6 "Fair value" was not defined, but the commission's clear ,intention was to avoid the previous experience of overcapitalisation. Finally, a clear-cut division of responsibility between the Commonwealth and States was proposed, including a sharing of costs after mutual agreement about settlement projects. By this means the commission hoped to avoid the States' promotion of uneconomic settlement projects. The oommission's report was sent to a Cabinet sub-committee in May 1 944 from which emerged six general principles for the guidance of ex-service land settlement.7 As presented to the Premiers' Conference in August 1 944, these were as follows : 1. That land settlement of servicemen should be undertaken only where economic prospects for the production concerned are reasonably sound; the number to be settled should be determined by settlement opportunities rather than the number of applicants. 2, That servicemen should not be assisted to become settlers unless a competent authority is satisfied as to their suitability, qualifications and experience. 3. That settlers should be allotted sufficient land to enable them to farm efficiently, and to earn a reasonable labour income. 4. That lack of capital should not preclude a serviceman, otherwise suitable, from settlement. 5. That all settlement financially assisted by the Commonwealth should be on a perpetual leasehold basis with option to purchase. 6. That adequate guidance and technical advice should be available to settlers through agricultural extension services.8 The fifth of these principles was the only one about whioh there was room for serious argument. The Government believed strongly, however, • 7

Para 220 of Report. Full Cabinet Agenda 665 and 665A; decision 26 May 1944.

8 Proceedings

of the Conference of Commonwealth and State Ministers,

Aug 1944, p. 23.

Canberra, 25 and 26

736

R E C O N S T R U C T I O N - T H E F E D E RA L D I M E N S I O N

that the problem of overcapitalisation could best b e avoided by the use of leasehold tenure. This would obviate the need to determine land values when agricultural prices were exsimilar controls) in oonnection with the company's activities. The inter-departmental committee was impre>ssed with many aspects of the proposal and embarked on a detailed examination. But its hands were tied from the outset by acceptance of the General Motors-Holden's offer and the equal treatment clause. To be sure, the Government would have found it very difficult to make a capital gift to a company over which it did not have ultimate control, while freedom from price control could not have been sanctioned. The committee was anxious to encourage the Ford Motor Company as far as possible because of the prospect of a locally­ made truck, Australian equity participation, and as insurance

against

default by General Motors-Holden's. Alternative means of assistance could no doubt have been devised, but ultimately the scheme foundered on the prior commitment to General Motors-Holden's; extension to both com­ panies ( and possibly others ) of the assistance sought by Ford was judged to be too expensive in view of the fact that the General Motors-Holden's scheme, on its own, involved no direct financial obligation. In November

1 945 the company was advised that the Government was unable to agree

MOTOR

VEHICLES

761

to most of the concessions that had been sought.7 At the same time the Prime Minister outlined what was described as a counter proposal which offered the company concessions along the lines of the General Motors­ Holden's undertaking on condition that Ford initiate the manufacture of

car, utility and truck chassis on the basis of a plan which would increase progressively the Australian content from 22-!- per cent in the first year to 85 per cent at the end of five years. Involving as it did motor vehicle chassis only, the counter proposal was much less ambitious than Ford's original scheme but was judged to be within the company's financial capability without requiring extensive Government support. Discussions

with the Ford Motor Company continued on the basis of the counter proposal , but it was 1 948 before the company had recast its own plans sufficiently, and had overcome shortages of materials and equipment, to announce its firm intention of proceeding with a four-stage programme of lifting the Australian content of its vehicles. The proposals submitted by Nuffield, Chrysler and Rootes were in general terms only and little serious consideration was given them by the inter-departmental committee. Nuffield envisaged the erection of plant for the assembly of parts imported from England and eventually the manufacture of ohassis in Australia, but the timing of this development was left open. The Chrysler plan was similar in outline to the Ford scheme, and involved the assembly of 1 5 ,000 passenger vehicles in the Chrysler, Dodge, Plymouth and De Soto class ( all about 30 h.p. ) , and

5,000 trucks, to be achieved over a three-year period. Some parts were to be manufactured locally but the programme for increasing Australian content was not specified. Chrysler had not worked out its plan in detail and was not able to give a clear undertaking. 1lhe most tentative plan of all was by Rootes whioh intended to concentrate on small and medium-sized cars, and assembly of trucks; but as intended maximum production was 5,000 small cars, 2,000 medium cars, and 2,000 trucks the scheme bore the stamp of economic inefficiency. In the development of motor vehicle policy, the dominant consideration was the creation of employment opportunities in the engineering and metal trades after the war. These were branches of industry which had expanded rapidly during the war, and whioh threatened after the war one of the largest percentage contractions. The Secondary Industries Commission was convinced, fairly enough, that wartime experience in the production of heavy artillery, tanks, torpedoes, machine tools, aircraft and the like had demonstrated the country's technological capacity to embark on integrated motor vehicle manufacture. The commission was also con­ vinced, again with reason, that the large overseas firms who had handled some of the largest and most difficult wartime contracts and who had ready access to the most advanced teohnology were in the strongest posi­ tion to initiate the Government's plan. But the crucial decisions lacked professionalism, and the way they were made illustrated the danger of 7 Full Cabinet Agendum 588D; meeting 26 Oct

1945. Prime Minister to H. C. French, General Manager of the Ford Motor Co. of Australia, 28 Nov 1945.

762

INDUST RIAL R E CONSTRUCTION

relying s o heavily o n the advice of technical experts. The two vital steps were the issue of the invitation to manufacturers in very general terms, and acceptance of the General Motors-Holden's offer without a detailed investigation and without offering an opportunity to other firms to have their plans considered at the same time and on the same basis. The first was taken without reconciliation between the Labor Party's antipathy towards monopoly and the well-grounded economic judgment that for the foreseeable future the market was only large enough for one manufacturer to produce efficiently. The second surrendered the right to attempt to improve the General Motors-Holden's terms by negotiation on the basis of competing offers. There is no simple explanation of why such important decisions were taken without due process. As noted earlier, uncertainty about the intentions of the manufacturers, a desire to get on with the job, and the influence of Jensen on Ohifley played their part. In a broader context, however, the key element was probably the narrow technical preoccupation of the Secondary Industries Commission derived from the Munitions background of most of its members. Relations between General Motors-Holden's and Munitions had been good, and it is clear that Jensen at least had made up his mind that on the basis of teohnical capacity General Motors-Holden's was the firm for the job.8 This judgment could not be disputed. All the evidence indicated that the company was in the best position to make a success of motor vehicle manufacture : it had the largest share of the market before the war, it was in the strongest financial position, it had the best access to advanced technical knowledge, and through L. J. Hartnett it had demonstrated an interest in and capacity for innovation towards the development of a passenger car suitable for local market conditions. But the wider policy implications were ignored as had been the pattern in the Department of Munitions. The choice of General Motors-Holden's to make the inside running was correct; the racing regulations were not. S H I P B U I LD I N G , T E XTI L E S A N D

O P T I CAL

I N S T R U M E N TS

No other manufacturing industry received the same attention as the motor vehicle industry, and the great majority made the transition from war to peace without direct government intenvention. But important decisions were taken affecting the shipbuilding, textiles and optical instru­ ment industries. Consideration of the post-war future of the shipbuilding industry was determined almost entirely by defence considerations. The inter­ departmental Committee on Post-War Shipping and Shipbuilding formed in January 1 944 accepted from the outset the desirability of retaining a substantial proportion of wartime capacity irrespective of the cost disad­ vantage facing Australian yards. The evident desire was to avoid a repeti­ tion of the shipping crisis of 1 942, and to secure a greater degree of •

Relations with the Ford Motor Company were not so happy. Broadly, there had been diffi· culties between Munitions and Ford since the termination of the tank programme. Ford had been given a loan to help construct a tank annexe, and the dispute centred on repayment of the loan following cancellation of the programme.

S H IP B U I L D I N G , T E X T I L E S A N D O P T I C A L I N S T R UM E N T S

763

self-sufficiency in the construction of ships for use in and around Aus­ tralian waters. The committee also accepted the need for the retention of substantial capacity for repair work. Even the Department of Post-War Reconstruction, often an opponent of non-economic reasoning, accepted the defence argument without serious qualification. Discussion quickly narrowed, therefore, to three matters : the volume of construction which would be consistent with minimum defence needs, the types of ships to be built, and the form of assistance to be given the industry. The initial proposal of the Australian Shipbuilding Board was ambitious : an expansion in the size of the Australian-registered merohant fleet over a ten-year period from a pre-war figure of about 450,000 dead:­ weight tons to 750,000 deadweight tons. This indicated a rate of construc­ tion of 70,000 tons a year, about one-half for replacement and the building of training ships, and the remaining half for net expansion. The proposal was based on two assumptions : the post-war programme should include vessels in the large overseas class, and the growth of traffic would support expansion of the coastal fleet. These assumptions were found wanting by the inter-departmental committee. The indications were that after an initial period of shortage, overseas class vessels would be in heavy oversupply in the post-war period. Further, there appeared to be no need for expansion in the size of the coastal fleet. Thus, the committee settled on a programme which was based on the demand for replacement of existing coastal vessels. It recommended that the wartime rate of con­ struction be reduced over a three-year period to a minimum of 32,000 tons annually ( exclusive of naval construction ) , a figure which it expected would enable shipyards to continue to operate economically and would provide for the regular replacement of the fleet and also a reduction in the average age of ships. The committee did not rule out the possibility of some increase in �he size of the fleet, but this was left for future considera­ tion by the Department of Supply and Shipping when more evidence was available about the trend of coastal traffic after the war. As replacement of the coastal fleet was to be reserved for Australian shipyards, the committee reaohed the conclusion that the payment of bounties to the extent of equalising overseas and local costs of construc­ tion was the appropriate method of assisting the industry. This method had the advantage of removing upward pressure on freight rates originat­ ing from higher Australian costs of construction.9 While the primary intention was to improve shipping standards along the coast, the com­ mittee's recommendation that no ship be licensed for the interstate trade after it reached twenty-five years of age was an additional element of protection for shipyards in so far as greater continuity of replacement orders was assured.1 The committee's report was referred to a cabinet sub-committee,2 but • In 1944 Australian construction costs were estimated at about £60 per ton compared with £30

£40 per ton in the United Kingdom. of the Inter-Departmental Committee on Post-War Policy for building, Oct 1944, War Cabinet Agendum 76/1945. • War Cabinet Minute, 27 Feb 1945. to

1 Report

Shipping

and

Ship.

764

I N D U S T RI A L R E C O N S T R U C T I O N

in the event few ohanges of substance were made. The Full Cabinet decided in August 1 945 to maintain a merchant ship construction pro­ gramme in peacetime of 32,000 gross tons annually for "defence purposes and, because of the widening Australian industrial structure, [the main­ tenance of] the level of employment and the continued utilisation of resources built up in wartime". Freight and charter rates for interstate traffic were to be controlled, and the purchase price of Australian-built ships subsidised ( although no specific rate of subsidy was nominated at this stage) . Registration of interstate ships was to be limited to those under twenty-five years of age, subject to the right of the Minister to approve exceptions. For the control of the peacetime programme, the Australian Shipbuilding Board was to be reconstituted by statute. In addition, the Cabinet authorised in principle a naval production programme as an "essential accompaniment to the planned merchant progr amme "; but a decision on the scale of naval construction was deferred pending con­ sideration of the size of the Australian Military Forces in peacetime.3 J1hese were long-range decisions which were intended to assure the industry that it would not be allowed to disintegrate as after the war of 1 9 1 4- 1 8 . The industry's immediate post-war future was assured by completion of the wartime programme. There were several pressing reasons for early ,oonsideration of the post-war future of the textiles industry. First, peacetime employment in the industry was notoriously unstable, and the resumption of import competition after the war could threaten a large number of jobs (par­ ticularly women's jobs ) . Second, Australia remained heavily dependent on imports of cotton yarn and piece-goods, and there was a case-at least on defence grounds-for a substantial lift in the proportion of the cotton­ goods market supplied from local production. Third, wartime develop­ ments in the manufacture and use of artificial fibres revealed more clearly than before the threat to the future of the wool industry. Thus, there was a strong case for increased government support for research in wool technology. Fourth, domestic manufacture of synthetic fabric was a negligible proportion of total consumption, and a decision was required as to whether this branch of the industry was to be encouraged. The original intention appears to have been to conduct a comprehen­ sive examination of the requirements of the industry. A Textiles Advisory Panel was appointed in November 1 943 (the first of the Secondary Industry Commission's Panels to be appointed) with a general brief to consider the needs of the woollen, cotton, knitting and synthetic branches of the industry, and to recommend as a matter of urgency the provision of research facilities including the establishment of a textiles college. A number of specific recommendations followed, and a few general papers were prepared by the Secondary Industries Commission. But the industry was not subjected to systematic examination, and the only general policy that emerged was that the industry should respond to the post-war situa• Full Cabinet Agendum 900; meeting 28 Aug

1945.

S H IP B U I L D I N G ,

TEXTILES AND OP TICAL INSTRUMENTS

765

tion in its own way without the prospect of additional tariff protection. The rationale appears to have been that the industry was already highly protected, and that on economic grounds and because of current trade negotiations an increase in the tariff was not justified; if employment diffi­ culties arose these would be dealt with through the budget or the National Works Council. In short, the Government preferred to restrict its attention to a few matters of immediate concern. The first such matter was the strengthening of training and research in textiles technology, with particular reference to the wool industry. Following a report by the Textiles Advisory Panel early in 1 944, the Government accepted a recommendation to equip the Higher Textile Training College at Geelong, Victoria, with a "balanced plant", and to establish training schools for operatives in Sydney and Melbourne. On completion of the Reconstruction Training Scheme,4 buildings and plant were to be taken over by the respective State governments. A furtJh.er report by the panel on wool research and promotion led to a comprehen­ sive soheme for an increase in the allocation of funds for these purposes.5 In November 1 944 the Government announced its proposal to increase the tax on wool from 6d. to 2s. per bale for research and promotion, and to match the amount so collected with a government payment into a Wool Researoh Trust Fund. Not less than one-half of the proceeds of the bale tax was to be paid into the trust fund by the Australian Wool Board so that research (mainly by the Council for Scientific and Industrial Research) would receive not less than three-quarters of total funding; the remainder would be available for promotion by the Wool Board. These changes were incorporated in the Wool Use Promotion A ct of 1 945 which in addition reconstituted the Australian Wool Board as a corporate body and estab­ lished the Wool Consultative Council to advise the Government on all matters affecting the wool industry. The second matter sprang from a proposal by Burlington Mills (Aus­ tralia) Limited to develop rayon and nylon fabric manufacture using the munitions factory at Rutherford near Maitland, New South Wales. The proposal had a number of attractive features. No artificial fibre was spun in Australia, and local weaving represented a nominal three per cent of total consumption of 8 3,000,000 yards in 1939-40. There existed there­ fore considerable scope for import saving, although initial planned capacity was only for 3,000,000 yards. The company estimated that it would be able to produce at a price which would be more than competi­ tive with imports without the imposition of a protective tariff. Existing customs duties were low and for revenue purposes only. Establishment at Rutherford would make use of a cartridge-filling factory no longer needed for war purposes, and would assist decentralisation and provide women with work in an area deficient in female employment opportunities. Initial capitalisation would be a modest £300,000, with one-half the equity available for Australian subscription and the remainder for Ameri• 5

Part of the general scheme described earlier, Ch. 23. Full Cabinet Agendum 741; meeting 25 Sep 1944.

766

INDUSTRIAL R E CONSTRUC TION

can interests. Finally, the promotion would secure access to American equipment and technical knowledge. On the debit side, the Capital Issues Advisory Committee pointed out that the American interests would have effective control as their fifty per cent equity would be held in a block, .and it appeared that a high price was to be paid for goodwill. The committee argued that the Govern­ ment should press for no less than sixty per cent local equity, and should canvass Australian-owned companies for alternative proposals. Although not part of the committee's report, the point might have been made that the company's cost estimates had not been independently assessed and tJhat there appeared to be good reason to suppose that once the project had been launched an approaoh to the Tariff Board would be made for protection on infant industry grounds. These and other less important reservations were set aside by the Cabinet sub-committee on Secondary Industries, and the Full Cabinet gave the venture its unqualified blessing in May 1 944.6 The agreement between the Government and the company specified that the project IShould commence by tJhe end of 1 944; the Rutherford factory was to be made. available on lease for an initial period of five years with an option to the company to continue . the lease for another five-year period or purchase at an agreed . price. The dominant reasons for the swift acceptance of the Burlington Mills offer were ( i ) the prospect of providing about 6,500 women with employment in a country district, (ii) the opportunity for making use of a munitions factory whioh had become redundant, and (iii) the addition that would be made to the range of manufacturing industry. Concern about the ultimate economic efficiency of small-scale rayon weaving and about the appropriate percentage of Australian equity was, in tJhe context of 1 944, far less important. The work of the Cabinet sub-committee on Secondary Industries and the Secondary Industries Commission touohed on a wide range of other industries and sub-industries in piecemeal fashion. Frequently the decision was that no action was required, or that the Government should not or could not become involved. When Government assistance was thought to be necessary, this was normally restricted to the immediate problem of peacetime conversion; acceptance of a long-term commitment was rare. Optical munitions was one of the first industries to be refused assistance. The development of optical instrument manufacture was one of tJhe out­ standing technical achievements of the war.7 With no previous manufactur­ ing experience and with very little technical assistance from abroad, a high degree of self-sufficiency had been achieved by 1 942-43 in the production of optical glass, leqses, prisms, searchlight mirrors and associ­ ated instrumentation. By the end of 1 943 the primary military need for instruments had been met, and in December 1 943 the Secondary Industries Commission appointed an Optical Industry Advisory Panel to explore • Full Cabinet Agendum 618A; meeting 10 May 1944. • Mellor, The Role of Science and Industry, Ch. 12.

DIS P O SA L O F M U NI T I O N S F A C T O R I E S

767

post-war possibilities for the industry. The panel reported in April 1 945 that the industry could not continue on the basis of defence orders, and that if a sufficient number of skilled operatives was to be retained the industry would have to develop commercial products. The panel believed that, while the commercial risk was high, the development of a number of commercial prototypes was justified. But the Secondary Industries Com­ mission had made up its mind that an indigenous optical instrument industry would not be economic, and refused to sponsor a modest request for £2,500 for the development and testing of commercial prototypes. For the time being this put an end to the hopes of a commercial optical instrument industry. The Secondary Industries Commission might well have been correct in its economic judgment, but its refusal to support small-scale experimental work and to gather more evidence to test its judgment was more difficult to defend. Some information was also collected on the problems facing manu­ facturers of electric motors, plywood, furniture, refrigerators, radio and signal equipment, and stoves and ovens. In eaoh case the commission was unable or unwilling to offer assistance. The main problem facing manu­ facturers of plywood and furniture was shortage of labour and materials. A suggestion by the Plywood Advisory Panel in 1947 that the Government and private industry should jointly develop the Bulolo-Wau area of New Guinea for the production of plywood was rejected. A perennial problem facing the furniture industry-the manufacture of shoddy lines-was outside the commission's responsibility and was referred to the Standards Association of Australia. In the case of electric motors, refrigerators, radio and signal equipment, and stoves and ovens, the commission found that there were no serious conversion problems facing manufacturers. In a number of other areas the commission played the role of passive midwife, rarely influencing the course of events. It gave its blessing to the conversion of synthetic ammonia plants at Albion and Ballarat, Vic­ toria, Mulwala and Villawood, New South Wales, for the production of nitrogenous fertiliser. However, the initiative came from the Directorate of Explosives Supply in Munitions and Imperial Chemical Industries of Australia and New Zealand Ltd. Through the inter-departmental com­ mittee on motor vehicles, assistance was given to the proposal by Inter­ national Harvester Co. Pty Ltd for an increase in the Australian content of its tractors. The commission played a part in sponsoring in 1 944 the manufacture of bicycle fittings and spare parts by British Tube Mills (Australia) Pty Ltd, a proportion of the components to be made by the small arms factory at Lithgow. And it helped provide factory sp::.ce for the development of newsprint manufacture in Tasmania. In short, the Government's involvement in the detailed problems of transition facing secondary industries was limited and highly selective. D I S P O S A L O F M UN I T I O N F A C TO R I E S

Public discussion in 1 944 of the post-war future of government munitions factories divided along traditional political lines. A number

768

I N D U S T R I A L R E C O N S T R U C TI O N

of Ministers made no secret o f their ambition t o retain control of all factories so as to extend the range of public enterprise. The Minister for Munitions appeared to be stating settled Government policy when he declared in February that : If Commonwealth establishments are to be maintained in a state of efficiency and operated along economical and profitable lines, it is essential that the Govern­ ment should be permitted to enter into industry on a strictly commercial basis in supplying civilian needs.8 The Prime Minister immediately supported Makin in a statement whioh changed the emphasis but not the substance : . . . it appears to me that the vast capital investment the nation has made in the complete equipment of industries for war should not be sacrificed but should serve as the foundation on which any similar situations could be more completely dealt with.9 Business interests could not fail to read such statements as a prescription for socialism, and for the development of public manufacturing in direct competition with private industry. However, no formal decision was taken. A Cabinet subInission by the Department of Post-War Reconstruction had urged in November 1 943 the retention of all government factories, their separation from depart­ mental control and the Public Service Board, and the creation of a registered company wholly owned by the Commonwealth whioh would operate the factories on a commercial basis.1 But there were legal doubts as to whether the Commonwealth had the constitutional authority to operate commercially in peacetime in this way, and the proposal was deferred pending the outcome of the "fourteen powers" referendum of August 1 944 which included a power to enable the Commonwealth to make laws with respect to "the production and distribution of goods". Before the referendum, however, a less doctrinaire approach had emerged under the influence of the Secondary Industries Commission. The commission had reached the conclusion that the Government would not need to retain all factories for defence purposes and argued that a propor­ tion could be leased or sold to private industry without reduction of the country's future defence capability. It also accepted the general view that post-war manufacturing capacity would exceed demand for industrial goods, and counselled against heavy government involvement in non­ defence manufacturing; these views were reinforced by the comInission's own preference for private enterprise. As described earlier, the lease of the Rutherford factory in May was the first strand of the new approach. Basic principles were defined by the Prime Minister in a detailed public statement on 1 st August 1 944 which divided factories into three groups :

( 1 ) those suitable only for the production of munitions-to be retained by the Government for future defence needs ; ( 2 ) those not producing munitions directly but representing the nucleus of general engineering 8 Digest of Decisions and Announcements, No. 74, 74, 1 Full Cabinet Agendum 564.

• Digest of Decisions and Announcements, No.

p. 45. pp. 45-6.

DISP OSAL O F MUNITIONS FACTORIES

769

plant on which wartime munitions production would depend-to be con­ sidered for retention by the Government; ( 3 ) those capable of being used for the production of civilian goods-to be either retained by the Govern­

ment, leased or sold to private interests, or operated jointly by mixed public and private enterprise along the lines of Amalgamated Wireless (Australasia) Ltd depending on the merits of the particular case.2 In short, policy would be kept flexible except for nucleus defence establish­ ments classified Group One. Further, Curtin ruled out direct competition between public and private manufacturing. If the Government decided to enter commercial manufacturing, the intention would be to "round out the Australian industrial structure by filling in those gaps which are known to exist, and thereby making Australia more capable of meeting her require­ ments in manufactured goods". Coming as it did shortly before the referendum, the statement had an overt political purpose. But witih the rejection of constitutional alteration the three-tier classification of factories remained the basis of policy. The Secondary Industries Commission was left free to advise on the future of those in the second and third groups; in the bulk of cases the commis­ sion's advice was accepted in favour of lease or sale to private enterprise. After the referendum the Cabinet appears to have lost interest in the possibility of the creation of a government manufacturing corporation, and there was little subsequent discussion of the retention of key engineer­ ing plant or joint public-private enterprise. The Department of Post-War Reconstruction reintroduced the question of separating Group One fac­ tories from departmental and Public Service Board control, but this foundered on legal problems and bureaucratic jealousy.3 In 1 945 the emphasis shifted to the disposal of Groups Two and Three, non-metropoli­ tan factories, in such a way as to encourage industrial decentralisation. Indeed, policy moved decisively during 1 945 in favour of the lease (or sale) of the bulk of factory space to private industry. The collapse of Germany encouraged belief in a new era of stable international relations, and the political mood was now against the preservation of a large munitions establishment under government control. This mood was rein­ forced by practical considerations. A large munitions industry would be expensive, and the huge stockpiles of standard items were expected to meet basic peacetime needs for many years. Further, the Secondary Industries Commission argued, plausihly, that war-created capacity would be utilised more efficiently and its military potential maintained if turned over to private industry; capacity for the creation of employment was

also

expected to be enhanced. Thus , when the Defence Committee as an interim arrangement recommended early in 1 946 the retention of forty-five per cent of productive capacity, the Cabinet sub-committee on Secondary Industries decided instead to limit Group One classification to the bare minimum.4 The factories in the category were: 2 Digest of Decisions and Announcements,

No. 85, pp. 4-8. Full Cabinet Agenda 564A, 564B and 564C; meetings 20 Mar, 20 Nov and 17 Dec 1945. • Cabinet sub-committee on Secondary Industries, Decision 40 of 20 Mar 1946 on Agendum 15/1946. 3

770

INDUSTRIAL RE CONSTRUCTION Ammunition : Chemical warfare: Explosives and filling. Ordnance : Small arms:

Footscray, Victoria Maribyrnong, Victoria Maribyrnong, Victoria; Mulwala, New South Wales Maribyrnong, Bendigo, Echuca, Victoria Lithgow, New South Wales

With the concentration of parent factories at Footscray, Maribyrnong and Lithgow, this was in substance a return to 1 939. The sub-committee's only concession to the Defence Committee was the proposal to retain forty-five per cent of special purpose machinery and the same proportion of general purpose equipment unless the development of manufacturing industry was likely to be affected adversely. But in the absence of factory capacity to utilise the equipment, this concession was of minor defence significance even in the short-term. The guiding principle in the disposal of factories was that the terms of the lease or s ale should be sufficiently flexible to encourage industrial decentralisation. This meant simply that the Government was prepared to reduce the sale price or rental sufficiently to ensure continuity of industrial activity in country areas and in the less industrialised States; it was also willing to give some regional preference in the disposal of machine tools and other equipment. In Sydney, Melbourne and Adelaide, the standard terms of a lease were based on capitalisation of usable factory space at £ 1 per square foot, with rental determined by applying six per cent to the capital value estimated in this way. Outside these three cities terms varied appreciably, but the rental was normally three or four per cent with possibly some reduction in capitalisation. While the Government claimed this as a major step towards non-metropolitan industrial growth, the concessions were no more than acceptance of the lower level of demand for factory space outside the main cities. Even at the reduced rentals and in the context of a serious shortage of space, disposal of a number of factories was slow-particularly those in more remote areas such as Mudgee and Parkes, New South Wales, and in such localities as Derwent Park on the outskirts of Hobart, a long way from principal markets. There was a sense of resignation in further efforts to promote decen­ tralisation. It was generally accepted that a serious attack on the problem depended on detailed Commonwealth-State co-operation and the expendi­ ture of large sums of money, but the Commonwealth was not prepared to make a large financial commitment and the States were more interested in competing between themselves for new industries. By the end of the war the Government had encouraged the States to profess an interest in decentralisation, and most had agreed to offer freight, water and power concessions. This exercise in tokenism was matched by the Commonwealth which established a Decentralisation Section within the Department of Post-War Reconstruction's Division of Industrial Development.5 At the Premiers' Conference in August 1 945 the States resolved to encourage decentralisation to the full extent of their resources, while the Common5 Full

Cabinet rejected in Jul 1945 a proposal to establish a fully-fledged Commonwealth authority to administer decentralisation policy. preferring a less conspicuous intrusion into the field of the States and one without definite financial obligation. Full Cabinet Agendum 892.

D I S P O SA L O F M UN I T I O N S F A C T O R I E S

771

wealth undertook to collaborate with the States in all matters of industrial policy, investigate with the States the prospects for developing manu­ facturing industries in selected areas, and to consider the provision of financial assistance when a project was of national interest and beyond the the the To

resources of the State concerned.6 This left most of the initiative with States. In the post-war scramble between the States for new industries, insubstantial character of decentralisation policy was quickly exposed. a limited extent the Commonwealth encouraged the competition

between the more and the less industrialised States, for one of its important although unpublicised objectives was, for defence reasons, to reduce the industrial dominance of Sydney and Melbourne. A shift away

from

Sydney or Melbourne was discreetly encouraged, by for example negotia­ tions between the Secondary Industries Commission and Philips Electrical Industries of Australia Pty Ltd for the lease of the Hendon ammunition factory which involved a move for the company from Sydney t o Adelaide. In the same vein three factory complexes were sold to State governments so that the States involved could develop the capacity in their own way. The three were the Rocklea ammunition factory, Queensland, Welshpool ammunition factory, Western Australia, and the Derwent Park ammunition and explosives factory, Tasmania. In the case of the large group of factories at St Mary's, New South Wales, the Government decided to develop t:he industrial estate itself; a proportion of the 900 buildings was reserved for Commonwealth use but by 1 949 the remainder was leased to eighty-five private firms. Broadly, however, the Government was not pre­ pared to intervene decisively in the geographical distribution of industrial capacity between or within States. vhe remaining disposal principles may be summarised briefly. Leasehold

rather than outright sale was the preferred method of transfer of factories to private industry, with an option available to the lessor to purchase on

the expiry of the lease. Leasehold enabled the Government to retain some control of the development of the factory site, including resumption in the event of another war. For practical reasons, however, machine tools and other equipment not required for government establishments or the Com­ monwealth Reconstruction Training Scheme were sold. So long as capacity was fully occupied and offered employment to former munitions workers, only mild influence was exercised over the nature of the firms accepted as tenants. In most cases the locality and former use of the factories dictated post-war utilisation. Thus, the small arms feeder factories in the central west of New S outh Wales were occupied predominantly by textile and clothing manufacturers; the explosives components of the factories at Villawood and St Mary's tended to be leased to chemical-based firms, while ordnance plant went to metals and automotive manufacturers, for example the lease of the Armoured Fighting Vehicles Directorate factory at Fishermen's Bend, Victoria, for the assembly of Hillman cars and trucks by Rootes Limited. Munitions annexes were usually sold to their wartime • Proceedings

of the Conference of Commonwealth Aug 1945, pp. 69-72.

and State Ministers, Canberra, 20

to

23

772

INDUSTRIAL RECO NSTRUC TION

operators. When the Secondary Industries Commission used its discretion, it was in the direction of encouraging an extension of the range of manu­ facturing activity, and it was especially anxious to induce overseas firms to commence operations in Australia. It merely echoed the tradition, there­ fore, of the country's industrial policy. The peak of disposal activity was reached in 1 946 and 1 947, and by 1 949-when the Secondary Industries Commission was wound up-the work had been completed. The total area of factory building space leased or sold was made up as follows : Munitions factories Munitions annexes Aircraft production factories Dehydration factories Grain alcohol distilleries Flax mills Warehouses •

•

•

•

.

6,190,274 square feet 576,982 3 8 1 ,7 1 9 179,2 16 240, 1 8 3 60,774 570,700 "

8,199,848 The total area comprised 80 factories which were transferred to 293 separate firms. The most complex task undertaken by the commission was the development of the St Mary's explosives and ammunition factory as an industrial estate which involved the transfer of 1 ,000,000 square feet of space to 8 5 private firms and the planning of a new satellite town west of Sydney. In a commercial sense the commission completed its task quickly and efficiently : the rapid transfer of buildings and equipment, usually on attractive terms, provided a useful impetus to early post-war industrial expansion. In terms of its charter this was all the Secondary Industries Commission was required to do.

C HA P T E R 2 5 THE C O L L A P S E O F T H E W A R E C O N O M Y P R E PA RI N G F O R T H E T R A N S I T I O N

T

HERE was n o lack o f appreciation wi1Jhin the Department of Post-War Reconstruction and the Government generally about the importance, for the purpose of maintaining full employment, of the transition period from war to peace. Plainly, the war economy could not be disbanded over­ night. The transfer of half a million men from the Services to civilian life was a task of major proportions. If employment opportunities were to be created at an appropriate rate and in the correct order of priorities, much of the wartime system of economic regulation would be required during the transition to reshape the structure of the economy for the peace. Just as the market offered inadequate incentives for the mobilisation of a war economy, it could not be relied upon during demobilisation wi�hout damaging side-effects. The most prominent side-effect was likely to be rapid price inflation during the early post-war years. With a high level of deferred demand for consumption and investment goods, excessive bank liquidity, and the per­ sistence of chronic shortages, reliance on the market would inevitably lead to tear-away inflation. Thus the White Paper on Full Employment, in its brief outline of transition problems, nominated price control (includ­ ing control of rents and land values) as one of five key areas of control for retention in the post-war period. The control of prices, reinforced by consumer rationing, was needed to restrain inflation and also to prevent an inequitable distribution of scarce consumer goods, overcapitalisation of investment goods, and deterioration in the competitive position of Australian exports. Most of all it was needed to prevent a sudden fall in the price level and employment at the end of the transition phase. The other key controls were required either to support price control and employment stability or to help achieve special post-war objectives. The retention of trade and monetary controls was required to supplement price control, conserve essential supplies for domestic use, and to restrict the use of foreign exchange resources. Trade and monetary controls were the one key area clearly within the constitutional power of the Commonwealth and provision had already been made for the retention of these restrictions. In addition, the White Paper indicated the need for continued control of building materials to allow priority to be given to the construction of homes, hospitals, schools and factories. To support building materials control and monetary restrictions, and to limit the use of investible funds for non-essential purposes, capital issues control would also need to be retained. Finally, regulations would be required for some time after the war to permit the orderly winding up of wartime marketing arrangements for primary products. While the need for the temporary retention of these controls was accepted widely within official circles and given adequate publicity, far

774

T H E C O L L A P S E OF T H E WAR E C O N O M Y

less attention was given t o the host of other wartime controls. A s early as September 1943 Production Executive had appointed an inter-departmental committee on the application and removal of controls, as an extension of War Organisation of Industry's co-ordinating function,! but the committee acted merely as a controls clearing house to enable proposals for the revocation or imposition of restrictions to be examined by other interested authorities. The . initiative for any change lay with the administering authority, and the committee did not promote any examination of the controls network. Nor did it prepare any policy for the systematic removal of controls after the war. No further action was taken until after victory rin Europe and the simultaneous growth in the number of questions in Parliament about the removal of "obnoxious restrictions" on personal liberty. In answer to one of these questions Chifley, as Acting Prime Minister, was caught momen­ tarily off guard and stated that a ministerial committee had been appointed to review wartime controls.2 No such committee had in fact been estab­ lished, but the slip produced a flurry of activity. Production Executive authorised the committee ex post early in June,3 and requests were sent to all departments for an immediate review of all regulations and orders with a view to removal of those no longer required. This produced a first list of quite minor restrictions for removal, such as the regulation of advertising during Christmas, New Year and Easter, the control of gas producers and substitute fuels, and restrictions on the manufacture of baby carriages and repair of refrigerators.4 But the ministerial committee did not meet, and no progress was made in preparing an integrated pro­ gramme of controls relaxation. The initiative continued to rest with administering departments, the inter-departmental committee acting as secretariat. The leisurely approach to "decontrol" was predicated on the assumption that the war in the Pacific would last well into 1 946 and that no general relaxation could be permitted until the Japanese surrender was within sight. The dropping of the atomic bomb on Hiroshima on 6th August and the termination of hostilities on the 1 5th ohanged the mood in Canberra dramatically. There was now a rush led by Dedman to abandon controls as rapidly as possible and to revert (within limits enumerated by the White Paper) to a free market economy. In the time available there was no possibility of preparing an integrated programme of relaxation and the Government had to rely on the machinery and policy fragments as they existed. An emergency depart­ mental meeting was held on 1 5th August whioh brought together the threads for War Cabinet submission on the 1 7th. The threads consisted of ( a ) a list of 39 controls which departments had presented for immediate relaxation; (b) a further list of some 7 5 controls suitable for removal on the cessation of hostilities, but which had not yet been circulated for 1 Production Executive Agendum 5/1942,

Supplement 1 ; Decision 346, Vol. 182, p. 2049. • Production Executive Decision 707, 7 Jun 1945• • Production Executive Agendum 53/1945, Supplement I, 31 Jul.

• Commonwealth Debates,

15 Sep 1943.

PRE PARING FOR THE TRANSITION

775

comment; and (c) a list of 40 regulations which were expected to be required for longer t:han six months after the end of the war. For the most part list ( a ) comprised relatively minor controls such as those relating to the use of transport facilities, the storage of primary products, daylight saving, holiday and travel leave regulations and other redundant wartime measures; but, more important for reconstruction, the list included the prohibition on new manufactures and a number of non-essential items. All these restrictions were to be removed within ten days. At the same time the War Cabinet removed most of the extensive powers of the Director-General of Manpower. The second list was to be circulated for immediate report by any interested department, while the third list was to be prepared for submission to a Premiers' Conference to be held within a few days.5 Subsequent decontrol policy continued, as before, on an ad hoc basis. There was some attempt to classify controls into broad categories. Apart from the "White Paper controls", those which related to the supply of and demand for scarce essential commodities were singled out for more detailed attention. Thus, rationing of clothing, meat and butter, and the control of rubber, motor vehicle tyres, and non-ferrous metals were restrictions recommended by the inter-departmental committee for gradual relaxation. This was the closest that the Government came to policy specification. Most of the remaining controls were abandoned rapidly and haphazardly. The inter-departmental committee was scrapped in mid-August and proposals for decontrol emanating from departments were handled by a small section within Post-War Reconstruction. Some depart­ ments, particularly Trade and Customs, and Transport, were inclined to resist the pressure for early relaxation because of the disruption to markets that would follow. But the tendency for bureaucrats to hang on to controls was much less pronounced than the Liberal Party and the press claimed. The desire to abandon government by regulation as far as possible was activated by the impossibility of effective enforcement. By 1 945 most regulations were being evaded so widely-especially by the larger com­ panies and wealthier groups-that relaxation was the only realistic option available. Further, public servants were not insensitive to the general public antipathy, and were anxious to redirect their energies into new and more rewarding avenues. Thus, during September and October several hundred controls were revoked. Together with those removed since July 1 945, this represented about half of those imposed during the war and still in force on V-E Day. The list included a large number of orders designed to control the produc­ tion of clothing and footwear, simple household products such as cooking utensils, and electrical appliances. Commonwealth control of taxi cabs was removed, although the States continued these regulations in a modified form. Similarly, the zoning of milk, bread and ioe deliveries was aban­ doned in Queensland and South Australia as from 1st December, but in the other four States the Commonwealth delayed revocation until 1 st • War Cabinet Minute 4353,

17 Aug 1945; Agendum 439/1945.

776

THE C O L L A P S E O F T H E

WAR

E CO N O M Y

January 1 946 tD allow these States t D pass their own legislatiDn.6 The States were alSD invited tD submit their Dpinion Dn the Manufacture Df Domestic Furniture Order which was designed, among Dther things, tD prevent the manufacture of shoddy gDods. As Dnly three replies were received, ProductiDn Executive decided tD revDke the order and leave the States to deal with this matter.7 Other wartime measures which were abandoned included marine war risk insurance, holiday and annual leave regulations, restrictions Dn the transport of racehorses by rail, funeral vehicles Gontrol, and cDntrol Df a long list Df essential materials. 8 This left about three hundred controls still in fDrce at the end Df October. A few of these were the "White Paper controls" and supporting regulations; the history of these will be discussed separately. Others fell into the category identified by the inter-departmental committee as those controls required tD allocate scarce essential commodities and which could be relaxed only after the supply position had improved significantly. A third group was retained pending the completion of State legislation (for example, the zoning regulations ) . Finally, there was a large number of routine orders which were retained until certain fDrmalities had been completed. For instance, the distributiDn of Lend-Lease goods was con­ trolled until Australian-United States negotiatiDns on Lend-Lease settle­ ment were cDmplete; and the Chinese seamen regulatiDns remained in force until these men had been repatriated. The bulk Df the cDntrols of this kind disappeared at the end Df 1 945 Dr early in 1 946. Indeed, most Df the Dther controls were revoked during 1 946 as supplies improved gradually. Certainly by the end of 1 946, when the National Security A ct lapsed, the elabDrate wartime apparatus had been reduced to a shadDw. There were those WhD despaired of the rapid and unco-ordinated un­ winding of the war economy, with all its makeshift features and lack of planning. TD be sure, the disintegration of controls was far removed from the theoretical ideal. As was predicted, markets were disrupted; the distri­ bution Df scarce commodities was skewed in favour of the wealthy and powerful; severe pressure was placed on price and capital issues cDntrol, and Dn the remnants of consumer rationing. With hindsight, however, it seems unlikely that a more integrated and systematic approach to decontrol would have smoo,thed the transitiDn materially.

Given

the

widespread evasion of regulatiDns by the end of the war, the administrative burden would have been intolerable; and as much disruption could have been caused by prolDnging restrictions as was in fact experienced. In the event, there was a brutal logic in permitting the market tD re-emerge at an early stage and in allowing supply tD respond accordingly. Thus, by concentrating Dn a few key controls the Government probably arrived at a sensible modus vivendi, especially in view of uncertainty about the constitutional position and the fragility of· Commonwealth-State co­ operatiDn. • Production Executive Agendum 107/1945, 26 Dct. ' Production Executive Agendum 88/1945, 25 Oct. • Production Executive Agenda 53/1945, Supplements 3 and 4, 3

Sep and 26 Oct.

THE

"

WHITE

PAPER CONTROLS

"

777

T H E "WH ITE P A P E R C O N T R OLS"

The importance that was attached to the continuation o f tJhe control o f prices, wages , capital issues and building materials was related directly to the full employment strategy and to the priority accorded the housing programme. As explained by Senator Keane at the conference of Com­ monwealth and State Ministers in August 1 945 : An inflationary movement immediately after the war would be followed, as it was after the last war, by a period of deflation. This would cause instability in the whole economic structure, and impose the greatest injustices upon returned soldiers. The experience after the last war must not be repeated, and it can be avoided only if the governments of Australia are determined to grapple with the problem of price control in the disturbed years of rehabilitation.9

Price control carried the implication that the wage pegging regulations would be continued in some form : the Government accepted from the outset that the two were inseparable. Commonwealth authority over prices, wages and capital issues was derived, of course, from the National Security A ct. As this legislation was itself derived from the Commonwealth's defence power, the Act was due to terminate on "a date to be fixed by proclamation, and no longer, but in any event not longer than six months after His Majesty ceased to be engaged in war". The words appeared simple, but there was con­ siderable uncertainty about the meaning of the phrase "ceased to be engaged in war". Initially officials interpreted the phrase literally and assumed that the Act would cease to operate as from 1 5th February 1 946 -six months after the Japanese surrender. This explained in part the haste to abandon routine regulations and to summon a Premiers' Conference. But on the basis of experience after the war of 1 9 1 4- 1 8 the phrase could also be interpreted to mean six months after the day on which a formal peace treaty was signed. Again on previous experience, this could take a number of years and leave the date of termination of National Security Regulations in considerable doubt. Further, depending on the attitude of the High Court, the defence power could be used to enable certain regulations to remain in force beyond the expiry date of the National Security Act if these were regarded as essential for the orderly transition from war to peace. The defence power had been used in this way to retain important elements of the War Precautions Act after the peace treaty with Germany came into force in January 1 920. The surrender of Japan was signed aboard the Missouri on 2nd Septem­ ber 1 945 and this was the date on whioh hostilities between Japan and Australia formally ended. But this was merely the beginning of a pro­ tracted period of Allied occupation and political reconstruction of countries that had been held by J apan.1 In this period Australia continued to be, legally, in a state of war. Peace negotiations were indeed much more • Proceedings 0/ the Conference 0/ Commonwealth and State Ministers, Canberra, 20 to 23 1

Aug 1945, p. 40. For problems after the surrender see Hasluck, pp. 602-12.

The

Government and the People 1942-1945,

778

T H E C O L L A P S E OF T H E WAR E C O N O M Y

prolonged than after the war o f 1 9 1 4- 1 8 and the treaty was not signed until 8th September 1 9 5 1 and came into force in April 1 952. For political reasons the Government could not allow the future of remaining National Security Regulations to be subject to continual un­ certainty and speculation. After initial dithering it decided, in April 1 946, to terminate the National Security Act by special legislation2 as from 3 1 st December 1 946. At the same time the Prime Minister made it clear that action would be taken ih legislative form before the end of 1 946 to enable "anti-inflationary" controls to be retained for some time thereafter on the basis of the Commonwealth's defence power.3 However, the majority official view was that the "White Paper controls" would be required indefinitely in the post-war period. Three or four years after the cessation of hostilities was regarded as a minimum and it appeared unlikely that use of the defence power would escape successful legal challenge for this length of time. Thus, at the Premiers' Conference in August 1 945 the Government proposed that Commonwealth price con­ trol should continue for a minimum of three ears after the termination of the National Security A ct on the basis of a temporary referral of power by the States to the Commonwealth as had been agreed at the Constitu­ tional Convention in 1 942. As the importance of price control during the transition and the need for uniformity was accepted, the States agreed to the proposal in principle. But there was no discussion about the nature or future of Common­ wealth control. Was the ceiling of April 1 943 to be maintained, or would there be a planned increase in ceiling prices? Or should the concept of the ceiling be abandoned altogether and the method of control revert to the principles of Prices Regulation Orders 100 and 666 ( a combination of cost-plus and profit control) ? In 1 945 such questions had still to be resolved. Complicating the matter further were questions about the future of the wage-pegging regulations. During 1 945 there developed strident demands from all sections of the labour movement for an increase in real wages and an improvement in conditions of employment generally. The war had made heavy demands on most sections of civilian employment. In the drive for greater production from a depleted work force, long periods of overtime were necessary. In many industries, and particularly in hastily­ erected munitions factories, physical conditions of work had deteriorated. Industrial productivity had risen steadily but workers were prevented from sharing the benefits by the needs of national security. To be sure, there were some compensations. Despite heavy taxation the take-home pay of most workers increased appreciably because of overtime, and some received special benefits such as war loadings. Also, women workers had been able to improve their status vis-a-vis men and, with the expansion of employment opportunities for women, many families were for the first time in receipt of two wage packets. But with the disappearance during

y

• National Security Act No. IS of 1946. • Digest of Decisions and Announcements, No. 133, pp. 20-22.

T H E "W H I T E P A P E R C O N T R O L S "

779

1 945 of national emergency conditions, employees no longer saw the need for the continuation of wage-pegging regulations which, they believed, would allow employers to exploit the position. Although sympathetic to these demands and concerned about the effect of growing industrial turbulence on reconstruction, the Government resisted firmly trade union pressure for an immediate relaxation of wage controls. The Australasian Council of Trade Unions countered with two proposals designed to side-step the wage-pegging regulations. First, it requested the Government to use National Security Regulations to incor­ porate prosperity and war loadings in a new basic wage increased by an average of 6s. per week. Second, it proposed the use of the external affairs power to declare a forty-hour standard working week. Both of these were rejected on constitutional grounds,4 but it was clear that some concessions would have to be granted in the near future to help curb industrial stoppages. Ohifley declared his willingness, therefore, to support an application by the A.C.T.U. to the Arbitration Court in favour of a forty-hour week and an examination of the basic wage. Both inquiries would take some time to complete and would provide the Government with a breathing space to resolve questions about the future of its prices policy. There was no clearly defined timetable for the relaxation of wage controls , but policy was directed towards giving as much relief as possible consistent with the avoidance of uncontrolled competitive bidding for scarce labo'Ur. The trade union movement's first priority for its members during 1 945 and 1 946 was relief from the grind of wartime production. More leisure in the form of increased annual leave, a greater number of national holidays and a shorter working week were the declared means to this end. (Strike action added to the amount of leisure actually enjoyed. ) Increased wages were important too, but more spending money was of limited advantage while severe shortages persisted. In accordance with its under­ taking to review the wage provisions of the economic organisation regula­ tions at an early date, the Government announced the first important relaxation in March 1 946. This permitted the Arbitration Court to make awards varying the standard hours of work in any industry, and also to make awards varying the basic wage.5 In October 1 945 an application had been lodged with the court by the Printing Industry Employees Union for a forty-hour week in the printing industry, but in March 1 946, by the intervention of the A.C.T.U. , the application was widened to a considera­ tion of standard hours in industry generally.6 The Government's amend­ ment allowed the court to proceed meaningfully on the basis of a general application, and in May 1 946 the Standard Hours Inquiry was eventually launched on its long and tortuous career. The preoccupation of the unions with the forty...hour week inquiry was indicated by their failure to make an application for a revision of the • Digest 0/ Decisions and Announcements,

No. Statutory Rules 1946, No. 63, 28 Mar. • Commonwealth Arbitration Reports, Vol. 59,

109, pp. 30-1.

•

pp.

583-6.

780

THE C O L L A P S E O F THE WAR E CO N O M Y

basic wage. A s the Standard Hours case dragged o n through the winter and spring of 1 946 without any sign of an early conclusion, increasing concern was being expressed about the probable delay in determining a new basic wage. As explained by the court : During the hearing of claims by very many unions for the reduction of standard hours to 40 per week it became clear to the Court that a reconsideration of the amount of the basic wage was, in the public interest, a matter of increasing urgency. By the end of October . . . the application for reduction of standard hours had already occupied the Full Court for a period of over five months and it was obvious that a complete and final adjudication upon the basic wage, even if expedited so far as possible by its being combined with the further stages ot the Standard Hours case, could not be effected for a very considerable time.7

The court interpreted the Government's partial relaxation of the wage­ pegging regulations in March 1 946 as a brief for an early basic wage determination as "part of the national plan of economic organisation in the early post-war period". Also, a favourable basic wage decision might help reduce the number of industrial disputes. But in fulfilling its duty the Court was somewhat embarrassed by the absence of any move on the part of any applicant for an increased basic wage. Of this embarrassment the Court was to some extent relieved by an application made on 30 October, 1946, by the Attorney-General . . . for the restoration to the Full Court list of certain adjourned 1940 basic wage applications. . . . This, however, did not of itself meet the urgencies of the situation because . . . the complete and final disposal of these claims would have occupied many months during which the interests of the com­ munity may have been further seriously prejudiced by delay. Finally, after the Court's concern about the position had been made very plain to the parties, application was made by counsel for the Australasian Council of Trade Unions . . . for an interim basic wage declaration . . . .8

Once the necessary applications had been received, the Court adjourned the Standard Hours case and proceeded forthwith to the "Interim" Basic Wage Inquiry. Most of the relevant evidence was already before the court from the Standard Hours case and formality was reduced to a mini­ mum in favour of a quick decision. After eight sitting days the court announced on 1 3th December an "interim" increase in the "needs" portion of the basic wage for the six capital cities of 7s. per week-a rise of 7 . 1 per cent in the total wage payable. No explanation was given, for the court reserved the right to re-examine all the evidence and express its final opinion at a more complete inquiry in the future.9 The "interim" basic wage judgment forced the Government's hand on the nature of post-war price control. Little progress had been made in the interval in securing uniform action by the States. The Tasmanian Legislative Council had not passed the necessary legislation. In Victoria legislation was passed but could not be proclaimed until the Governor-in­ Council was satisfied that substantially similar legislation had been enacted by all other States. In Western Australia the reference of power was for • Commonwealth Arbitration Reports, Vol. 57, p. 604. • Commonwealth Arbitration Reports, Vol. 57, pp. 604-5 . "interim" decision was confirmed by the Court's judgment of 1950 which, in addition, added a further £1 per week to the basic wage and established the general minimum female rate at 75 per cent of the male rate. Technically, the inquiry of 1949-50 completed the adjourned hearing of 1940.

• The

T H E " W HI T E P A P E R C O N T R O L S "

78 1

two years only. During 1 945-46 the Commonwealth maintained the prices ceiling of April 1 943 by heavy expenditure on subsidies, but there was growing concern about the burden of subsidy payments. Nevertheless, the Commonwealth made a further attempt to secure uniform action. At the Premiers' Conference in August 1 946 the States agreed to resubmit the proposal to their parliaments in the form of a uniform draft prepared by the Crown Solicitor.1 As this would take some time ( and National Security Regulations were required in 1 947 for other purposes ) , the Government took advantage of legal precedent which established that the defence power could be used "to wind up after a war to restore conditions of peace-gradually if that is thought wise . ".2 Control over prices, rents, interest rates, capital issues and marketing arrangements was included in the Defence (Transitional Provisions ) Bill .

.

introduced on 2 1 st November 1 946 which extended Commonwealth power until 3 1 st December 1 947.3 But the Commonwealth was even less success­ ful than before in securing co-operation. All the States passed legislation in the form of Economic Stability Acts but in a form which limited severely 'the period of referral.4 The repeated failure of State parliaments to honour agreements reached at Premiers' Conferences was a major reason for the Commonwealth's attempt to achieve permanent power over rents and prices by constitutional alteration through a referendum on 29th May 1 948. In anticipation of the "interim" basic wage decision, a review of the price stabilisation policy was initiated by a Cabinet sub-committee on wages and prices and by the Prices Commissioner,5 towards the end of 1 946. Most of the issues raised in these discussions concerned the future of subsidy payments. The Government was understandably reluctant to commit addttional resources to isolate increases in the prices of materials and labour. During 1 946-47 price stabilisation subsidies increased to 8 per cent of Commonwealth expenditure on defence and associated services in connection with the 1 939-45 war, compared with 2 .4 per cent in 1 944-45. Unless this commitment was reduced the Government would find it diffi­ cult to grant taxation concessions as promised. Further, in view of the uncertain future of Commonwealth price control the Government was unwiIIing to maintain an expensive policy which might not yield it political advantage. Finally, economists advised that it would be advantageous to allow prices to rise by up to five per cent per annum in the early post-war period. They argued that "controlled inflation" would help maintain money wages at a high level, ease difficulties associated with post-war structural change, help maintain full employment, and ease the burden of the public debt. 1 Proceedings

of the Conference of Commonwealth and State Ministers, Canberra, 20 to 21 Aug 1946, pp. 8-11. 2 Commonwealth Law Reports, Vol. 46, p. 464--Latham, Chief Justice. S Act No. 77 of 1946. The Act was renewed in 1947 and again in 1948 to extend the use of the defence power in this way to 3 1 Dec 1949. • The extreme case was Victoria which limited its Act to 30 Jun 1947. Only Queensland passed the Act in the agreed form. • M. E. McCarthy succeeded D. B. Copland as Prices Commissioner on 31 Oct 1945.

782

THE COLLAPSE

O F T H E WAR E C O N O M Y

The Cabinet sub-committee thel'efore decided on 1 2th December that no further subsidies would be paid to cover future increases in wages including the "interim" increase announced the following day. Existing wage subsidies were to be eliminated gradually, as were subsidies on minor items. Also, subsidies on other costs were not, in general, to be increased, but the Price Stabilisation Committee was to exercise its discretion in connection with basic items and there was to be no general liquidation of subsidies on these items for the time being. Although this decision made necessary a revision of prices policy, the Government insisted that there should be no reversion to automatic price adjustment; that applications for price increases should be treated on their merits; and that industry should absorb as high a proportion of the wage increases as possible. In other words, there was to be no relaxa­ tion of profit control ; profit margins established by Prices Regulation Order 666 were, in general, to be maintained. This directive placed a formidable additional burden on the Prices Branch. Since the end of the war prices administration had become increasingly complex with the multiplication of new products, and the volume of investigation involved caused frequent delay in reaching decisions. Anomalies were also common. Together with the widespread evasion of price control, this led to a great deal of public criticism of the Branch. Staff shortage and poor morale was an important part of the problem. With the cloud over Commonwealth price control, many able members of the Branch left to take up positions in "growth" departments. In common with most government departments the Prices Branch was understaffed in 1 945 but, unlike most other depart­ ments, the position deteriorated further. The staff position and the rapid post-war increase in the number of individual commodities forced the Prices Commissioner to adopt a rule-of­ thumb approach. Broadly, commodities were divided into two groups : ( a ) those which required immediate relief from the increase in the basic wage ; and (b) other commodities. Prices in the first ( and smaller) group were allowed to rise by the full or a fixed lower proportion of the wage increase immediately and without prior application. For the second group industry or related commodity applications were invited by the Commis­ sioner for rapid interim determination, subject to subsequent detailed review and investigation. Adjustment to the new system was for the most part orderly and did not result in severe general price increases. The change was assisted by the policy of considering groups of commodities together which helped to maintain established price relativities. The Com­ missioner was also successful in ensuring the absorption by industry of a proportion of the increase in costs. Between September 1 946 and March

1 947 retail prices increased by 1 .7 per cent whereas the basic wage for the six capital cities increased by 1 0.4 per cent. Further relaxation of price control followed closely the progressive abandonment of wages

regulation.

Following

a conference with

the

A.C.T.U. and the Land Transport Group of trade unions, the Prime

T H E " WHI T E P A P E R C O N T R O L S "

783

Minister announced on 1 3th December 1 9466 a modification of control over marginal rates and war loadings. Provided that the increases in marginal rates did not exceed an amount set by a formula,7 industrial and public employment authorities were free to take independent action to adjust rates without the need to secure the authority of the Ohief Judge of the Commonwealth Arbitration Court. Where the formula was found inappropriate, authorities were required to submit the case to the Chief Judge for a determination. A review of penalty, shift and piece rates was also permitted with the authority of the Chief Judge. Finally, State industrial authorities were permitted to fix a basic or living wage on condi­ tion that the amount of any increase did not exceed any general increase in the Commonwealth b asic wage.s The remaining control over wage increases was removed substantially during 1 947. In April industrial authorities were empowered to alter rates of any type provided only that the Chief Judge was satisfied that the alteration was not opposed to "the national interest", a change which in effect abandoned the formula provision of the previous December.9 And then in October the need to obtain the authority of the Chief Judge was dropped;1 the only minor restriction remaining related to over-award payments by "consent". Price control moved in the same direction during 1 947, albeit at a slower pace. With the steady increase in labour costs the Commissioner had no alternative but to adopt a cost-plus formula in most cases. Opportunities were also taken to decontrol prices as circumstances per­ mitted, ahhough only a narrow range of commodities was released at this stage. The approach used was to decontrol commodity by commodity on a national basis as evidence became available that illegal pricing was being eliminated and that supply would meet demand at the fixed maxi­ mum price in a free market. Thus, some agricultural products were released from control in 1 946-47 following improved seasonal conditions.2 For political reasons services supplied by State, semi-governmental and local bodies were deoontrolled in May 1 947.3 More important was the accelerated phasing out of subsidies. In February wages subsidies under the clothing trades' award and female minimum rates regulations were eliminated. In May the concept of "essentiality" gave way to "eligibility" for import subsidies which reduced the number of imported items in receipt of subsidies to about twenty.4 Most of the remaining items were in the • Digest 0/ Decisions and Announcements, No.

122, pp. 22-3.

7 The formula was designed to limit the increase in margins to the deterioration in the "real"

value of marginal rates since 1939 plus a proportion . of war loadings. Increases in margins were therefore authorised as long as the resultant total wage did not exceed the sum of (i) the current basic wage, (ii) the marginal rate in force at the outbreak of war, (iii) a percentage of that marginal rate equal to the percentage rise in the cost of living since that date, and (iv) a fixed sum of 3s. The formula permitted a rise in margins of about thirty per cent. However, the complexity of the formula resulted in some misunderstanding which . was made the occasion for further industrial stoppages. 8 Statutory Rules 1946, No. 184, 12 Dec. • Statutory Rules 1947, No. 49, 9 Apr. 1 Statutory Rules 1947, No. 145, 8 Oct. • Initially selling prices of hay, chaff, straw, oats; and growers' prices of fruit and vegetables. • Prices Regulation Order 2970, 29 May. ' Import subsidies were suspended as from 31 Jul 1948.

784

T H E C O L L A P S E OF T H E WAR E C O N O M Y

clothing and textiles group. Finally, the subsidy element in the price of potatoes and tea was reduced during the year. With the defeat of the rents and prices referendum on 29th May 1 948, the Prime Minister announced immediately that the Commonwealth would relinquish control over prices within three months. At the Premiers' Conference in August arrangements were made for the transfer to be completed on 20th September. The transfer was conducted in an orderly fashion : the States agreed to adopt Commonwealth prices orders on a uniform basis; most of the staff transfen-ed to State Prices Branches, and as much information as possible was made available to the States. Price stabilisation subsidies on all commodities except tea were suspended on 20th September.

INDICES OF RETAIL PRICES IN SEVEN COUNTRIES (Base: 1939 = 100)

Australia Canada New Zealand Sweden South Africa United Kingdom United States

1945

1949

123 1 18 1 19 138 132 128 1 29

1 54 159 136 152 153 142 171

Source: Labour Report, No. 39, pp. 42-3. Even before the rents and prices referendum i t had become clear that the Government's post-war incomes policy was crumbling. Before mid1 947 price rises were well within the target limit of 5 per cent per annum, but during 1 947-48 the rate increased to 8.9 per cent and in 1 948-49 to 9.8 per cent. To be sure, much of this inflationary pressure was outside the Government's direct control. Both export and import prices had risen sharply; uncertainty about the future of Commonwealth control 1hampered the formation of a coherent policy and the enforcement of existing con­ trols; the mood of the community favoured rapid decontrol; and trade union militancy forced earlier relaxation of wage controls than would otherwise have been sanctioned. Further, the rapid liquidation of price stabilisation subsidies during 1 947 and 1 948 added appreciably to the upward pressure on costs-both directly and through automatic wage adjustments. Even though prices and wages policy disintegrated in 1 947 and 1 948, the primary objectives were generally attained. Australian prices moved broadly in line with those in most other advanced countries in the post­ war period and, given the general level of international price inflation, it is unlikely that the country's price level vis-a-vis the rest of the world could have been altered appreciably even without the constitutional

T H E " W HI T E P A P E R C O N T RO L S "

785

barriers. In spite of the hazards of international comparison of this type, it would appear that wartime and post-war control succeeded in preventing deterioration in Australia's international competitive position. This was in marked contrast to the situation after �he war of 1 9 1 4- 1 8 . The Government was able to exercise greater caution i n the abolition of consumer rationing. The ration scale for most items was not greatly below normal consumption, and the continuation of rationing for several years after the war helped to maintain reasonable equity in the distribution of items in short supply. Further, there was strong pressure from the United Kingdom to continue rationing tea, butter and meat until world production of these commodities was able to meet demand. After the war there was no strong case for the continuation of sugar rationing. The scale of one pound per head per week did not limit con­ sumption by a significant amount and thus did not make more available for export. When the validity of this proposition had been tested over two export seasons, rationing was dropped in July 1 947. The case of clothing was more complex. As described earlier, materials for the production of woollens and worsteds were in adequate supply although labour shortage restricted the quantities and styles that were available; cotton and rayon materials were in very short supply. Accord­ ingly, substantial relaxation of the scale was introduced in November 1 945 . Footwear, headwear, knitted underwear, knitted outerwear, hosiery and many minor items such as men's collars were removed from the scale; piecegoods and clothing made of wool were given reduced ratings. As these changes represented a reduction of about one-half in clothing items covered by rationing, the currency of ooupons was extended from six to thirteen and a half months. But there was no change in the ratings for cotton and rayon pieoegoods. In 1 946 and 1 947 the world-wide cotton shortage was aggravated by the dollar crisis, for cottons were only available in quantity from the United States. By 1 948 cotton goods were still in short supply but supplies of other items were satisfactory. As it was impractical to continue rationing of one clothing category only, all clothes rationing was abandoned in June 1 94 8 . Meat and butter rationing were continued well beyond the end of the war so as to limit the growth of domestic consumption and encourage exports to the United Kingdom. Meat rationing was even more extensively evaded after the war than before, and it is unlikely that increased exports were achieved by this means. Meat rationing was abolished in June 1 948. Because of the very slow post-war recovery in the dairy industry, rationing of butter was continued until June 1 950. In 1 947-48 consumption averaged 24.7 pounds per head per year compared with 32.6 pounds in 1 938-39, yet exports were still 1 9 per cent below their immediate pre-war level. Butter was the commodity with easily the strongest case for the post-war continuation of rationing. By contrast, tea rationing was retained until July 1 950 for reasons advanced by the United Kingdom. The Rationing Commission proposed abolition in May 1 945, but there were strong objections from London.

"REVOCA TION OF CONTROLS." "Here's your claes and trappings, Santa Claus I Now, ye auld capeetalist, go awa wi' the rest 0/ the capeetalists and per/oororm meerac/es I" Scor/ield In Bulletin (Sydn�y) 22 Aug 1945.

Dedman, whose department of War Organisation of Industry had introduced many of the controls, was born in Scotland.

THE "WHITE P A P E R CONTROLS"

787

While Australia enjoyed a level of supply which was adequate to meet a generous ration, other countries were not in such a fortunate position. If tea rationing was eliminated these supplies could no longer be guaran­ teed. The Government continued to toe this line until after the lapse of National Security Regulations. But it did so for the additional reason that abolition of rationing would have made necessary the withdrawal of the price stabilisation subsidy which would have produced a significant rise in the consumer price index. 5 Capital issues control suffered a fate similar to price control. As with prices and rents, the Commonwealth invited the States to refer power in August 1 946, but the lack of uniformity in State legislation negated the conference decision. Thus, the Commonwealth continued to exercise con­ trol under its defence power. Control was relaxed more rapidly than in the case of prices and rents. Despite the stress on capital issues control before the end of the war as a key instrument of post-war planning, there was little attempt to direct investment into "socially desirable" avenues. Some proposed issues which were regarded as objectionable either because of an unsound financial structure or because they were blatantly fly-by-night were dis­ couraged, but resource management along wartime lines was not an objective. Rather, capital issues control retreated into a mild form of financial management. Its purposes were to support price control; to strengthen central bank quantitative and qualitative control of bank lend­ ing; and to enforce the direct control of non-bank interest rates. In prac­ tice, the control of mortgage lending rates and the rates on securities such as preference shares became the primary post-war function of the Capital Issues Advisory Committee. At the end of the war the regulations were eased to the extent that registration of new companies with a nominal capital up to £ 1 0,000 was permitted without approval, and also an increase in the nominal or issued capital of a company up to £ 1 0,000 in any period of twelve months.fl This led to some evasion by the registration of a number of small companies under common control and for the same purpose, but the difficulty of access to the market for small companies was such that the evasion was not regarded as a matter of serious concern. At the same time an attempt was made to regulate the flow of new issues so as to avoid undue strain on the market. Companies intending to raise relatively large amounts-in excess of £50,000-were invited to submit their applications as far ahead as possible and establish their place in the queue. By this means Capital Issues was able in a limited way to regulate the timing of market approaches. In the scrip hungry post-war market, there was no real risk of over-supply; but the control of timing did help to clear the way for the Government's major loan operations. The open market price of tea had risen rapidly since the end of the war. In Mar 1947, for example, the Australian price was set at 2s. 9d. per pound, but it was estimated that, in the absence of subsidies, the retail price would have risen to between 6s. and 7s. per pound. • Statutory Rules 1945, No. 133, 20 Aug. 5

788

THE C O L L A P S E O F THE

WAR

E CONOMY

Control was eased further at the end of 1 946 by increasing to £25,000 the amount of capital which could be raised in any period of two years. The borrowing limit was raised to £5,000 per annum for companies or individuals, and £5,000 was also the new limit for the acceptance of a deposit or unsecured loan.7 By 1 947 approvals were more or less granted automatically, Capital Issues checking mainly to see that interest rates on mortgages and other fixed-interest securities were within the regulations. (At the beginning of 1 947 the maximum mortgage rate was lowered from 41 to 4t per cent in line with a general reduction in interest rates. ) The easing of control was in part a response to growing concern about the threat of legal action. A challenge to the regulations had been avoided, but only by approving applications of several companies who threatened to file a writ unless a satisfactory verdict was obtained. Indeed, control had become so loose that the Commonwealth Bank complained that it was receiving inadequate support for advance control, and that far too much capital was being raised for production of consumer durables. Apart from interest rates, the main concern of Capital Issues in 1 947 was to ensure that new shares were issued at a premium if the market value of old shares was well above par value. In October 1 946 the Prime Minister issued a statement which in effect allowed the issue of new shares at par even though market valuation was much higher. However, the result of the announcement of a par issue in these circumstances was that a minor bull market developed in the shares in question and Chifley's old prejudice against speculation was resurrected. The expedient that was adopted was to insist that, as a condition of approval, new issues should

carry a premium equivalent to about two-thirds of the difference between the par and market value.s For the same reason bonus share issues were not approved unless examination revealed that proposed issues were based on a genuine increase in asset valuation. After 1 947 the premium that was required was gradually reduced to one�half then one-third of the difference between the par and market value. The stipulation was dropped in July 1 949 because of a weakening in the investment market.9 While oontrol of prices, rents, land sales and building materials had reverted to the States by the end of 1 948, the Commonwealth decided to retain capital issues control under the defenoe power. In addition to the established reasons, the Treasury supported continuance as a supple­ ment to exchange and import control. In view of the dollar shortage, it was deemed "desirable to encourage capital investment in production of goods which will lessen demand for dollars, and to discourage expansion 7 Statutory Rules 1946, No. 193, 19 Dec. The previous mortgage limit was £1,500. 8 The formula adopted to determine the premium that should be imposed was M

1.5 + 'hR where M = current market premium on shares; R = ratio of the number of ordinary shares to be issued to the number of ordinary shares already issued. • By 1949 the effect of an announcement of a new share issue was to cause a fall in the price of the shares in question. As an anti-speculative device, the premium stipulation had served its purpose.

THE "WHITE P A P E R CONTROLS"

789

of companies whose activities involve a demand for hard currencies".l But the threat of legal challenge to the regulations was such in 1 948 and 1 949 that 'control was for the most part nominal. As was admitted freely at the time, the main effect was to discourage a few undesirable issues. Another was to limit severely the number of new preference share issues. On 1 3 th January 1 950 the Menzies Government announced that it intended to relinquish capital issues approved automatically thereafter.2

control,

and

applications

were

More than any of the other "White Paper controls", the future of land sales control occupied the time and intellectual energy of the Government. Between 1 944 and 1 947 the matter was under review by a Cabinet sub­ committee, the Rural Reconstruction Commission, a committee of Com­ monwealth and State officers, an inter-departmental committee, the almost defunct Financial and Economic Committee, and the Premiers' Conference. There was unanimity that the control of land values should continue for an indefinite period after the war. In particular, it was agreed that the increase in rural land value should be contained s o as to prevent over­ capitalisation and excessive indebtedness, and to limit the cost to govern­ ment of the acquisition of agricultural land for settlement by ex­ servicemen. But there was no satisfactory solution to the problem of how values could be controlled after the war. The unsatisfaotory nature of the wartime method of control based on February 1 942 values was acknowledged, mainly because effeotive enforcement was impossible and because of the arbitrary dating of the official price freeze. In 1 946 it was estimated 1!hat actual prices were from fifteen to twenty per cent above permitted values, and the simplest solu­ tion appeared to be to allow an official rise of about this proportion. But there were oomplications. Several States were tied to 1 942 values for the purpose of acquiring land for soldier settlement. More important, it was believed that a rise of this amount would still not meet the market: a black market would persist because of the strength of the demand for both urban and rural real property. And if a serious attempt was made to lift official values to clear ,the market, substantial overcapitalisation would result. The Rural Reconstruction Commission recommended the creation of a Land Valuation Service in each State and Territory in association with the continuation of land sales control for at least five years after the war,3 but this depended on the co-operation of the States (or a constitutional amendment) . L. F. Giblin, returning to ideas he had advanced in 1 942, proposed the imposition of a stiff capital gains tax combined with compulsory resumption of land assessed to be inflated in value. Again, only the States had the power of compulsory resumption. Given these 'constraints, the Treasurer decided to retain the 1 942 system despite all its deficiencies so as to keep values as low as possible. 1 Treasury memorandum, 30 Aug 1948. 2 Capital

issues control was re-imposed on 1 Feb forced final abandonment in mid-1951. • Ninth Report, para 2067.

1951, but the long-expected legal challenge

7 90

T H E COLLAPSE OF THE WAR E CONOMY

The regulations were eased i n December 1 946 t o the extent that the Treasurer's power to refuse consent was confined to ( a) the price limita­ tion, (b) the £5,000 borrowing limitation and ( c ) the restriction on the maximum rate of interest payable.4 In practice, permission was not refused so long as prices came within about twenty per cent of 1 942 values. Further attempts were made to curb "excessive" black marketing,5 but there is little evidence to suggest that the attempt was successful.6 As during the war, it is likely that the immediate post-war retention of land sales control helped to some extent to reduce the inflation of values between 1 945 and 1 948. If, as was claimed at the time, prices were on average twenty ( or even twenty-five ) per cent above those of 1 942, the increase was not greatly out of line with the ohange in the capacity of primary producers and home-purchasers to service the larger debt that was involved. For February 1 942 prices were heavily depressed because of the invasion threat, particularly in the urban areas of the eastern seaboard. Pre-1 949 purchasers received some benefit, therefore, from the combination of price control and low interest rates. But the benefits of the policy were eroded by the inability of the Commonwealth to retain control for any length of time. As all authorities acknowledged, the threat of overcapitalisation would probably persist for a long period after the war and the ·temporary Commonwealth power conferred by the National Security Regulations would be totally inadequate for the purpose. The Premiers in August 1 94 6 expressed their support in principle for the continuation of control,7 but at 'the same time exhibited a marked disinclination to assume responsibility for a difficult, expensive and generally unpopular measure. In the case of land, uniform action by the States was not essential ( although desirable) , but the Commonwealth was sufficiently sceptical of the reliability of State parliaments to incor­ porate control of land prices in the prices and rents referendum of May 1 948 . With the rejection of the referendum proposals, land sales control reverted to the States in September 1 948. Most of the States adopted the Commonwealth's price control provisions but without the restrictions on borrowing and interest rates. However, the Commonwealth's scepticism was justified for, with few exceptions, the States abandoned control in 1 949. The chronic shortage of housing, hospitals, schools and public buildings of all types in 1 945 made necessary the ·continuation of control on essential building materials. Materials of all types were very scarce at the end of • Statutory Rules 1946, No. 192, 19 Dec.

• Mainly by requiring that the details of any options taken over land be declared at the time

applications to purchase were made, and by permitting those who had paid black market prices to sue for the recovery of the excess. Symptomatic of continued widespread evasion in 1947 were allegations about irregularities in the conduct of the Land Sales Control Office, Sydney, which led to the appointment of a Royal Commission. The commission revealed the extent to which certain real estate agents were prepared to go to subvert the regulations. The commission's report is not bound in parliamentary papers, but the substance is recorded in Commonwealth Debates, Vol. 192, pp. 2897-901, 3573-4. 7 Proceedings 0/ the Conference of Commonwealth and State Ministers, Canberra, 20 to 21 Aug 1946, pp. 5-8. •

T H E " W H I T E P A P E R C ON T R O L S "

79 1

the war, especially timber-much of which had to be imported-corru­ gated iron, and roofing tiles. Unless materials control was used to support the schedules of building priorities established by the Department of Post­ War Reconstruction, the housing and other construction programme s were likely to disintegrate. The control of materials was difficult enough in wartime, and worked reasonably well only because of the co-operation of leading manufacturers. In peacetime the problems were likely to be far greater, and the assistance of manufacturers could no longer be relied upon. In brief, effective control depended on an immense amount of detailed technical and commercial knowledge on a regional basis, and there were serious impediments to control being exercised after the war by a central authority. There were, fundamentally, two functions for any post-war control authority. First, the available supply of materials should be directed to high priority projects. Second, materials should be distributed so as to ensure that all regions received a fair share of available supply. The second task arose because production of some materials was concentrated in one or two States, for example corrugated iron (New South Wales ) and plywood ( Queensland and northern New South Wales ) . Unless special control measures were adopted, supply of materials in this category was likely to be concentrated geographically in the manufacturer's own region. As an extreme case, there would be no profit incentive for Broken Hill Proprietary Co. Ltd to ship corrugated iron and structural steel to Western Australia when it could sell all it could produce in Sydney and Newcastle. Again, a majority of the States were willing to allow the Commonwealth to retain control, but Dedman made clear at t:he Premiers' Conference in August 1 945 that the Government was only prepared to do so on two conditions : first, that all Premiers were unanimous and, second, that the States share in the administrative responsibility. What was clear at the conference was that the Commonwealth was not willing to bear the full political cost of a policy designed to assist State housing and construction programmes.8 There were also sound practical reasons for involving State administrations in the details under post-war conditions for, as noted, local knowledge of supply conditions was essential. Since Playford, the Premier of South Australia, rejected continued uni­ form control and the States as a whole were not willing to share responsi­ bility jointly, Dedman found himself in the position of insisting that control must revert to the States. The C ommonwealth was prepared to continue control of those materials produced in one or two States, but this was the only function it would perform. The result probably surprised even Dedman who overplayed his hand and forced a decision contrary to the intention of his departmental advisers. The Department of Post-War Reconstruction had been angling for the establishment of a joint Commonwealth-State authority, and they were aghast at the prospective chaos of individual State action. Subsequent control was indeed chaotic 8 Proceedings

of the Conference of Aug 1945, pp. 49-54.

Commonwealth and State Ministers, Canberra, 20 to 23

792

T H E C O L L A P S E O F T H E WAR E CO N O M Y

with the States responsible for such materials a s bricks, cement, plaster and tiles and the Commonwealth for timber, baths, sinks, pipes and other metal products. Of course the problem of control was aggravated by the persistent ohronic shortage of most materials, but it was made much more difficult by the idiosyncrasies of the federal system. Commonwealth control over a diminishing range of building materials was retained until 1 949. A large proportion of the National Security Regulations which were retained during the post-war period related to the acquisition and marketing of primary products. During the war the shortage of food, raw materials, and shipping had made necessary Commonwealth control of practically all primary commodities, and the adaptation of the various schemes to post-war conditions was a task of major proportions. A full account of all the expedients that were adopted would occupy a separate volume. The following precis attempts no more than a general outline of the transition problem. Control was required during the transition for three basic reasons. First, certain guarantees had been given to growers to stabilise incomes and encourage production for war purposes. In the case of wheat, for example , compulsory acquisition had been associated with the payment of a fixed price and farmers had arranged their sowings for the 1 945-46 crop on the assumption that the stabilisation scheme would continue. Clearly, the Government had to honour its obligation for the 1 945-46 crop and probably for a year or two thereafter until a permanent scheme was finalised. Second, high world prices of some commodities required the retention of acquisition to support export control and price control. The world price of leather and hides, for example, was much higher than the domestic price and control was required to prevent the Australian market rfrom being denuded. Third, the shortage of shipping reinforced the need for Government acquisition and marketing of a large number of commodities. The extreme case was apples and pears which depended on what was in 1 945-46 a very rare service-refrigerated transportation. The Apple and Pear Marketing Board was likely to be needed, therefore, for a number of years after the war. All the acquisition and marketing schemes depended on the defence power. The Commonwealth could control export marketing and the pay­ ment of export subsidies in peacetime, but Section 92 of the Constitution prevented any interference with the freedom of interstate trade, and hence any unilateral action by the Commonwealth in the area of acquisition and domestic marketing. Once again, joint Commonwealth-5tate co-operation was mandatory failing a constitutional amendment. The subsequent course of events was a near carbon copy of a now familiar story. Taking the wheat industry as the prime example, the Commonwealth attempted initially to secure uniform action; in January 1 946 an undertaking was secured from the Premiers to establish by oom­ mon legislation a permanent wheat marketing organisation which would incorporate the essential features of wartime acquisition and stabilisation.

T H E " W H I T E P A P E R C ON T R O L S "

793

The Government proceeded with its Wheat Industry Stabilisation Bill in 1 946, but a number of State parliaments failed to accept the details­ mainly the provision relating to the control of production. In September 1 946 the Government failed in its attempt to alter Section 92 by referendum to permit Commonwealth power over marketing, and in 1 947 the Australian Agricultural Council resumed intensive negotiations to secure joint action before the expiration of the defence power. Eventually a rare measure of agreement was obtained (in July 1 948 ) and uniform legislation was passed by all parliaments by the end of 1 948. But the price was high. The Commonwealth agreed to drop output control from the plan, and to include automatic adjustment of the guaranteed price by means of a cost of production index. The only quid pro quo it obtained was an undertaking by the States to restrict production in marginal areas, but in substance the Commonwealth surrendered its authority over its financial commitment to the industry. The Government also managed in 1 948 to secure uniform legislation for the retention of the Australian Hide and Leather Industries Board in its wartime role,9 but other special marketing authorities lapsed or were reduced in status. There were two main lines of development based on the relative importance of export markets for particular commodities. For those commodities with large overseas sales, the Commonwealth usually substituted permanent legislation for those parts of the regulations dealing with export marketing. Thus, at the end of 1 946 the Meat Export Control A ct replaced the wartime scheme, and at the end of 1 947 the Australian Egg Board was reconstituted by means of the Egg Export Control A ct to administer the long-term contract for egg sales to the United Kingdom. Similarly, the Australian Dairy Produce Board was re­ constituted in 1 947 to deal with all export matters. However, the Aus­ tralian Rabbit Skins Board was abandoned in April 1 949 because the steep fall in the price of skins obviated the need for export control. By contrast, marketing control of those commodities with minor overseas sales reverted to State authorities or lapsed. The Commonwealth ceased to acquire barley after the 1 947-48 crop. Acquisition was continued by two States-Victoria and South Australia-whioh operated jointly a restricted form of the Australian Barley Board. Potato marketing under National Security Regulations ceased at the end of 1 948 and responsi­ bility was assumed by separate State boards. Finally and again at the end of 1 948, the Australian Tobacco Board suspended operations and market­ ing by open auction was restored. Given the limitation on the use of the defence power and the endemic shadow sparring between the Commonwealth and the States, it was inevitable that the relaxation of the key economic controls should have been random and unrelated to economic criteria. As noted, the critical question of timing was determined by the unpredictable outcome of Premiers' Conferences or decisions of State parliaments. The most serious • The board commenced operations at the beginning of

1949.

794

T H E C O L L A P S E OF T H E WAR E C O N O M Y

casualty of Commonwealth-State interaction was control of building materials. Even allowing for the depleted state of the building industry in 1 945, divided control had a disruptive effect on its restoration and retarded improvement in efficiency. By grace of the High Court, the other "White Paper controls" were retained for a sufficient period to serve their primary purpose in a rough and ready fashion. As outlined, price inflation was kept within reasonable limits, and even the rise in land prices was restrained to some degree. Not much was attempted in terms of investment allocation, but interest rates were kept at a low level. And arrangements were made for the marketing of the more important primary products. No doubt an additional period of price control would have helped moderate the growing instability of the late 'forties and early 'fifties, but the central fact is that, with the assistance of the unexpectedly rapid growth of world trade, unemployment did not exceed two per cent of the work force at any stage between 1 945 and 1 949. DISPOSAL Related t o the unwinding of the war economy was the question of the disposal of a very large quantity of surplus defence equipment and materials. The method and timing of disposal was of importance in two related ways. First, some items-motor vehicles, clothing, food, machine tools and temporary housing-could be inserted into the civilian economy without much delay, to relieve severe shortages. The sooner these releases were made, the greater the contribution to smoothing the transitional period. Second, disposal had implications for post-war full employment. Unco-ordinated dumping of war assets at a late stage of the transition could threaten employment in a number of key industries, an additional reason for preparing disposal procedures well before the end of the war. On the initiative of the Board of Business Administration in the Defence Division of Treasury, an early start was in fact made. As a result of the depression of munitions production in 1 943 , a Controller of Liquidation within the Department of Munitions was appointed and joined the Com­ monwealth Salvage Commissionl and a number of other small government units dealing with disposal. To integrate the activities of these various groups and to lay down firm policy guidelines, the War Cabinet authorised the appointment of a specialist disposals authority and a ministerial sub­ committee in November 1 94 3 .2 The outcome was the appointment of the Commonwealth Disposals Commission which commenced operations in September 1 944.3 The basic rules of disposal were laid down by the ministerial sub­ committee before the commission commenced operations. The first of these was that existing warehouse facilities were to be used and that there 1 This commission was established in Jul 1943 with P. L. Coleman as chairman and chief executive to strengthen the work of voluntary organisations in the collection and recycling of such materials as waste paper, rag, wool grease and scrap rubber. 2 War Cabinet Minute 3183, 24 Nov 1943. • Statutory Rules 1944, No. 87 2 Jun, as amended by No. 136, 13 Sep. A. V. Smith, Secretary, Department of Supply and Shipping, was the commission's first chairman, but was replaced by G. T. Chippindall in 1945. G. A. Davis and W. Howie were successively general managers.

DISP OSAL

795

was to be n o physical transfer of goods until after sale. Physical control would remain with those authorities which declared the surplus, a sensible decision based on the need to conserve transport, manpower, and ware­ house space. The commission was authorised to approach departments to expedite the declaration of surpluses, but the final decision rested with the holding authority. Surpluses were offered first to other Common­ wealth and State departments (including semi-governmental instrumentali­ ties) and then to the public. The reason for this was partly financial but mainly to reduce public authority demand at an early stage of the transi­ tion and at a time when productive resources would be fully taxed. Sales were to be made whenever possible through established trade chan­ nels, or by public auction or tender at "fair market prices" determined in association with the Prices Commissioner. All sales were to be made on an "as is, where is" basis and for cash. A few special priorities were established. Primary producers were to be given preference in the disposal of motor vehicles; on the sponsorship of the Department of Post-War Reconstruction, certain types of equipment such as machine tools were to be allocated to ex-servicemen and to technical colleges involved in reconstruction training. Special consideration was to be given to the needs of overseas relief organisations and the Red Cross, as well as local hospitals and charitable organisations. Although the definition of policy and the appointment of the commis­ sion in 1 944 enabled an early start to be made, further progress was hindered by the active opposition of the Commander-in-Chief. In a series of minutes to the Minister for the Army,4 Blamey objected strenuously to most of the rules that had been laid down by the ministerial sub-committee. Smarting under the reduction in Army strength, he complained in particu­ lar about ·the retention of physical control by holding authorities. To relieve Army personnel from the responsibility of guarding and accounting for surplus stores, Blamey proposed, unrealisticalIy, that centralised dis­ posals agencies be established in capital cities staffed by people responsible to the commission. The nub of the matter was that the Commander-in­ Chief rejected preparations for disposal as premature, especially the release of stores to ease civilian shortages. His disclaimer of 3rd November 1 944 was as unconvincing as it was revealing: It will, of course, be understood that . . . I am not unsympathetic to the Govern­ ment's desire to provide immediate relief for essential primary and secondary industries and, at the same time, to secure to the Commonwealth the best financial results. But it is clear that the time has not yet been reached when we can afford to divert more military personnel from the Amy's primary task or to imperil our scientifically planned maintenance system by releases to relieve civilian needs. Blamey was reacting, too, to a War Cabinet direction of July 1 944 for a survey of all stocks to be made together with an indication of surpluses available for disposal.5 Even though there was a trend in both the United States and the United Kingdom to shorten stocks in 1 944 to lessen the • Dated 24 and 25 Oct, 3 5

Nov 1944. War Cabinet Mirlute 3668, 22 Jul 1944.

796

T H E C O L L A P S E OF T H E W A R E CO N O M Y

post-war disposal problem, the Australian Army claimed that the defini­ tion of "excess or surplus" stores was impossible while the war continued, Blarney adding , fancifully, that the stock position should be maintained because of probable Australian operations in China, Japan or other temperate or cold 'Climates after the defeat of Germany.6 Although the Army's position was roundly condemned by the Acting Minister for the Army,7 Blarney did succeed in delaying the preparatory work of the commission. The R.A.A.F. and R.A.N. made some attempt to comply with the instruction to survey surplus stocks,8 but the Army maintained that accurate lists could not be drawn up until after the post­ war strength of the Services was established.9 Negotiations dragged on during the first half of 1 945 but very little real progress was made. In July 1 945 a compromise was achieved whereby stocklists were to be prepared of items in short civilian supply, and sales of these were to be arranged;! but the collapse of Japan a few weeks later made the oompromise plan redundant. The result was that disposal sales for the period September 1 944 to June 1 945 amounted to a moderate £7,979,000 (mainly army vehicles in poor condition, clothing and apparel) . The contribution to relieving civilian shortage was insignificant. The Disposals Commission was successful, however, in disposing of surpluses fairly quiokly after the war. Early preference was given to consumer goods and those industrial raw materials which could be used immediately by manufacturers. Sales of motor vehicles grew rapidly to average 1 ,000 a month in 1 946. Given the heavy, demand for vehicle,s of all types , there was some dissatisfaction with the method of distribution and the system of priorities established. Most vehicles were sold to the large distributors and repaired by them before subsequent resale. Until 1 947 priorities were determined along wartime lines in association with the Department of Transport, and retail prices were determined by rules laid down by the Prices Commissioner. Understandably, small distributors complained about their lack of participation; but it was clearly desirable to restrict the number of distributors involved so as to retain some control over prices and the quality of repair work. There were complaints, too, of the high priority given to primary produoers. Of the 1 00,627 vehicles sold by the commission, seventy per cent were allocated to the rural sector -partly because a large proportion of ,the vehicles were more suitable for use in rural areas , and partly as recognition of the particularly severe transport problem in these areas. Given the gap between market and ceiling prices for vehicles of all types, breaches of the prices regulations and other irregularities were common. But by channelling the bulk of sales through the large distributors, these appear to have been kept within bounds. • Minute to F. M.

Forde, 3 1 Jan 1945. Senator J. M. Fraser. • War Cabinet Agendum 189/1945 contains the RAAF survey; survey. • War Cabinet Minute 4194, 22 May 1945; Agendum 209/1945. 1 Production Executive Agendum 82/1945, 27 JuI. 7

Agendum

270/1945

the

RAN

797

DISP OSAL COMMONWEALTH DISPOSALS COMMISSION - SALES (£'000) 1 944-45 1945-46 1 946-47 1 947-48 1948-49 1 . Crude materials 2. Basic materials and products 3. End products 4. Unclassified 5. Total

Total

167

288

350

55

4

864

3,3 1 2 4,499

12,896 23,959 2,232

1 0,309 3 1,41 1 1 1 ,009

6,951 14,021 3,770

2,140 5,676 1 ,377

35,658 80,068 1 8 ,599

7,979

39,375

53,080

24,797

9,197

1 3 5 , 1 89

Note : Detail may not add because of rounding. The difference between the totals for each group and yearly group figures is accounted for by sales in July 1949, the last month of the commission's existence. The main components of the groups are as follows: I-metallic ores and con­ centrates, crude vegetable products, and vegetable fibres; 2-basic textiles, non­ ferrous metals, iron and steel, chemicals, and prefabricated metal products; 3motor vehicles and cycles, real property, metal working machinery, finished textile products and footwear, food, small watercraft and marine engines, and agricultural machinery. Source: Fifth and Final Report, Commonwealth Disposals Commission, 1949. Most other consumer goods with civilian end-uses were disposed of quickly. Notable examples were clothing, fabrics, and footwear. Very large stocks of manufactured textiles were held at the end of the war,

and during its life the commission sold 1 1 ,000,000 yards of khaki and

green drill, the same amount of canvas and cotton duck, and 6,000,000 yards of "desouttie"2 together with large quantities of shirting material, serge, flannelette and more specialised fabrics. For civilian purposes these fabrics-and the footwear that was released---J1 ad their limitations; but they did make an important contribution to clothing supply in 1 946 and 1 947. More specialised industrial clothing and some types of heavy foot­ wear for which a limited domestic demand existed were sold on the export market. Other items to make important contributions in the early years were prefabricated housing, industrial machinery ( including maohine tools) , heavy construction equipment, and tractors. Although reasonably large stocks of food were held, a high proportion was dehydrated meat and vegetables with a limited domestic demand. Most of these stocks were either exported or made available to V.N.R.R.A. The commission's most difficult task was the disposal of stores left behind in Papua and New Guinea. With the rapid withdrawal of troops from the territory, inadequate provision was made for the collection and storage of Army supplies. Pilfering was rife among servicemen, indigenous people, and organised crews of salvage pirates. Rapid jungle growth and tropical humidity also claimed a large quantity of the stores which had been abandoned by the Army. In its race against the jungle and the pi1ferers, the commission abandoned its usual policy and took physical 2 Hand-woven cotton cloth made in India, used mainly as cheap lining for suits, pockets,

etc. Rarely if ever used now. The term could be a corruption of "dhootie"-the Indian loin cloth.

798

T H E C O L L A P S E OF T H E W A R E CO N O M Y

possession of the surpluses and arranged on-the-spot auction sales as rapidly as possible. By the end of 1 946 the commission had cleared stocks in its possession, frequently at bargain prices; but it is clear from the profitable activities of privateers as late as 1 948 and 1 949 that a great deal of material had been missed. Disposal of specialised military equipment presented problems of a different kind. There was no alternative to the destruction of vast quanti­ ties of high explosive, ammunition, mines , bombs and the like after the salvage of metal components for scrap. Some aircraft were sold to New Zealand, but in view of the world-wide glut most combat aircraft had no resale value. Tiger Moths and Wirraways were sold to amateur aviators and the Department of Civil Aviation absorbed most of the aeronautical equipment; but Beauforts, Beaufighters and Mosquitos were scrapped and engines stripped for spare parts. Hulls were occasionally used for temporary homes and caravans. As a curiosity, the slipstream from a running aero-engine was used for frost control on one vineyard in the Hunter Valley. The demand for tanks and Bren-gun carriers was found to be greater than expected because of the shortage of tractors, and in rural areas sales were made readily for heavy traction duty such as timber hauling, earth moving and ploughing. The heavy stocks of pontoons and landing equipment had little more than scrap value after the war, but there was a steady demand for small craft and ships by fishermen, harbour authorities and those in the tourist trade. A number of corvettes were sold to Chinese interests for conversion to the passenger trade. The peak of the commission's activity was reached in 1 946 and 1 947 and during these years it was probably the largest commercial organisation in the Commonwealth. The principles established in 1 944 were firmly adhered to throughout, and most sales were made at public auction or by tender. The commission was assisted by numerous trade panels, and responsibility was delegated as far as possible. For example, the Depart­ ment of Supply and Shipping handled the disposal of clothing and footwear, and the Department of the Navy small craft. Given the size of the organisation and the extent of the commercial pressures that were exerted, malefaction was inevitable. Dealers in second-hand clothing, motor vehicles and scrap metal had a field day. In general, however, stocks were cleared efficiently and rapidly, and there was no significant disruption to normal commerce. After 1 947 the volume of sales declined sharply and the commission was terminated in July 1 949 after which remaining disposals functions were assumed by the Department of Supply and Development.

INDEX ABATTOIRS, 194, 51 1-12, 515, 552 ABBOTT, Hon J. P., 98 ABORIGINES, 295 ABSENTEEISM, 8, 25, 47, 57, 178, 276, 315, 348,

368, 370-1, 444, 446-7, 485, 490-1, 514, 557; see also under names of specific subjects

A.B.U. MANUFACTURING Co PIT LTD, 559n ACHESON, Dean, 135-{i, 459, 462, 610-11 A.C.T.U., see AUSTRALASIAN COUNCIL OF TRADE UNIONS ACTUARY, COMMONWEALTH, 317n, 594 ADELAIDE, 86, 250, 254, 277-8, 415, 770 ADJUTANT-GENERAL, 6, 37 ADMINISTRATIVE PLANNING COMMITTEE, 8, 98-9,

140-2, 150

184; restrictions, 18-19, 158-9, 177-8, 281, 298-9, 774; liquor adver­ 210 ADVISORY WAR COUNCIL, 45, 85, 412 Age (Melbourne) , 37 AGRICULTURAL COUNCIL, AUSTRALIAN, 192, 195, 499, 507, 793 AGRICULTURAL ECONOMICS, BUREAU OF, 710, 740 ADVERTISING,

172-5,

tising,

AGRICULTURAL

ORGANISATION,

D'IRECTOR

OF,

699n

AGRICULTURE, DIRECTORATE OF, 501-2 AGRICULTURE, DIRECTOR-GENERAL OF,

699n

193, 498,

AGRICULTURE, STANDING COMMITTEE ON, 507 AGRICULTURE, STATE DEPARTMENTS OF, 107, 193,

195-{i, 198, 498, 501, 525 DEPARTMENT OF, 69-70,

AIR,

417-18, 433

AIR, MINISTER FOR, 412 AIR BOARD, 45, 41 1-12, 418 AIRCRAFT, shortage of, 2;

141,

191,

218,

8 1 -2; pur­ chase of, 8 1 , 121, 128, 129n, 610- 1 1 ; service and repair facilities, 84, 412, 415-16; tyres, 272-3 ; surplus planes, 339, 413; post-war disposal of, 798 -ANSON, 83 -BEAUFIGHTER, 81-3, 410, 414, 418, 798 -BEAUFORT, 79, 81-3, 410-1 1 , 413-14, 418, 798 -BOOMERANG, 82-3, 410, 413-14 -CA-4, 81-3 -CA-15, 411n, 413 -CURTIS P-{iO, 411n -DH-84 DRAGON, 8 1 , 83, 414 -LANCASTER, 41 1-14, 416 -LIBERATOR, 411 -LINCOLN, 414, 416-18 -LOCKHEED-HuDSON, 121n -MOSQUITO, 83, 413-14, 417-19, 798 -MUSTANG, 82-3, 411, 413-14, 416, 4 1 8 -SPITFIRE MARK VI II , 4 1 1 -TEMPEST II, 4 1 1 n -TIGER MOTH, 81, 83, 410, 414, 417, 798 -TRAINERS, 79, 8 1 -3 -TuDOR, 414, 416-18 -VULTEE VENGEANCE, 8 1 -WACKETT TRAINER, 410, 414 -WIRRAWAY, 79, 81-2, 410, 414, 419, 798 -ZERO, 410-11 AIRCRAFT ADVISORY COMMITTEE, 80 AIRCRAFT ENGINES, 121n; imports, 83; produc­ tion of, 84, 399, 411-13 -ALLISON, 415 -DH-84, 8 1 -GIPSY, 8 1 , 414 -MERLIN, 83, 411-14, 418 -PRATT AND WHITNEY, 4 1 1 , 415 -TIGER, 81, 83 -WASP, 81, 83, 413-14

exports,

AIRCRAFT FACTORY ADMINISTRATION, BOARD OF,

419

AIRCRAFT

400-1, 79-80,

programmes, 4, 23, 410-14, 416-19; problems, 7, 21, 52, 82-3, 417-1 8 ; manpower for, 17, 22-3, PRODUCTION,

AIRCRAFT PRODUCTION-Continued

32, 39-41, 44, 46, 5 1 , 82-3, 87-9, 349, 353, 355, 382, 393-4, 399, 410, 413-18, 685, 688, 692, 695; annexes for, 17, 1 5 1 , 413-15; number of employees, 22, 39-41, 46, 51n, 414, 416; materials for, 58, 115, 417, 454; use of private contractors, 79-84, 413, 430, 434; factories for, 79, 83-4, 1 5 1 , 414-15, 417-18, 772; cost of, 81-3; pooling of, 81-2; production figures 81-3, 411-14, 416-17; components, 82-3, 413-17' machinery and machine tools, 82-3, 342 414, 417-18; working conditions, 415; cut­ backs, 418-19 AIRCRAFT PRODUCTION, DEPARTMENT OF, 421, 742; manpower, 39, 42-3, 357, 380-1, 413, 415-16, 418; inter-departmental involvement, 79-80, 99, 466, 687n; production policy, 82, 396, 399, 412-13 ; absorbed by Munitions, 419

:

AIRCRAFT

PRODUCTION,

DIRECTOR-GENERAL

OF,

79,

81,

7, 43n, 46n, 80, 82, 3 5 1 , 421

AIRCRAFT PRODUCTION,

MINISTER

FOR,

412, 748-9

AIRCRAFT PRODUCTION COMMISSION, AIRFIELDS, 7, 15, 34, 102, 132, 141, AIR RAID PRECAUTIONS, 3-4, 41, 64, ALBION, Vic, 60-1, 767 ALBURY, NSW, 59, 250-1, 253, 261 ALEXANDRIA, NSW, 414 ALICE SPRINGS, NT, 151, 250, 253 ALIEN DOCTORS BOARD, 29 ALIENS, 314; as source of labour,

7, 79-81 144, 149-52 248, 336

27, 29, 34, 379; 200;

145-7, 199-200, 379, 522; internees, 29, in Services, 29; as doctors, 29; women, immigration, 703-4

ALIENS CIVIL AUXILIARY SERVICE, 379-80 ALLEN, R. G. D., 129n, 1 3 1 ALLIED CONSULTATIVE SHIPPING COUNCIL,

19, 231, 475

ALLIED MATERIALS HANDLING STANDING MITTEE, 489 ALLIED SUPPLY COUNCIL, functions and

ties,

217COM­

activi­

8, 43n, 45, 46n, 99-105, 112, 1 17, 1 19, 140, 160, 234-{i, 280-1, 351, 388, 408n; and War Commitments Committee, 43n, 46n; administrative problems, 99; membership of, and Lend-Lease Mission, 102-3, 105,

��it)();

ALLIED WORKS, CO-ORDINATOR-GENERAL OF, 23 ALLIED WORKS, DIRECTOR-GENERAL OF, 23-4,

34, 46n, 362, 379

104,

142-3,

145,

147-8,

153,

351,

455; functions and activities, 7, 34, 104, 140, 142-3, 147, 150-3, 202, 204, 267, 376, 489, 512, 520-1, 524; number of employees, 22, 39-40; inter­ departmental involvement, 23, 151, 687n; manpower for, 24, 35, 39-41, 142-5, 149, 153, 246, 348-9, 353, 355, 357-9, 388-9, 499, 688, 692; employment of aliens, 29, 34, 145; membership of, 142-3; equipment and materials, 142-3, 149-50, 182-4, 280, 376-7; use of public construction authorities, 142, 144, 146, 1 5 1 ; private contractors, 144, 146, 1 5 1 ; rates of pay, 144-5; training facilities, 149; release of manpower for seasonal work, 376, 521 ; see also CIVIL CONSTRUCTIONAL

ALLIED

WORKS

COUNCIL,

CORPS ALLUVIAL MINING EQUIPMENT LTD, 457 ALPHA KNITWEAR PTY LTD, 558n ALUMINIUM, 58 AMALGAMATED CLOTHING AND ALLIED TRADES UNION OF AUSTRALIA, 559n AMALGAMATED ENGINEERING UNION, 57 AMALGAMATED WIRELESS (AUSTRALASIA) LTD,

404, 415, 769

AMERICAN EXPORT-IMPORT BANK, 607 AMMUNITION PRODUCTION, 397-8; surplus, 48-9,

58, 60, 394, 420; for small arms, 48, 57, 59-61, 420; for guns, 49, 57-61, 67, 356, 420,

800

INDEX

AMMUNITION PRODUCTION-Continued

AUSTRALIAN ARMED FORCEs-Continued

ANGLO-AMERICAN FINANCIAL AGREEMENT, 609 ANGLO-AMERICAN JOINT STATEMENT OF EXPERTS,

724-3 1 ; see also AUSTRALIAN ARMY; Aus­ TRALIAN IMPERIAL FORCE, SECOND; AUSTRALIAN WOMEN'S ARMY SERVICE; AUSTRALIAN AIR FORCE; AUSTRALIAN NAVY; MILITIA; WOMEN' S AUXILIARY AUSTRALIAN A I R FORCE; WOMEN'S ROYAL AUSTRALIAN NAVAL SERVICE AUSTRALIAN ARMY, and universities, 6, 36;

428; production problems, 53, 57-8; man­ power for, 55, 57, 59-61 , 74; factories for, 57-61, 402, 422, 770-2; annexes for, 57-8, 402; shell forgings, 57-9; machinery and machine tools, 57-9; components, 58-9, 402, 420; raw materials for, 58, 93, 454-6; sup­ plied to American forces, 58-60, 128, 132; export of, 60, 356; imports of, 121, 128; cut-backs, 383, 391, 394, 401-2, 457; disposal of surplus stocks, 798 656-7, 663-4

ANGUS, M., 234, 236n, 489n ANTIMONY, 454-5, 457 ApPEALS TRIBUNAL, 327n ApPLE AND PEAR MARKETING BOARD, 207-9, ARARAT, Vic, 439 ARBITRATION COURT, COMMONWEALTH,

792

148, 490-1, 493, 495, 505-6, 555-6, 558-61, 779-81 , 783 ARCHER, R. F., 681 ARCHERFIELD, Qld, 415 AREA MANAGEMENT, BOARDS OF, 52; criticism of, 86-7, 392; membership of, 87 -NEW SOUTH WALES, 429, 432 -SOUTH AUSTRALIA, 429, 432 -VICTORIA, 50, 52, 55, 429, 432-3 -WESTERN AUSTRALIA, 59n, 87 ARGENTINA, 205 ARMITAGE, H. T., 619 ARMOURED FIGHTING VEHICLES, 49, 53, 62, 128, 284, 394, 798; see also TANKS

ARMOURED FIGHTING VEHICLES, DIRECTORATE OF, 75, 407, 771 ARMSTRONG, Hon J. 1., 294n ARMSTRONG, Gp Capt W. S., 410n ARMY, DEPARTMENT OF THE , 140, 191, 218,

230, 356

ARMY,

MINISTER

654n, 711, 795

FOR

THE,

45, 66, 80, 251,

ARMY AND MUNITIONS CO-ORDINATING COMMITTEE, 53-4 ARMY CANTEENS SERVICE, 179-80 ARMY EDUCATION SERVICE, 725, 729 ARNDT, H. W., 633n ASBESTOS, 455, 467 ASH, Mr, 72 ASSOCIATED CHAMBER OF COMMERCE, 155-6 ASSOCIATED CHAMBER OF MANUFACTURES, 155-6,

747

ASSOCIATED

STOCK

EXCHANGES

OF

AUSTRALIA,

321, 324, 595-6

ASSOCIATION OF CO-OPERATIVE BUILDING SOCIE­ TIES, 591, 593 ATLANTIC CHARTER, 632, 649 ATTORNEy-GENERAL, 32-3, 148, 308, 330, 448n,

449, 477, 492, 565-8, 718n, 744n, 755, 780 ATTORNEY-GENERAL'S DEPARTMENT, 330n, 567n, 629n -SOLICITOR-GEN ERAL, 567, 575n AUSTRALASIAN COUNCIL OF TRADE UNIONS, 156, 779-80, 782 AUSTRALIAN AIR FORCE, manpower, 22, 39-40, 44, 46-7, 355, 357-8, 362-3, 687; strength, 22, 39-40, 141, 355, 362n, 363, 41 1 , 417, 686; inter-departmental collaboration, 45, 80, 237, 351; war material orders, 52, 57, 67-8, 70, 82-3, 100, 280, 406n, 417-18, 471; construc­ tion units, 141; releases men, 149, 694, 69'7, 699-700; disposal of surplus stocks, 796 AUSTRALIAN ALUMINIUM CO, 415 AUSTRALIAN A N D UNITED KINGDOM OFFICIALS, JOINT COMMITTEE OF, 531n, 533 AUSTRALIAN ARMED FORCES, overseas service,

1-2; manpower for, 3-4, 6, 1 1-12, 15, 17-18, 21, 23, 27, 29, 34-5, 39, 41, 43-4, 46-7, 87-9, 260-1, 339, 348, 350, 353, 359, 363-4, 499, 688-9, 692, 695; exemption from Services, 6, 13, 15n, 16-17, 24, 29, 36; strength of, 6, 12, 15, 22, 39-40, 189, 625, 701; seasonal employment leave, 29, 41, 43-4, 149, 199, 376, 499, 519, 522; women's Services, 3 1 , 39-42, 44, 46, 348, 357-9, 362n, 363-4, 366, 368,

625, 688, 69? ; war material orders, 52-4, 85, 100, 124; mter-departmental collaboration, 98, 160, 179; construction work, 141; wharf work, 229, 372, 490; release of men, 344-5, 687, 690, 693, 695n; demobilisation, 625-6 683, 700-1, 773; public criticism of, 693-4 ;

training and education of discharged soldiers,

manpower, 22, 39-41, 46, 153, 355, 357-8, 362-5, 697; strength of, 22, 39-40, 686, 694, 700, 795-6; Labour Corps, 29; war material orders, 52, 58, 63-9, 75, 77, 100, 280, 406n, 408; British-American-Australian Shipping Committee, 237; and railways, 251, 253-5; and War Commitment Committee, 351; release of men, 363-5, 380-1, 387, 499-500, 522, 685, 694, 696-7, 699-700; disposal of surplus stocks, 795-6

AUSTRALIAN BOOT TRADE EMPLOYEES' FEDERATION, 560n AUSTRALIAN CAPITAL TERRITORY, 270 AUSTRALIAN CONFERENCE LINE, 481 AUSTRALIAN CONSOLIDATED INDUSTRIES LTD, 63,

421, 754-5

AUSTRALIAN EXPORT TRADING CORPORATION , AUSTRALIAN IMPERIAL FORCE, SECOND, 5,

134, 363

752 63,

AUSTRALIAN JOURNALISTS' ASSOCIATION, 1 8 1 AUSTRALIAN LABOR PARTY, see LABOR PARTY A ALIAN MEAT INDUSTRY EMPOYEES' UNION,

���

AUSTRALIAN MINING COUNCIL, 458 AUSTRALIAN NATIONAL AIRWAYS LTD, 415 AUSTRALIAN NATIONAL UNIVERSITY, 732, 748

Australian National University Act, 732n AUSTRALIAN NAVY, 152; strength, 22, 39-40, 686; manpower for, 39-40, 46, 355, 357-8, 695; inter-departmental involvement, 45, 217, 237, 351; war material orders, 52, 63-4, 67, 69, 100, 406n, 408; manning of commercial ships, 227; disposal of surplus stock, 796 AUSTRALIAN RAILWAYS UNION, 247 AUSTRALIAN SHIP OWNERS FEDERATION, 494n

AUSTRALIAN STEAMSHIP OWNERS' ASSOCIATION,

216n, 479

AUSTRALIAN TEXTILE WORKERS UNION, 558n AUSTRALIAN UNIVERSITIES COMMISSION, 727 AUSTRALIAN WAR SUPPLIES PROCUREMENT (WASHINGTON ) , 123, 461, 464, 468-9, 475-6,

477n, 606

AUSTRALIAN WAR (WASHINGTON ) ,

608

SUPPLIES

PROCUREMENT

Director-General of, 477n,

AUSTRALIAN WOMEN'S ARMY SERVICE, 22, 3 1 , 39-40, 46 Australian Women's Weekly, 182n AUSTRALIAN WORKERS' UNION, 156, 455 AUTOMOTIVE SPARE PARTS, 1 1 4n, 283; Controller of, 248 A. V. ROE AND CO, see ROE (A. V . ) AND CO AVRO SLIPPER Co, 560n

Balaar,

Australian ship, 485

467, 598-604, 648, 651, 656-7, 662, ��' 631 , 633, 635, 645, 134-5,

BALANCE

OF

PAYMENTS,

BALLARAT, Vic, 25, 60-1, BALMFORD, W. C., 31 7n, BANFIELD, C. R. F., 581

439, 767 594

Banking Act, 605 Banking Bill, 676-7

BANK OF ADELAIDE, 759 BANK OF ENGLAND, 599-602 BANK OF NEW SOUTII WALES, 169-70, BANKS AND BANKING, concentration of

759

industry,

169-70, 368; trading banks, 312-13, 317, 320, 347, 429, 583-8, 593, 595, 614-15, 620; and inflation, 313; controls, 320, 347, 583, 612-

801

INDEX BANKS AND BANKING-Continued

15, 617; and prices, 329; bank profits, 583, 587, 614; savings banks, 584-5, 587; interest rates, 584, 586-8, 614, 620; nationalisation threat, 612, 615; see also under names of

specific banks

BANKSTOWN, NSW, 418 BARKLY TABLELAND, 712 BARLEY, 44, 201, 206-7, 508, BARLEY BOARD, AUSTRALIAN,

793 206-7, 793 Barrigun, Australian ship, 485 BATHURST, NSW, 67

BATTERIES, see MOTOR VEHICLES BAUXITE, 455 BEASLEY, Rt Hon J. A., 99, 191,

193, 233-6, 243, 245, 246n, 425, 429, 452, 479, 494, 498, 659-61 BEEKEEPING, 198 BEER, see LIQUOR BELGIUM, 603 BELLEMORE, C. J., 14n BENALLA, Vic, 439 BENDIGO, Vic , 25, 422, 770 BEVERIDGE, W. H., 658 BICYCLES, 767

BINOCULARS, see OPTICAL EQUIPMENTS BrRDUM, NT, 712 BrRTH RATE, see POPULATION BITUMEN, 7, 92, 94, 1 02, 150, 222 BLACKHEATH, NSW, 25 BLACK MARKETING, 10, 108, 267, 272-3,

304-5, 308-9, 322, 328-30, 347, 435, 517, 564-9, 789-90 Black Marketing Act, 308, 329, 565-6, 568 BLACK MARKETING BILL, 329, 565 BLAMEY, Field Marshal Sir Thomas, 45, 76-7, 234, 253, 344-5, 372, 382, 394, 470, 795-6; see also COMMANDER-IN-CHIEF, AUSTRALIAN

MILITARY FORCES BLUE MOUNTAINS. NSW, 25 BOMBS, 59, 61, 798 BORRIE, Professor W. D., 702n BOTTLES, 175-6, 178 BOURKE, NSW, 7 1 1 -12 BRADFORD COTTON MILLS, 1 17n BRADFORD KENDALL LTD, 74n BRAMBLES INDUSTRIES LTD, 489n BRAME, J. F., 235n BRANDS AND TRADEMARKS, 172-8 BRANDY, see LIQUOR BRAZIL, 110 BREAD, 167, 276, 544, 775 BREAD INDUSTRY ADVISORY COMMITTEE, 167 BREEN, H. P., 759n BRETTON WOODS CONFERENCE, 602, 648, 657,

660-8, 673

BRIDGES, 151 BRIGDEN, J. B., 621n, 647n, 662 BRISBANE, 151, 250-1, 253-4, 275-8, 409, 415 BRISBANE FISH BOARD, 517 BRITISH-AMERICAN-AuSTRALIAN SHIPPING COMMITTEE, 237, 474 BRITISH MEDICAL ASSOCIATION, 29n BRITISH NAVY , 1, 153, 241n, 470-1, 489, 700 BRITISH PHOSPHATE COMMISSION, 215, 217n BRITISH PURCHASING COMMISSION, 71, 122-3,

124n

BRITISH SUPPLY COUNCIL, see COMMONWEALTH SUPPLY COUNCIL BRITISH TuBE MILLS (AUSTRALIA ) PTY LTD, 767 BRITISH WOOL CONTROL, 204 BROADCASTING, 152, 174 BROKEN HILL, NSW, 59, 250, 259n, 7 1 1-12 BROKEN HILL PROPRIETARY Co LTD, 215, 220,

225, 240, 404, 452, 475, 485, 791

BROWN, Sir Allen, 681 BROWN, C. E., 228n BROWN, Sir Harry, 584, 627, 708-9 BROWN, H. P., 674 BROWNIE, R. Woo 733n BRUCE, Rt Hon Viscount, 101, 599-600, 634 BRUMBY, L., 541n BRUNSWICK, Vic, 25 BRUSHWARES, controls, 7, 92, 94, 1 12-13, 435,

437;

toothbrushes,

7, 92, 94,

1 12-13,

1 15,

BRUSHWAREs-Continued

437; bristles, 94, 112-13, 437; paintbrushes, 112

BRYANT AND MAY PIT LTD, 178-9, 180n BUCKLEY, K. A. H., 578n BUDGET, see FINANCE BUILDING INDUSTRY, 41, 341 ; materials,

104, 318, 390, 567, 591, 603, 608, 723, 730, 773, 777, 788, 790-2, 794; controls, 31 6-18, 723, 773, 777, 788, 790-2, 794; housing pro­ grammes, 390, 591, 691, 693, 695; manpower, 723, 728-30 BUILDING SOCIETIES, 318, 587-8, 591, 593 BULCOCK, Hon F. W., 193, 204 BULOLO-WAU AREA, New Guinea, 767 BUNNING, W. R., 716n BURLINGTON MILLS (AUSTRALIA) LTD, 765-6 BURNS PHILP & Co LTD, 221, 483 BURTON, J. W., 647n, 669 BUSHFrRES, see FIRES BUSINESS ADMINISTRATION, BOARD OF, 433 BUTCHER, Engr Cdr W. G. C., 246n BUTLIN, Professor N. G., 158n-9n, 655n BUTLIN, Professor S. J., 7n, 38n, 56n, 60n,

70n, 75n, 80n, 95n, lOIn, l06n, 154n, 201n, 202n, 215n, 240n, 310n, 312n, 425n, 433n, 443n, 51 1n, 518n, 519n, 536n, 537n, 585n, 587n, 603n, 604n BUTTER, see DAIRY INDUSTRY

1 1 1n, 247n, 480n, 562n,

64n, 122n, 286n, 504n, 583n,

369, 377n-8n; controls, 3, 9-10, 19, 94, 174, 192-3, 195, 202, 213, 235, 269, 282, 287, 291, 293n, 330, 749, 789; manpower policy, 13, 19, 22-4, 31 -2, 43-5, 47, 87, 152, 455, 456n, 696; and war material industries, 65, 83-4; and primary production, 200, 2035, 497-8, 500, 506-7, 5 1 1 , 516; and transport, 235, 242, 244, 246n, 278, 492, 495-6, 567n, 7 1 1 , 763-4; and industrial relations, 372, 555, 558; and coal production, 448-9, 452; and Lend-Lease, 466, 607n, 608, 61On; on prices, 540, 542, 545, 781-2; black market, 567;

CABINET,

post-war

reconstruction

policy

and

views,

590, 629, 635, 653, 661-3, 665-7, 678, 743-4, 753, 755-6, 766, 769-70; banking policy, 61415, 618-20; 624; Planning Office, 675, 677; and immigration, 703-4; and housing, 717-19; and education, 732 CArRNS, Qld, 151, 217, 277 CALLAGHAN, Sir Allan, 501 CALLINAN, D. E., 410n CALWELL, Hon A. A., 678, 703n, 705-6 CAMERON, D., 14n CAMERON, Hon D., 79 CAMPS, 7, 15, 34, 128, 132, 147, 151-2, 200, 323 CANADA, 139n, 179, 205, 210, 281, 466-8, 478, 603, 638, 643, 652 CANBERRA, 194 Canberra, Australian cruiser, 227, 494 CANNAN, Maj-Gen J. H., 470n CANTEENS FUND, 297 CANVASWARE, 98, 437-8, 797 CANVASWARE, Controller of, 438 CAPITAL ISSUES ADVISORY COMMITTEE, 286, 31718, 319n, 320, 325, 583, 589-92, 595, 597-8, 744, 746, 766, 787-8 CAPITAL IssUES BOARD, 31 7 CARLTON AND UNITED BREWERIES LTD, 597-8 CARTELS, 655, 659 CARVER, S. R., 51n CASEY, Rt Hon Lord, 123 CASEY, Brig-Gen H. J., 141 CASHMAN, E. I., 557n CASINO, NSW, 276 CASTLEMAINE, Vic, 25 CEMENT, 263-4 CENTRAL CARGO CONTROL COMMITTEE, 216, 218, 230-3, 235, 237, 408n, 474, 491, 496 CENTRAL COAL AUTHORITY, 450-1 CENTRAL COUNCIL OF EMPLOYERS, 155-6 CENTRAL TRAFFIC COMMITTEE, 215, 218 CENTRAL WOOL COMMITTEE, 152, 201-4, 230, 537

802

INDEX

CEREALS, 222 CEYLON, 130, 271, 300-1 CHARLES RUWOLT PTY LTD, see RUWOLT (CHARLES) PTY LTD CHARLEVILLE, Qld, 712 CHEESE, see DAIRY INDUSTRY CHEMICAL INDUSTRY PANEL, 744n CHEMICALS, industrial, 60-2, 91, 94, 129, 17980, 376; controls, 91, 94; factories, 771 ; disposal of Army stocks, 797 CHIEF OF AIR STAFF, 46n, 82, 3 5 1 CHIEF O F NAVAL STAFF, 246n CHIEF OF THE GENERAL STAFF, 46n, 52n, 351 CHIEFS OF STAFF, 73, 140, 344-5, 350, 360, 363-4, 382, 686 CHIEFS OF STAFF COMMITTEE, 140, 142, 151 CHIFLEY, Rt Hon J. B., 155, 579n; on educa­ tion, 38n; on shipping, 246n, 477n; and financial issues, 3 1 1-13, 316, 324, 3 3 1 , 336-8, 429, 574, �86, 588, 593, 595, 597, 614, 61719, 622, 624; and Lend-Lease, 464-5, 610- 1 1 ; o n industrial relations, 555, 5 5 8 , 779; post­ war reconstruction policy, 629, 640, 661-2, 682, 708, 710, 741; relations with Coombs, 629, 648; on full employment, 678; charac­ teristics, 7 1 3 ; on housing, 721, 724; on motor vehicle manufacture, 755, 756n; Jensen's influence on, 755-6, 762; and controls, 774 CHINA, 90, 94, 1 12, 437, 643, 663, 673 CHIPPINDALL, Sir Giles T., 46n, 120n, 1 54-5, 163-4, 235n, 540n, 794n CHRYSLER-DoDGE DISTRIBUTORS, 754, 759, 761 CHULLORA, NSW, 72, 74 CHURCHfLL, Rt Hon Sir Winston, 700; war policy, 2, 5, 48, 343; discussions with Roose­ velt, 48, 343, 468; and Curtin, 685 CINEMA INDUSTRY, 597-8 CIVIL ALIENS CORPS, 146-7, 376, 380 CIVIL AVIATION, DEPARTMENT OF, 798 CIVIL CONSTRUCTIONAL CORPS, 379; established, 7, 34, 146; manpower for, 34-5, 146, 152; strength of, 36, 146-7, 377; employment of aliens, 146; wages and conditions of work, 147-9, 295, 297, 455; release of labour for seasonal work, 376, 455-6, 522; see also ALLIED WORKS COUNCfL; CIVIL ALIENS CORPS CIVILIAN MINING CORPS, 455 CIVILIAN REGISTER, 19, 2 1 CIVILIAN REGISTRATION CARDS, 21, 255, 295, 367 CIVILIAN REQUIREMENTS BOARD, 176, 187, 2 1 3 , 2 5 3 , 509, 530, 532, 689 CLAPP, Sir Harold, 235n, 247, 253-4, 261, 264, 284, 71 1-12 CLARK, G. L., 457n CLAYTON , W., 609, 668 CLEANING INDUSTRY, 97, 167 CLEARING UNION, 632-4, 638-41, 643-5, 647-8 668n CLOCKS, 98 CLOTHING AND TEXTILE ADVISORY COUNCIL, FEDERAL, 163 CLOTHING AND TEXTILES, 14, 105, 129, 539, 762; rationing, 3, 91-2, 1 15-17, 160-1, 163-4, 173, 2 1 1 , 287, 289, 291-5, 297-300, 309, 325, 440-1 , 775, 785; for Services, 97, 101, 106, 1 14-1 5, 1 1 9, 128, 1 3 1-2, 161, 163-4, 175, 200, 211-12, 291-5, 438-9, 441; for civilian sector, 1 1 4-17, 1 19, 161, 163-4, 167, 175, 177, 292-5, 297-300, 361, 362n, 390, 438-41, 463, 603; factories, 152, 399, 439-40, 7 7 1 ; manpower, 291, 361, 390, 438-9, 557, 560, 691, 695, 764, 785; hours of work and working conditions, 438, 557. 559-61, 783; decentralisation policy, 438-9; efficiency, 438, 745; prices, 537-8, 544-5; subsidies, 538, 561, 784; post-war activities, 591 ; research activities, 764-5; disposal of army stocks, 794, 796-8 CLOTHING AND TEXTILES, DIRECTORATE OF, 1 19, 425, 438 CLOTHING AND TEXTILES, DIRECTOR OF, 299 CLOTHING AND TEXTILES COMMITTEE, 438 CLOTHING COUNCIL, AUSTRALIAN, 1 14, 1 1 9-20, 160, 187, 203, 438 CLOTHING TRADES MANPOWER COMMITTEES, 163, 438

CLOTHING TRADES UNION, 161n CLUNIES-Ross, Professor Sir Ian, 38n, 192n, 204 CLYDE ENGINEERING Co LTD, 257 CLYNE, Hon Mr Justice Sir Thomas, 233, 235n COAL BOARD, 443 COAL CENTRAL INDUSTRIAL AUTHORITY, 451 COAL COMMISSION, 425, 443-4, 448, 449n, 450, 550-1 COAL COMMISSIONER, 232, 239, 247, 263, 425, 443-4, 450-1 Coal Mines Profits (Wartime) Act, 451n COAL MINING, supplies and consumption, 3, 98, 225, 238, 262-4, 275, 443, 446, 448-53, 475; distribution and transport, 98, 223-5, 233, 239, 245, 25 1 , 262, 443, 448, 473-4, 477, 480; kinds of coal, 147, 263, 267n, 379, 444-6, 453; production, 147, 177, 424, 444, 446-53, 473, 475, 478; for railways, 225, 249-50, 256, 262-4, 443, 446, 448-9, 452-3, 550; absen­ teeism, 371, 444, 446-7; strikes, 371-3, 443-53, 550; manpower, 390, 444, 448-9, 692; for munitions industries, 443, 446, 450, 452-3; efficiency and productivity, 443, 447, 550; for shipping, 443; "Canberra code", 445-6; work­ ing conditions and hours of work, 447, 550-1, 556; post-war employment position, 447; rationing of, 448, 450, 452-3; for gas utilities, 448, 450, 452-3; for electricity utilities, 448 , 450, 452-3 ; prices, 550-1; profits, 550; subsi­ dies, 550-1, 554 Coal Production (Wartime) Act, 451 Coal Production (Wartime) Bill, 450-1 COAL REFERENCE BOARDS, 443, 445, 449-51 COBURG, Vic, 25 COCHRAN, S. F., 744 COCKATOO DOCKS AND ENGINEERING Co PTY LTD, 240, 243, 485 CODE, A. R., 71-6, 77n, 79 CorFEE, 300-2 COIMADAI, Vic, 457 COIR YARN, 437 COLEMAN, P. L., 794n COLES, A. W., 294n COMFORTS FUND, AUSTRALIAN, 378, 532 COMMANDER-IN-CHIEF, AUSTRALIAN MILITARY FORCES, 7, 43n, 234, 253, 795; Allied Land Forces, 45, 100; South-West Pacific Area, 99-100, 124, 142, 363 COMMERCE AND AGRICULTURE, DEPARTMENT OF, food programme, 107, 168, 190-5, 257, 498, 500, 512, 518, 749; criticism of, 190, 192, 196; change of name, 193; and rural indus­ tries, 195-6, 198n, 204, 209, 213, 377, 508, 521 ; functions and activities, 215, 216n-17n, 218, 231, 233-4, 235n, 243, 305, 399, 402-3, 425, 465; inter-departmental collaboration, 513n, 537n, 687n, 749n, 750, 752 COMMERCE AND AGRICULTURE, MINISTER FOR, 191, 193, 195, 204-5, 218, 233n, 360-1, 498-9, 516, 528-9, 654, 677 COMMONS, D. J., 562n COMMONWEALTH AIRCRAFT CORPORATION PTY LTD, 7, 67, 79-84, 41 1, 413 COMMONWEALTH BANK, 547, 662, 788; loans for primary industry, 207, 2 1 1 , 620-1, 623; and inflation, 286; special account, 312-13, 583, 585, 587, 613-15, 620; interest rates, 3 1 5 , 586-8, 6 1 4 , 620, 624; inter-departmental in­ volvement, 317n, 59On, 622; control of bank­ ing system, 320, 347, 583, 612-15, 617, 787; central bank credit, 347, 579, 5 8 1 , 583, 586, 678; loans for contractors, 429; external finance, 599-602, 605; development of the, 612-15, 617-23; minimum deposits, 613, 614n; industrial finance, 620-3 ; hire purchase finance, 623; loans to General Motors­ Holden, 759 Commonwealth Bank Act, 619, 621, 624 Commonwealth Bank Bill, 615, 617, 619-21, 624, 674 COMMONWEALTH BANKING CORPORATION, 620; see also COMMONWEALTH BANK; COMMON­ WEALTH DEVELOPMENT BANK; COMMON­ WEALTH SAVINGS BANK; RESERVE BANK OF AUSTRALIA

INDEX COMMONWEALTH DEVELOPMENT BANK, 621 COMMONWEALTH PRIME MINISTER'S CONFERENCE, 685, 703 COMMONWEALTH SAVINGS BANK, 5 8 1 , 587n, 624 COMMONWEALTH SHIPPING LINE, 496 COMMONWEALTH-STATE RELATIONS, general cooperation, 7, 1 3, 25, 707, 7 1 3 , 747n; financial co-operation, 9, 331-5, 574-5, 577, 584, 586, 708, 714-15; on manpower, 13, 23, 25; on transport matters, 169, 247-8; on rural industry, 190, 192-3, 195-6, 2 1 3, 734-8; on war-time controls, 265, 295, 32 1 , 595; on public works, 707-10, 714-15; on housing, 716-21, 723-4; on education and training, 724-5, 731-2; on decentralisation, 770-1 ; on post-war controls, 776, 778, 780-1, 784, 787, 789-94 CONSERVATION SOIL COMMONWEALTH-STATE STANDING COMMITTEE, 740 COMMUNISTS, 446-7 COMPENSATION ( MINERALS) BOARD, 457n COMYN SMITH & CO, 478n CONFECTIONERY, 177, 194, 287 CONNELL, J., 451n CONSCIENTIOUS OBJECTORS, 199 Constitutional Alteration (War Aims and Re­ construction) Bill, 629n CONSTITlITIONAL CONVENTION, 778 CONSTITUTION OF THE COMMONWEALTH OF Aus­ TRALIA, Sec. 92 of, 256, 792-3; judicial interpretation of, 256, 333, 335; Sec 96 of, 334-5 : powers of the Commonwealth and States under, 334-5, 347, 594, 597, 614, 619, 622, 683-4, 707-8, 710, 716-17, 723-4, 733, 738, 768, 773, 776-9, 78 1 , 784-5, 788-9, 792-3; Government seeks amendments of, 564, 629; rents and prices referendum ( 1 948 ) , 564, 7 81 , 784, 790; fourteen powers referendum (1944), 598, 629n, 683-4, 707, 719, 724, 755, 768-9;

social services, marketing, industrial employ­

ment referendum ( 1 946) , 793 CONTRACEPTIVES. 177 CONTRACT BOARDS. 52, 98, 105-6, 190, 402, 425, 428, 430, 432, 537 CONTRACTORS, 34, 348; financial framework, 55, 106, 143-4, 1 5 1 , 425-34; profits, 426-34; see also under specific subjects CONTRACTS ADVISORY PANEL, 427, 429-31 CONTROL ORDERS, 783n; non-essential produc­ tion, 8-9, 92, 1 17n, 182; essential materials, 10, 92, 94-5; hand tools, 94n; rubber 94n, 272-3, 435n, 437n; paper, 97; leather, 1 10 ; foot­ wear, 1 1 1 , 163n; tinplate, 1 1 2n; automotive spare parts, 1 14n, 283; silk, 1 1 5 ; woollens, 1 1 6 ; elastic materials, 1 1 7 , 1 6 1 n ; clothing, 1 1 7, 161, 441 ; cotton materials, 1 1 7, 439; knitted goods, 1 1 7n, 1 6 1 , 441; bread industry, 167n; refrigerators and refrigeration equipment, 184n; furniture, 185n, 776; prices, 185n, 329, 542, 547, 549, 551-3, 778, 782; liquor, 210; interstate passenger transport, 255n; road transport, 278; brushware, 437n; canvasware, 437n; utensils, 437n

CONTROLS AND RATIONING, 286-9, 291, 308-10, 312, 329-30, 338, 424, 434-5, 579, 773-7, 784-5, 794; see also under names of specific

commodities and services.

COOLANGATTA, Qld, 275 COOMBS, Dr H. C., 657n; committee work, 164, 291n, 294, 477, 537n, 540n, 690; views on banking, 617; as Director-General of Post­ \Var Reconstruction, 629-30, 680- 1 ; relation­ ship with Chilley, 629; views on full employ­ ment, 634, 646-8, 652, 676; on post-war export policy, 752 CO-OPERATIVE SOCIETIES, 3 1 8 COOTAMUNDRA, NSW, 249, 261, 439 COOTE AND JORGENSEN PTY LTD, 409n COPLAND, Professor Sir Douglas, 164, 287, 289, 291, 3 1 1 , 328, 331 n, 536-7, 540n-ln, 543-4, 7 81n COPPER, 94, 424, 453-7, 605 COPPER AND BAUXITE COMMITTEE, 454, 456 COPRA, 222 CORDITE, see EXPLOSIVES

803

COSMETICS INDUSTRY, 167 COSTERFIELD, Vic, 457 COTTON, 105; imports, 1 1 5-17, 123, 125, 291, 295, 299, 438-9, 549, 748, 764; production of, 198, 377-8, 440, 502; shortage of, 294, 424, 438-9, 785 ; subsidies, 549; price, 549; post­ war situation, 590, 764; disposal of army stocks, 797 COUNCIL FOR SCIENTIFIC AND INDUSTRIAL RE­ SEARCH, 404, 413, 435, 7 1 3 , 740, 747, 765 COUNCIL OF FIRE AND ACCIDENT UNDERWRITERS, 155-6, 170-1 COUNTRY PARTY, 621 COWRA, NSW, 67 CRAWFORD, Sir John, 192n, 497n, 681, 740n CRAWLEY, L., 759n CREAM, see DAIRY INDUSTRY CRIPPS, Sir Stafford, 4 1 1 CRISP, Professor L. F . , 615n, 667n CROMPTON PARKINSON (AUSTRALIA) PTY LTD, 402 CROWLEY, L., 462 CROWN CRYSTAL GLASS Co Pry LTD, 558n C.S.I.R., see COUNCIL FOR SCIENTIFIC AND INDUSTRIAL RESEARCH CUMMING, J. B., 294n CUNNAMULLA, Qld, 712 CURTIN, Rt Han John, 154-5; broadcasts to the nation, 3, 90, 293, 578-9; character and views, 1 1 , 25n, 3 2 1 ; industrial relations, 25, 372, 445, 449, 451-2, 558; and manpower, 31-2, 359, 383, 686-7, 691, 693n; administra­ tive work, 45, 99, 142-4, 193, 353; relation­ ship with MacArthur, 72, 221-2, 382, 471, 686; war industries, 80; Lend-Lease, 124, 384; shipping, 233, 234n, 245n, 246; war finance, 328, 336, 5 8 1 ; food policy, 498; post­ war reconstruction, 629, 708, 769; full em­ ployment, 673; and Churchill, 685; housing, 721, 724; soldier settlement, 736 CURTIN, P. W. E., 38n, 537n CURTIN-MACARTHUR-WASSERMAN AGREEMENT, 124-5 Customs Act, 604-5 DAIRY INDUSTRY, production, 189, 195, 197-8, 201, 304-5, 349, 361, 374, 380, 387-8, 497, 499, 503-9, 533, 535; butter, 189, 195. 304-5, 447, 501, 503-9, 530, 534, 740, 775, 785; cheese, 195, 304, 503-9, 534, 740; manpower, 197, 349, 380-1, 387-8, 507, 509; wages, 197, 504-6 ; 556; milk, 213, 276, 304, 502-3, 505-9, 530, 534, 541, 544, 5 5 1 , 554, 775; rationing, 276, 304-5, 447, 501, 505, 507, 509, 530, 534, 775, 785; subsidies, 322-3, 506-9, 544, 551, 554, 740; prices, 504-9, 541, 5 5 1 , 740; cream, 505 Dairy Industry Assistance Act, 506-7, 551n DAIRY INDUSTRY ENQumy COMMITTEE, 504-6, 537 DAIRY PRODUCE BOARD, AUSTRALIAN, 793 DAIRY PRODUCE EQUALISATION COMMITTEE, 506 DAJARRA, Qld, 7 1 2 Dalby. Australian ship, 485 Dandenong, Australian ship, 485 DARLING HARBOUR, NSW, 255, 261 DARLING RANGE, WA, 7 1 5 DARWIN, 1 , 3, 8, 150-1, 250, 2 5 3 , 489 DAVIDSON, Sir Alfred, 169-70 DAVIDSON, C. G. W., 445, 447n DAVIS, G. A., 1 19n, 163-4, 190-1, 193, 425, 438, 794n DAWSON VALLEY, Qld, 377-8 Daylesford, Australian ship, 485 DAYLIGHT SAVING, 370n, 775 DE BAUN, Han Mr Justice A. J., 216n, 494 DEBT, see LOANS DEDMAN, Han J. J., 690, 791; committee work, 45, 46n, 164, 246n, 263, 449n, 678, 691, 693n, 752; as Minister for War Organi­ sation of Industry Department, 99, 154-5, 159, 183n, 498, 679; relationships with Curtin and Chilley, 154-5 ; character, 159; clothing control, 1 6 1 , 293n; rationalisation of industry, 167, 170, 174-5, 178, 1 81-2, 186-7; manpower

804

INDEX

DEDMAN-Con tinued

question, 689; university education, supports lifting of controls, 774 DEER PARK, Vic, 60

DEFENCE, DEPARTMENT OF,

433

732;

141, 247, 351, 360,

DEFENCE, MINISTER FOR, 350-1, 755 DEFENCE COMMITTEE, 344-5 ; inter-departmental

involvement, 45; reviews war effort, 47, 88, 349-50, 355-6, 361 ; manpower allocation, 74, 356-8, 363-4, 381-3, 686, 718; membership of, 351; criticism of, 362, 380, 382-3, 393, 686; American forces in Australia, 363, 470; munitions production, 392-5, 398, 419-20, 422,

749-50, 769-70

DEFENCE

193

DEFENCE

FOODSTUFFS,

CONTROLLER

FOODSTUFFS,

DIVISION

OF,

OF,

190-1,

190, 193,

425, 498

DEFENCE FOODSTUFFS ADVISORY COUNCIL, DEFENCE FOODSTUFFS COMMITTEE, 190

190

Defence (Transitional Provisions) Act, 564, 781n Defence (Transitional Provisions) Bill, 781 DE HAVILLAND AmCRAFT PTY LTD, 79-81 , 83, 414, 417-18 Delamere, Australian ship, 485 Delungra, Australian ship, 485 DEMAND, demand management, 347; domestic demand, 347, 773; international demand, 347, 785; and supply, 579, 641, 775-6, 783 Demobilisation Bill, 674 DENBY, Mr, 72-3, 76, 236n DENTISTS, see MEDICAL SERVICES DERWENT PARK, Tas, 59, 770-1 DEVELOPMENT CO-ORDINATING COMMITTEE, 707 DIETARY STANDARDS, 213, 497, 502, 527, 530-2, 535, 634-5, 649-50 DISPOSALS COMMISSION, COMMONWEALTII, 282, 794-8 DISTRICT CONTRACT BOARDS, see CONTRACT BOARDS DISTRICT WAR AGRICULTURAL COMMITTEES, see WAR AGRICULTURAL CoMMITTEES DIXON, Rt Hon Sir Owen, 123, 216, 217n, 228n,

233, 459, 462, 643n

DOCKS OPERATING COMPANIES, 229 DOCTORS, see MEDICAL SERVICES DOMESTIC SERVICE, 39, 340, 369 DONALDSON, T., 60

Dorrigo, Australian ship, 485 DORSET VALLEY, Tas, 457 DOUGLASS-POZZEY MISSION, 524n DOWNING, R. I., 541n, 553n-4n, 677n DRAKE-BROCKMAN, Hon Mr Justice E. A., 443, 450n-ln, 559-60 DRINKING, 178, 210, 227; see also HOTELS; LIQUOR DROUGHT,

206-7, 263-4, 304-5, 374, 453, 497, 501, 509, 512, 516, 523, 526, 551, 553, 567, 581 DRUGS AND MEDICINE, 94, 107, 158, 173-4 Dubbo, Australian ship, 485 DUBBo, NSW, 67, 377 Dulverton, Australian ship, 485 DUMBARTON OAKS CONFERENCE, 669 DUNCAN'S LTD, 180 DUNK, Sir William, 236n, 469, 608-9 DUPONT CO, 62 EAGLEHAWK, Vic, 439 EARTII MOVING MACHINERY, 149, 798 EAST AFRICA, 1 10, 456 EASTERN GROUP SUPPLY COUNCIL, 3,

60, lOOn, 101, 1 16, 212, 300, 392, 394-6, 398, 406n-7n, 440-1, 748-50 ECHUCA, Vic, 422, 770 Economic Stability Acts, States, 781 EDUCATION, expenditure, 340; professional staff, 368, 725-7; Commonwealth involvement, 7245, 728-9, 731-3; buildings and equipment, 725-8; see also REcONSTRUCTION TRAINING SCHEME, COMMONWEALTII; TECHNICAL CATION; UNIVERSITIES EDUCATION, COMMONWEALTII OFFICE OF,

EDU­

732

Education Act, 732 EDWARDS, S . T., 494n

19, 52, 342, 348, 362, 400, 418, 424, 433, 438, 443, 447, 473, 478, 487-9, 537, 539, 549-50, 552, 555, 557, 675, 745, 747, 766, 778; see also under names

EFFICIENCY AND PRODUCTIVITY,

of specific industries and subjects EGG BOARD, AUSTRALIAN, 519, 793 Egg Export Control Act, 793 EGG INDUSTRY BOARD, 518 EGGLESTON, Hon Sir Frederic, 123, 468 EGGS, see POULTRY INDUSTRY EGG SUPPLIES, CONTROLLER OF, 518 EGYPT, 130, 663 ELECTRICAL EQUIPMENTS, 62, 90, 408, 467-8, 775 ELECTRICITY, 3, 552 ELECTRIC MOTOR INDUSTRY, 402, 767 ELECTRIC MOTOR INDUSTRY PANEL, 744n ELECTRONICS EQUIPMENTS, 128, 404-5 ELLIOTT, R. D., 427n ELLIS, J. A., 258n ELTIlAM, E. P., 725n, 730 EMERGENCY ROAD COMMITTEE, 248

420,

EMERGENCY ROAD TRANSPORT, DIRECTOR OF, 248 EMERGENCY SUPPLIES, DIRECTOR OF, 287 EMMCO PTY LTD, 402 EMPIRE Am TRAINING SCHEME, 22, 134, 467 EMPmE PURCHASE SCHEME, 171 EMPLOYMENT A N D UNEMPLOYMENT, 90; extent

of unemployment, 19, 22, 41-2, 47, 342, 536,

553, 626-7, 631-2, 636-7, 646, 648, 683, 701, 794; unemployment increase, 55; full employ­ ment, 91 , 347, 588, 619-20, 741-2, 773, 777, 781; White Paper on full employment, 673-9, 707, 739n; see also MANPOWER; POST-WAR

RECONSTRUCTION and under specific subjects EMPLOYMENT SERVICE, COMMONWEALTII, 701,

714 Enfield, Australian ship, 485 62

ENGINEERS' SUPPLIES, ENGLAND, J. E., 269n ENTERTAINMENT, 287 ESSENDON , Vic, 25

Eugowra, Australian ship, 485

EVANS, G. T., 481 EVANS, I., 438n EVANS DEAUN AND Co LTD, 240, 485 EVATT, Rt Hon H. V., 216, 651,

662; in Washington, 135-6, 477, 647; coal supplies, 452; committee work, 626, 629; full employ­ ment, 635-6, 649; Hot Springs conference, 649; post-war planning, 653-4; Wellington conference, 668; San Francisco conference, 669-70

610, 614, 639-40, 644-5, 647, 654-7, 662, 664-5, 773, 788-9 53-5, 59-61 ; manpower, 54-5, 59, 61-2, 86; factories, 54-5, 60-2, 86, 770-2; raw materials, 58, 60-2, 93; machinery and machine tools, 60-1; disposal of surplus material, 798 EXPLOSIVES SUPPLY, DIRECTORATE OF, 60, 767 EXPLOSIVES SUPPLY, DIRECTOR OF, 60 EXPORT COMMITTEE, 643n, 689, 748-52 EXPORTS, 23, 773; foodstuffs, 41, 168-9, 189-92, 194, 201, 213, 222, 257, 302, 304-7, 389, 500-1, 504-9, 5 1 1-16, 518-21, 527-8, 530, 532-5, 685-6, 749, 785, 793; war materials, 60, 65, 68-70, 81, 101, 392-5, 685, 748-51 ; skins, 1 13, 201, 21 1 ; wool, 1 17, 201-4, 440, 603; wine, 177, 201, 2 1 1 ; primary products, 201, 204-6, 209-10; railway equipment, 257, 748, 750-1 ; increase, 345, 631, 748-51 ; machinery, 403; minerals, 454, 605, 751; controls, 604-5, 748-51 , 793; motor vehicles, 605; civilian goods, 748-51 EXPORT SUGAR COMMITTEE, 537 EXTERNAL AFFAms, DEPARTMENT OF, 703n; Australian Legation (Washington ) , 475-6, 477n, 606, 609; Aust Minister to the US, 123, 459, 468 EXTERNAL AFFAms, MINISTER FOR, 477, 646, 654n, 668 EXTERNAL RELATIONS, COMMITTEE ON, 630 EXCHANGE RATES,

EXPLOSIVES, production,

805

INDEX FAIRFIELD, Vic, 414 FAIR RENTS BOARDS, 562-3, 564n FARM MACHINERY, 128; machinery pools, 200, 508, 525, 527; shortage of, 201, 213, 361, 374, 402-3, 519, 699; production, 214, 499, 501, 527, 767; marketing, 403, 468, 523, 623; manpower, 381-2, 386, 390, 403, 688, 692, 699; disposal of army stocks, 797 FEDERATED SHIPWRIGHTS AND SHIP CONSTRUC­ TORS ASSOCIATION OF AUSTRALIA, 370 MERCHANT'S SPIRIT AND W,NE FEDERATED ASSOCIATION, 178 FEINSTEIN, C. H., 578n FERTILISERS, manpower, 169, 700; controls, 1945; production, 195, 767; shortage of, 201, 205,

213, 302, 304, 361 , 374, 390, 501, 519-20, 534, 699-700, 733; allocation, 207, 376, 521, 523, 525; transport, 222, 264; subsidies, 509, 521 JUTE; 109-10; see also COTTON ; FIBRES,

MANILLA; SISAL; SYNTHETIC FIBRES FINANCE, DIRECTORATE OF, 431n FINANCE, DIRECTOR OF, 427, 431n

Financial Agreement Acts, 586 FINANCIAL

AND

ECONOMIC

3 1 1 , 331, 630-3, 636-7, 702, 745, 789

COMMITTEE,

286-7,

640, 645-6, 648, 654,

general policy, 9, 3 1 0-12, 337, 342, 570, 612; controls over spending, 18; budget, 310, 314, 336, 570, 575, 577, 586, 765; capital issues control, 3 19-20, 322, 589-93, 596-8, 614, 723, 773, 776-7, 781, 787-9 FINSBURY, SA, 57, 59, 86, 422 FIRE CONTROL EQUIPMENT, 62, 176n FIRES, 264, 267, 457, 507 FIREWOOD, 147, 264, 379, 554 FIRTH, G. G., 674, 677n FISH, 177, 497, 503, 517, 535, 567 FISH, CONTROLLER OF, 5 1 7 FISHERMEN'S BEND, Vic, 84, 4 1 1 , 413, 758, 7 7 1 FITZGERALD, A . A . , 158n, 317n FLAX, 93, 97-8, 110, 152, 264, 349, 377-8, 502 FLOUR AND FLOUR-MILLING, 167-9, 194, 264 FLOUR INDUSTRY COMMITTEE, AUSTRALIAN, 194 FODDER, 168, 195, 206-7, 263-4, 453, 508-9, 567, 568n, 569, 783n FOOD, CONTROLLER-GENERAL OF, 193-5, 466n, 699n FOOD, CONTROLLER OF, 498 FOOD AND AGRICULTURE ORGANISATION, 635, 649-50, 672 FOOD BOARD, COMBINED, 210, 500, 502, 516 FOOD CONTROL OFFICE, 176n, 364, 502, 529, 532n FOOD COUNCIL, AUSTRALIAN, 187, 191-5, 210, 516, 525 FOOD EXECUTIVE, 193, 498-9, 507, 689 FOODSTUFFS, production, 12, 21, 41, 130, 159, 1 89-97, 201. 213-14, 349, 364, 450, 470, 472, 497-503, 507, 527-8, 533, 535; manpower, 4 1 , 1 3 0 , 199, 345, 349, 377, 3 8 1 , 386-7, 389, 507, 525, 688; for Americans and the Services, 93, 97-8, 107, 128, 1 3 1 -2, 189-91, 1 93-4, 251, 360, 364, 389, 458, 470, 472, 497, 499-502, 504, 507, 509, 5 1 1 -12, 514, 516-19, 521-9, 532-5, 689; contractors, 107, 502, 525; plants and processing, 1 1 1-12, 125, 152, 190, 195, 361, 362n, 364, 377, 380, 387, 389, 399, 499-500, 557, 560, 608, 6 1 1 ; marketing, 129, 190, 192, 360, 364, 389, 467, 497, 500-1, 504-9, 51 1-12, 518-19, 527-8, 530, 532-5, 686; controls, 159, 189-90, 195, 201, 214, 295, 297, 792; for civilian sector, 190-1, 194, 341-2, 389, 500-1, 504, 509, 512, 514, 516-19, 521-4, 526-8, 530, 532-5; transport, 190, 251, 264, 5 1 1 , 516; wages, 364; relief supplies, 532; prices, 538; subsidies, 538; disposal of army stocks, 794, 797; see also under names of specific foods FOOTSCRAY, Vic, 25, 57, 59, 85, 422, 770 FOOTWEAR, 1 05-6; bootnaiis and bootnailing machinery, 7, 93; controls, 7, 93, 98, 1 10-11, 161. 163, 212-13, 775, 785; for civilians, 101, 1 10-1 1 , 299, 300n; for Services, 110-11, 21213, 300n; disposal of army stocks, 797-8 FORBES, NSW, 67 FORDE, Rt Hon F. M., 78, 251, 668-9, 796n FINANCE,

FORD MOTOR COMPANY OF AUSTRALIA, 409, 428,

754, 757-61 , 762n

FORD MOTOR COMPANY OF CANADA, 754, 759-60 FORTIFICATIONS, 4, 7, 15, 34 FOSTER, Hon Justice A. W., 33n, 492-3, 557,

558n, 559

FOUNDRIES, 58, 87 FRANCE, 665, 673 FRASER, Sir Colin, 454 FRASER, Hon J. M., 470n, 796n FRASER, P., 655 FREELAND LEAGUE FOR JEWISH TERRITORIAL COLONISATION, 703 FREMANTLE, WA, 151, 206, 277, 7 1 1-12 FREMANTLE LUMPER's UNION, 228n FRENCH, H. C., 761n FRENCH ARMED SERVICES, 65 FRUIT, production, 27, 29, 44, 195, 198, 201, 209-10, 349, 377-8; fresh fruit, 41, 194, 201, 207.. 209, 264, 349, 524, 532, 740, 792; dried frUit, 194-5, 209-1 1 , 264, 349, 740; canned fruit, 194, 201, 209-10; marketing, 207-10, 740, 792; juices, 209; transport, 264; con­ trols, 792 FUEL, see COAL MINING; ELECTRICITY; FIRE­ WOOD; PETROL AND PETROL PRODUCTS FUEL CO-ORDINATION COMMITTEE, 448-50, 452 FUEL SHIPPING AND TRANSPORT, DEPARTMENT OF, 495 FUNNELL, W., 14n, 689 FURNITURE INDUSTRY, 177, 184-5, 568n, 766-7 FURNITURE INDUSTRY PANEL, 744n GARDNER, R, N., 608n G.A.T.T., see GENERAL AGREEMENT ON TARIFFS AND TRADE GAWLER, J. S., 716n GAYE, Sir Arthur, 217n GEELONG, Vic, 25, 409, 439, 727, 765 L AGREEMENT ON TARIFFS AND TRADE, GE 6 GENERAL MOTORS CORPORATION OF THE UNITED STATES, 754, 759-60 GENERAL MOTORS-HoLDEN'S LTD, 64-5, 68, 70,

����

83, 409, 415, 417, 421, 428, 590, 753-62

GEPP, Sir Herbert, 235 GERMAN ARMED SERVICES, 65, 340 GIBLIN, Professor L. F., 135n, 3 1 1 , 537n, 583n,

603n, 613n, 705, 789

619,

630,

634, 645,

648, 702,

GLADSTONE, Qld, 5 1 1 GOLD, 601-2, 639, 645, 656 MINING, 41, 59, 177, 3 18, 320, 455, 602, G n GOODGER, H. W., 63 GORDON, Sir Thomas, 217n, 228n, 231, 233,

���

236-40, 242n, 243, 246n, 473-6, 482-4, 489, 491, 493-4, 496

478,

480,

GOUGH, L. S., 1 15n GOULBURN, NSW , 59, 439 GOULBURN VALLEY, Vic, 377 GOVERNMENT EXPENDITURE, 575, 577, 581, 5834; see also WAR EXPENDITURE COMMISSION, CoMMONWEALTH, 552, GRANTS

575, 577

GRANVILLE, NSW, 415 GRATWICK, E. F. P., 256n GRAVING DOCKS, Sydney, 144, 1 5 1 ; Williamstown, 240; Captain Cook, 241; Brisbane, 242 GRAY, C. V., 245n GRAY, E. D., 579n GRAZIER'S FEDERAL COUNCIL, 375 GREAT BRITAIN, aid to Australia, 2, 48-9, 52,

61-4, 68, 77-8, 8 1 , 83, 100, 1 1 3 , 1 1 5-16, 598;

weapons development, 62, 66; imports of war materials, 65, 69-70, 8 1 , 598; Lend-Lease,

122-5, 126n, 127-8, 130-1, 139, 459-63, 468-9, 606-9, 612; Mutual Aid Agreement, 126, 1 32-4, 136, 139, 630 et seq; national income, 131n; imports of food, 189-90, 194, 201, 20910, 302, 304-7, 389, 500-1, 504-9, 5 1 1-16, 5 18-21, 527-8, 530, 532-5, 793; motor car exports, 281 ; exports of civilian goods, 437, 439, 604; imports of minerals, 454; post-war exports, 604; emigration, 702-3

806 GREAT BRITAIN-Continued -ADMIRALTY , 534 -AIRCRAFT PRODUCTION, MINISTRY -CONSUMER NEEDS BRANCH, 176n -DOMINIONS OFFICE, 462, 668 -FOOD, MINISTRY OF, 190, 209-10,

305, 50S, 507-8, 51 1-12, 518 -SHIPPING, MINISTRY OF, 215 -SUPFLY, MINISTRY OF, 1 10, 394 -TRADE, BOARD OF, 652n -WAR CABINET, 133 -WAR OFFICE, 512

INDEX

OF,

412

213, 301,

-WAR TRANSPORT, MINISTRY OF, 215, 217n, 218, 220-1 , 223, 228n, 230, 237-9, 243, 473, 475-8, 480, 5 1 1 GREEN, Col G . A . , 75-9 GROSS NATIONAL EXPENDITURE, 340-2, 554-5 GROSS NATIONAL PRODUcr, 320, 571, 577-8, 589

GUN AMMUN ITION PRODUcrION, DIRECTORATE OF, 401-2 GUN AMMUNITION PRODUCTION, DIREcrOR OF,

421

PRODUCTION, production prob­ lems, 48, 63-6; types of guns, 48, 58, 62-9, 80, 420; production, 53, 62-4, 66, 68-9, 397-8; imports, 62-3, 67-8; materials and tools, 63-7; orders for, 63-5; factories, 64-5; manpower, 64-5 ; private contractors, 64-5. 67-8; exports, 65; production cut-back, 383, 394; over-commitments, 394, 399, 420

GUNS AND GUN

HAIRDRESSING, 369 HAITI, 110 HALIFAX, Rt Hon Earl , 608-9 HALL, A. R., 585n, 587n, 602n HAMILTON, Vic, 59 HANDLING EQUIPMENT POOL, COMMONWEALTH,

489n 34, 132, 141, 149, lSI, 230-2, 234, 237, 489 HARROD, R. F., 469n HARTNETT, Sir Laurence, 52-3, 68, 421, 755, 756n, 757-8, 759n, 762 HARVESTERS, see FARM MACHINERY HASLUCK, Rt Hon Sir Paul, 3n, lOn, 31n, 99n, 140n, 200n, 365n, 446n, 629n, 655n, 668n-9n, 683n, 686n, 694n, 701n, 777n HAWKIN S, H., 668 HEALTH, DEPARTMENT OF, 173, 176n, 191, 530 HEALTH, MINISTER FOR, 173 HEALY, J., 228-9, 490-1 HEMP, 93 HENDERSON, A. W . , 557 HENDERSON, R. G., 181n HENDON, SA, 57, 59, 771 HICKMAN, F., 451n HARBOURS,

HIDE AND LEATHER INDUSTRIES BOARD, Aus­ TRALIAN , 212, 793 HIDES AND SKINS, 1 13, 201, 211-13, 792-3 ; see also LEATHER HIGH COMMISSIONER (LONDON ) , 62, 70, 189-

90, 209, 404, 599, 601-2, 634

COURT OF AUSTRALIA, 333, 614, 794; appeals to, 17n, 334, 564; decisions of, 39n, 256, 335-6, 543, 547n, 558, 563, 594, 684, 777 HIGHER TECHNICAL TRAINING COLLEGES, 727, 764-5 HIRE PURCHASE, 325, 623; see also COMMON­ HIGH

WEALTH BANK HODGSON, Col W . R., HOLIDAYS AND LEAVE,

76n 3, 6, 8, 24-5, 1 59, 261-2, 264, 371, 449, 490-1, 505, 775-6, 779 HOLLOWAY, Rt Hon E. J., 629, 678 HOLT, Rt Hon H. E., 626 HOMEBUSH, NSW, 512, 51 5 HOME SECURITY, MINISTER FOR, 3, 427, 677 HORSBURGH, J., 454n HORSEFIELD, J. K., 638n, 640n, 644n, 657n HORSES, 165, 776 HORSHAM, Vic, 59 HOSPITALS, for American forces, 128, 132, 150; building of, 149-52, 773, 790; labour require­ ments, 361, 390, 557, 560, 689; see also MEDICAL SERVICE; NURSES

HOTELS, 323, 597; see also DRINKING; LIQUOR HOT SPRINGS CONFERENCE, 646, 649-50 HOURS OF WORK, see INDUSTRIAL CONDITIONS HOUSING, for war workers, 25-