A LOS OBREROS Y A LAS OBRERAS
V. CONSTRUCCIÓN DE LOS PALACIOS.
treasurers
Prologue
The newly re-elected Tasmanian premier and treasurer Joseph Lyons sat at his desk in 1925, writing a note of appreciation to the former Queensland premier and treasurer ‘Red Ted’ Theodore for coming to Tasmania to campaign for him.433 In his short letter Lyons
thanked Theodore for his ‘signal services’ which he hoped to one day reciprocate.434
Theodore had stood down from the Queensland parliament to move to federal politics, where there was something of a leadership vacuum on the Labor side.435 Theodore believed Lyons would one day also make a strong contribution to national government. Indeed, when the federal party successfully talked Lyons into making the move, Theodore apparently personally guaranteed Lyons' salary should he be defeated at the election.436
433 Theodore addressed public meetings in Devonport, Burnie, Launceston and Hobart. In Devonport,
Theodore said Lyons ‘had accomplished wonders in straightening up the financial position and saving the state from the verge of insolvency’; (Burnie) Advocate, 23 May 1925, p 6. He said he was ‘impressed with Mr Lyons’s earnestness, his sincerity, his tenacity and his courage’; Mercury, 22 May 1925, p 7.
434 The letter, dated 30 June 1925, is in the Theodore papers, NLA MS 7222, folder 2. Lyons may not have
met Theodore in person until they were elected to the federal parliament in 1929. Theodore had not been to Tasmania before 1925 and there is no reference to the men sharing a platform while he was there. Lyons had only made a handful of trips to the mainland. Lyons had been selected as a delegate to Labor’s national conference in 1919, which Theodore attended, but Lyons could not attend for financial reasons; Hart (1967, p 23). Lyons was not a delegate to any other Labor national conference and Theodore was not a delegate when it met in Hobart in 1912. Theodore attended the 1916 premiers’ conference as acting premier and the 1918 conference as Queensland treasurer but Lyons did not attend either. Lyons attended the 1915, 1926 and 1927 conferences (none of which was in Brisbane) but Theodore did not. Neither attended the premiers’ conferences of 1917 and 1920. Theodore attended the 1919 treasurers’ conference but Lyons was then in opposition.
435The talented TJ Ryan, Theodore’s predecessor as Queensland premier, had moved to federal politics
and become deputy leader but died suddenly in 1921, aged just 45. The ALP leader, Frank Tudor, died in 1922. His successor Matthew Charlton had been hospitalised with a serious illness during the 1922 campaign. Former senior Labor figures such as Hughes, Pearce and Watson had defected to the conservatives over the conscription issue, while Fisher was living in declining health in London.
436 Hector McFie, a Tasmanian MLC, claims this in a letter to Philip Hart 3 June 1964, Hart papers, National
Library of Australia, MS 9410, folder 1. Theodore believed Lyons was ‘a man whose word was worth listening to, who was sincere, who knew his subject and who commanded respect’; Denholm (1922, p 59).
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Table 5.1: The parallel lives of Joseph Lyons and Edward Theodore
Joseph Lyons Edward Theodore
Born Sept 1879 Dec 1884
Elected to state parliament April 1909 Oct 1909
Becomes deputy Labor leader January 1914 Sept 1912
Appointed state minister April 1914 June 1915
State treasurer April 1914 – Nov 1916; Oct 1923 – Jun 1928
June 1915 – Feb 1925
State deputy premier April 1914 – Nov 1916 June 1915 – Oct 1919
State premier Oct 1923 – Jun 1928 Oct 1919 – Feb 1925
Elected to federal parliament Oct 1929 Jan 1927
Appointed federal minister Oct 1929 Oct 1929
Acting treasurer Aug 1930 – Jan 1931 n.a.
Treasurer Jan 1932 – Oct 1935 Oct 1929 – July 1930;
Jan 1931 – Jan 1932
Prime minister Jan 1932 – April 1939 n.a.
Defeated at election n.a. Jan 1932
Died April 1939 Feb 1950
When writing his letter to Theodore, Lyons may have reflected on what his son Brendan Lyons (2008, p 101) would later call their ‘remarkable similar political backgrounds’. Both men had risen from humble origins through dint of hard work and application. Both were involved in union activities and joined the Labor Party. Both were elected to state parliament in 1909. Both quickly rose to become state treasurer and then premier. At this time, Lyons’ biographer Henderson (2011, p 171) observed they shared similarly pragmatic views about economics.
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But Lyons at that time would never have dreamed then that he would one day leave the Labor Party and bring down the Scullin Labor government in which he would serve with Theodore, ending Theodore’s political career.
When the Scullin government was elected in 1929, Theodore and Lyons were its only members with any government experience and both were given senior cabinet positions. Theodore was treasurer and, when he had to stand aside and Scullin was overseas, Lyons was acting treasurer.
But as the Scullin government wrestled with the Great Depression their views on how to deal with the economic collapse differed markedly. In time Lyons left the Labor Party and led the federal opposition. The December 1931 election saw Lyons become prime minister and treasurer and Theodore lose his seat. Lyons was treasurer as Australia gradually emerged from the recession. While Theodore never stood for parliament again, Lyons nonetheless contemplated appointing him to a government post.
This chapter looks at the reasons why these two men’s views diverged so far after starting off so close.
Family and childhood
Joseph Lyons was born in Stanley, Tasmania on 15 September 1879, of Irish ancestry, and grew to be a staunch Catholic. He retained some Irish sentimentality.437 He attended the local convent school, and was a keen student and debater. Indeed, one relative referred to him as ‘fairly droolin' with the schoolin'’.438 He was a good runner, footballer and
cricketer at school.439 After his father gambled away the family’s savings on the 1887 Melbourne Cup, Lyons had to find work. He had a number of part-time jobs, including as a printer’s devil as a nine year old (the same job as former treasurers Chris Watson and William Higgs).
437 In a parlour game in 1905 Lyons was asked his favourite colour and replied ‘the colour of the shamrock’;
illustration in Henderson (2011, p 37).
438According to Enid Lyons (1965, p 53). Bradish (1927, p 15) claims ‘as a boy he was tireless in every
opportunity to enhance his debating powers’. Manning Clark (1987, p 263), however, compares his intellectual thirst unfavourably with contemporaries such as Scullin and Curtin, claiming Lyons ‘was never a voracious reader or a man with a lively curiosity’.
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Edward Theodore was of more distinguished ancestry but grew up in similarly modest circumstances. He was born on 29 December 1884 at Port Adelaide. His father, a Romanian immigrant, originally called Vasile Teodorescu but later Basil Theodore, was a son of a senior Greek orthodox bishop and a nephew of the inventor of the first submarine440 but was himself only a labourer, tug boat operator and later part-time farmer. He had an interest in organised labour and was approached about standing for parliament but declined.441 Theodore's mother, born Annie Tanner, was an English immigrant. Ted
attended local schools and did some labouring jobs before heading for the Western Australian goldfields at the age of fifteen.
Unionism and self-improvement
After two aunts offered to pay his school fees Lyons was able to qualify to become a teacher and in 1907 was sent to Hobart to attend Teacher Training College. He was then sent all over the state, generally to small village schools, before gaining a post in Launceston in 1908. One of his postings was to the Carmichael Lyne estate, where he met the owner’s brother, William Lyne (the former NSW premier who went on to serve as federal treasurer), fuelling his interest in politics. By 1906, Henderson (2011, p 37) reports, he was listing ‘studying politics’ as his favourite occupation. Dissatisfied with the way teachers were treated, in 1906 Lyons joined the Tasmanian Workers’ Political League.
Theodore was much more peripatetic. He moved to the Abrolhos Islands and then to Broken Hill. By 1906 he had moved to Chillagoe, in the hinterlands of Cairns, where he toiled as a mine labourer and prospector. He literally bore the scars of his work there as a mining accident left his back permanently marked.442 He became known as ‘Red Ted’, for his politics rather than his appearance. In 1909 he married Esther Mahoney. Along with his close friend Bill McCormack, Theodore was a founder of the Amalgamated Workers’ Association of North Queensland, and Theodore was its first secretary. It was said that ‘Theodore provided the brains and McCormack the brawn’.443 When it merged
440Sydney MorningHerald, 5 September 1946, p 7. 441 Joyce (1959, p 1).
442 Fitzgerald (1994a, p 365).
443Kett Kennedy, cited in Moore (2015, pp 27, 97). Kennedy (1977, p 15) describes the ‘forcible’ way in
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with the much larger Australian Workers’ Union in 1913, Theodore served as the state president from 1913 to 1916.
While they had limited formal schooling, both Lyons and Theodore were interested in learning and read a good deal, although Theodore had greater intellectual depth. A contemporary journalist recalled Lyons as ‘intelligent and well-read’.444 Miners with
whom Theodore worked recalled his 'incessant reading'.445 Simpson (1931) reports that
Theodore built up a substantial library of books on economics after moving to a larger house in 1916.
Religious and political beliefs
Lyons was a staunch Catholic all his life. According to Manning Clark (1987, p 263), he ‘turned to God in all the crises of his life’. His first biographer, Hart (1967, p 8), however, considered ‘his Catholicism does not appear to have greatly influenced his views on particular political issues…he probably knew little of the Church’s detailed social teachings.’ Williams (2013, p 93) similarly observed that ‘he was uninvolved – and, it would appear, largely uninterested – in the debates of the 1930s conducted within Australian Catholic-intellectual circles’. He did, however, dress his crucial criticism of Theodore’s economic policy of expansionary credit in religious terms; ‘only the Creator could make something out of nothing’.446 Lyons was known as ‘honest Joe’, reflecting a
virtue very important to him.447
Lyons was involved with a discussion group of Fabian hue formed by the economist (and for a time fellow MP) LF Giblin, whom he had first met in 1907.448 While not professing to be an economist himself, Lyons was advised by economists of the stature of Giblin and Douglas Copland. Throughout his career, Lyons would reach out for diverse sources of
444Buchanan (1940, p 3). Denning (1937, p 30) recalled him as ‘abreast of the latest developments in
financial thought’. Johnston (1987b, pp 60-61) gives a similar view. He was also ‘widely versed in socialist literature’; Bolton (1963, p 293). Murphy (1975, p 175) refers to him as having ‘a zeal for reading socialist and economic tracts’.
445 Joyce (1959, p 1). Fitzgerald (1994b, p 39) remarks that even while an itinerant miner, 'wherever he
went he joined a library and read whatever he could' and once in parliament, 'he devoted his spare time to studying finance'.
446Cited by Manning Clark (1987, p 371). Along similar lines, Lyons claimed Theodore’s Fiduciary Notes
Bill attempted ‘what is possible only to the Creator –the performance of a miracle’; Hansard, 13 March 1931, p 237.
447As early as 1905 he described ‘honesty’ as his favourite virtue; Henderson (2011, p 37). 448 Coleman, Cornish and Hagger (2006, p 14); Henderson (2011, pp 47-48).
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advice. His wife wrote of how he 'conferred with pastoralists, industrialists, trade unionists, farmers and businessmen'.449
While in 1909 he referred to himself as a 'socialist', at times addressed colleagues as 'comrade', and in 1921 declared 'the capitalist system had failed'450, he never revealed any
deep knowledge of or strong support for Marxism.451 He opposed the Labor Party's adoption of the socialist objective in 1921 and became interested in finding a 'third way' between capitalism and communism.452 Towards the end of his life he confessed ‘I am
still a Labor man at heart’.453
Despite Theodore’s father’s family being pillars of the Greek Orthodox church, Edward was also raised a Catholic (his father having adopted his mother’s faith) but, while for a time he was a regular attender at mass, religion never appears to have played a big part in his life.454 By his latter years he was apparently an atheist.455Fitzgerald (1994b, p 410) reports that a priest came to him on his deathbed but it is not clear whether Theodore genuinely welcomed him or just wished to appease some family members.
Theodore had the stronger and more curious mind of the two men. He was widely read in socialist literature456 and in Theodore (1926, p 3) referred to capitalism as a ‘passing phase of human history’ which was chiefly responsible for inequality. He added, however, that Labor’s planned transition to a more socialist model would be gradual and peaceful. Theodore was never a Marxist revolutionary. Indeed, he was a significant investor and
449 Cited in Henderson (2008, p 207). When he appointed an advisory council in 1925 to investigate ways
of ameliorating the state's financial position, its members included former conservative premier and treasurer Sir Elliot Lewis and leading businessmen Sir Alfred Ashbolt as well as Giblin
450He continued '…it has to go. Hitherto the Labor Party has attempted to correct the evils of a rotten
system. Now, they must seek to remove the rotten system…'; Hobart World, 14 March 1921, p 4.
451 Hart (1967, p 7), his son Brendan Lyons (2008, p 65).
452 Bird (2008, p 15 and 2009, p 41). Enid Lyons (1965, p 145) describes how by the late 1920s 'his early
dreams of socialism were tempered now by awareness of the danger to individual freedom that lay within it'. Melville (c1974, p 63) recalled Lyons as ‘never really very much imbued with Labor traditions’. As early as the mid-1920s there had been signs of Lyons moving away from the Labor movement; Denholm (1977). For example, an editorial in the Mercury, 23 July 1926, p 6 commented ‘in practice there is really no substantial difference between one party and the other in Tasmania. It is, more or less, a matter of chance that Mr Lyons has political connections with the Labour Party’.
453 Denning (c1948b, p 23) and Lyons’ daughter Sheila, cited in Crawford (1989, p 24).
454 Fitzgerald (1994b, pp 74-75), Young (1971, pp 6-7). Greenwood (1966, pp 2-3) pointed out that
Theodore was sent to a government rather than catholic school.
455 A letter from John Wren to Theodore on 4 October 1949 refers to a conversation between them where
Theodore expressed disbelief in an afterlife; Griffin (2004, p 33).
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saw nothing wrong with this. As John Howard (2014, p 28) put it, he ‘mixed easily with entrepreneurs; he was something of one himself, though prone to corner cutting.’
Rather than overthrowing capitalism Theodore sought to reform and govern it to make it consistent with the interests of the workers. Kim Beazley Snr (1966, 1972) called Theodore ‘Australia’s first significant Keynesian’;457 probably true of parliamentarians
but there were Keynesian economists in Australia at the time such as Giblin and Copland.
Into state parliaments
In 1909 Lyons resigned as a teacher and successfully stood for the state seat of Wilmot.458 This was a largely rural seat, although it included Launceston. Lyons supported the Labor programme, which included radical measures such as breaking up large estates. Although untrained in finance, he took an early interest in financial matters, serving on the Standing Committee on Public Accounts. In 1912 he became president of the Tasmanian branch of the Labor Party, and topped the poll in Wilmot. He was soon the deputy leader of the parliamentary Labor party.
Also in 1909, aged only 24, Theodore won the Queensland Legislative Assembly mining seat of Woothakata (from 1912 Chillagoe), on some accounts having won a toss of a coin to decide whether he or McCormack should be the candidate.459 Working hard to improve his rhetoric and studying finance in the parliamentary library, he was rewarded with a rapid rise. When T J Ryan became leader in September 1912, Theodore became his deputy. Theodore spoke out on economic issues, calling for a debt sinking fund and advocating succession duties, increased income tax, a tax on dividends and a land tax.460
457In a more accurate refinement, Beazley (1971, p 4) referred to him as the ‘first Keynesian in Australian
public life’, an accolade repeated by Souter (1998, p 265). A cynic might say he would identify with Keynes’ comment to Lytton Strachey that his ambition was ‘to manage a railway or organize a trust, or at least swindle the investing public’; cited in Walsh (2007, p 49). (Keynes’ biographer Harrod (1950, p 111) discreetly omits the latter part of this quotation.)
458 The Tasmanian lower house was elected under proportional representation using the same electorate
borders as the federal electorates. As second on the Labour ticket, Lyons had a good chance of being elected, although it was still a gamble to quit his job.
459 Childe (1923, p 114), McMullin (1991, p 81) and Moore (2017, p 60) report this story –as does Hardy’s
(1950, pp 324-5) fictionalised account -- but Sykes (1988, p 226) does not believe it. An anonymous journalist (1945, p 7) reports old-timers recalling Theodore as a reluctant candidate who saw himself as too young and inexperienced.
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State treasurers
The election of a Labor government in Tasmania in April 1914 saw Lyons become treasurer, as well as deputy premier and minister for education and railways. The government, however, had only a precarious hold on the lower house and faced an obstructive upper house. Lyons represented Tasmania at the Premiers' Conference in Sydney in 1915, which doubled as a honeymoon with Enid. As education minister, ahead of his time, he attempted to introduce equal pay for women.461 He established a royal commission into public debt, serving as a commissioner himself along with Giblin and three others.462
The Tasmanian economy suffered from educating children who then left for the mainland to find work. By January 1915, the unemployment rate in the state was over 13 per cent. With little manufacturing industry of its own, the rural exporters in Tasmania suffered from the federal tariffs.
After a bitter conscription referendum campaign and a split in the Labor Party, the government was defeated and Lyons became leader of the opposition in November 1916 and was seen as Labor’s ‘bright new hope’.463 He stood unsuccessfully for the northern
Tasmanian federal seat of Darwin in 1919. A car accident in 1926 put his life at risk, and left him lame for years in one leg.
Meanwhile in Queensland TJ Ryan had led Labor into power in 1915 and Theodore became treasurer464, deputy premier and secretary for public works. The new administration aimed to be a reformist government in the mould of the concurrent federal government led by fellow Queenslander Andrew Fisher. In May 1916 Theodore took to the national stage as acting premier at the premiers’ conference.
Theodore’s approach to the state budget was described as ‘orthodox’.465 Indeed Fitzgerald
(1994b, p 62) suggests that Theodore and Ryan ‘swept into power largely because they embodied petit-bourgeois ideals of good book-keeping’. But this did not prevent them
461 Enid Lyons (1972a, p 3).
462 Frank Green (1969, p 10), who served as secretary to the commission. 463 Davis (1983, p 10).
464 This appointment surprised some, who regarded William Lennon, a former banker who had served as
Labor’s acting leader, as the best qualified candidate for the position; Greenwood (1966, pp 114-5).
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implementing many reformist measures. The new government sought to promote competition by establishing government-owned enterprises ranging from ‘cattle stations and butchers, timber and sugar mills, banking and insurance services, even a hotel’.466 It