Federation, globalisations and the environment

Bernard O’Dowd won the Bulletin’s 1900 competition for a Federation poem with his sonnet Australia. Generations of schoolchildren obliged to decipher its complexities were turned off poetry. Despite O’Dowd’s arcana, he counterpoised pertinent questions about the coming Commonwealth. “Are you”, he queried,

A new demesne for Mammon to infest?

Or lurks millennial Eden ‘neath your face?

O’Dowd and his mates around the Victorian radical weekly, Tocsin, were right to suspect that the Constitution had been fixed for the benefit of British bond-holders and colonial plutes. For O’Dowd. the promise of a workingman’s paradise lay in social revolution more than in the planting of a garden continent.

To challenge federation from the left in 1899 was to be isolated among the distinguished company of radical nationalists opposed to both imperial control and local capitalists. The dissenters wanted a democratic polity, and not a monarchical model which would be broken from the start.[1] Among those calling for a “No” vote in 1899 was Henry Bourne Higgins, who, in the following year, lost his Geelong seat in the Victorian Legislative Assembly for characterising the Boer war as “unnecessary and unjust”. In 1901, an inner-Melbourne working-class electorate returned Higgins to the first House of Representatives; he became Attorney-General in the first Labor administration in 1904, and as President of the Conciliation and Arbitration Commission went on to make the most of the bad job of Federation.

At the close of this centenary year, with its bias towards celebrating individual politicians and deploring their racism or sexism, it is time to recall that Federation happened within a global economy and ecology. Throughout most of the European occupation of Australia, our story was treated as an appendix to the deeds that made the Empire. During the 1960s, Australia took center stage. The lens has become so focussed on the local that we have been losing sight of our place in the world. To counter that tendency, five of the interweaving contexts in which Federation was achieved merit attention: nation-building; competing empires; high finance; monopolising; and climatic turmoil. In short, Federation needs to be considered in terms of a previous stage in globalisation, the third of four eras deserving that name.

Globalisation Mark I had flourished around the Iberian seaborne empires, bringing Vasco da Gama eastwards to India (1497-98), Ferdinand Magellan westwards to the Philippines (1520-21) and Luis Vaez deTorres (1606) through the strait that bears his name. Globalisation Mark II took over during the seventeenth century with the triangular trade of slaves, molasses and rum between Africa, the Americas and England. In our region, Mark II manifested itself in the East India Company and the Netherlands Indies Company. Mark II saw the British claims of possession by Cook in 1770 and occupation under Phillip from 1788 to serve the China trade.[2]

Placed in the context of Globalisation Mark III, Federation is revealed as a tardy example of the creation of nation-market-states. The rise of the nation-state was in reality the rise of the nation-market-state, with governments extending their territories and functions in keeping with the accumulation of capital.

After 1860, the United States accelerated towards a continental market through the war against Confederate independence, by completing the genocide of the Amerindians, and the building of transcontinental rail links. Guided by London, Canada’s elites federated into a Dominion between 1867 and 1871, partly to ward off any takeover from the reunited power to its south. At the same time, wars advanced German and Italian political integrations, which were mostly complete by 1871. Elements in the Japanese ruling circles staged the Meiji Restoration in 1868 to do the same to their archipelago in a civil war. Legal and physical impediments to internal trade lingered in every case. The Union of South Africa in 1910 had been hammered into being on the battlefield at the time of our Federation. These states marshaled and inculcated the ideology to legitimise the nation-markets, often through compulsory military training followed by ex-service bodies.

Australia’s first prime minister, Edmund Barton, could declare on 1 January 1901: “There is a nation for a continent, and a continent for a nation”. Confined to geography and government, that slogan left out the key aspect of the federal impulse, which was to establish a state to promote a market across the continent. The heart of this drive was the abolishing of inter-colonial tariffs under Section 92: “On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free”.  The federationists could not confine the market to their nation-continent because Australia’s state, nation, continent and market were all inside the British Empire.

The new Commonwealth did exclude one element of Globalisation Mark III, namely, the switch from chattel slavery to indentured labour, “a new system of slavery”. The Indian or Chinese coolie and the kanaka made way for White Australia as a national ideal, not just a restrictive immigration policy.

Federation also helped to concentrate the allocation of investment. One example was the erection of BHP’s iron and steelworks at Newcastle, instead of squandering resources in each of the six colonies. The rolling of the first steel there on 24 April 1915 has as much claim to be called the birth of an Australian nation as the landing at Gallipoli a few hours later. This rationalisation of capital funds continues to be weakened by the States’ use of their residual powers to underbid for projects. For instance, the South Australians required BHP to construct a steel works at Whyalla in order to gain access to ore bodies.

A web of empires
Several of the new nation-market-states learned that in order to survive they had to become colonisers themselves. The Meiji oligarchs saw that the way to preserve their independence was to mimic the Europeans by setting up an empire, starting with attacks on Formosa and Korea in the 1890s.

In terms of territorial expansion, US Imperialism also peaked around 1900 with its annexations of Puerto Rico, the Philippines and Hawaii, and its occupation of Cuba. The prize in the Pacific was China where Washington called for an “open door” so that its firms would not be confined to one slice of the melon.

These rising powers challenged the supremacy of the British Empire. Australia was again caught within a web of rivalries, this time between France, Germany, Great Britain, Japan, Russia and the US of A. An Empire-wide movement to catch up with German efficiency appeared in the recommendations of the 1901 Royal Commission on Victoria’s technical education. From within Britain’s industrial heartlands came the 1903 call for an Imperial Tariff by Colonial Secretary, Joseph Chamberlain.

The initial response by Australians had been to get London to rally around the flag against the Germans in the Pacific. But, after 1895, Britain’s search for allies brought it closer to Japan. The rise of an Asiatic power quickened calls to strengthen Australian defences by integrating six colonial armies and five navies. The pooling of resources after 1901 meant that, by 1913, the national government could afford a battle cruiser, HMAS Australia, and maintain 300,000 volunteers abroad in 1914-18. Tariff-spawned factories supplied the British military with boots, jackets, jams and jellies.

High finance
Reporting the under-subscription of the May 1891 loan for Queensland, the Economist expressed the disquiet of London financiers at the rising Labour movement in the Australian colonies: “Possibly the rates of wages in Australasia will suffer by a partial cessation of borrowing, but the trade of that important section of the empire will be far from suffering in consequences”. As David Kynaston observed: “Thus the City and its commentators regulated the rhythms of economic life down under”.[3]

The agitation to federate coincided with an economic contraction in the Eastern colonies and a gold boom in the West. The Barings collapse in 1890, followed by bank failures in Victoria and Queensland, made investors more anxious to protect their funds. Throughout the 1880s, Australia had attracted a fifth of new issues on the London financial market, and returned to that level in the late 1890s only because of the gold rushes around Kalgoorlie. The proportion going to the older colonies halved.

Bank crashes in Australia contributed a too often overlooked reason for an alliance between the colonies. Melbourne financiers such as the Austro-Hungarian consul, Carl Pinschoff, urged that London would be more willing to lend if the debts of each colony were underwritten in a federation. A crisis in one part of the country could be compensated for by the resources of the rest. That reduction in risk offered the further advantage of lower interest rates. Section 105 allowed the new Parliament to “take over from the States their pubic debts”.

In the USA, promoters of railroad stock had been swindling British investors. To restore confidence, Congress established an Interstate Commerce Commission in 1887 to regulate the industry. In Australia, governments built the railways, making the loans more secure. Nonetheless, our politicians defaulted in their personal projects. In 1892, London investors charged the Queensland treasurer, Sir Thomas McIlwraith, with fraud over his handling of the Queensland Investment and Land Mortgage Company. When he won on appeal in the local courts, rumours reached London that he had forced the Chief Justice to resign, replacing him with the premier, Samuel Griffith, godfather of the draft constitution, with whom McIlwraith had been in the “Griffilwraith” coalition since 1890.

Under these circumstances, British capitalists and their political agents were keen to maintain appeals to Privy Council to protect investments in government and corporate ventures. In 1897, the Colonial Office worried that loans may not be secure if suits for their recovery were to be finalised in the High Court of Australia, as proposed in Section 74 of the draft. “Is it likely”, a high official wrote, “that the House of Commons where such capital is largely represented will allow the appeal to be swept away?” Worse still, populist politicians might repudiate repayments.

The Secretary for the Colonies, Joseph Chamberlain, conspired with the premier of New South Wales, George Reid, to secure amendments to Australia’s Constitution to protect British investors. The Adelaide Convention altered the clause dealing with the Privy Council to allow unfettered appeals on non-constitutional questions. Another result of the Chamberlain-Reid understanding was that the Governor-General could act without the advice of the Executive Council, as Sir John Kerr did on 11 November 1975.

When the Australian delegates went to London in the summer of 1900 to watch over their draft being turned into the Act of the British parliament that would grant the Commonwealth its legal status, the movement towards Federation almost stalled on the question of appeals. As one of the delegates, Alfred Deakin, put it: “The Conservative classes, the legal profession and all people of wealth desired to retain the appeal to the Privy Council and had heartily and openly supported Chamberlain’s proposed abolition of clause 74”. Those interests wanted an absolute right of appeal in all cases. Chamberlain assured the House of Commons that he was protecting “the private interests of investors … a very large class … of British subjects interested in Australia”. In the end, the Australians agreed to the High Court’s having the power to allow appeals on Constitutional issues. That concession came on top of the one worked by Reid in 1897.[4] (Appeals to the Privy Council continued until 1982.)

The crucial realignment during Globalisation Mark III was the creation of ever larger businesses, then referred to as “Trusts”, which needed larger markets and stronger governments. The expansion of capital had produced the modern corporation by the 1880s. This concentration of capitals was federation in the sphere of commerce and industry. The US Congress sought to control the monopolisers with the Sherman Act of 1890, but its provisions instead stimulated a wave of mergers in 1899-1901, after which 320 corporations held 40 per cent of US manufacturing capacity.

Australia’s federationists were alert to the US situation, just as their drafts had been inspired by its Constitution. Their concern can be read in Section 51 (xx) which gave the new Commonwealth power to make laws for the control of “foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth”.

One such giant was International Harvester which had extended its price-fixing ring to Australia in collusion with H. V. McKay’s “Sunshine” company at Ballarat. In 1905, McKay alleged that its US partner was determined to drive him out of business by dumping machines here at whatever price would bankrupt his factory. This claim was credible given that McKay’s production had grown from 50 to 1900 units during the decade after 1896. McKay turned to the Commonwealth which passed The Australian Industries Preservation Act.

Although sections of that Act were modeled around the Sherman anti-trust Act, the local law was aimed not at increasing competition but at guaranteeing employment and sustaining British industry against yet another US encroachment on Imperial trade. International Harvester already had 90 per cent of world sales. The US monopolisers were part of world-wide developments that squeezed the markets and profits for British firms, thus weakening the Empire’s capabilities in every field.

With so many factories serving farms in Australia, it is not surprising that the key constitutional cases for tariffs, monopolies and the basic wage during the first decade of the Commonwealth should have been initiated by a supplier of agricultural equipment. The significance of that connection for the early Commonwealth lies in the natural environment viewed on a global scale, as O’Dowd had when he recognised Australia as home to “The cenotaphs of species dead elsewhere”.

El Nino
The years 1895 to 1902 saw three back-to back  El Nino effects. Sheep numbers fell by a third and the New South Wales wheat harvest reached only one tenth of its usual total. The long drought did not drive Federation, but crimped its inaugural years. Projects that the first parliamentarians had hoped to initiate were postponed, or abandoned. One small example of the impact of retrenchment from the drought was that the first Governor-General, Earl Hopetoun, asked to be recalled in 1902 after the Parliament declined to lift the gubernatorial salary from £10,000 to £18,000.

Political affairs are more subject to the weather than geographers have been able to teach historians. In Victoria, for instance, the long drought gave rise to the Kyabram Movement, a forerunner of the Country Party, to reduce the costs of government. That upsurge delivered a reactionary administration in 1902 which attacked public servants on both the industrial and political fronts, provoking a rail strike in 1903, and wholesale dismissals under a Coercion Act. One follow-on was the defeat of the first Federal Labor government in 1904 when it tried to extend the Arbitration Act to State government employees. The shelving of the Report on Victorian Technical Education was another effect of the stringency.

The rolling El Nino meanwhile had ravaged a sweep of societies from East Africa, through India and China, and the Netherlands Indies and the Philippines, and on to Brazil. In China, the failure of crops enflamed the Boxer Rebellion against the Christian missionaries who had been backed by the cannon of the foreign concession holders.[5] One Boxer manifesto read:  

No rain comes from Heaven,
The earth is parched and dry,
And all because the churches,
Have bottled up the sky.

New South Wales and Victoria dispatched naval contingents to Hong Kong in 1900 to suppress the Boxers. Britain learned from its dealings with the other Concession holders that the Royal Navy could no longer rule all the waves by itself and thus signed the 1902 Alliance with Japan.

The ending of that El Nino sequence opened the way to other environmental changes in Australia. Prickly Pear had been held back during the drought when it was used as stock feed. From infesting 10,000 acres in 1900, it covered 58 million acres by 1920.[6]

The drought refocused attention on irrigation, which the Victorians had been pushing since 1885, initially guided by Alfred Deakin. Control of the Murray waters became an issue at the 1897 Convention in Adelaide as the delegates debated giving the Commonwealth power over “The control and regulation of navigable streams and their tributaries within the Commonwealth and the use of the waters thereof”.[7] The host colony sought to preserve its navigation and fisheries; Victoria wanted to irrigate; New South Wales had no immediate scheme in mind, but asserted its ownership of all the water to the South Australian border.

The Federal spirit flickered in the symbolically significant town of Corowa at the 1902 meeting that set up a tri-State Royal Commission on the use of the Murray River, which was then almost dry. In 1905, the Victorian government brought the management of its rivers under a single authority, a precondition for any cross-border arrangements.[8] Rivalries prevented an inter-State agreement until the next big drought encouraged the creation of the River Murray Commission in 1915.

The prospect of famine in Australia had stimulated research for higher yielding grains. Crops per acre had been falling since 1860 as the later maturing types in the higher rainfall areas were blighted with stem rust. Millers imported grain in 1890 from overseas after crop losses of £2 million. In 1900, after fourteen years of cross-breeding, William Farrer named his “Federation” strain, an early maturer and drought resistant type, which expanded the wheat belt beyond the Great Divide, thereby changing the colour of the agricultural landscape from golden to brown.

New strains, however, could not prevent the return of El Nino. In 1914-15, Australia’s wheat yield was the lowest since 1902. The following year, the crop was the most abundant ever, leaping from 25 million to 179 million bushels, ample to feed the Mother Country at war. To the promise of aiding Britain to “the last man and the last shilling” should be added “and the last loaf”.

The uncertainty of cereal output had implications for the clash of empires. Britain’s naval spending rose 300 percent between 1894 and 1913 to protect the conveyance of grain tonnage which had grown by only one quarter. As Anver Offer put it: “Free trade no longer came free. The cost of naval power became a subsidy for food not different in principle from the tariffs”.[9]

German strategists anticipated that, once hostilities commenced, their import of grains and superphosphates would be disrupted. That fear encouraged the quest for a catalyst to lower the temperatures and pressures at which the creation of ammonia from the combining of nitrogen and hydrogen could be done economically. The answers developed in the Bosch-Haber process between 1908 and 1913 were applied to making explosives.

By the golden anniversary of the Commonwealth in 1951, the landscape of much of Australia would have been unrecognisable to the generation who had forged the Federal compact. Following a drought in 1944 as severe as that in 1902, the Australian earth was about to regenerate. The release of myxamatosis in 1950 killed off so many rabbits that the landscape looked greener than it had for some seventy or eighty years. Grasses and shrubs took off at once, but tree seedlings also had more of a chance to grow. This rebirth was a mixed blessing because exotic flora were no longer held in check while foxes and cats turned on native species.

In The reluctant nation (1994), ex-Director of the Australian Conservation Foundation, Phillip Toyne, recognised that the Commonwealth possessed the constitutional authority under the foreign affairs and the corporations powers bestowed in Section 51 to protect the environment. Sometimes, that authority has been used, by both the Coalition over sand-mining on Fraser Island, and the ALP on damning the Tasmanian south-west. Just as often, the Federal government has compromised with the States, as in the Regional Forests Agreements. According to Toyne,

There remains to be found the approach which avoids the better confrontation generated by unilateral intervention by the Commonwealth, but abandons the “lowest common denominator” of the consensus approach to achieving national objectives in environmental protection. (p. 15)

The answer is not adding a new power to the Section 51. Despite the 1967 deletion of “other than the aboriginal race in any State” from sub-section xxvi, no Federal government has been game to override the States on land rights. The same will apply to the rights of the land itself. They too will need preservation from States Rights when used as a stalking horse for corporate plundering.

The future for our Federal compact in the current round of Globalisation cannot be glimpsed by regurgitating Barton’s slogan of “a nation for a continent, and a continent for a nation”. His vision splendid dealt with demands within Globalisation Mark III for co-operation among the colonies to strengthen the Empire. Globalisation Mark IV is more likely to establish linkages between regions inside Australia and specific parts of other countries. Regions are the nodes for expanding trade, built around their comparative advantages. In place of cliches about Australia’s becoming part of Asia, the point to ponder is which bits of Australia are likely to be tied to which bits of every other continent. Nation, market, state, region, empire and class remain the stars in our constellation but the latest wave of Globalisation is realigning them so that Eden needs fresh defences against Mammon.

Humphrey McQueen is a freelance historian working from Canberra. His recent books include Temper Democratic, How Exceptional is Australia? (Wakefield Press, 1999) and The Essence of Capitalism, The Origins of Our Future ( Sceptre, 2001).

[1] Hugh Anderson, Tocsin: contesting the constitution, Red Rooster Press, Melbourne, 2000.
[2] K. Dallas, Trading Posts or Penal Colonies, Fullers Bookshop, Hobart, 1969.
[3] David Kynaston, The City of London, volume II, Golden Years, 1890-1914, Chatto & Windus, London, 1995, p. 48.
[4] J. A. La Nauze, The Making of the Australian Constitution, Melbourne University Press, Carlton, 1972, pp. 172-75 and  263-64.
[5] Mike Davis, “A World’s End: Drought, Famine and Imperialism (1896-1902)”, Capitalism, Nature and Socialism, 10 (2), June 1999, pp. 3-46.
[6] Ian Tyrrell, True gardens of the gods, Californian-Australian environments, University of California Press, Berkeley, Calif., 1999, p. 205.
[7] Official Report of the National Australasian Convention Debates, Government Printer, Adelaide, 1897, p. 794.
[8] Don Wright, “The River Murray: Microcosm of Australian Federal History“, Federalism in Canada and Australia: the early years, ANU Press, Canberra, 1978, pp. 277-86.
[9] Anver Offer, The First World War, An agrarian interpretation, The Clarendon Press, Oxford, 1989, pp. 219-20.