IN A PANIC

Evening Post, Volume CXI, Issue 30, 5 February 1931, Page 13

IN A PANIC

AUSTRALIAN LABOUR PARTY

PRIME MINISTER'S BLUNDER

(From "The Post's" Representative.) SYDNEY, 29th January. The dramatic moves that have followed the decision of the Prime Minister to readmit Mr. E. G. Theodore to his Cabinet have placed the Australian Labour Party in a panic. Tito party developed a decided crack with the threatened resignation of Mr. Fenton, who acted as Prime Minister during the absence of Mr. Sculliu, and there are many who will tell you that a distinct smash is coming. During the war period the conscription issue split the Labour Party in two, and it took years to recover. Now financial problems will split the party, not into :two but into three groups, and the recovery may take proportionately longer. \ Up to a fortnight ago it seemed as though the Federal Labour Party was split irrevocably into two sections — moderates and extremes. Now there are three, and the ny.ddlo group, carefully and patiently nurtured over many months by Mr. Theodore, has at last emerged as a vital force, so much sa that.it has assumed control-of the situatioi|. -It has Mr; Scullin at its head, and 'with tho promise of a definite financial policy more radical than the Lyons policy, but more conservative than the Anstey policy, the middle group may be expected to grow in numbers. It has been explained that the middle group does not stand, for either inflation or deflation, but for the "judicious release of credit," whatever that might mean. The nineteen members of the caucus who opposed the return of Mr. Theodore were drawn from camps with differing policies and entirely different motives, and it remains to be seen whether they can pull together. Except on the one point they are hopelessly divided.

SCXTLLIN'S MISTAKE. It is clear now that Mr. Scullin realises that he made a mistake when he gave his support to the intrigue which had for its object, the return of Mr. Theodore to the Treasury. Had he known how many of the members of his party' would be opposed to it he would have followed a different plan. He believed that tho party was almost unanimous and he told his Cabinet col; leagues so before the caucus met. Had Mr. Theodore himself remained neutral he would certainly have been defeated, but he and his -friends did their best to swing the vote as they desired it. They even secured a postponement of the decision while they interviewed members of the party who were sitting on tho wall as it were. First one member and then the other, surrendered, and as soon as the Theodore party was satisfied that it could carry the day the vote was hastened, with a result that will have far-reaching effects on the political future of Australia. ■ "With the threatened resignation of Mr.' Fenton as a protest against the, readmission of Mr. Theodore, it was recognised on Tuesday that the very existence of the Scullin Government was in the melting pot. (3ne member of the party said that Mr. Fenton had taken very bitterly the fact that in the first vote of caucus taken since his return, Mr. Scullin should have ranged himself against the two men (himself and Mr. Lyons) who held the fort for him while he was abroad, and placed himself in' the same camp with Messrs. Beasley and Blakcly and others who had been ! the chief factors in mutilating the Melbourne financial agreement which Mr. Scullin liimsolf had signed. Mr. Fenton would probably not have taken any action if Mr. Theodore had been content to return to the Cabinet. However, he demanded not only the Treasuryship, but his reinstatement as Deputy-Leader of the, party. Mr. Teuton felt that it was a' strong personal affront that he, who had been acting-Prime Minister during the absence of Mr. Scullin, should now not be entrusted even with the dcj)utyleadership. JUSTIFYING THEODORE. By way of justifying the decision of. the caucus in-favour of Mr. Theodore, the Prime Minister made the following statement:—"Although I never for one moment believed that Mr. Theodore was guilty of the serious charges made against him in the report of the Royal Commissioner on the Mungana mine transactions, nevertheless I approved of the announcement of his resignation from the, Federal 'Cabinet and of his demand that a criminal prosecution should be launched against him to allow him to exonerate himself. "When the Queensland Government, after careful investigation, found that a criminal prosecution would not lie, and instituted civil proceedings, the position was fundamentally altered. Everyone believed that these proceedings would be pushed on with and disposed of at an early date to enable Mr. Theodore to re-enter tho Cabinet. It is a keen disappointment to me, on my return from abroad, that although more than' six months have elapsed since Mr. Theodore resigned,, tho case has ,-not yet even come before the Courts. I am; advised, moreover, that the case will* not be concluded for another six months or longer. The Commonwealth Govern ment arid, tho country as a whole_ want the-services of Mr. Theodore in the present difficulties, "and the extraordinary delay in dealing with the case is entirely unwarranted. I expressed that opinioD to the members of the Federal Parliamentary Labour Party at the meeting, and the party endorsed my opinion. In the Federal Cabinet Mr. Theodore, as Treasurer concentrated his energy on tha financial problems confronting Australia. "He has a very fine grip of these problems, and his inclusion in tho Cabinet will be of the greatest service to tho Ministry in the- Herculean task that faces it at this serious period of our nat:onal life." NATIONALIST ATTITUDE. It is certain that the Nationalist Party will take action that will embarrass the Government following on the return of Mr. Theodore. Towards the end of the last session of Parliament the Leader of the Opposition (Mr. Latham) refused to sit on a Committeo to which Mr. Theodore had also been appointed. The Nationalists have- not yet decided what line of action they will follow, but they are in tho position of being able to force a crisis which would end with a double1 dissolution of Parliament—the House of' Representatives and the Senate. Having a majority in the Senate, the Nationalists arc in a particularly strong position '^nd can refuse to pass any Act that has been agreed to by the House of Representatives. The Senate is in a position to hold up any financial reforms which the Cabinet, guided by the advice of Mr. Theodore, might think fit and proper. Mr. Latham believe 3 that the reinstatement of Mr. Theodore before ho has cleaved his name will reflect on the credit of Australia, and on its reputation too. In the meantime the Labour Party h;is evolved no financial reforms, and -was glad to grasp the opportunity this week of postponing further discussion <of. them for -another three weeks at least. And with tho passing of each week the position becomes worse. Nothing can prevent a deficit oil £8,000,000 at least. So why worry?