The Dismissal of Jack Lang
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Australia Between The Wars

John Thomas Lang was the Premier of New South Wales from 1925 to 1927 and again from 1930 to 1932. He was the most loved, hated and controversial political leader of his day. Born in 1876 into an impoverished Irish and Scottish family with its roots in Labor politics, he was known as Jack Lang, or the `Big Fella'.

In 1913 at the age of 37 he was elected to New South Wales Parliament and served as the Labor Party member for the electorate of Granville. In 1923 Lang was elected Labor leader in New South Wales. He led them to victory in the 1925 general election and became NSW Premier until he lost in the 1927 election. The Jack Lang government established social programs and reforms that were regarded as the most progressive New South Wales had seen. This was a time when the conservative Commonwealth Government played no part in providing welfare services. Lang pushed through pioneering legislation for a 44-hour week, pensions for widows, workers compensation and child endowment. His government abolished student fees in state-run high schools and made widespread improvements to major roads.

After Labor's 1927 loss, Jack Lang remained as leader. He was elected NSW Premier again in October 1930 with a landslide victory, giving Labor a 20-seat majority. The Great Depression was having devastating effects on Australia by 1930. More than one in five adult males had lost their jobs, and in the poor Sydney suburbs like Newtown and Darlinghurst the unemployment rates were as high as 50 per cent of men. Voters were looking for decisive political leadership to bring them through the problems.

Seaching for Solutions
Sir Otto Niemeyer from the Bank of England advised the Federal Government on economic planning to fight the effects of the Depression

Only 17 days before the Wall Street stock market crashed, Labor leader James Henry Scullin had been elected Prime Minister of Australia. The misery unleashed by the crash sent governments scurrying for solutions. Bitter debate and political splits followed as the government battled against the worst economic crisis in Australia's history. Two main ideas on how to end the Depression gained support:
  • Deflation: This required continued cuts in government spending and wages, raising taxes and keeping up the payment of overseas loans.
  • Inflation: This required an increase in government spending, provision of relief work for the unemployed and a reduction of the repayments being made on overseas loans.

On the advice from Sir Otto Niemeyer of the Bank of England the Labor government decided on a Policy of Deflation.
Despite the social cost, Labor Prime Minister Scullin and the state premiers signed a commitment to a deflation plan, known as the ‘Melbourne Agreement’. This meant cutting wages and big cuts to public spending in order to pay back all government overseas loans on time. With increased unemployment, Australia's standard of living dropped even further. Compulsory pay reductions destroyed what little confidence people had in the nation's economy and more businesses collapsed as spending decreased even further.

The Lang Plan

Jack Lang believed that the Depression was due to selfish capitalists and the greed of overseas bankers and that following the Melbourne Agreement would only increase Australia's suffering. In 1931 Lang released his own daring plan to fight the Depression. Lang refused to cut New South Wales Government salaries and spending, and he stopped paying overseas banks the interest due on their loans. Lang proposed the money saved should be used for social services and unemployment relief. He argued that an injection of money into the Australian economy would stimulate industry and commerce. This was a challenge to the power of the federal Labor government, British financiers and the Bank of England.

On 25 May the state premiers and the Commonwealth Government met for another emergency conference. The `Premiers Plan' was drawn up as another solution. It called for continued reductions in spending and interest rates. The plan was to reduce the income of people who were living off their investments and to reduce rent and mortgage repayments. Along with wages, pensions and social services were to be cut by 20 per cent. Thousands of unemployed, widows and war pensioners were to be deprived even further.

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A political cartoon depicting Lang losing the 1927 NSW elections

By the end of 1931, the Scullin Labor government had lost support from within and was accused of having sold out to the rich. There was an atmosphere of despair and public disillusionment with any political or economic plan. The Labor Party splintered into groups that either supported or protested against the government's strategies for recovery. With the lack of confidence in his government, Scullin was forced to call an election on 19 December 1931. He led a political party that appeared defeated even before the votes had been cast. Labor suffered a crushing electoral defeat, with only 14 out of 75 Labor members being returned to Canberra.

Extremist politics

The growth of private armies was an unexpected and disturbing reaction to the Depression in Australia. The best known of these were the New Guard and the White Army. These groups, whose officers were usually World War I veterans, were organised along military lines. The New Guard, based in Sydney, was led by an ex-AIF officer called Eric Campbell. Campbell was violently opposed to the Labor government of Jack Lang. There were rumours in Sydney that the New Guard had a plan to kidnap or assassinate Jack Lang. Campbell said that if the Commonwealth Government would not move against extremists like Jack Lang, then it was up to the New Guard. Campbell also feared that unemployed workers might turn to communism to solve the economic problems of the day.
The New Guard believed they would maintain law and order and take over the running of the state in the event of a communist uprising. In reality, the New Guard used the community fear of revolution as an excuse to attack any political group they disagreed with. They were involved in street fights with striking relief workers, unionists and communists.

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Lang’s Dismissal

In February 1932, Prime Minister Joseph Lyons led the newly elected United Australia Party government. Lyons announced that he would force the Lang government to pay £958 763 in overseas loan repayments. Lang declared he would fight. He withdrew all the New South Wales Government money from bank accounts so that the Commonwealth Government could not confiscate it.
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The image of Lang popularised by his supporters was of a hero in the struggle against evil bankers and financial conspirators, as illustrated in this cartoon by George Finey in the Labor Daily, 1932. Governor Phillip Game is depicted in green stabbing him from behind.

In May 1932, Governor of New South Wales, Philip Game, dismissed Lang from the office of Premier for defying the Commonwealth Government. And so ended one of the most controversial political events in Australian history. Jack Lang had split his own party and helped to bring about the defeat of the federal Labor government.

Lang was strongly attacked by political groups like the New Guard and the conservative members of his own party. He was expelled from the Labor Party but continued his career as an independent politician in both New South Wales and the Federal Parliament. In speeches and interviews he continued to be a passionate politician until his death in 1975 at the age of 98.

Was Jack Lang a dangerous and radical politician who was a threat to Australian stability or a champion of the ordinary people in the struggle against powerful financial interests? The question of what motivated Jack Lang, and whether his radical approach to politics and the economy had any merit, continues to be a subject of debate for historians

Test your knowledge

1. When was Jack Lang Premier of NSW?
2. Which party was he elected to in 1913 and which electorate did he represent?
3. What two main ideas on how to end the Depression gained support and what did each propose?
4. Who advised the Federal Labor Party to adopt a Policy of Deflation?
5. Who signed the Melbourne Agreement?
6. What did this involve?
7. What was Lang's daring plan and why?
8. What was the outcome for the Federal Labor party as a result of the Policy of Deflation?
9. What was 'The New Guard'?
10. Who was elected Prime Minister in 1932 and what was his party?
11. What did Lyons announce he would force the NSW Lang government to do?
12. What was Lang's response?
13. What was the end result for Lang and his party?