The Government has occupied itself in efforts to render normal the situation of sugar, the low price of which has proved detrimental to Cuban interests.

In Peru, President Leguia has continued to act as President. On July 28 the Republic celebrated the centenary of its independence. In foreign affairs attention has chiefly been centred on the dispute with Chile concerning the ownership of the provinces Tacna and Arica.

In Paraguay a revolution occurred in November which, after a period of confusion, appears to have left President Gondra still in power.

In Uruguay, various social laws were passed, including one prohibiting house-owners from charging any advance in rent on that previously obtained, and a Bill was passed giving women equal rights with men.

There is little to note with respect to the remaining States of Latin America; but, on the whole, the year may be said to have been a peaceful one throughout the continent, and, although the industrial and commercial situation of the various countries has been adversely affected by the world-wide depression in trade, and the exchanges have for the most part been adverse, yet much steady progress has been made.

CHAPTER X.

AUSTRALASIA: THE COMMONWEALTH OF AUSTRALIA-NEW

ZEALAND.

COMMONWEALTH OF AUSTRALIA.

DURING 1921 the dominant considerations in the political life of Australia were the future of the Pacific, the revision of the Tariff, and financial reconstruction.

A new Tariff Act came into operation by virtue of resolutions passed on March 25, 1920, and its detailed revision occupied the greater part of the 1921 session in the Federal House of Representatives and Senate. As amended, the Tariff substantially increased the duty upon goods which could be manufactured in Australia, but the principle of preference for goods of British origin was preserved and expanded. The Act also fixed an intermediate duty rather higher than the British rate but less than the general duty; this intermediate duty was intended for use in cases of reciprocal trade with countries which do not benefit under the British rate. The general purpose of the revision was to secure what the Right. Hon. W. A. Watt described as “a Federal Tariff which would strengthen the loins of this young country in the great struggles of the future."

One of these possible struggles-the control of the Southern Pacific-came prominently before the Australian public on

the eve of Mr. Hughes's departure to attend the Imperial Conference in London at which the renewal of the AngloJapanese Treaty was to be discussed, together with the general question of inter-imperial defence. On April 7, the Prime Minister (the Rt. Hon. W. M. Hughes) made a long statement in the House of Representatives, in which, regarding the Imperial connexion, Mr. Hughes said, "If I am asked what is the constitutional link that binds us to Great Britain, I say deliberately that it is the King-the monarchy." Mr. Hughes pointed out that the Empire must crumble and decay if the British Navy did not retain control of the seas. During 1920, he added, Australia had spent 3,250,000l. on the navy, but this was "ludicrously inadequate" for the defence of the country. "Within a few days' sail there is a part of the world which is over-crowded. And we have set up our banner, we have said that we will retain this continent for ourselves. This banner of a White Australia is really a very arrogant boast. How long would that banner fly if behind it there were not massed the legions of the Empire and ringed about it the protection of the British Navy?" Mr. Hughes continued, "Here is our dilemma. Our safety lies in the renewal of the Anglo-Japanese Treaty. Yet that Treaty is anathema to the Americans. The ideal at which we should aim during the Imperial Conference in London is the renewal of the Anglo-Japanese Treaty in such a form as will be acceptable to Britain, America, Japan, and ourselves. . . . It is utterly wrong for the Japanese to think that because we have passed certain laws we regard them as inferiors. But we have our ideals and they have theirs."

On September 30 Mr. Hughes delivered a second speech in the Federal House of Representatives, supplementing that of April 7, in which he reviewed the results of the Imperial Conference. The Prime Minister also discussed the Australian aspects of the Disarmament Conference at Washington, in which Australia was represented by Senator Pearce. On this subject Mr. Hughes said, "Frankly, I see no hope for disarmament until the Pacific problems are settled, and this can only be done by a modus vivendi satisfactory to Japan, America, and Australasia, a judgment which happily foreshadowed the results achieved at Washington.

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The debates and newspaper discussions which followed Mr. Hughes's speeches gave a new reality to the related problems of White Australia," the Anglo-Japanese Treaty, and Australia's contribution to the Imperial Navy which was needed if the Imperial Conference in London was to have full value. The Hon. F. G. Tudor, leader of the Opposition, in the House of Representatives on April 13, said that he saw no difficulty in keeping the policy of "White Australia" inviolate if the Japanese Treaty were renewed. Dr. Earle Page, leader of the Country Party, expressed similar views,

but added that Australians were dubious lest at the forthcoming Conference they might be committed to some form of Imperial Federation. Mr. Hughes interjected, “I have always opposed it. I do not believe in it." The Hon. T. J. Ryan, deputy leader of the Labour Party, moved an amendment calling upon the Prime Minister not to make Australia party to any Anglo-Japanese Treaty without the consent of the Australian Parliament, on the ground that this would give offence to the United States. The amendment was rejected on a party division by 42 votes to 21. Mr. Ryan, who had resigned the Premiership of Queensland at the end of 1919 to enter Federal politics, had a great capacity for leadership, and his mastery of Parliamentary tactics quickly secured him a position of authority in the Federal Opposition. Mr. Ryan's unexpected death on August 1, 1921, was a serious loss to the Australian Labour Party.

The defence problem in Australia is closely connected with the population of the continent, and the tendency for this population to centre in the capital towns of the various States. The census of 1921 showed that, exclusive of full-blooded aborigines, the population was 5,436,794, an increase of about 985,000 over the 1911 figures. The census also showed that the tendency to crowd into the capital cities of the six States. was as marked as ever. The population of the States' capitals increased 37.87 per cent. during the last decade, whereas the county population only increased 8.81 per cent., that of Sydney being 897,000 and Melbourne 765,000. The primary industries of the Commonwealth, which are also affected by the slow growth of population in the country districts, however, suffered even more from lack of shipping and other marketing facilities. Between 1915 and 1920, the sale of Australian wheat was controlled by a Wheat Pool consisting of Ministers of Agriculture in the wheat-producing States, a Commonwealth official, and four representatives of the wheat industry. When war conditions ended, this Wheat Pool was dissolved. In May, 1921, a Conference of the wheat growers in the four wheatproducing States urged that a new compulsory Wheat Pool should be formed, controlled by representatives of the growers. This scheme met with much opposition on the ground that it would give too much power to the growers. Fortunately the value of wheat was high in 1921, averaging 9s. to 10s. a bushel. Similar difficulties followed the closing of the Wool Pool on June 30, 1920. The British Australian Wool Realisation Association (Bawra) was registered in January, 1921, to supervise the sale of Australian wool, including large supplies held by the British Government in England. In July, 1921, the unsold Australian and New Zealand wool was approximately 9,500,000 bales, a considerable part being wool which the British Government bought at a flat rate of 15 d. per pound and for which the Australian grower has been paid. The wool

included the produce of four seasons. Before the war the average price of Australian wool was 10d. a pound; during the war it was 15 d. a pound plus bonuses; in 1921 a reserve price of 9d. was fixed.

With much of her wool unsaleable at prices which would cover the cost of production, with beef selling for less than its production cost, and lead, copper, tin, and zinc selling for half they were making in 1920, the economic situation in Australia was strained throughout 1921. The difficulties were increased by the demand of the Labour Party for the fixing of a basic wage. The Hon. F. G. Tudor asked that every adult male worker in the Commonwealth should be paid a minimum wage of 51. 16s. a week. The demand was strengthened in February, 1921, when the Federal Basic Wage Commission recommended that provision should be made for a minimum wage which would vary in the different capitals, the highest proposed being 51. 17s. for Sydney and the lowest 5l. 6s. 2d. for Brisbane. This proposal for a basic wage was submitted to the Federal Arbitration Court which gave judgment (on September 23) that the standard proposed was impracticable. The Commonwealth Government, however, went so far as to agree to a basic wage for public servants at 41. a week, with 5s. extra for each child under fourteen years.

Wage regulation in Australia also received a set-back through the resignation, at the end of 1920, of Mr. Justice Higgins, first President of the Federal Arbitration Court. The personality of Mr. Justice Higgins not only gave vitality to a difficult office but to the whole policy of wage regulation which the Federal Arbitration Court sought to establish. During a time of rising prices and large profits, his policy of ignoring the relation between wages and output and his refusal to take into account the rates an industry could bear, were possible. In 1907 Mr. Justice Higgins had fixed the minimum wage of an unskilled labourer at 7s. a day. He argued that if an industry could not pay this, it had no right to exist. But the position changed after the World War when a period of rapidly fluctuating prices began. Having obtained the highest wages Mr. Justice Higgins was disposed to give, a number of powerful Trade Unions resorted to direct action in order to secure further increases. They refused to approach the Arbitration Court. In more than one case Mr. Hughes and the Federal Government appointed special tribunals to deal with these special difficulties. Mr. Justice Higgins found his position untenable and resigned, being succeeded by Mr. Justice Powers.

The effect of this wage regulation upon certain industries in Australia was serious. In December the Broken Hill Proprietary Company's steel works at Newcastle closed for a month in order to reduce their staff from 5,500 to 1,800. The necessity arose from the increases in wages and the decreases in hours of work consequent upon decisions of the Arbitration Court.

The

well-known Mount Morgan copper and gold mine in Queensland and the Mount Lyall copper mine in Tasmania were also compelled to consider closing their works owing to the fall in the selling price of copper. In March the directors of both companies proposed an all-round reduction in wages to enable the mines to carry on, and in both cases the workers replied that "the question of lowering wages is wholly a matter for the Arbitration Court." To this the directors replied that the Arbitration Court had laid it down as a fundamental principle that it would be better to abandon an enterprise which cannot be maintained without reducing the basic wage. After a ballot the Mount Morgan employees, by a 30 per cent. majority, rejected the proposal and the mine was closed down at the end of March. A Conference between the Unions and the Mount Lyall Company, which resulted in a rearrangement of working hours, made it possible to avoid closing the Mount Lyall mines.

An important judgment was delivered on August 1 when the Federal High Court, by four votes to two, refused to authorise an appeal to the Privy Council on the question whether the Arbitration Court might make an award binding on a State instrumentality. In the previous August, the High Court, reversing earlier decisions, determined that such an award was binding upon a State. On that decision Mr. Justice Higgins acted; the judgment of August, 1921, made it final and conclusive. The importance of the judgment was that it removed certain landmarks which had hitherto separated the legal province of the Commonwealth from that of the States. It had been understood that the Commonwealth could not interfere with a State instrumentality, any more than the State could give to its "legislative or executive authority an operation which would fetter or control the free exercise of the legislative or executive power of the Commonwealth" (judgment in "D'Emden v. Pedder"). Australian Federalists have expressed regret that an appeal to the Privy Council was not sanctioned on so vital a principle.

On November 7 a Conference of State Prime Ministers with Mr. Hughes was held to discuss the matter of Federal and State jurisdiction in industrial affairs. The Conference unanimously agreed to restrict the arbitration law to really Federal matters and to create a special judicial tribunal to define a "Federal industry." The States agreed to surrender to the Commonwealth the power to legislate in connexion with the basic wage and standard hours of labour in industries which had been determined to be Federal. return, the Commonwealth promised to confine the jurisdiction of the Commonwealth Arbitration Court to disputes in Federal industries. All employees of a State or of a State instrumentality were exempted from the jurisdiction of the Commonwealth Court. The Conference, therefore, practically restored the law to the limits it had before the High Court

In