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Friday, 2 July 1920

Eva advises you have sold Australfield. Have re-read cables both ways between us on sale of ships, and think proper procedure is to get definite authority from Cabinet for all such transactions before arranging them ; otherwise Government here compelled to confirm business already completed. This is not criticism of merits of either sale, which really appears advantageous, but expresses desire that procedure should be put on regular basis for future. Think you should carefully observe this rule.

Watt to Hughes, 24th January, 1919- . . but I suggest for your earnest consideration wisdom and necessity of communicating with Cabinet and securing its concurrence before any policy pledging Government is announced. Even' in cases where immediate action is necessary, we should surely be apprised of facts and reasons. This is my strong personal view, which I have abstained from putting before colleagues, and I urge it on your attention as the only possible working basis.

Then note what Mr. Watt claims in his cablegram to me of 27th May, 1920 -

I do not know whether Cabinet or you is responsible for the situation which I have described, but I am determined that it cannot longer continue. I have, therefore, decided to proceed no further with the work of the mission until my position is defined. If you want me to do good work here, you must leave matters confided to my care entirely in my hands, and trust my judgment as to whether I should consult you or decide them here.

I ask honorable members and my fellow citizens throughout the Commonwealth to contrast Mr. Watt's ultimatum with the position clearly laid down, not once, but many times, by Mr. Watt, when Acting PrimĀ© Minister, that Cabinet must be consulted, and that nothing must be done unless Cabinet has approved it. I ask honorable members and my fellow citizens also to contrast the tone of Mr. Watt's cables to me, both when I was in England and France, on my mission as a representative of the Commonwealth, with the tone of those sent when I was at the head of the Government here during Mr. Watt's mission. Mr. Watt said over and over again that I must do or not do certain things, and while on this mission the tone of his cables is the same. He said, " Kindly, inform me whether you intend to do this; if it is not done I will not go on." And again - "Unless you are prepared to leave to my discretion whether I should consult you or not, I will not carry on." He said that he was asked to assume " the garb of a plenipotentiary with the mind of a telegraph messenger " in relation to the Spa Conference, when all I asked him to do was what I think every honorable member will agree that the Government had a perfect right to ask him to do - that he should not, on questions involving the policy of the White Australia, the open door, indemnity, and the mandates for the Pacific Islands, alter the existing policy without consulting the Government. Will any man say for one moment that that was an improper limitation upon the powers of a representative of the Commonwealth? I ask them to contrast that with my position in London, when I was told that I must not even ask that Australia - this great Commonwealth that made such tremendous sacrifices for the Empire during the war - should be represented at the Peace Conference at Versailles, and that he could not allow me to go straight on. I must quote his exact words, which were -

We feel we are not justified in letting you go straight on the course you have marked out without seeing more plainly the contents of previous cables as to what our opinions are. I personally and earnestly trust you will give due heed to them, and advise the results.

I ask honorable members to say what would have happened to the Commonwealth if I had acted as Mr. Watt has done, and had left Australia without representation at the Peace Conference at Versailles. What would have happened? Australia would not have had any representation on matters of ' ' life and death," for it would have been quite impossible for another representative to have reached Europe to submit the views of the Commonwealth in connexion with the mandates over the Pacific Islands and the White Australia policy. I say deliberately that had I given Mr. Watt every cause for irritation and resentment, as he was the representative of the Commonwealth on a mission which meant life or death to us, he ought not to have abandoned his post. Had I been in his place, and he in mine - although, perhaps, what I would have thought could not be expressed here owing to the rules of the House - I would have remained, and when I returned would have said exactly what I thought. I have no doubt that is the feeling in the minds of nine out of every ten people in the Commonwealth. Mr. Watt has left us now without a representative in London at one of the most critical junctures in our history. I invite honorable members to note those acts of omission which he said irritated him. I invite them to note that I did what he asked at the earliest possible moment. I notified the British Government of the fact that he had been appointed as our representative on the Imperial Cabinet. He asked me to see that he received copies of cables to and from the Secretary of State for the Colonies, and I* directed that that should be done. I said, further, that, whilst I did not admit for a moment that his complaints were justified, I understood his position, and I would in future be silent, or I would speak as he desired. I said that I would despatch no more cables apart from those he wished me to send to support him. I invite honorable members to note the tone of my last cable, the concluding paragraph of which reads -

Having said so much, let me say this further to you. I am merely following the rule which you yourself so strongly insisted upon. You will admit, I think, that the rule is a sound one........ I want to say, however, that I know how embarrassing and irritating the application of this rule must be. I felt it so a hundred times, and had I said exactly what I felt I should no doubt have sent you many telegrams which would not have differed much from yours. So, speaking from the depth of my experience, I quite understand your attitude, but hope that you will look at the matter as I did, and do the best you can. Believe me, I shall not embarrass you, but will do everything to help you and keep you informed. I shall not communicate direct with Secretary of State re wool half profits or finance, excepting at your request. In regard to Spa Conference, the only restrictions upon your freedom of action are in relation to those matters upon which overwhelming bulk of Australians have fixed opinions. ....... Now for a final word. I. have endeavoured to cover the points raised in your cable, and put matter quite clearly. I understand, I think, just how you feel, and I want to assure you that you have no reason whatever for the belief that anything is being done, pr will be done, at this end to impede your mission. On the other hand, everything will be done, whether by silence or action at your request, to further it. We want you to succeed. We both have the same object in view, viz., the welfare of Australia. I want to do everything I can to help or support you ; if it appears to you otherwise, I ask you to accept my assurance that you are absolutely mistaken.

I confess, Mr. Speaker, that I am utterly at a loss to understand the reason for Mr. Watt's resignation. I have had feuds with honorable members in this House, but if any man here had sent me a letter concluding with such an assurance, I would have wiped away everything that had passed, and shaken him by the hand. But Mr. Watt overlooked all these attempts at conciliation, which were couched in not merely studied moderation of tone, but such language as from a man like me, at any rate, might have assured him that I was most anxious that he should realize that I desired his co-operation, and wanted him to go on,. Yet despite every effort to conciliate him he persisted in his resignation.

Mr. Watt'sresignation reached me at 9 o'clock on the morning on which it appeared in the press. It is true it arrived where I was staying at 11 o'clock on the previous night - or rather the last four lines relating to his actual resignation reached me - the whole telegram was not then deciphered, and it did not come to hand until the next day. I was in bed at the time, and if that be a crime I plead guilty. I read the message the next morning. The press had the information before me, and their representatives came out 20 miles from Wagga, at midnight. I declined to say anything of a definite character. No one knows better than Mr. Watt that it is absolutely without precedent for a Minister to communicate his resignation to the press before it had been received and acknowledged by the Prime Minister. Yet Mr. Watt did not allow me even to communicate with my colleagues before he

Mr. Hughes.announced his resignation to the press.

What would have been said of me if I had accepted it, even though it had been, announced in the press, without consulting my colleagues ? Does any one blame me for calling my colleagues together when it was a matter of life or death to the Commonwealth? I did what any sensible man would have done in my place, and said nothing. 1 was censured by the press for refusing to speak before I had consulted my fellow Ministers. In the meantime, Mr. Watt, not satisfied with taking this unprecedented course, forwarded his resignation direct to His Excellency the GovernorGeneral - again a step without precedent. The Governor-General had no more to do with it - less in fact - than any citizen in the street. The GovernorGeneral could no more act on it than could a resident of, say, New Zealand, as His Excellency can act only on the advice of his Ministers. !No one knew that better than Mr. Watt.

In the face of all this, there was no course open to us but to accept the resignation of a man who had slammed the door on every effort on our part at conciliation or reconciliation. The Government have, therefore, with the utmost regret, accepted his resignation. I .am very sorry. I have endeavoured to understand why he resigned, and I do not even now know the reason. I have looked through the files, and I can find nothing to justify it. I ask honorable members to recollect that the only thing I did in reference to the half profits on sales of wool were things that, in the very nature of things, had to be done, and had to be done in Australia. Mr. Watt could not negotiate with the growers, neither could he retain one penny of the money unless the growers ' assented. The growers were in Australia. I was the man to meet the growers, and I did so. For some reason or other Mr. Watt took umbrage at this, although I notified him at the earliest opportunity of what T had done. I communicated direct with Mr. Watt. But he acted in a very different manner towards me, for he sold the wool when I. was tin the water without even notifying me of the sale. He states that his ship had wireless, so had mine; and, although I was at Auckland for a week, at Suva for a day, at Honolulu for a similar period, and was four weeks in America, I did not hear one word concerning the sale of the wool. Yet, although I was surprised and strongly objected to what he had done, I went on with my mission.

I have endeavoured to put "the matter quite fairly. I am naturally much disturbed at what has happened. I am disturbed personally, because it has broken the intimate relations that have existed between Mr. Watt and myself during three or four of the most trying years in the history of the Commonwealth. But I am more disturbed because of the consequences to Australia. She is unrepresented now, when she is in urgent need of representation by a competent man. Our finances are in a very delicate and embarrassing position, and "matters of life and . death " require attention by a man on the spot, yet we have no representative in London or elsewhere to endeavour to adjust them.

Mr. Watthas resigned. I have explained the circumstances under which he has done so; I think I should add that this is the third time that he has sent in his resignation since my return from England. Mr. Watt then met me at Fremantle, and accompanied me across the continent. His health was at that time giving him, his family, and his friends grave concern. We discussed together the position as it then stood and the future as we saw it reflected in the mirror of the present. He told me - I give the substance of our conversations, because I cannot remember the actual words - that he could not continue in office, that he had merely held on during my absence, but would now have to resign. On my side, I said what honorable members know to be true, that I had had five or six years 'of incessant struggle. Those who' know me best know what a wrench the cataclysm that divided the Labour party in 1916 was to me. I had returned from a mission in regard to which I might fairly claim that the reputation of Australia had not suffered at my hands. I had done that which I was sent to do. There were many reasons why I should retire- I shall not speak of the opportunities laid before me in England on which I turned my back, but it can be understood that returning as I did, and being received as T was received, I could not have selected a more propitious moment for temporarily withdrawing, at any rate, from my position. -I had had enough. Therefore, I said to Mr. Watt, " If you retire, I shall retire also. I shall not carry on." To that he replied that he would think the matter over, and let me know his decision. Subsequently he said that he would carry on, and honorable members will recall that that decision was publicly announced. I told him that as his health was such as to preclude him from doing much electioneering work, in the event of an election he could remain in Melbourne, and I would do the greater part of the electioneering. That promise was kept. Subsequently, however, Mr. Watt twice resigned, definitely and in writing. In each case I persuaded him to withdraw his resignation.

Honorable members now have all the facts before them. These show clearly that I did everything in my power in this instance as I did on other occasions topersuade Mr. Watt to remain in the Government. The cablegrams prove conclusively that there would have been no sufficient reason for his resignation had he been in Melbourne, and had I spoken to him in the terms in which I wrote to him. No one would dream of resigning a portfolio on that account. I have been in a Ministry with the honorable member for Yarra (Mr. Tudor), and he, like other members who have held office, know that at Cabinet meetings there are frequently differences of opinion expressed, and that after discussion the will of the majority must prevail, and the Minister holding a contrary view must either fall in with his colleagues or resign. I do not say that there are not circumstances which justify resignation if the Minister is on the spot; but during a long Ministerial career I can now recall only one instance in which I felt so strongly on a matter that I would have resigned had it been decided adversely to my view. The matter to which I refer had nothing whatever^ to do with conscription. The honorable member for Yarra was one of my colleagues at the time, and he and I decided to resign unless effect were given to a certain policy. Effect was given to it, and we did not resign. Had we resigned, however, our resignation would not have embarrassed the Commonwealth. But when men are sent 12,000 miles overseas on a mission of vital importance to the country, there is imposed on them a sacred obligation which they cannot evade, and I cannot conceive of anything that would justify their resignation. Certainly there is nothing in the cablegrams that I have read to justify Mr. Watt's resignation. I have sat at Cabinet meetings at which hard things have been said, I will not say worse than anything I wrote to Mr. Watt, because I wish that every one would speak to me as I wrote to him, and no doubt others would like me to speak to them always as I wrote to him. I cannot conceive of anything that would justify the abandonment of a mission so vitally important to the Commonwealth as that of Mr. Watt. I regret the right honorable gentleman's resignation; I regret the loss of the man himself, and, above all, I regret the consequences of the resignation to the Commonwealth.

There is one other cablegram which I have not mentioned. It was sent . in code by the Central Wool Committee to a similar body in England, and this is a decode of it. The address was, "Dirawmat, London," and the cablegram was dated the 21st May last. It reads as follows : -







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