other industrial tribunals would not be extended to his new factory.^6 In spite
of this, he was a paternalistic employer, providing his employees with good
conditions by the standards of the day and generally paying his workers
above-average wages. In 1906, he paid his unskilled workers six shillings
a day, while the average for unskilled workers was 5/6d a day (Lack 1986,
p. 292).
Today a business of the size of H. V. McKay’s would have a team of in-house
legal counsel as well as giving large amounts of legal work to the big lawfirms.
In those simpler times, all of McKay’s legal work was done by his cousin,
George Shaw, the oldest son of George and Eliza Shaw (and the present
author’s great-uncle). Shaw had completed his law degree in the darkest days
of the depression of the 1890s, and set up as a solicitor in Melbourne. He did
well and, by the early 1900s, had built up a thriving practice, with McKay as
his most important client and industrial law as his main area of practice.^7
12.2 The Judgement
In 1903 Alfred Deakin became prime minister, and it is Deakin whose name
is most closely associated with the Australian‘special way’, with the Deakinite
Settlement being the name given to the series of measures enacted in the
early years of Federation that set out in legislation the basis of Australia’s special
path. These were the White Australia Policy, protection of Australian industry,
and a centralized framework for the arbitration of industrial disputes.^8 Long
a protectionist, Deakin described his policy while prime minister as the New
Protection—the old protection simply erected tariffs to protect industries from
overseas competition, but he believed the New Protection could spread
the benefits of tariff protection to workers and even consumers.^9 In 1906, his
government passed two related Acts as part of the New Protection policy—the
Customs Tariff Act and the Excise Tariff Act. The Customs Tariff Act increased
the existing tariff and the Excise Tariff Act introduced a matching new excise
on products manufactured in Australia. However, manufacturers would be
entitled to a remission of the excise if they paid‘fair and reasonable’wages
and reduced the price of their products. The legislation did not define what
(^6) ‘Mr McKay’s Reply’(1904);‘The Factory Act. Sunshine Harvester Works. A Question in
Parliament 7 ’(1904),‘Sunshine Harvester Works’1905.
Information about George Shaw junior in this chapter is based primarily on extensive
discussions of his son, the late Professor A. G. L. Shaw, with the author. 8
For an excellent summary of the Deakinite Settlement see Kelly (1994, pp. 5–12), and La Nauze
(1965, ch. 18). 9
For Deakin’s own description of the New Protection, see‘Mr Deakin’s Third Address. New
Protection Scheme. Angling for Labour. Fair Returns and Fair Conditions. Social Legislation.
Admiration for Germany’(1906).
Peter Yule