was in most ways a very conservative man. He was a member of the Royal
Melbourne Golf Club and the Melbourne Club—he died in his favourite
armchair in the Melbourne Club in 1953—and he lived in a large house in
Toorak, then, as now, Melbourne’s most exclusive suburb. He was strongly
partisan in his politics, always voting for the non-Labor parties, which
he simply called‘our side’. So why would such a man—and many more
conservatives—support the establishment of a legal minimum wage based
on the needs of workers and their families rather than leave wage-setting to
the operation of market forces?
I think the answer goes back to the depression of the 1890s and the indus-
trial relations turmoil that accompanied it.
The depression of the 1890s was a great shock to contemporaries. Australia
had enjoyed sustained economic growth almost without interruption from
the discovery of gold in 1851 until the end of the 1880s. Wool and gold were
the basis of a highly successful export-oriented economy that gave Australians
the highest per capita income in the world. Wages were high because there
was a near permanent shortage of labour. During the 1880s, high export
prices, the discovery of rich new mines at Mt Morgan and Broken Hill, and
rising capital inflow from Britain led to an economic boom across most of
Australia. In Melbourne, the boom turned into a frenzied bubble. In 1887 and
1888, prices for city and suburban land doubled, trebled, even quadrupled
over a matter of months, share prices soared, and mansions were built for the
paper millionaires.^14
Every boom is followed by a bust and the bust of the early 1890s was of epic
proportions. From 1890, most of the economic trends which had caused the
boom of the 1880s went into reverse, leading to the most severe depression in
Australia’s history. The only colony to escape the depression was Western
Australia, due to the discovery of gold at Coolgardie and Kalgoorlie. Tens of
thousandsfled Melbourne and headed west—the population of Melbourne
fell from 486,000 in 1891 to 417,000 in 1901, and streets of houses built in the
boom stood empty.^15
The early 1890s saw a massive wave of industrial unrest as workers tried to
maintain wages and employment as the economy collapsed, while employers
tried to force wages down to keep their businesses afloat. The shearers’strikes
and the maritime strike were the largest and most violent, but strikes and
lockouts occurred in many other industries. Given the high unemployment it
was almost inevitable that the strikes failed, with the result that wages were
(^14) The origins of the boom of the 1880s, and particularly the land boom in Melbourne, are
discussed in Hall (1968, pp. 117, 126); Davison (1978, pp. 13, 155, 158); Blainey (1958, pp. 130);
Boehm (1971, ch. 9); and Cannon (1995, pp. 18 15 – 21).
For detailed analyses of the causes of the depression of the 1890s, see Boehm (1971, chs 8, 9,
and 10); Blainey (1958, pp. 136–43); Davison, (1978 pp. 167–8); and McLean (2013, ch. 6).
The Industrialist, Solicitor, and Justice Higgins