Below is the paper RMI historian Dr Zachary Gorman presented at the MHHV’s ‘Game Of Dominoes: Australia’s Security And The Cold War 1947-1991’ Conference on Sunday 14 April 2024. The paper was entitled ‘Menzies, the Kremlin, and the Waterfront’:

Australia’s waterfront has often been at the centre of the nation’s most serious industrial disputes, and this was certainly the case during the Menzies era of 1949-1966. When introducing the 1965 Stevedoring Industry Bill – the sixth such bill drafted by the Menzies Government as it exasperatedly tried to deal with a perpetual problem – Minister for Labour William McMahon cited statistics suggesting that despite making up less than one percent of Australia’s workforce, waterside workers accounted for 21% of the total time lost by all workers in all industries over the preceding decade.

But this was only the tip of the iceberg, because the stevedoring industry represented the crucial nexus point or more often than not bottleneck of the Australian economy. It was vital to the efficient expedition of our agricultural exports, which remained Australia’s main money maker and never more so than during the Korean War wool boom of the early 1950s. The waterfront brought in the key imports that kept our domestic economy humming, both in providing necessary equipment for businesses and consumer goods for households. And its strategic significance in times of conflict simply cannot be overstated. War is a battle of logistics, as much as it is a battle of courage, strategy, willpower or anything else for that matter.

In the early 1950s the Cold War made a major, World War Three type conflict appear imminent. It was therefore of grave concern to the government that the Waterside Workers’ Federation – which had a virtual monopoly on the docks – was headed by an avowed and charismatic communist in Jim Healy. He was firmly entrenched in his position, having first been elected as General Secretary in 1937.

In the event of a potential war with the USSR and its local allies in Asia, it remained to be seen whether the loyalties of Healy and the men who voted for him would lie with Australia, or with the cause of international revolution. If the propaganda produced by the Federation’s journal the Maritime Worker was anything to be believed, there loomed the very real possibility that it would side with the latter. From 1952 its editor was Rupert Lockwood, who would later appear before the Petrov Royal Commission for authoring one of the documents handed over to the Soviets.

Because a conflict of significant scale never did erupt, a definitive test of the loyalties of the WWF was never made. Instead, we are left with a long running debate over whether correlation equals causation. That is to say, whether the WWF’s repeated militancy throughout this period was due to the fact that its communist leadership wanted to undermine Australia’s national interest and therefore benefit the prospective enemy, or whether the strikes it spearheaded were prompted exclusively by industrial concerns, and were fairly typical of the federation’s long and turbulent history.

The seminal text in this debate is Tom Sheridan’s Australia’s Own Cold War: The Waterfront Under Menzies. Published in 2006 after more than a decade of meticulous research, Sheridan’s book acts as a vigorous defence of Healy, whom the author describes in glowing terms by saying ‘In studying Australian industrial activity for 40 years I have come across no more capable and attractive figure than Healy’.

A central aspect of Sheridan’s argument is that the Waterside Workers’ Federation was exactly what its name suggested, a highly federalised and decentralised organisation which was impossible for one man or leadership group to wield for nefarious purposes. Moreover, those branches of the WWF which exercised their autonomy by electing Grouper anti-communist executives, proved themselves to be no less disruptive than their communist counterparts.

Scarred by severe mistreatment during the Great Depression, waterside workers of all political stripes wanted to use the bargaining power provided by full employment and the consequent labour shortage to squeeze everything they could out of the recalcitrant shipowners. In this endeavour they were remarkably successful, with McMahon’s Stevedoring Industry Bill speech citing an incredible 1200% rise in waterside workers’ margins in the thirty years since 1935.

In a relatively brief address such as this, I will not attempt to directly challenge Sheridan’s conclusions, nor to summarise his detailed narrative of a saga which spawned four separate stevedoring acts and two additional draft bills, all of which aimed to bring the WWF into line so as to preserve the national interest which the union (and admittedly also the shipowners) were seriously jeopardising.

Though I will note briefly that even Sheridan admits that ‘Belief in a red plot could perhaps be sustained if the coverage of foreign affairs in the Maritime Worker were taken as typical’ of wharfies’ views. He argues that the rank and file members voted for communists because they felt that they could extract the largest concessions, but when it came to actual politics the mainstream membership was generally sympathetic to the more moderate ALP. Although that does not preclude the positions of power gained by the communists being misused if they tried to carry through their professed political faith, particularly in times of emergency. Indeed, opponents of the communists always stressed that the party was small in terms of numbers, but that it had nevertheless infiltrated key positions.

Instead of rehashing Sheridan’s narrative, I am going to give something of a pre-history of Menzies’s relationship with both the WWF and the Kremlin, to reveal why he and his government were so prone to suspect an underlying motive of treason, or at least the prospect of treason should war break out.

It is worth pointing out at the start that Menzies was not inherently opposed to trade unionism. His grandfather John Sampson was a Cornish miner, who after moving to Australia was instrumental in taking the six hundred members of the Creswick Miners’ Union into the Australian Miners’ Association, for which he was consequently blackballed by mine owners. A young Menzies used to talk to his grandfather about political issues, and even though Robert admitted he was already far more conservative than Sampson, he was clearly sympathetic to Sampson’s story and viewpoint.

Menzies’s relationship with the WWF actually started out on quite a positive note. As one of Australia’s brightest young lawyers in the 1920s, Menzies had been happy to accept briefs for the federation and many other unions. Menzies’s claim to fame was victory in the Engineers’ Case which was essentially a win for unionists, as it brought their employers under the jurisdiction of the Commonwealth Arbitration Act.

Working on the basis of the ‘cab rank rule’ Menzies likewise appeared for the shipowners on several occasions. In the latter capacity he experienced first-hand the difficulty of getting the federation to abide by the processes and decisions of the Arbitration Court. Menzies’s attitude towards industrial relations throughout his career was seldom to seek radical reforms in the manner of John Howard, but instead to insist that the existing law was applied to the letter.

On becoming Federal Attorney General in 1934, Menzies found himself at the centre of a major seaman’s strike spanning 1935-6, which tangentially involved the WWF, and was an early example of the Communist Party of Australia being at the centre of a major industrial dispute – and for opponents, deliberately instigating that dispute.

Menzies also had his first taste of communism’s international reach, when he controversially tried to bar the entry of communist writer and activist Egon Kisch in 1934. The reason for the ban was that while Kisch was ostensibly only visiting Australia to preach against any potential rearmament, Menzies had British intelligence reports linking Kisch with deliberate subversive activities. Menzies had by this time had acquainted himself with the central tenets of Marxist theory, and he insisted that by its very nature ‘Communism connotes revolution’, rather than working within the prudent and successful confines of democratic government. But he would ultimately be embarrassed when Kisch won the day on the back of a Hight Court decision steered by Justice Herbert Evatt.

While under the ironic guise of ‘anti-fascism’ communists were thus trying to dissuade Australia from readying itself for war, they subsequently acted in a manner that might provoke a war in the famous Dalfram dispute. Taking place between November 1938 and January 1939, this was a protest in which Port Kembla WWF members led by Healy’s later deputy and communist Ted Roach refused to load scrap iron bound for Japan. Their argument was that this could be used to facilitate Japan’s war with China, but at the same time this was a clear example of the federation’s aims not being confined to industrial disputes in the manner which Sheridan tries to stress. Instead, they were directly concerned with the intimate workings of international relations – and specifically the interests of the Soviet Union which was fighting a series of escalating border skirmishes with the Japanese in the mid to late 1930s.

This ‘forgotten war’ only ceased shortly after the signing of the Molotov Ribbentrop Pact which I will discuss below, as Russia made peace in the East to allow it to pursue war in the West. Notably, this peace would last the vast majority of the Second World War, as even after joining the Allies the Soviets refused to fight the Japanese, until at the last second when it suited their plans for territorial aggrandisement.

While Menzies’s sympathies lay with nationalist China when it came to the Sino-Japanese conflict itself – and it is worth noting that later as Prime Minister Menzies would formally establish Australia’s diplomatic relationship with its government in 1941 – he was resolute in opposing the waterside workers’ stance. He believed that an elected government must decide its own foreign policy, and that Australia imposing unilateral sanctions without the support of any other member of the League of Nations would do nothing to inhibit Japan’s war machine, but it would do a great deal to unnecessarily antagonise its government. He would later explain that Australia also needed to buy time to catch up in the race to arms, and that by maintaining the trade relationship, Australia was able to import from Japan a substantial quantity of lathes, grinding machines, and other technical equipment badly needed for Australia’s own munitions program.

Although he exhibited considerable personal bravery in travelling to Wollongong to negotiate directly with the protestors, Menzies’s reputation took a significant battering from Dalfram, earning him the eternal epithet ‘Pig Iron Bob’. But despite this and the attacks of Country Party Leader Earle Page, who thought Menzies was ill suited to leadership on account of his lack of wartime service, Menzies was still able to succeed Prime Minister Joseph Lyons after he tragically passed away in office on Good Friday 1939.

By this stage the outbreak of war in Europe seemed almost inevitable, and indeed the stress resulting from this knowledge was one of the contributing factors behind Lyons’s premature death. However, the real harbinger of war would be the shock announcement of the signing of the Molotov Ribbentrop Pact, named after the respective foreign ministers of Russia and Germany, which was reported in Australia on 23 August 1939.

When the note reached Menzies’s desk, he could scarcely believe what he read. He described the news as ‘impossible to reconcile… with Herr Hitler’s repeated claim to be Europe’s bulwark against Russian communism’ and likewise completely contradictory of the fact that the Nazi alliance with Japan was explicitly called the ‘Anti-Comintern Pact’.

In the weeks to come, the Soviets would assist in the Nazi’s invasion of Poland which was carved up between the two totalitarian powers under the pretext that the USSR was stepping in to protect ethnic Russians in Poland’s erstwhile Eastern territory. Additionally, the USSR would use the cover of the conflict to invade Finland. For these reasons, during the early part of the war, which is precisely the time when Menzies was Prime Minister, the Soviet Union functioned as a de facto Axis power. Menzies lamented the Soviet duplicity, noting that:

‘Only a few months ago Russia was discussing ways and means of protecting Baltic States, including Finland, against German aggression. To-day she has invaded Finland herself. One more small European Power is to be crushed. The march of force goes on, but the war has yet to begin.’

In contrast to Menzies’s sympathy for the Finns, the Communist Party of Australia directly supported and sought to propagate the Soviet position. Australian Communists argued that it was the aristocratic leadership of Britain and France who had deliberately tried to set Hitler and Stalin upon a collision course, but instead the superior Soviet leadership had ‘frustrated the insidious plans of the provokers of war’ and secured peace between the two largest powers in Europe. The war between the Nazis and the democratic West was described as being ‘a struggle between two groups of imperialists for the repartition of the world’, hence Australia’s war effort had no moral superiority to that of its enemy and should be actively undermined. As for Finland, on 12 December 1939 the Sydney Trades Hall hosted a rally supporting the invasion, where the Communist’s own newspaper reported ‘wave after wave of applause interrupted the speech of Lance Sharkey, national chairman of the Party’.

In the period after Poland’s capitulation, the Communist Party of Australia were one of the central advocates of the so-called phoney war, the idea that Australia did not need to mobilise as the British had merely been saving face when they declared war over Poland, and now that the territory was conquered the conflict would peter out. The widespread acceptance of such an idea was a major obstacle for Menzies, who was trying to galvanise the nation so that it would be willing to make the necessary sacrifices for the task ahead. Instead, he faced major opposition to even the most minor inconvenience such as early attempts to limit fuel consumption.

Once the concept of the phoney war itself proved to be a mirage, the communists instead turned their attention to encouraging strikes in a bid to undermine the so called imperialists. Paul Hasluck’s official history, The Government and the People Volume 1, argues that ‘during the war, industrial stoppages were regarded by the Communists as being of prime importance as a political weapon rather than as an immediate objective in themselves’

There were also serious allegations that the Communists were trying to infiltrate our military. In January 1940 a memorandum was submitted to the War Cabinet which warned that ‘the well-known method of the Communists was to plant “cells ” in units—one to spread propaganda and to lead agitation, and another to collect information and to learn as much as possible of military technique, especially the handling of arms. It was also known that the party had a special section whose principal task was to carry out this secret work in the armed forces and that recently branches had been instructed that the party’s “unknown members” must join the militia, although the party’s public fight against conscription was to continue. One definite instance at Ingleburn was quoted of a proposal that party organisers should work on the discontent of the troops over alleged profiteering in canteens and organise them for mass demonstrations against the Federal Government’.

The Naval Board reported its own ‘clear indications that Communist agitation and activities are growing amongst naval personnel’, and all three services pressed the government to use security regulations to declare the Communist Party an illegal organisation. The Cabinet initially resisted this proposal, preferring to err on the side of civil liberties, before further investigations led to a ban finally being imposed on 15 June 1940.

Such a ban did not stop the Communists from putting up their own ‘independent’ candidates at the 1940 election, nor continuing with their disruptive propaganda (albeit at a more limited scale). Indeed when Hitler finally did invade Russia in Operation Barbarossa, Hasluck reports that the Australian communists were so used to parroting Soviet talking points that they were confused as to how to react to the whole situation. Far from immediately embracing Mother Russia’s new allies, they continued to insist that the changed circumstances did not alter the ‘class character of the ruling monopolists in our own country or any other’.

Sheridan cites the fact that industrial disputes on the waterfront continued even after Russia joined the Allies as evidence that the WWF was not a puppet of the Soviets under Healy. Though this is at best a back-handed compliment suggesting that the waterside workers were consistent in their disregard for a broader national interest.

With Labor now in government, Menzies drew a similar conclusion in the ‘Manifesto of the National Service Group’, which he released in April 1943 to announce that he was forming what was essentially a splinter group within the United Australia Party to push for the elimination of any territorial limits on where conscripts could be deployed. Weaving his Forgotten People ideology with a denunciation of the WWF, point seven of the Manifesto read:

‘We must abandon our suicidal policy of wiping out the middle class of people. Why should they who have no unions, who draw fixed or modest incomes, who get no cost of living adjustments, whose taxes are doubled and redoubled, who have few capital resources such as the rich have, and no drilled disciplined political party to serve their ends, be required at a time like this to dig into their pockets in order that the waterside workers should be paid amazing wages…’

The main point of my argument is that for Menzies, concern about the strategic threat posed by communists on the waterfront was not the product of some Cold War hysteria, it was the product of learned experience during his first stint as prime minister and afterwards. When Russian victories on the Eastern Front led to people in Australia lionising the Red Army, Menzies was very keen to ensure that people did not forget early treachery of Australia’s Communists, nor mistake ordinary Russians defending their homeland as something inspired by a love for Stalin’s supposed utopia.

In one of his ‘Forgotten People’ radio broadcasts delivered in that same month of April 1943, Menzies implored his listeners to recognise:

‘a class of men whose historic place in Australia’s war effort is that they were against the war when it was merely the British people against a ruthless and powerful enemy, but became its supporters when Russia was attacked by Germany! When your sons were wounded or dying in Libya or Greece these men were actively opposing production on the home front. They made no demand for a second European front when Britain was fighting the bitter battle of 1940 for our safety and the freedom of the world. They were too busy “making strikes their business”’.

Given this context it is arguably not all that surprising that on coming to power in 1949, Menzies pursued the Communist Party Dissolution Act, one of the main targets of which was Healy and the WWF, as Healy and other communists would have been barred from union leadership positions under the legislation. After all, the Communists had been so disruptive during a war to which the USSR was not originally an official party, how much more disruptive were Communists likely to be when the ‘worker’s paradise’ was itself the enemy? What is probably more surprising is that Menzies initially opposed conservative calls for the reimposition of the wartime ban, splitting with the Country Party over the issue at the 1946 election.

As has been well documented by biographer Allan Martin, as well as Human Rights Commissioner Lorraine Finlay in her recent chapter for The Menzies Watershed, it was changing international and domestic circumstances which prompted Menzies’s change of heart. These included the communist coup in Czechoslovakia in February 1948, the blockade of West Berlin, the detonation of the first Soviet nuclear weapon, and Communist victory in the Chinese civil war, as well as large scale railway and coal strikes within Australia.

It is worth noting that Healy was even goaled for how vigorously the WWF supported the 1949 coal strike, which caused such a major disruption that even the Chifley Government felt compelled to send in the army to break the strike. Simply put, these were not ordinary times, particularly when it came to industrial disruption, and it was not unreasonable for observers to assume that communist led unions were at least partly inspired by communism when it came to their actions. Indeed, it would have been somewhat bizarre were they to assume that such leadership figures were not informed at all by an ideology which they openly professed.

Nevertheless, Menzies’s main concern over Australian communism remained the strategic and defensive threat posed by a potential fifth column in a time of conflict. He did not see the party as a direct political threat considering its small electoral support, nor did he think it was strong enough to attempt a peacetime coup.

This is largely confirmed by the fact that the Communist Party Dissolution Act relied explicitly on the Defence Power outlined in Section 51 of the Constitution – Menzies was pre-empting an imminent war. However, such pre-emption was famously deemed unconstitutional by the High Court, after one Herbert Evatt accepted a brief from the WWF. The Judges’ reasoning was essentially that the Cold War did not constitute an actual war, and therefore the Defence Power could not be used.

However, as Justice Edelman and Angela Kittikhoun point out in The Young Menzies, recent High Court judgements have broadened the application of the Defence power, such that Michael Kirby has argued that ‘it appear[ed] likely that, had the Dissolution Act of 1950 been challenged today, its constitutional validity would have been upheld’. This is because, in the modern era of terrorism, judges have become far more open to the idea that matters of national defence cannot be confined to openly declared wars between nation states.

But the 1950s were obviously not the 2000s. Instead, in light of the High Court decision and subsequent narrow referendum defeat, the Menzies Government was left to use more moderate legislative devices in an attempt to bring the WWF to heel. You can read Sheridan for a detailed account of how that occurred, but I hope I have provided some fresh insights into why that occurred.