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CHAPTER 1

THE IMPACT OF PACIFIC WA R

HE Japanese many-headed assault on 7th December 1941 was


T profound shock to Australians . Japan was traditionally the potentiaal
enemy ; in 1939 planning had presumed active Japanese hostility from th e
outset ; during the second half of 1941 the prospects for peace in th e
Pacific had deteriorated steadily . But few Australians thought the situa-
tion at the beginning of December was hopeless, or contemplated tha t
Japan was on the verge of challenging America as well as the Allies b y
direct attack . The shock was correspondingly severe as the full range o f
Japanese plans became clear . Initial attacks on Kota Bharu in Malaya an d
Singora and Patani in Thailand and on Hong Kong were overshadowed b y
the startling news of the devastating raid on Pearl Harbour and the les s
important one on Manila in the Philippines .
The news was heavy with portents and threats, the full meaning an d
magnitude of which it was difficult to comprehend . America was, at last,
in it ; henceforth she was a full fighting ally, and it was impossible to con-
ceive America being other than finally victorious . But it was Japan tha t
had attacked America, and the crushing defeat she inflicted at the outse t
in Hawaii underlined both Japanese confidence and Japanese ability t o
strike hard. America might be an active ally, but the implications of Pear l
Harbour offered no comfort to Australia, no assurance of immediate o r
effective aid . And Japan seemed strong for attack wherever she chose .
In the days that followed, the initial shock was accentuated by th e
unbroken record of Japanese aggressiveness and Allied inability to mak e
more than token resistance . Guam fell on 10th December and Wake ,
assaulted the next day, on the 23rd . The air attacks on Manila were
followed by a landing on the 12th . American strength in the Pacifi c
seemed an illusion . Meanwhile news of Malayan fighting, as available t o
the public, was disquieting . The loss of Prince of Wales and Repulse con-
firmed the pitiful air weakness of British, Indian and Australian forces i n
Malaya ; the repetition of news of one retreat followed by anothe r
sharpened fears already acute enough, while optimistic and soothing report s
from Malayan commanders were soon being read as forewarning o f
another defeat impending .
In January the immediacy of the threat to the Australian mainlan d
became real . Rabaul in territory held under a League of Nations mandat e
was bombed on the 4th and subsequently, until strong forces landed o n
the 23rd, the same day as Kavieng in nearby New Ireland was assaulted .
Singapore fell on 15th February, and Rangoon on 8th March . Darwin had
on 19th February the first and most severe of a series of bombing raids ,
to be followed by other raids on north-western ports . Timor was taken o n
the 23rd ; in the following days there were severe naval losses north o f
Java, the position of which was apparently hopeless . On 8th March

2 THE IMPACT OF PACIFIC WA R

Japanese forces landed at Lae and Salamaua on the mainland of Aus-


tralian New Guinea, and on the 12th Allied forces in Java surrendered .
At that point the Japanese had achieved in three months what they ha d
planned to achieve in six . They held a line stretching from Rangoon i n
Burma down to Timor, through northern New Guinea and north throug h
Wake Island to the Kuriles, and enclosing Malaya, the Netherlands East
Indies, the Philippines and the last American outposts of Wake and Guam .
Within that vast area only Australian guerillas in Timor and a doome d
American force in Bataan qualified Japanese victory . Her air supremacy
was overwhelming, and her negligible naval losses stood out starkly agains t
the repeated destruction of Allied vessels on almost every occasion o f
confect .
To Australia what had happened seemed but a foretaste of what was t o
come . From Britain little could be expected . What forces could be spare d
from Europe and the Middle East would clearly go to the defence of India ;
any optimism concerning British aid must have been quenched by th e
evident determination of Churchill to give Indian defence priority ove r
Australian, even to the extent of diverting Australian forces, returnin g
from the Middle East, to that theatre. Such help as could come mus t
come from America.
And however great that might ultimately be, it was brutally clear tha t
it would not be, for some time, large . American troops landed in Aus-
tralia late in December 1941 had consisted only of some units that ha d
been on their way to the Philippines and the intention was to find mean s
of ferrying them forward to those islands . The urgent need for aircraft, i t
appeared, would not be met for some time except by token forces . Warn-
ings from America indicated that for a while American mobilisation woul d
probably reduce supplies of warlike material below the level enjoyed unde r
Lend-Lease before the Japanese attack . Those supplies must come acros s
sea routes threatened by the dominant Japanese navy . Help would come
but, immediately, Australian defence must be sustained almost wholly b y
its own forces .
The economic events of the first three months of Pacific war must b e
seen against this background . Abruptly the country so far participating i n
a distant war, was plunged into near-at-hand confect, in which attempte d
invasion seemed certain . What could be or should be done on th e
economic front was dictated by the probability that war would be waged
on Australian soil, and the certainty that for some months only limite d
American aid would be available . Moreover, for more than three month s
the full dimensions of this situation were unfolding. In December it was
still possible to hope that Malaya would hold ; by January the question wa s
whether the Indies could delay the Japanese long enough to permi t
defence in New Guinea and on the northern coast to be organised ; by
February invasion seemed likely . Worst of all, the Japanese seeme d
irresistible .
The effect of this developing threat on Australian attitudes is the

THE IMPACT OF PACIFIC WAR 3


concern of another volume . l It was a period of great uncertainty and fear ,
but not of panic . In a national broadcast on the day following the Japanes e
attack, the Prime Minister, John Curtin, declared :
I can give you the assurance that the Australian Government is fully prepared .
It has been in readiness for whatever eventuality, and last Friday the initial step s
were taken and fully carried out . From early this morning the Service Ministers of
the Cabinet and the Chiefs of the fighting Services have done everything that has t o
be done by them . The War Cabinet met and put into effect the plan devised fo r
our protection . This afternoon, the full Cabinet met and I am able to announc e
to you prompt decisions on a wide variety of matters—all of them vital to the ne w
war organisation that confronts us .
All leave for members of the fighting Forces has been cancelled . An extensio n
of the present partial mobilisation of Navy, Army and Air Forces is being prepared .
The Minister for Home Security will, tomorrow, confer with Army authorities on
air raid precautions . Regulations will be issued to prohibit the consumption of petro l
for purposes of pleasure . A conference will be held by the Minister for Supply wit h
oil companies on the storage of fuel and the security of that storage . Arrangements
will be made for all work on services that are essential nationally to be continue d
on public holidays in future, while, in this connection, all transport services will b e
concentrated upon necessary purposes . The Minister for Labour will leave fo r
Darwin immediately to organise the labour supply there . An examination will b e
made to ascertain what retail establishments should continue to trade after 6 p .m.—
so as to conserve light, coal, transport services .

Most of the measures referred to were naturally military, and it was th e


duty of a Prime Minister to reassure the public . But on the economic front
there was some justification for the claim of preparedness . The plans for
a Manpower Directorate, for instance, were well advanced ; and other plan s
were in fairly specific form. More generally, a wide range of measure s
which took precise shape in the following weeks had been canvassed, s o
that in the new atmosphere they could be implemented at short notice .
Controls which a month earlier would have been unwelcome could now
be hurried forward with the certainty of public co-operation . There was
preparedness in this wider sense, not of a set scheme for action shoul d
Japan attack, but of recognition of problems and exploration of solutions .
What the new situation would demand on the economic front was a s
unclear and as changing as were the military demands of Pacific war . Now,
as at no earlier time, what was required of the economy was dictate d
directly and immediately by a fast-changing military situation . Neatly inte-
grated economic planning was neither possible nor sensible in December -
February . An urgent military need which demanded major use of economi c
resources might disappear within days and be replaced by a new one . Thus
the Japanese attack which might have increased the need for supplies fo r
the Eastern Group Supply Council, based in India, by its onrush mad e
the shipment of such supplies virtually impossible—and, for example ,
clothing accumulated, to provide welcome easing of Australian rationin g
months later . Northern defence works appeared at one stage so urgent that
the import of Javanese labour was sanctioned, but the speed of the Japanes e
advance made the labour unavailable and changed the strategic need .
i See P . Hasluck, The Government and the People, 1942-1945 (1970) in this series.

4 THE IMPACT OF PACIFIC WA R

Japan's rapid approach brought a sharp intensification of air raid precau-


tions work . Such a fluid strategic situation meant that economic strateg y
must remain obscure until the military demands were more clearly defined .
What was clear, assuming that Australia was not overrun within a brie f
space of time, was the general direction in which economic policy must go .
There must be great and immediate expansion of the armed forces, t o
which all other demands must be subordinated, and labour must b e
diverted to air raid precautions—in other words, a great call on manpower
engaged in production, a call which must be met at once . Munitions, and
especially aircraft production, must be expanded—but along broadly the
established lines . War supplies of all sorts must be produced in greate r
quantity, including, it presently appeared, war supplies for the Americans .
Defence works must be rushed ahead in many places, including remot e
ones . Oversea supplies would be, at least temporarily, tenuous, even
supply of the most vital materials . The economy must be prepared in hast e
for sustaining a greatly expanded war effort even though territory migh t
be lost to an invader, and any locality under actual or threatened attack .
Several morals were painfully plain, so plain that it does not seem
they were even formally stated, although recognition of them was con-
stantly implicit in what followed : the great and central need was man-
power—manpower for the forces, for air raid precautions, for wa r
production, for the essential minimum civil needs ; all "non-essential"
activities must be slashed ruthlessly, and the civilian standard of livin g
seriously curtailed ; economic aid from America was likely to be slower i n
arriving than major military help must be, and therefore, in the short run ,
Australia must depend primarily on her own manpower and productiv e
resources . These central issues were obvious . What could not be seen wa s
how far action must go, whether total resources would be adequate, and,
above all, whether there would be time enough for the required far -
reaching transfers of activity .
But the main lines were clear, and action could proceed . The forces
could be expanded; non-essential production could be slashed ; the organi-
sations for controlling and directing mass movements of labour, and fo r
executing a great works programme, could be created . How far it migh t
prove to be necessary to expand the forces, to cut living standards and t o
regiment labour, could scarcely be guessed, and must be left to emerg e
with time. At least from December 1941 to March 1942 it seemed clea r
that what could be achieved in that critical period could not possibly b e
too much. Rather the driving force was the conviction that the most that
could be done might well be too little or too slow . Whether it would in
the end be enough and in time, could only be determined by the unfor-
giving arbitrament of battle .
What therefore was striking at the time remains noteworthy in retro-
spect . There was no panic in the Administration . There was fear,
deepening as the Japanese pressed on, that invasion and defeat might b e
very near . But fear only becomes panic when no solution to pressing
danger can be seen, or when it seems that all hope is lost . In those early

THE IMPACT OF PACIFIC WAR 5


weeks of Pacific war Australians could take some comfort from havin g
America as an ally—at least, in the end, Japan must be defeated, sinc e
defeat of America was unthinkable . If for a few months the Japanes e
could be held, military and economic aid must come from America i n
quantity .
In the months to come, in the popular and in the political mind th e
cheering fact seemed to be the presence of United States troops on th e
Australian mainland . But during 1942 and 1943 events in the South-Wes t
Pacific Area were not to be vitally influenced by United States groun d
forces ; even the United States army air forces were not a major factor unti l
a year after Japan's attack . From time to time during 1942 and 194 3
United States naval forces intervened decisively, but this was largel y
invisible to Australians . The strongest then-effective military reinforce-
ment that could or did reach Australia during 1942 was the return of th e
A .I .F . from the Middle East ; the determined insistence on this return to
Australia rather than Burma against the stubborn opposition of Churchil l
rested on appreciation of the hard fact that no other immediately opera-
tional ground forces were available . In the short term the primary form
of American aid was to be in supply .
The military task was clear and, at least, not hopeless ; so was th e
economic . The best economic effort of which the country was capabl e
might not prove enough, in the sense that invasion and even complet e
occupation might precede an ultimate Allied victory in the Pacific . But th e
broad pattern of advance of the economy was sharply defined .
The immediacy of the threat swept away the resistances and release d
the inhibitions that had dogged the first two years ; for the first time th e
Government was confronted by a population clamouring to be told wha t
to do and what to sacrifice, and critical only of apparent slowness or
tenderness in applying the scourge . But it would be grossly false to see the
economic decisions of December-March as panic responses to repeate d
disaster . What was noteworthy was how the Administration, in the circum-
stances as they were then known, did what was to prove the right thing .
That must not be attributed to confidence in being "saved" by America .
At the highest political, Service and administrative levels there could b e
no illusions as to the scale on which American military or economic ai d
would be immediately available . Nor would thankful reliance on earl y
rescue have prompted the drastic reorganisation of the economy which wa s
pressed through during the first half of 1942 . The "rightness " of what was
initiated in the first three months of Pacific war was conditioned primaril y
by the brutal clarity with which the essential lines of policy were defined ,
for government and population alike, and secondarily by the two years'
experience of less immediate war and all that that had entailed .
For some weeks, however, the activities of the Government could only
be obscurely known to the public. After the first sweeping announcement s
time was required, even if measured only in days, to translate principle s
of action into legal form, to bring organisations into being, and to deter-
mine what persons should move where . Undue precision in advance

6 THE IMPACT OF PACIFIC WA R

announcements—as happened with curtailment of holidays—could pro -


duce confusion, and criticism deriving from that confusion . The plans for
the Manpower Directorate were endorsed within days, but regulation s
could not be published until a nucleus organisation had been created and
other preparations made . Cuts in petrol rations could be determined, bu t
could have no effect until the current ration period expired at the en d
of January .
Opinion therefore, as reflected in or moulded by the Press, tended to be
critical, not so much of particular actions as of the lack of this or tha t
action . The Sydney Morning Herald declared in magisterial tones that th e
Government
may be sure that they will have the country solidly behind them . . . . It must use th e
authority then given it . The public looks for the strongest action and will be critical
only of hesitation and delay . 2

This was an accurate enough forecast ; there was such criticism, most of i t
misdirected in inevitable ignorance . For, in retrospect, the "rightness" o f
what was done was matched by the speed with which action, even i f
necessarily withheld from the public, was decided and executed .
What was initiated during the first three months makes a pattern readil y
intelligible against the definition of the demands upon the economy. I n
foremost place was the enlargement of the Services . Before the Japanes e
attack numbers in the forces were 382,100 . Immediately large call-ups
commenced. By March the net total of the Services had grown to 554,700 .
The rapid removal of such numbers of efficient workers placed great strain
on essential production and made the already planned manpower organi-
sation even more urgent . Later the tradition was to develop that th e
Services demanded too much in this transition period and that a primar y
purpose of the Manpower Directorate was to restrain unreasonable Servic e
demands . Some months later this was true, but by then circumstances wer e
very different . By then the Services were expanded beyond a size whic h
could be maintained for more than a year or so by a population o f
7,000,000, and, in any case, once the Manpower authority was in existenc e
it was natural and reasonable for the Services to press their claims fo r
manpower, and for the Manpower authority, in its role of arbiter, to see k
to restrain them . But in the first weeks the issue was not seen by anyon e
in the terms later attributed to this period . No one questioned the urgen t
necessity of rapid increase in the Services, and on several occasions, i t
was the Services that took long views . For instance, curtailment of exemp-
tions for University students in December was liberalised in January o n
the initiative of the Adjutant-General ; he was concerned that the army
should not receive recruits who would not be ready for battle for months ,
at the cost of being short of specialist officers a year or two later when, i f
the Japanese were held, they would be sorely needed . Moreover it was he ,
not educational authorities, who used a parallel argument concerning
training for skills which had no special military use, and (later) the

2 12 Dec 1941 .

THE IMPACT OF PACIFIC WAR 7

Commander-in-Chief had already begun to reduce the establishment o f


the army before War Cabinet demanded that this be done .
Hard on the heels of action to enlarge the Services came multiplicatio n
of specific controls over materials and goods, shortage of which wa s
already of concern to Munitions and the Services. Some of these had an
obvious relationship to the demands implied by the transfer of larg e
numbers of men into camp—control over certain types of timber, over
tinplate (with special reference to food containers), over liquid fuel drums ,
toothbrush handles, boot nails and boot nailing machinery, hand tools ,
motor vehicle spare parts, bitumen, leather and the like. These listed too k
effect mainly in December or early January . In later weeks controls of
this type multiplied and were tightened .
Parallel action was taken to open bottlenecks and eliminate troubl e
spots in vital production . Aircraft were clearly of the highest priority an d
hence the clash between Commonwealth Aircraft Corporation and th e
Aircraft Production Commission, which was of long standing, was dis-
posed of promptly, substantially by subordinating the Corporation to th e
newly appointed Director-General of Aircraft Production . Personal con-
flicts at the Lidcombe, New South Wales, engine factory were similarly
dealt with .
These were matters which brooked no delay and could be execute d
forthwith . There was equal speed in creating the Manpower Directorate ,
although its operation necessarily could not be effective for some weeks .
As has been noted in the previous volume 3 the Directorate grew directl y
out of the Manpower Priorities Board and followed closely the blueprin t
it had drawn . Time was required primarily to secure the nucleus of senior
staff and prepare administrative procedures ; that delay permitted but di d
not arise from argument over the need for full powers of direction o f
labour, which was resolved by shelving the issue . Direction was not to be
necessary for some months . With the Manpower Regulations of 31s t
January 1942 there was in existence a central executive authority respons -
ible for co-ordinating the now clamant demands for labour .
Somewhat more time was required to create the organisation for the
vast construction programme demanded not alone by the accommodation
and related needs of a rapidly growing army, but by defence works i n
innumerable places, by new transport needs, by airfields, by storage
requirements . Parallel demands for American forces almost immediatel y
had to be added and, if possible, integrated . The special labour needs were
to be met by the creation of a Civil Constructional Corps, independent o f
the Manpower Directorate but co-ordinated with it . The central organisin g
authority took the form of the Allied Works Council, planned to utilis e
whenever and however practicable the established construction organisa-
tions of State and local government, statutory corporations, railways and
private enterprise, and to create new organisations wherever they would
be more effective .

8 S . J. Butlin, War Economy 1939-1942 (1955) in this series.


8 THE IMPACT OF PACIFIC WA R

The specific issue of co-ordinating construction for Australian and


American needs had a wider parallel in co-ordination of Australian and
American Service demands on the civil economy . A transient body, the
Administrative Planning Committee, was replaced by a permanent Allie d
Supply Council on 5th May 1942, with functions which were to grow
with time .
Thus far what have been noted are the highlights of action which wa s
demanded as the immediate response to a specific and urgent need . Mean-
while action was preparing in other directions . There was a rapid sprea d
of "releasing " controls, that is those in which the approach was that all
resources of all kinds would be needed, and non-essential uses of the m
should be prevented or sharply curtailed, without close inquiry as to th e
precise or immediate war use for the resources that might be released .
The purest example of this approach was the first Prohibition of Non -
Essential Production Order of 23rd February, which took the form o f
simple prohibition of production of a variety of listed articles . Thi s
particular order was prepared in haste to meet a government decision to
establish the central principle of blunt prohibition of non-essential activitie s
at a moment when the public was shocked by the first raid on Darwin ; the
list of goods was in fact made up late at night with no more guidance tha n
could be got from trade directories . But the central principle was not new ,
nor was it adopted without thought or restricted to this sort of application .
Already general restrictions on holidays had been applied to all productio n
and not only to that classed as "essential" ; restrictions on pleasure
activities which used petrol or encouraged absenteeism (for example hors e
racing) were in force. Presently there was to be drastic curtailment o f
retail deliveries, and, more generally, the whole "rationalisation " policy
of the Department of War Organisation of Industry . That policy, already
formulated before Pearl Harbour, was based upon recognition of the fact
that essentiality was a complex concept, and blanket prohibitions ha d
severely restricted use ; in the main, eliminating the non-essential de-
manded tedious investigation and difficult and contentious planning . Over
the next few months this more sophisticated approach was to prevail, bu t
still guided by the dominant principle that the non-essential must go .
Consistent with this approach was the conviction that civilian produc-
tion should be directed to satisfying essential civil needs more adequately ,
partly in recognition of existing deficiencies, partly because these deficien-
cies would become more acute . In the Department of Supply which ha d
been primarily concerned with Service supply and had already establishe d
"controls " of, for instance, jute goods in December, a system of controller s
was developed . Much of the complexity of the Department of War Organi-
sation of Industry ' s rationalisation activities stemmed from the need t o
devise schemes to ensure that essential needs were adequately served .
But in many directions it was fairly clear that the best planning woul d
not secure sufficient civilian supplies . The probable need for formal coupon
rationing of goods to civilians was generally recognised, and preparation s
for it were initiated . It was to be unfortunate that it was not implemented

THE IMPACT OF PACIFIC WAR 9


early, when the public mood would have ensured acceptance . In the end
it had to be introduced when, in fact and in appearance, it was the solu-
tion to an emergency, and when so much delay ensured that, on the on e
hand, ready acceptance was lacking (an attitude reflected by some Minis-
ters) and, on the other, any administrative preparations produce d
immediate widespread rumours .
Finally there must be noted the Government's broad financial policy ,
which was announced in February . One facet of it was the avowed deter-
mination of the Government to eliminate the States from income taxation .
The opening shot was establishment of a committee to report on how thi s
might be done, and the sequel was long delayed . In the end, by August,
the policy was established that there should be one income tax throughou t
Australia . The delay meant that the weapon was not unsheathed unti l
1943, but it did place in the hands of the Commonwealth power to pe g
the spending of State governments and, in total, of individuals . Associated
in principle but not in form were the Economic Organisation Regulation s
of more immediate application . Broadly these were intended to peg wage s
at the level of the date of the regulations, 19th February ; to limit profits
to 4 per cent per annum ; to direct price control to controlling profits ; to
peg interest rates and prohibit speculative dealings in property . Suc h
sweeping principles were to prove difficult in application, as with the
pegging of wages, or so difficult in administration and so complex in thei r
effects that, eventually, they were abandoned, as with profit limitation .
But in the mood of early 1942, as Singapore fell and New Guinea wa s
invaded, they appeared to the Government as desirable and practicable ,
and, in general, to the public as acceptable . Eventual abandonment o r
weakening of the proposals should not disguise the fact that for perhap s
six months they achieved a significant purpose . Broadly there was con-
formity to the intention of the regulations, not because investors and em-
ployees on the whole accepted them but because they served as a guid e
to conduct, so long as fear of invasion was dominant . Together unifor m
taxation and the Economic Organisation Regulations represented th e
application to broad financial problems of the same approach as was
embodied in the Directorate of Manpower or the Prohibition of Non-
Essential Production Order : in a pressing national danger citizens shoul d
be told what to do and what to sacrifice . For perhaps six months afte r
Pearl Harbour, the principle worked ; fear of the Japanese embodied th e
most potent form of self-interest .
As important as the specific acts of economic policy so far sketche d
were the attitudes they expressed . There was a great and willing surrende r
of political authority . Parliament continued to meet, indeed more fre-
quently . Later in 1942 debate was to be determined and hard knock s
given and received, as with civilian rationing . But for several months
members tacitly recognised that war and the outward conventions o f
political freedom were inconsistent . Cabinet devolved extensive executiv e
authority on informal committees, some of which came into being simpl y
for a single act at the request of the Prime Minister . Ministers really

10 THE IMPACT OF PACIFIC WA R

exercised, without reference to Cabinet, powers which were already nomin-


ally theirs, but which previously were not exercised without prior Cabinet
endorsement . Thus the sweeping regulation 59 of the original Nationa l
Security Regulations was the explicit authority for a wide range of execu-
tive action for the first time without necessary reference to Cabinet . In
December and January there was a spate of delegations to officials o f
Ministers ' executive powers . Regulations and orders tended to be in
sweeping terms, to be spelled out by officials . Thus the Essential Material s
Order of February, perhaps the most pedantically precise of all wartime
orders, contained a clause which in effect gave the Director of Supply i n
the Department of Munitions power to rewrite the terms of the order t o
suit any occasion .
It could be said that the surrender of democratic political authority was
the price of rapid action and the efficient formulation of controls . Wha t
must be noted is the speed with which this development occurred, and th e
ease with which it was accepted . But it had some unfortunate results .
Senior officials came to be better known to the public than their Ministers ,
to announce policy decisions, and to sign orders which as recently a s
November would have been the prerogative of Ministers . Many of them
came to like the notoriety and to seek it . 4
Among Australians generally there was a ready abandonment of in -
grained doctrines which in 1941 had been effective brakes on action . For
some months there was ready acceptance of the pegging of wages and o f
profits . Plans for permitting the Americans to import Javanese labour for
northern works, which in form outraged the White Australia policy an d
challenged deeply-held union principles, were adopted without difficult y
by a Labor Government . When the first prohibitions of non-essentia l
production were announced the Department of War Organisation o f
Industry was besieged by its victims, mostly small businessmen whos e
livelihood had been abolished, and scarcely any sought more than guidanc e
as to what he should do. Publication of plans for extensive employment
of women in replacement of men evoked no hostility.
Within the Administration there were established habits of mind which
were later to be sources of difficulty . There developed a deceptive faith
in controls whose efficiency depended upon the victims' co-operation .
"Black-marketing" did not become part of the Australian vocabulary fo r
perhaps a year, because the thing itself was of minor importance . But
most of the controls applied during the first half of 1942 were incapabl e
of rigid enforcement against unco-operative citizens . As much as any
people Australians had always regarded the government as fair game and ,
in a normal atmosphere, instructions to report scattered stocks, to charg e
fixed prices for goods of highly varying quality, to do this or refrain fro m
that, would have been of limited effectiveness . For the first half of 1942
fear of the Japanese was the overriding sanction . That was not true of late
1942, still less of 1943, a change which many officials had to learn b y

*For discussions of such developments see Hasluck, The Government and the People, 1942-1945 .

THE IMPACT OF PACIFIC WAR 11


painful experience . The maintenance, for instance, of a ritual of pric e
control under State authority for ten years after the war ended reflecte d
naive belief in "controls" which was mostly born in 1942 .
There developed too a disposition to control for the sake of control, t o
pursue "tidiness " as a goal in itself, to seek completeness in detailed
administration far beyond the point where any useful wartime purpose wa s
served . This was true of much of the late 1942 rationalisation activity o f
the Department of War Organisation of Industry . The effective sanctio n
for reorganisation of an industry was often the removal of part of it s
labour by the Directorate of Manpower ; at that point the industry migh t
have been left to work out its own salvation, but its members naturall y
welcomed the readiness of War Organisation of Industry officers to do th e
work for them—and to take the public criticism .
Similarly there developed a disposition to identify "austerity" with a
contribution to the war effort . With Curtin this had the justification of hi s
puritan views ; consciously or not he was pursuing other objectives besides
those of war ; but with many officials there could be no such justificatio n
for the readiness with which they assumed that a restriction was desirable .
Restriction on beer, for instance, was probably a misguided policy, if onl y
because of the man-hours wasted in liquor queues, but Curtin's emotiona l
obsession with this subject found willing collaborators amongst official s
with no such personal feelings .
So too there was excessive concern with "fairness" . Too often effort
was devoted to arranging "fair" sharing of a supply that was too small to
satisfy more than a small part of demands, where it did not really matte r
much whose demands were met . When production of non-essentials wa s
prohibited, the prices of the existing stock should not have mattered, bu t
such goods were invariably brought under price control . The Departmen t
of War Organisation of Industry's objective of "concentration of industry "
foundered on undue concern with fairness .
These reflections on later consequences do not detract from the magni-
tude of what was achieved in the early months of Pacific war . But much
more was achieved then than the specific things outlined above . There
were set in motion forces which developed great momentum, and con-
tinued to drive economic policy along the lines broadly defined in March .
Until perhaps September there was little to restrain the intensification o f
restrictions on the civil economy, the enlargement of production and of
Services' commitments for manpower, or to prevent controls spawnin g
controls . The lines of advance required had been caustically etched i n
December, emotional reactions had established obsessions, and the plunge
towards a totally regimented war economy could be described as headlong.
By the end of 1942 it would be necessary to face the fact that th e
Australian economy was overcommitted, in the sense that it could not
achieve all that, by then, it was planned it should do ; and wrongly com-
mitted, in the sense that by then, some of the objectives being sought wer e
attainable only at the expense of more vital ones . In January it coul d
seem that whatever could be achieved might fail in being too little or too

12 THE IMPACT OF PACIFIC WA R

late ; by December it was clear that what was then being attempted o r
planned was too much .
In a sense this overcommitment of the economy was inevitable, an d
indeed desirable . Setting in motion drastic recasting of the structure of a n
economy under the spur of national danger was easier than slowing dow n
that process under way, when the danger was only less, not eliminated .
Going too far was for this reason almost inescapable . Moreover phrase s
such as "overcommitment", or "slowing down" meant concretely deter -
mining the degree to which, for instance, munitions production should b e
allowed to have labour at the expense of other apparently equally essentia l
activities ; deciding how to balance food production against size of th e
armed forces . By the time these questions became the leading ones, th e
latter half of 1942, overcommitment had already occurred .
Equally the overcommitment could be described as desirable : it wa s
overcommitment only in the sense that the worst did not happen, in par t
because of the very intensity with which resources were diverted to
defence . Had the battle of Milne Bay or that of the Owen Stanleys not
been won ; without the code-breaking that produced victory at Midway ;
if the Americans had been pushed out of Guadalcanal—then the positio n
at the end of 1942 would have been very different . Until all threat of
invasion was past the only sensible principle for economic policy was tha t
the most could not be too much. There could be criticisms of particular
applications of the principle—for example persistence with tanks o r
torpedo production . But it could also be said that it was the pursuit of the
maximum as the only limit, established as a principle in the first thre e
months, which ensured that a year later it should then be too much .

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