The Money Men

to Australian politics, especially to his conservative tradition, was the model of a coalition government that he pioneered. This could have been a short-lived experiment in Australia; while it is the norm in many other countries, Australia’s system of voting means that a coalition government is not necessarily a likely outcome. But while Page was prepared to play hardball politics to achieve his aims, he was also prepared to work cooperatively with his more powerful Nationalist colleagues to achieve a common goal. Things that are now the norm were innovations of Page’s making, including Cabinet solidarity in coalition governments, an aversion to three-cornered contests, joint senate tickets and separate party room meetings.

4

EDWARD GRANVILLE (TED) THEODORE

A Treasurer Interrupted

Born: December 1884, Adelaide

Died: February 1950, Sydney

Treasurer: 22 October 1929 – 8 July 1930

29 January 1931 – 5 January 1932

TED THEODORE’S TENURE was relatively brief, but few treasurers are as well known. The challenges he faced were greater than any of his predecessors or his successors. He was, and is, widely regarded as one of the most talented holders of the office. Any ranking of treasurers will have him at or near the top in terms of his understanding of finance and ability to mount an economic argument. And if there were a list of the ‘Best prime ministers we never had’, it would include Theodore (alongside Casey, Hasluck, HV Evatt, Arthur Calwell, Hayden, Kim Beazley and Costello). To my knowledge, no other treasurer has had his life portrayed in a novel, as Theodore did in Frank Hardy’s (albeit highly unsympathetic) portrayal of the character Ted Thurgood in Power without Glory. It has not only been partisan Labor supporters who have formed the view that Theodore is among the best treasurers the nation has had. The pre-eminent economic historian of the Depression, CB Schedvin, argues he was ‘probably the most able holder of the Treasury portfolio in Commonwealth history’.¹ Treasury officials of the era apparently ranked him and Stanley Melbourne Bruce as the best treasurers of their time.² Even his political opponents acknowledged his skills. Bruce described him as being ‘most competent, a magnificent speaker and a good administrator,’³ while the conservative premier of NSW Sir Bertram Stevens said he was ‘the coolest, best and most experienced financial brain in the Southern Hemisphere’.⁴

One other thing is certain: no treasurership has been marked by as much lost potential and missed opportunity as Theodore’s. His is the most tragic treasurership of them all. He faced a bitterly divided Labor Party, its NSW organisational wing dominated by his sworn enemy, premier Jack Lang. He faced a hostile Senate, which stopped him from implementing some of his most important proposals. He had to deal with a central bank that seemed to see its key task as being to dampen his effectiveness. Private banks were then much more powerful economically than they are today, and they also actively worked to undermine the treasurer’s objectives. The Treasury did not work against Theodore, but in that era, it was staffed with accountants, not economists, and it was unable to give him the support that modern treasurers receive in formulating innovative policy solutions and mounting arguments against opponents. Finally, he was politically crippled at a crucial time by one of Australia’s most salacious corruption scandals, forcing him to stand aside when the Labor government and the nation needed him the most.

Theodore became federal treasurer two days before the Wall Street Crash of October 1929. His subsequent policy prescriptions were undoubtedly imperfect (whose aren’t?) but he was willing to recognise that the risks inherent in trying new things were massively outweighed by the risk of sticking to a tired orthodoxy that was clearly failing the economy and throwing millions of people onto the scrap heap of unemployment. Kim Beazley Senior described Theodore as ‘Australia’s first significant Keynesian’.⁵ Perhaps more accurately, John Hawkins describes him as a ‘proto-Keynesian’, recognising that Theodore was, in some instances, advancing Keynesian ideas before Keynes himself did. Theodore was the first Australian to own a copy of Keynes’ A Treatise on Money (sourced for him by a friend), but he was grappling with these issues six years before Keynes released his definitive General Theory.

Some have argued that the ideas that Theodore presented were not his own, but rather belonged to the radical one-time professor of economics at the University of Sydney, Richard Irvine. This is a false argument. Theodore sought advice from Irvine and no doubt was influenced by him. But it was the responsible thing for any policymaker to do to seek out ideas and advice from outside the bureaucracy, which was failing miserably to come up with solutions to the economic malaise gripping Australia. Theodore should not be criticised for seeking out Irvine’s counsel; he should be praised for it.

Looking back on the arguments that raged through politics and economics in Australia during the Depression, it is impossible to escape the conclusion that Theodore’s ideas had the best chance of seeing Australia through the crisis. He eschewed the radical and disastrous economic nationalism of Lang and sought out more innovative solutions. Theodore’s biographer, Irving Young, is undoubtedly correct when he writes, ‘It is unlikely that Theodore’s modest proposals would have been remotely sufficient to drag Australia out of the trough of the Depression. They would certainly have avoided some of the human hardship that the alternatives, and particularly the Premier’s Plan, did impose.’⁶

Hindsight tells us that Theodore was mainly right about the big calls he had to make when he was treasurer.

Beginnings

Ted Theodore was the first Australian treasurer to come from a non-English-speaking background. His father, Basil Teodorscu, was a Romanian labourer who’d migrated to Australia, and who followed a common convention of the time in anglicising his surname to ‘Theodore’. His mother, Annie Tanner, was of English background. Theodore was born in Adelaide on 29 December 1884 and was educated at Lefevre Catholic and Aldgate public schools, leaving formal education at the age of twelve. At first