Mungana
With the benefit of hindsight, it is very easy to see that any chance the Scullin government had of successfully navigating the shoals of the Depression disappeared on 4 July 1930, the day that the Campbell Royal Commission released its findings into the Queensland Government’s purchase of the Mungana copper mine thirteen years earlier. The government’s most original thinker and formidable advocate was removed from the political field for just over six months, and the state and the nation both paid a considerable price as a result.
Rumours had circulated for many years, spread by internal and external political opponents, that both Theodore and his successor as premier, William McCormack, had improperly benefited from the Queensland Government’s purchase of the Mungana mine, which was in Theodore’s Chillagoe electorate. On Theodore’s ascension to the federal treasurership, the conservative Moore government in Queensland decided to order a royal commission to investigate the rumours—all the evidence points to a calculated attempt to land a fatal political blow on Scullin’s likely successor. The Moore government appointed former NSW Supreme Court judge James Campbell to conduct the review. The usual practice at the time (as it is now) would have been to appoint a retired Queensland judge, but given that most such judges had been appointed by the previous Labor government, a NSW-based appointment was preferred, and the government of that state was asked for recommendations.
Theodore was not invited or subpoenaed to appear as a witness before the commission. But given he was clearly the target of the inquiry, he telegraphed a request to give evidence before it. He also requested that he be allowed to do this after the imminent (and important) federal Budget had been delivered. Of course, a treasurer travelling from Canberra to Brisbane would be a relatively straightforward matter today. In the 1930s, however, it was a major undertaking involving several days of train travel. Nonetheless, Campbell refused Theodore’s request for a delay, and he then brought down his findings without hearing Theodore’s defence, despite the fact that it would have meant waiting only another fortnight before making his findings known.
Unsurprisingly, the Queensland Government released Campbell’s report very quickly. On 2 July, prime minister Scullin announced that he would travel to London to attend the Imperial Conference and that Theodore would be acting prime minister in his absence. The Campbell Royal Commission report was released two days later—and four days before Theodore was due to bring down his Budget. Its findings were sensationally written, and explosive. In reference to Theodore and Ryan, Campbell found that the men ‘who occupied high office and responsible positions in the state … betrayed for personal gain the trust reposed in them and acted corruptly and dishonestly’.17
Young captures the nature of Theodore’s response:
Theodore faced the day by beginning work in his Sydney office at 9AM. He was silent, imperturbable and grave, but as a reporter remarked, ‘that was his usual appearance’. After working on the budget papers for the better part of the day, he finally called the newspaper men to his office and read from a prepared statement.18
Theodore told the reporters that ‘the report of the Commission was the most dastardly piece of partisanship it is possible to imagine’.19 He stood down with immediate effect and called for charges to be brought against him so that he could clear his name. It was not to be so simple.
Queensland law stipulated that only criminal and not civil charges could be brought against Theodore. But the Queensland Government knew that the case against him would not pass the ‘beyond reasonable doubt’ test necessary to secure a criminal prosecution. So it took the extraordinary step of amending the state’s Crown Remedies Act 1874 to specifically allow a civil case to be brought against Theodore, with the lesser ‘balance of probabilities’ test being the threshold of evidence required. This meant that at a crucial time, Theodore was sidelined for months, unable to clear his name.
The civil case was eventually heard by the chief justice of Queensland, Sir James Blair. It was reported that Blair summed up the case in a way sympathetic to Theodore, noting that
criticism, suggestion and argument by counsel could not take the place of evidence. He [Blair] spoke about coincidence and circumstantial evidence and advised caution. His Honour told the jury that that there is nothing in the law to prevent an MP having a share in any concern provided it was acquired legitimately and the onus was on the Crown to establish that both the conspiracy and fraud had occurred. He added that all transactions between the Queensland Government and Mungana mines were in writing and on record. It was contrary to common sense that people engaged in conspiracy would forge evidence against themselves.20
The jury acquitted Theodore on all charges and ordered costs against the Queensland Government.
More than eight decades later, what are we to make of the Mungana saga? It is highly unlikely that all the facts will ever emerge, but we know enough to draw some conclusions. Theodore owned shares in Mount Isa Mining and other northern Queensland mines at the time of the Mungana purchase, and it is arguable that his holdings were greater than he publicly disclosed. This would not meet modern standards of transparency and accountability. However, there was no requirement at that time that members complete a pecuniary interest form. It is also important to note that AJ Jones, who was the minister for mines at the time of the transactions in question, gave sworn evidence that Theodore had disclosed his interests to him, although the shares did not appear on the share register for some time. In addition, Jones took full and personal responsibility for the decision to purchase the Mungana mine, and there is no evidence that Theodore owned shares directly in Mungana—indeed, he strongly denied having any interest in the copper mine.
It was impossible for the Queensland Government to establish any loss to the
