This book inspects the effect of an economic blockade imposed on the State of Queensland in the early 1920s. The blockade was launched in response to the Queensland Labor government's action against the privileged position of squatting interests in paying low pastoral rentals. Such action had been threatened by previous governments (of both sides of politics), but had been hitherto thwarted, either within Cabinet (as in 1910), or by the Upper House (from 1915 onwards). But in 1920, a newly-acquired Labor majority in the Upper House ensured the passage of the change, and British pastoral interests reacted with this economic sanction.
The impact of this blockade on Queensland's economic and political affairs is examined; and it is shown that dislocation of the state's economy, resulting in high unemployment, forced retrenchments and the abandonment or deferral of government schemes, was the result of this depletion of the government's loan revenue. It is argued that the impact on the economy generally, for which there is wide and diverse evidence, is more readily understood by focussing on two events in particular; the boom and contraction of the cotton industry, and the abandonment of the plans for a large state owned steel industry.
At the same time as the economy and the government's plans for it were thrown into disarray, a distinct change in the political character of the government took place. The impact of the loans embargo on the Labor Party is discussed in terms of the inherent divisions within it, and the way the affair affected and was reflected in the parliament. I suggest that the state's political direction altered, an early election in 1920 being the beginning of this change. This case is based in part on evidence from the parliament which is presented in two broad periods - from 1920-22 and 1923-24. By 1924, the reform program had come to a halt, and the local business community had become as anxious as the Labor premier that he would successfully negotiate new loan money in London.
As well as the economic disarray and the change in political character caused by the embargo, this investigation covers other areas of policy, such as education and law reform. The total picture emerging helps to explain the problem of Queensland's apparent political inversion from the 1920s to the 1950s and beyond. This reorientation can be seen in a condensed form in the loans affair. Despite the interpretation by Theodore and his supporters of the lifting of the sanction in 1924 as sensible compromise (the premier gave way on pastoral rents), I argue that the outcome must be seen as a comprehensive victory for capital. Thus this survey arrives at the conclusion that the affair left a permanent stamp on the future direction of Queensland, and the changes wrought in the state's domestic life are consistent with, and help to explain, apparently permanent changes in the political posture of successive Queensland governments.