They put it this way:
"Only trade with the Empire and its Allies. Every pound," it was said, "that is spent with Germany means another gun to our future menace." So the public were exhorted to confine business to the Empire and its Allies—with Britain, Africa, India, Canada, France, Belgium, Russia, Servia and Japan, and to cut the rest of the world. That is to say, to trade with three quarters of the world!
Their decision practically meant free trade with nearly the whole world, and so their hands were tied so long as Britain was joined up with foreign allies!
A striking proof that this slogan, "Trade with the Allies," was only an after-dinner sentiment was given when, in May, 1915, the Australian Postmaster-General rejected a Japanese tender for electric insulators, although its price was £1000 cheaper than a local tender, the total amount of which was £3281/6/8—a thirty-three per cent. preference being given against the work of an allied nation.
In the meantime the N.S.W. Government found their system of State Socialism so expensive that the Treasury began to rapidly empty. The war, with its upsetting of the British money market, stopped the usual method of loan-raising, but some smart English capitalists, more experienced in finance than the average labor politician, offered to take over the public works of New South Wales if they were paid 10 per cent. on their expenditure.
They 'cutely pointed out that by the system of State Socialism, the N.S.W. Government had gathered an immense army of laborers. It had built up an enormous civil service, and if men were thrown on the market consequent on the State's lack of funds, they would make it uncomfortable for the Government. That action would bring home to the workers the utter fallacy of State control of industries. They also whispered, with their tongues in their cheeks, that "private enterprise" would then become prosperous and the Labor movement would be thrown back for "years and years and years."
The temptation proved too strong and the compact was signed.
"Of course," said the Government, "you will give preference to unionists, the maximum wage, and all that?"
"Oh, of course," said the Syndicate, rubbing its hands with glee.
It was getting 10 per cent. on all the expenditure!