On one side, the manufacturers were telling him how to solve the problem.
"Put on thumping big taxes and help our factories to get busy, then we can take on the unemployed soldiers."
On the other side, the importers were advising the Prime Minister to drop the customs tariff and allow imports free. That, they explained, would cheapen the cost of living, and those out of work would have a better chance to live.
Then the "Syndicate," which had now grown to a great size, which, in fact, was controlling Government work in all the States, had a long consultation with the Prime Minister.
"Never mind the manufacturer," it said. "Remember, there are three stages in this country's development—Pastoral, Agricultural, and Manufacturing. The latter should be the last considered by Australia, which is a pastoral and agricultural country. We can develop Australia as it should be developed, by constructing irrigation schemes and opening agricultural areas. We could solve your unemployed problem, give your soldiers a good living wage and increase your country's prosperity. All we ask is that the Federal Government follow the States' example, and pay us 10 per cent. on the first five years expenditure, the whole amount of which we shall return at the end of that period with five per cent. added, provided you arrange with the States to give us, free of taxation, land they do not require."
A hurried conference of State Premiers was called and the situation was carefully studied. Unemployed were crowding Australian cities. Private enterprise was being crippled by the heavy income taxes imposed by State Governments to pay the increasing cost of the "Syndicates" controlling the Public Works of the various States. It was admitted that these works were being efficiently carried out, and being mostly railway and developmental constructions, they would be productive when completed. Still, with private enterprise choked off, investment was at a low level. The manufacturer was also being hard hit, for although some of the tariff duties imposed by the Federal Government helped him, each State appointed a Necessary Commodities Commission to regulate prices. The manufacturer, who was being helped by the tariff, had to pay high wages to manufacture his goods, but the Commodities Commission prevented him raising his prices so that he could not sell at a profitable figure. He, therefore, shut down and threw another mob of unemployed on the market.
Another factor that affected the matter was the great flow of immigration forwarded to Australia from Europe.
The Great War had put a sort of terror into the souls of men, and the fear of heavy taxation that threatened to follow drove them across the seas.
Every boat carried its full complement; so that when the "Syndicate" declared its intention to open up agricultural areas, each State recognised that this would not only absorb the unemployed, but as land development meant development in other quarters, a general prosperity would naturally follow. Hence they vied with each other in offering free of charge the choicest Crown lands.
The States recognised that the Crown lands had cost them nothing, and that the Commonwealth, having control of customs and land taxation, could easily raise the money for the cost of developing them.