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CHAPTER 1THE IMPACT OF PACIFIC WAR
THE Japanese many-headed assault on 7th December 1941 was aprofound shock to Australians . Japan was traditionally the potentia lenemy; in 1939 planning had presumed active Japanese hostility from th eoutset ; during the second half of 1941 the prospects for peace in th ePacific had deteriorated steadily. But few Australians thought the situa-tion at the beginning of December was hopeless, or contemplated tha tJapan was on the verge of challenging America as well as the Allies b ydirect attack. The shock was correspondingly severe as the full range o fJapanese plans became clear . Initial attacks on Kota Bharu in Malaya an dSingora and Patani in Thailand and on Hong Kong were overshadowed b ythe startling news of the devastating raid on Pearl Harbour and the les simportant one on Manila in the Philippines .
The news was heavy with portents and threats, the full meaning an dmagnitude of which it was difficult to comprehend . America was, at last,in it; henceforth she was a full fighting ally, and it was impossible to con-ceive America being other than finally victorious . But it was Japan thathad attacked America, and the crushing defeat she inflicted at the outse tin Hawaii underlined both Japanese confidence and Japanese ability tostrike hard. America might be an active ally, but the implications of PearlHarbour offered no comfort to Australia, no assurance of immediate o reffective aid. And Japan seemed strong for attack wherever she chose .In the days that followed, the initial shock was accentuated by th eunbroken record of Japanese aggressiveness and Allied inability to mak emore than token resistance . Guam fell on 10th December and Wake ,assaulted the next day, on the 23rd . The air attacks on Manila werefollowed by a landing on the 12th . American strength in the Pacificseemed an illusion . Meanwhile news of Malayan fighting, as available t othe public, was disquieting . The loss of Prince of Wales and Repulse con-firmed the pitiful air weakness of British, Indian and Australian forces inMalaya; the repetition of news of one retreat followed by anothe rsharpened fears already acute enough, while optimistic and soothing report sfrom Malayan commanders were soon being read as forewarning o fanother defeat impending .In January the immediacy of the threat to the Australian mainlandbecame real. Rabaul in territory held under a League of Nations mandat ewas bombed on the 4th and subsequently, until strong forces landed onthe 23rd, the same day as Kavieng in nearby New Ireland was assaulted .Singapore fell on 15th February, and Rangoon on 8th March. Darwin hadon 19th February the first and most severe of a series of bombing raids ,to be followed by other raids on north-western ports . Timor was taken onthe 23rd; in the following days there were severe naval losses north o fJava, the position of which was apparently hopeless . On 8th March
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2THE IMPACT OF PACIFIC WA RJapanese forces landed at Lae and Salamaua on the mainland of Aus-tralian New Guinea, and on the 12th Allied forces in Java surrendered .
At that point the Japanese had achieved in three months what they ha dplanned to achieve in six. They held a line stretching from Rangoon i nBurma down to Timor, through northern New Guinea and north throug hWake Island to the Kuriles, and enclosing Malaya, the Netherlands EastIndies, the Philippines and the last American outposts of Wake and Guam .Within that vast area only Australian guerillas in Timor and a doome dAmerican force in Bataan qualified Japanese victory . Her air supremacywas overwhelming, and her negligible naval losses stood out starkly againstthe repeated destruction of Allied vessels on almost every occasion o fconfect .To Australia what had happened seemed but a foretaste of what was t ocome. From Britain little could be expected. What forces could be spare dfrom Europe and the Middle East would clearly go to the defence of India ;any optimism concerning British aid must have been quenched by th eevident determination of Churchill to give Indian defence priority ove rAustralian, even to the extent of diverting Australian forces, returningfrom the Middle East, to that theatre. Such help as could come mus tcome from America.And however great that might ultimately be, it was brutally clear tha tit would not be, for some time, large . American troops landed in Aus-tralia late in December 1941 had consisted only of some units that hadbeen on their way to the Philippines and the intention was to find mean sof ferrying them forward to those islands . The urgent need for aircraft, i tappeared, would not be met for some time except by token forces . Warn-ings from America indicated that for a while American mobilisation wouldprobably reduce supplies of warlike material below the level enjoyed unde rLend-Lease before the Japanese attack . Those supplies must come acrosssea routes threatened by the dominant Japanese navy . Help would comebut, immediately, Australian defence must be sustained almost wholly b yits own forces .The economic events of the first three months of Pacific war must b eseen against this background . Abruptly the country so far participating i na distant war, was plunged into near-at-hand confect, in which attemptedinvasion seemed certain . What could be or should be done on th eeconomic front was dictated by the probability that war would be wagedon Australian soil, and the certainty that for some months only limite dAmerican aid would be available . Moreover, for more than three month sthe full dimensions of this situation were unfolding. In December it wasstill possible to hope that Malaya would hold ; by January the question wa swhether the Indies could delay the Japanese long enough to permi tdefence in New Guinea and on the northern coast to be organised ; byFebruary invasion seemed likely. Worst of all, the Japanese seeme dirresistible .The effect of this developing threat on Australian attitudes is the
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THE IMPACT OF PACIFIC WAR3
concern of another volume . l It was a period of great uncertainty and fear ,but not of panic . In a national broadcast on the day following the Japanes eattack, the Prime Minister, John Curtin, declared :I can give you the assurance that the Australian Government is fully prepared .It has been in readiness for whatever eventuality, and last Friday the initial step swere taken and fully carried out. From early this morning the Service Ministers ofthe Cabinet and the Chiefs of the fighting Services have done everything that has t obe done by them . The War Cabinet met and put into effect the plan devised fo rour protection. This afternoon, the full Cabinet met and I am able to announceto you prompt decisions on a wide variety of mattersall of them vital to the ne wwar organisation that confronts us .All leave for members of the fighting Forces has been cancelled . An extensionof the present partial mobilisation of Navy, Army and Air Forces is being prepared .The Minister for Home Security will, tomorrow, confer with Army authorities onair raid precautions . Regulations will be issued to prohibit the consumption of petro l
for purposes of pleasure . A conference will be held by the Minister for Supply wit hoil companies on the storage of fuel and the security of that storage. Arrangementswill be made for all work on services that are essential nationally to be continue don public holidays in future, while, in this connection, all transport services will b econcentrated upon necessary purposes . The Minister for Labour will leave forDarwin immediately to organise the labour supply there . An examination will b emade to ascertain what retail establishments should continue to trade after 6 p .m.so as to conserve light, coal, transport services .Most of the measures referred to were naturally military, and it was th eduty of a Prime Minister to reassure the public . But on the economic front
there was some justification for the claim of preparedness. The plans fora Manpower Directorate, for instance, were well advanced ; and other planswere in fairly specific form. More generally, a wide range of measure swhich took precise shape in the following weeks had been canvassed, s othat in the new atmosphere they could be implemented at short notice .Controls which a month earlier would have been unwelcome could nowbe hurried forward with the certainty of public co-operation . There waspreparedness in this wider sense, not of a set scheme for action shoul dJapan attack, but of recognition of problems and exploration of solutions .What the new situation would demand on the economic front was a sunclear and as changing as were the military demands of Pacific war . Now,as at no earlier time, what was required of the economy was dictateddirectly and immediately by a fast-changing military situation. Neatly inte-grated economic planning was neither possible nor sensible in December-
February. An urgent military need which demanded major use of economi cresources might disappear within days and be replaced by a new one . Thusthe Japanese attack which might have increased the need for supplies fo rthe Eastern Group Supply Council, based in India, by its onrush mad ethe shipment of such supplies virtually impossibleand, for example ,clothing accumulated, to provide welcome easing of Australian rationingmonths later . Northern defence works appeared at one stage so urgent thatthe import of Javanese labour was sanctioned, but the speed of the Japanes eadvance made the labour unavailable and changed the strategic need .i See P . Hasluck, The Government and the People, 1942-1945 (1970) in this series.
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4THE IMPACT OF PACIFIC WA RJapan's rapid approach brought a sharp intensification of air raid precau-tions work . Such a fluid strategic situation meant that economic strateg ymust remain obscure until the military demands were more clearly defined .
What was clear, assuming that Australia was not overrun within a brie fspace of time, was the general direction in which economic policy must go .There must be great and immediate expansion of the armed forces, t owhich all other demands must be subordinated, and labour must b ediverted to air raid precautionsin other words, a great call on manpowerengaged in production, a call which must be met at once . Munitions, andespecially aircraft production, must be expandedbut along broadly theestablished lines . War supplies of all sorts must be produced in greate rquantity, including, it presently appeared, war supplies for the Americans .Defence works must be rushed ahead in many places, including remoteones. Oversea supplies would be, at least temporarily, tenuous, evensupply of the most vital materials . The economy must be prepared in hast efor sustaining a greatly expanded war effort even though territory migh tbe lost to an invader, and any locality under actual or threatened attack .
Several morals were painfully plain, so plain that it does not seemthey were even formally stated, although recognition of them was con-stantly implicit in what followed : the great and central need was man-powermanpower for the forces, for air raid precautions, for wa rproduction, for the essential minimum civil needs ; all "non-essential"activities must be slashed ruthlessly, and the civilian standard of livin gseriously curtailed; economic aid from America was likely to be slower i narriving than major military help must be, and therefore, in the short run ,Australia must depend primarily on her own manpower and productiv eresources. These central issues were obvious. What could not be seen wa show far action must go, whether total resources would be adequate, and ,above all, whether there would be time enough for the required far -reaching transfers of activity .But the main lines were clear, and action could proceed. The forcescould be expanded; non-essential production could be slashed; the organi-sations for controlling and directing mass movements of labour, and forexecuting a great works programme, could be created . How far it migh tprove to be necessary to expand the forces, to cut living standards and t oregiment labour, could scarcely be guessed, and must be left to emerg ewith time. At least from December 1941 to March 1942 it seemed clea rthat what could be achieved in that critical period could not possibly b etoo much. Rather the driving force was the conviction that the most thatcould be done might well be too little or too slow. Whether it would inthe end be enough and in time, could only be determined by the unfor-giving arbitrament of battle .What therefore was striking at the time remains noteworthy in retro-spect. There was no panic in the Administration . There was fear ,deepening as the Japanese pressed on, that invasion and defeat might b every near . But fear only becomes panic when no solution to pressingdanger can be seen, or when it seems that all hope is lost . In those early
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THE IMPACT OF PACIFIC WAR5weeks of Pacific war Australians could take some comfort from havingAmerica as an allyat least, in the end, Japan must be defeated, sinc edefeat of America was unthinkable . If for a few months the Japanes ecould be held, military and economic aid must come from America i nquantity .In the months to come, in the popular and in the political mind th echeering fact seemed to be the presence of United States troops on th eAustralian mainland. But during 1942 and 1943 events in the South-Wes tPacific Area were not to be vitally influenced by United States groundforces ; even the United States army air forces were not a major factor unti la year after Japan's attack . From time to time during 1942 and 194 3United States naval forces intervened decisively, but this was largelyinvisible to Australians . The strongest then-effective military reinforce-ment that could or did reach Australia during 1942 was the return of theA .I.F . from the Middle East ; the determined insistence on this return toAustralia rather than Burma against the stubborn opposition of Churchil lrested on appreciation of the hard fact that no other immediately opera-tional ground forces were available. In the short term the primary formof American aid was to be in supply .The military task was clear and, at least, not hopeless ; so was theeconomic. The best economic effort of which the country was capabl emight not prove enough, in the sense that invasion and even complet eoccupation might precede an ultimate Allied victory in the Pacific . But thebroad pattern of advance of the economy was sharply defined .The immediacy of the threat swept away the resistances and release dthe inhibitions that had dogged the first two years ; for the first time theGovernment was confronted by a population clamouring to be told wha tto do and what to sacrifice, and critical only of apparent slowness ortenderness in applying the scourge . But it would be grossly false to see theeconomic decisions of December-March as panic responses to repeate ddisaster . What was noteworthy was how the Administration, in the circum-stances as they were then known, did what was to prove the right thing .That must not be attributed to confidence in being "saved" by America .At the highest political, Service and administrative levels there could b eno illusions as to the scale on which American military or economic ai dwould be immediately available . Nor would thankful reliance on earlyrescue have prompted the drastic reorganisation of the economy which wa spressed through during the first half of 1942 . The "rightness" of what wasinitiated in the first three months of Pacific war was conditioned primaril yby the brutal clarity with which the essential lines of policy were defined ,for government and population alike, and secondarily by the two years'experience of less immediate war and all that that had entailed .For some weeks, however, the activities of the Government could onlybe obscurely known to the public. After the first sweeping announcement stime was required, even if measured only in days, to translate principle sof action into legal form, to bring organisations into being, and to deter-mine what persons should move where . Undue precision in advance
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6THE IMPACT OF PACIFIC WARannouncementsas happened with curtailment of holidayscould pro -duce confusion, and criticism deriving from that confusion . The plans forthe Manpower Directorate were endorsed within days, but regulation scould not be published until a nucleus organisation had been created andother preparations made . Cuts in petrol rations could be determined, bu tcould have no effect until the current ration period expired at the en dof January .Opinion therefore, as reflected in or moulded by the Press, tended to becritical, not so much of particular actions as of the lack of this or tha taction. The Sydney Morning Herald declared in magisterial tones that theGovernmentmay be sure that they will have the country solidly behind them . . . . It must use theauthority then given it . The public looks for the strongest action and will be criticalonly of hesitation and delay . 2This was an accurate enough forecast ; there was such criticism, most of i tmisdirected in inevitable ignorance. For, in retrospect, the "rightness" o fwhat was done was matched by the speed with which action, even i fnecessarily withheld from the public, was decided and executed .What was initiated during the first three months makes a pattern readil yintelligible against the definition of the demands upon the economy. Inforemost place was the enlargement of the Services . Before the Japaneseattack numbers in the forces were 382,100 . Immediately large call-upscommenced. By March the net total of the Services had grown to 554,700 .The rapid removal of such numbers of efficient workers placed great strainon essential production and made the already planned manpower organi-sation even more urgent . Later the tradition was to develop that theServices demanded too much in this transition period and that a primar ypurpose of the Manpower Directorate was to restrain unreasonable Servic edemands. Some months later this was true, but by then circumstances wer every different. By then the Services were expanded beyond a size whic hcould be maintained for more than a year or so by a population o f7,000,000, and, in any case, once the Manpower authority was in existenc eit was natural and reasonable for the Services to press their claims fo rmanpower, and for the Manpower authority, in its role of arbiter, to see kto restrain them. But in the first weeks the issue was not seen by anyonein the terms later attributed to this period. No one questioned the urgentnecessity of rapid increase in the Services, and on several occasions, itwas the Services that took long views . For instance, curtailment of exemp-tions for University students in December was liberalised in January o nthe initiative of the Adjutant-General ; he was concerned that the armyshould not receive recruits who would not be ready for battle for months ,at the cost of being short of specialist officers a year or two later when, i fthe Japanese were held, they would be sorely needed . Moreover it was he ,not educational authorities, who used a parallel argument concerningtraining for skills which had no special military use, and (later) the212 Dec 1941 .
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THE IMPACT OF PACIFIC WAR7Commander-in-Chief had already begun to reduce the establishment o fthe army before War Cabinet demanded that this be done .
Hard on the heels of action to enlarge the Services came multiplicatio nof specific controls over materials and goods, shortage of which wa salready of concern to Munitions and the Services. Some of these had anobvious relationship to the demands implied by the transfer of largenumbers of men into campcontrol over certain types of timber, overtinplate (with special reference to food containers), over liquid fuel drums ,toothbrush handles, boot nails and boot nailing machinery, hand tools ,motor vehicle spare parts, bitumen, leather and the like. These listed tookeffect mainly in December or early January. In later weeks controls ofthis type multiplied and were tightened .
Parallel action was taken to open bottlenecks and eliminate troubl espots in vital production. Aircraft were clearly of the highest priority andhence the clash between Commonwealth Aircraft Corporation and th eAircraft Production Commission, which was of long standing, was dis-posed of promptly, substantially by subordinating the Corporation to th enewly appointed Director-General of Aircraft Production . Personal con-flicts at the Lidcombe, New South Wales, engine factory were similarlydealt with .
These were matters which brooked no delay and could be execute dforthwith. There was equal speed in creating the Manpower Directorate ,although its operation necessarily could not be effective for some weeks .As has been noted in the previous volume 3 the Directorate grew directlyout of the Manpower Priorities Board and followed closely the blueprin tit had drawn . Time was required primarily to secure the nucleus of seniorstaff and prepare administrative procedures ; that delay permitted but didnot arise from argument over the need for full powers of direction o flabour, which was resolved by shelving the issue . Direction was not to benecessary for some months . With the Manpower Regulations of 31s tJanuary 1942 there was in existence a central executive authority respons -ible for co-ordinating the now clamant demands for labour .
Somewhat more time was required to create the organisation for thevast construction programme demanded not alone by the accommodationand related needs of a rapidly growing army, but by defence works i ninnumerable places, by new transport needs, by airfields, by storagerequirements. Parallel demands for American forces almost immediatel yhad to be added and, if possible, integrated. The special labour needs wereto be met by the creation of a Civil Constructional Corps, independent o fthe Manpower Directorate but co-ordinated with it . The central organisingauthority took the form of the Allied Works Council, planned to utilis ewhenever and however practicable the established construction organisa-tions of State and local government, statutory corporations, railways andprivate enterprise, and to create new organisations wherever they wouldbe more effective .8 S . J. Butlin, War Economy 1939-1942 (1955) in this series .
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8THE IMPACT OF PACIFIC WARThe specific issue of co-ordinating construction for Australian andAmerican needs had a wider parallel in co-ordination of Australian andAmerican Service demands on the civil economy . A transient body, theAdministrative Planning Committee, was replaced by a permanent Allie d
Supply Council on 5th May 1942, with functions which were to growwith time .Thus far what have been noted are the highlights of action which wa sdemanded as the immediate response to a specific and urgent need . Mean-while action was preparing in other directions. There was a rapid spread
of "releasing" controls, that is those in which the approach was that allresources of all kinds would be needed, and non-essential uses of the mshould be prevented or sharply curtailed, without close inquiry as to th eprecise or immediate war use for the resources that might be released .The purest example of this approach was the first Prohibition of Non -Essential Production Order of 23rd February, which took the form o fsimple prohibition of production of a variety of listed articles. Thi sparticular order was prepared in haste to meet a government decision toestablish the central principle of blunt prohibition of non-essential activitie sat a moment when the public was shocked by the first raid on Darwin ; thelist of goods was in fact made up late at night with no more guidance tha ncould be got from trade directories . But the central principle was not new,nor was it adopted without thought or restricted to this sort of application .Already general restrictions on holidays had been applied to all productio nand not only to that classed as "essential" ; restrictions on pleasureactivities which used petrol or encouraged absenteeism (for example hors eracing) were in force. Presently there was to be drastic curtailment o fretail deliveries, and, more generally, the whole "rationalisation " policyof the Department of War Organisation of Industry. That policy, alreadyformulated before Pearl Harbour, was based upon recognition of the factthat essentiality was a complex concept, and blanket prohibitions ha dseverely restricted use ; in the main, eliminating the non-essential de-manded tedious investigation and difficult and contentious planning . Overthe next few months this more sophisticated approach was to prevail, bu tstill guided by the dominant principle that the non-essential must go .
Consistent with this approach was the conviction that civilian produc-tion should be directed to satisfying essential civil needs more adequately ,partly in recognition of existing deficiencies, partly because these deficien-cies would become more acute . In the Department of Supply which hadbeen primarily concerned with Service supply and had already established"controls" of, for instance, jute goods in December, a system of controller swas developed. Much of the complexity of the Department of War Organi-sation of Industry ' s rationalisation activities stemmed from the need t odevise schemes to ensure that essential needs were adequately served .But in many directions it was fairly clear that the best planning wouldnot secure sufficient civilian supplies . The probable need for formal couponrationing of goods to civilians was generally recognised, and preparationsfor it were initiated. It was to be unfortunate that it was not implemented
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THE IMPACT OF PACIFIC WAR9early, when the public mood would have ensured acceptance . In the endit had to be introduced when, in fact and in appearance, it was the solu-tion to an emergency, and when so much delay ensured that, on the onehand, ready acceptance was lacking (an attitude reflected by some Minis-ters) and, on the other, any administrative preparations produce dimmediate widespread rumours .
Finally there must be noted the Government's broad financial policy ,which was announced in February . One facet of it was the avowed deter-mination of the Government to eliminate the States from income taxation .The opening shot was establishment of a committee to report on how thi smight be done, and the sequel was long delayed . In the end, by August ,the policy was established that there should be one income tax throughou tAustralia. The delay meant that the weapon was not unsheathed unti l1943, but it did place in the hands of the Commonwealth power to pe gthe spending of State governments and, in total, of individuals . Associatedin principle but not in form were the Economic Organisation Regulationsof more immediate application . Broadly these were intended to peg wagesat the level of the date of the regulations, 19th February ; to limit profitsto 4 per cent per annum; to direct price control to controlling profits ; topeg interest rates and prohibit speculative dealings in property . Suchsweeping principles were to prove difficult in application, as with thepegging of wages, or so difficult in administration and so complex in thei reffects that, eventually, they were abandoned, as with profit limitation .But in the mood of early 1942, as Singapore fell and New Guinea wa sinvaded, they appeared to the Government as desirable and practicable ,and, in general, to the public as acceptable. Eventual abandonment o rweakening of the proposals should not disguise the fact that for perhap ssix months they achieved a significant purpose . Broadly there was con-formity to the intention of the regulations, not because investors and em-ployees on the whole accepted them but because they served as a guid eto conduct, so long as fear of invasion was dominant . Together uniformtaxation and the Economic Organisation Regulations represented theapplication to broad financial problems of the same approach as wasembodied in the Directorate of Manpower or the Prohibition of Non-Essential Production Order : in a pressing national danger citizens shouldbe told what to do and what to sacrifice . For perhaps six months afte rPearl Harbour, the principle worked; fear of the Japanese embodied themost potent form of self-interest .
As important as the specific acts of economic policy so far sketche dwere the attitudes they expressed. There was a great and willing surrenderof political authority. Parliament continued to meet, indeed more fre-quently. Later in 1942 debate was to be determined and hard knocksgiven and received, as with civilian rationing . But for several monthsmembers tacitly recognised that war and the outward conventions ofpolitical freedom were inconsistent . Cabinet devolved extensive executiv eauthority on informal committees, some of which came into being simpl yfor a single act at the request of the Prime Minister . Ministers really
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10THE IMPACT OF PACIFIC WARexercised, without reference to Cabinet, powers which were already nomin-ally theirs, but which previously were not exercised without prior Cabinetendorsement. Thus the sweeping regulation 59 of the original Nationa lSecurity Regulations was the explicit authority for a wide range of execu-tive action for the first time without necessary reference to Cabinet . InDecember and January there was a spate of delegations to officials o fMinisters ' executive powers . Regulations and orders tended to be insweeping terms, to be spelled out by officials . Thus the Essential Material sOrder of February, perhaps the most pedantically precise of all wartimeorders, contained a clause which in effect gave the Director of Supply i nthe Department of Munitions power to rewrite the terms of the order t osuit any occasion .
It could be said that the surrender of democratic political authority wasthe price of rapid action and the efficient formulation of controls . Whatmust be noted is the speed with which this development occurred, and theease with which it was accepted . But it had some unfortunate results .Senior officials came to be better known to the public than their Ministers ,to announce policy decisions, and to sign orders which as recently asNovember would have been the prerogative of Ministers . Many of themcame to like the notoriety and to seek it . 4
Among Australians generally there was a ready abandonment of in -grained doctrines which in 1941 had been effective brakes on action . Forsome months there was ready acceptance of the pegging of wages and o fprofits. Plans for permitting the Americans to import Javanese labour fornorthern works, which in form outraged the White Australia policy an dchallenged deeply-held union principles, were adopted without difficultyby a Labor Government. When the first prohibitions of non-essentia lproduction were announced the Department of War Organisation o fIndustry was besieged by its victims, mostly small businessmen whos elivelihood had been abolished, and scarcely any sought more than guidanc eas to what he should do. Publication of plans for extensive employmentof women in replacement of men evoked no hostility .
Within the Administration there were established habits of mind whichwere later to be sources of difficulty . There developed a deceptive faithin controls whose efficiency depended upon the victims' co-operation ."Black-marketing" did not become part of the Australian vocabulary fo rperhaps a year, because the thing itself was of minor importance . Butmost of the controls applied during the first half of 1942 were incapabl eof rigid enforcement against unco-operative citizens . As much as anypeople Australians had always regarded the government as fair game and ,in a normal atmosphere, instructions to report scattered stocks, to chargefixed prices for goods of highly varying quality, to do this or refrain fro mthat, would have been of limited effectiveness . For the first half of 1942fear of the Japanese was the overriding sanction . That was not true of lat e1942, still less of 1943, a change which many officials had to learn b y*For discussions of such developments see Hasluck, The Government and the People, 1942-1945 .
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THE IMPACT OF PACIFIC WAR1 1painful experience. The maintenance, for instance, of a ritual of pric econtrol under State authority for ten years after the war ended reflecte dnaive belief in "controls" which was mostly born in 1942 .
There developed too a disposition to control for the sake of control, t opursue "tidiness" as a goal in itself, to seek completeness in detailedadministration far beyond the point where any useful wartime purpose wasserved . This was true of much of the late 1942 rationalisation activity o fthe Department of War Organisation of Industry . The effective sanctionfor reorganisation of an industry was often the removal of part of it slabour by the Directorate of Manpower ; at that point the industry migh thave been left to work out its own salvation, but its members naturall ywelcomed the readiness of War Organisation of Industry officers to do th ework for themand to take the public criticism.
Similarly there developed a disposition to identify "austerity" with acontribution to the war effort . With Curtin this had the justification of hi spuritan views; consciously or not he was pursuing other objectives besidesthose of war; but with many officials there could be no such justificationfor the readiness with which they assumed that a restriction was desirable .Restriction on beer, for instance, was probably a misguided policy, if onl ybecause of the man-hours wasted in liquor queues, but Curtin's emotiona lobsession with this subject found willing collaborators amongst official swith no such personal feelings .
So too there was excessive concern with "fairness" . Too often effortwas devoted to arranging "fair" sharing of a supply that was too small tosatisfy more than a small part of demands, where it did not really matte rmuch whose demands were met . When production of non-essentials wasprohibited, the prices of the existing stock should not have mattered, bu tsuch goods were invariably brought under price control . The Departmentof War Organisation of Industry's objective of "concentration of industry "foundered on undue concern with fairness .These reflections on later consequences do not detract from the magni-tude of what was achieved in the early months of Pacific war. But much
more was achieved then than the specific things outlined above . Therewere set in motion forces which developed great momentum, and con-tinued to drive economic policy along the lines broadly defined in March .Until perhaps September there was little to restrain the intensification o frestrictions on the civil economy, the enlargement of production and ofServices' commitments for manpower, or to prevent controls spawnin gcontrols. The lines of advance required had been caustically etched i nDecember, emotional reactions had established obsessions, and the plung etowards a totally regimented war economy could be described as headlong .
By the end of 1942 it would be necessary to face the fact that th eAustralian economy was overcommitted, in the sense that it could no tachieve all that, by then, it was planned it should do ; and wrongly com-mitted, in the sense that by then, some of the objectives being sought wer eattainable only at the expense of more vital ones . In January it couldseem that whatever could be achieved might fail in being too little or too
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12THE IMPACT OF PACIFIC WARlate; by December it was clear that what was then being attempted o rplanned was too much .
In a sense this overcommitment of the economy was inevitable, andindeed desirable . Setting in motion drastic recasting of the structure of a neconomy under the spur of national danger was easier than slowing downthat process under way, when the danger was only less, not eliminated .Going too far was for this reason almost inescapable . Moreover phrase ssuch as "overcommitment", or "slowing down" meant concretely deter -mining the degree to which, for instance, munitions production should b eallowed to have labour at the expense of other apparently equally essentia lactivities; deciding how to balance food production against size of thearmed forces . By the time these questions became the leading ones, th elatter half of 1942, overcommitment had already occurred .
Equally the overcommitment could be described as desirable : it wasovercommitment only in the sense that the worst did not happen, in par tbecause of the very intensity with which resources were diverted todefence. Had the battle of Milne Bay or that of the Owen Stanleys notbeen won; without the code-breaking that produced victory at Midway ;if the Americans had been pushed out of Guadalcanalthen the positio nat the end of 1942 would have been very different. Until all threat ofinvasion was past the only sensible principle for economic policy was tha tthe most could not be too much. There could be criticisms of particularapplications of the principlefor example persistence with tanks o rtorpedo production. But it could also be said that it was the pursuit of themaximum as the only limit, established as a principle in the first thre emonths, which ensured that a year later it should then be too much .
