Australian Dictionary of Biography

Arthur Fadden, c.1941

National Library of Australia, nla.pic-an12267359

Sir Arthur William Fadden (1894-1973), accountant and prime minister, was born on 13 April 1894 at Ingham, Queensland, eldest of ten children of Irish-born parents Richard John Fadden, police constable, and his wife Annie, née Moorhead. The son of a Presbyterian minister, Richard had served in the Royal Irish Lancers before emigrating to Australia; he joined the Queensland Police Force and, about 1900, took charge of the station at Walkerston, near Mackay. Educated at the local state school, at 15 Artie began work as billy-boy to a gang of cane-cutters and soon became office-boy at the Pleystowe mill.

As a young man he participated enthusiastically in social and sporting activities. He excelled at cricket, Rugby Union football, boxing and foot-racing, and performed in amateur theatricals as an original member of the Walkerston 'Nigger Minstrel Troupe'. Exhibiting a flair for figures, in April 1913 he was employed as a clerk with the Mackay Town Council. Three years later he discovered defalcations in the books kept by the town clerk; the man was dismissed and Fadden appointed in his place. He married a milliner Ilma Nita Thornber on 27 December 1916 with Presbyterian forms at her mother's Mackay home; they were to have four children.

On 20 January 1918 a cyclone hit Mackay, wrecking the town, killing more than twenty people and cutting off help from outside. Fadden and his family narrowly escaped being drowned. As a member of the cyclone relief committee, he worked tirelessly and effectively to find shelter for the homeless, and to distribute food, clothing and building materials. Having qualified in accountancy through a correspondence course, he resigned his local-government post in September and set up as a public accountant at Townsville. He became a member (1921) and fellow (1928) of the Commonwealth Institute of Accountants (Australian Society of Accountants). His business prospered and he was to establish the firms Fadden, Sutton & Co., Townsville, and A. W. Fadden & O'Shea, Brisbane.

Leading 'a non-political team' known as the 'Serviceable Six', Fadden was elected to the Townsville City Council in 1930 and held office as an alderman for three years. In 1932 he won the Legislative Assembly seat of Kennedy for the Country and Progressive National Party and rose to shadow treasurer in 1934. When a redistribution made Kennedy untenable for the C.P.N.P., Fadden unsuccessfully stood for the sugar-belt seat of Mirani in 1935.

At a conference at Toowoomba in March 1936, rural elements of the C.P.N.P. re-formed a separate organization, the Queensland Country Party, dedicated to maintaining an independent identity from the major conservative body, the United Australia Party. The death of Sir Littleton Groom in November precipitated a by-election for the Federal seat of Darling Downs. Endorsed as the Q.C.P.'s candidate, Fadden emphatically supported the new party's tenets throughout his campaign and on 19 December took the seat from the U.A.P.; he was to hold it until 1949 and then to represent the neighbouring seat of McPherson in 1949-58.

In April 1939 the leader of the Country Party, Sir Earle Page, attacked (Sir) Robert Menzies in the House of Representatives, hoping to prevent him from becoming prime minister. Fadden objected vigorously and withdrew from the parliamentary wing of the party, as did B. H. Corser, T. J. Collins and A. O. Badman. Page stood down as leader in September and A. G. Cameron succeeded him. In November Fadden and his group returned to the fold. Menzies included Country Party members in his cabinet in March 1940 and Fadden was named minister without portfolio, assisting the treasurer and the minister for supply and development. Following the deaths of J. V. Fairbairn, Sir Henry Gullett and G. A. Street in an aircraft accident, on 14 August Fadden received the portfolios of air and civil aviation, while retaining his assisting roles.

Cameron's leadership was challenged in the party room in October 1940. After he withdrew from the contest, Page and (Sir) John McEwen tied with eight votes each. To break the deadlock, Fadden was appointed acting-leader until harmony could be restored. He was confirmed as leader on 12 March 1941.

Promoted treasurer on 28 October 1940, Fadden had joined the all-party Advisory War Council that day. In November he brought down the first of his record eleven budgets. Menzies left on a four-month visit to London on 24 January 1941 and Fadden became acting prime minister. Next month he, John Curtin and J. A. Beasley issued a press statement, exhorting Australians to a greater war effort: the communiqué seemed to warn of the country's imminent danger and created a flurry of diplomatic exchanges.

Fadden's withdrawal from the Federal parliamentary Country Party in 1939 had unsettled members of the Queensland organization. They were outraged when, on 27 April 1941, he convened a secret meeting in Brisbane of Queensland Federal and State Country Party and U.A.P. parliamentarians which saw the amalgamation of the two parties as the short-lived Country National Organization. Fadden had ostensibly sought to lay the foundations for a national wartime government. When no other State Country Party branch followed his lead and the A.L.P. continued to rebuff overtures to enter a national government, the Queensland central council of the Country Party took a jaundiced view of his motives. It believed 'that Fadden had formed the C.N.O. in pursuit of his goal to eventually become Prime Minister, leading an Australia-wide anti-labor party'. L. A. G. Boyce warned that 'it may be that, as an election approaches, he will desire to give colour to his claim to be a Country Party man, but if the Queensland Country Party wishes to continue to exist on the basis on which it was formed, it appears to me that there is not room in it for Mr Fadden'. Doubts persisted as to the extent to which he was committed to the interests of country people.

Under increasing pressure from elements within the coalition, Menzies resigned the prime ministership on 28 August 1941. A joint party meeting chose Fadden as his successor and he was commissioned next day. 'The comparative tranquillity in party relations' which Fadden had achieved in his term as acting prime minister may have been a factor in his selection, and he had earned respect for his down-to-earth manner, his friendliness and his capacity for hard work. His government, however, lasted only forty days.

Previous administrations had been criticized for their lack of urgency in placing the nation on the necessary wartime footing. Fadden's government suffered similar jibes. He was irresolute in dealing with problems, and had difficulty in coping with U.A.P. colleagues too engrossed in political intrigues and personal animosities to give him the support he needed. In contrast, from Curtin, the leader of the Opposition, he received 'friendship . . . co-operation, understanding and loyalty' in difficult times. Curtin's backing was important when Fadden renewed Menzies' earlier representations to the British prime minister, (Sir) Winston Churchill, to relieve the Australian 9th Division at Tobruk, Libya, and to reassemble the Australian Imperial Force in the Middle East as one formation.

Despite Fadden's denials, some believed that he had plotted Menzies' downfall. Aware of Menzies' suspicions, Fadden thought that Joseph Winkler, a former officer in the Prime Minister's Department, had told Menzies that he was a conspirator. On 13 September 1941 Winkler gave Curtin copies of official documents which were potentially embarrassing to Fadden. Curtin declined to take political advantage of the matter and attacked Fadden's budget instead. On 3 October the government was defeated on the floor of the House by 36 votes to 33, two Independents—Alexander Wilson and (Sir) Arthur Coles—voting with the Labor Party. Fadden resigned and led the conservatives into Opposition. Curtin took office on 7 October. Defeated at the 1943 elections, the coalition broke apart and Menzies became leader of the Opposition.

As Labor introduced successive measures to expand the role of government in the economy, Fadden campaigned against what he saw as the imposition of socialism. He urged electors to vote 'No' in the 'fourteen powers' referendum of 1944. After World War II he condemned J. B. Chifley's government for its plans to nationalize the banks and for its alleged 'soft line on communism'. Reinvigorated, 'united, determined and loyal', the Country Party formed a cohesive force behind Fadden. By 1949 the party was prepared to make an electoral pact with the Liberals. Convinced he had 'an election winner if ever there was one', Fadden persuaded Menzies to promise that he would abolish petrol rationing. At the polls on 10 December the Liberal-Country Party coalition was returned to power, with Fadden as deputy prime minister and treasurer (from 19 December).

The immediate problem confronting the government was inflation, caused by pent-up consumer demand and exacerbated (after June 1950) by the war in Korea. Wool prices soared in 1950-51. Menzies and his supporters argued for an appreciation of the Australian pound; Fadden and the Country Party were adamantly opposed to such a course. Cabinet was so divided on the issue that, had not three Liberals sided with Fadden, the coalition may have collapsed. Nor could its members agree to alternative proposals for an export tax on wool or a special wool tax, both potentially disastrous for the Country Party. A compromise solution, embodied in the wool sales deduction scheme of 1950, provided for '20 per cent of the value of wool sold or exported [to] be paid to the Treasury . . . as a credit against woolgrowers' income tax obligations'. The legislation was repealed in the following year when wool prices began to fall, but growers were furious and a decade later Fadden's actions still rankled.

Further trouble with primary producers and the Country Party's rank and file awaited Fadden after he brought down his 1951-52 'horror' budget which entailed a 'large counter-inflationary surplus'. After the budget he was so unpopular that he ruefully remarked, 'I could have had a meeting of all my friends and supporters in a one-man telephone booth'. Rural people were particularly upset by modifications to the longstanding law permitting primary producers to average their incomes over five years for taxation purposes. Because the wool boom gave growers tax advantages not available to others, the portion of their income above £4000 was removed from the averaging scheme. Government fiscal and economic policies continued to alarm primary producers throughout Fadden's term as treasurer, but much was done on their behalf. The hated provisional tax notwithstanding, many ameliorative taxation measures were introduced, including increased depreciation rates and the abolition of Federal land tax in 1952.

In January that year Fadden went on his first official mission abroad, to attend a Commonwealth finance ministers' conference in London. The meeting had been called in response to a balance-of-payments crisis in the sterling area. Reflecting the Australian government's wish to accelerate economic development, Fadden resisted a British proposal that sterling-area countries restrict imports from the dollar area and Europe; he 'took the line that the sterling area could no longer continue as a closed and discriminatory system'. While in London he was invested with his knighthood (K.C.M.G., 1951) by King George VI and sworn of the Privy Council, an honour sponsored by Curtin in 1942. Fadden was to be elevated to G.C.M.G. in 1958.

Throughout the 1950s the private banks pressed the government to eliminate what they claimed to be unfair competition from the Commonwealth Bank of Australia. For all his readiness to placate the private banks, Fadden had no intention of reducing the commercial activities of the publicly owned system. In 1957 he introduced legislation to revise the banking structure. The reforms established the Reserve Bank of Australia to carry out central banking functions and control the note issue, and set up the Commonwealth Banking Corporation with authority over the Commonwealth Savings and Trading banks, and over the newly established Commonwealth Development Bank of Australia. Fadden regarded the Development Bank as his 'own brain child . . . designed to overcome the lack of adequate long-term borrowing finance for farm development and small industries' requirements'. He piloted the bills through the House, but they were initially rejected by the Senate and did not become law until 1959.

As treasurer, Fadden was fortunate that his tenure encompassed a period of prosperity during which there were generally good seasons and high prices for rural products. Yet his own qualities also contributed to his success. He relied heavily on the advice of Sir Roland Wilson, the head of the Treasury, but 'was quite capable of exercising his independent judgement'. Fadden was a 'shrewd assessor' who knew intuitively the quality of the advice he was given and could quickly see its political implications. His habit of cultivating 'confidence, indeed affection', with those with whom he worked won co-operation and loyalty.

Fadden's relationship with Menzies was a curious one. 'They became friends as politicians, never as men. It was always politics which dictated their relationship'. Fadden had few intellectual pretensions and his lack of a university education kept him rather in awe of his leader. None the less, Fadden was as much the architect of their successful collaboration as was Menzies. To the warm-hearted Fadden, it was hurtful that Menzies appeared 'to take his loyal friends for granted and impose on their loyalty'. Fadden reckoned that he had spent a total of 692 days as acting prime minister during Menzies' absences abroad.

While treasurer, Fadden chaired twenty meetings of the Australian Loan Council and attended numerous conferences of the International Monetary Fund and the International Bank for Reconstruction and Development. He stood down as parliamentary leader of the Country Party on 26 March 1958, did not contest the elections that year and was succeeded as treasurer by H. E. Holt on 10 December. Hoping to be chairman of the new Commonwealth Banking Corporation board, Fadden was deeply wounded when a committee headed by McEwen appointed (Sir) Warren McDonald to the post. Fadden refused the government's subsequent offer to chair the Australian National Airlines Commission. Living in Brisbane, he accepted directorships of a wide range of companies. His memoirs, They Called Me Artie, were published in 1969.

In his declining years Fadden was aware of moves within the Country Party to change its name and to contest urban seats as well as those in its traditional heartland. Although conscious of the steady decline in Country Party representation at Federal and State levels, he saw no advantage in such changes. He steadfastly believed that the interests of primary producers and the inhabitants of country towns could be given proper attention only by a specialist party which understood them and their needs. To increase its numerical strength, he argued, his party needed to win country seats held by its opponents.

Ebullient and gregarious, Fadden had liked political campaigning, thrived on repartee with hecklers, and put his case with vehemence and fluency. While never 'marked out to be an outstanding political leader', he was an exceptionally astute operator. He had the gift of friendship, and his encouragement and kindness to colleagues on both sides of the House were legendary. He relished convivial occasions, enjoyed his drink, and had a prodigious collection of stories which he told with zest and humour.

Political cartoonists delighted in the opportunities afforded by Fadden's sharp nose, his slightly prominent teeth, and his chin which receded into a heavy jowl as he aged. Journalists viewed him with considerable affection, portraying him as the epitome of mateship. He concluded his memoirs with an anecdote about his arrival at Mackay soon after he had been knighted. An old acquaintance from his childhood, an Aborigine named Harry, greeted him warmly, only to be told by one of the entourage that he should address Fadden as 'Sir'. 'What', replied the unabashed Harry, 'you now a school teacher, Artie?'

The University of Queensland conferred an honorary LL.D. on Fadden in 1972. Survived by his wife, two daughters and a son, Sir Arthur died on 21 April 1973 in Brisbane and was cremated. A portrait (1947) by (Sir) William Dargie is held by Parliament House, Canberra; another by Dargie and one by Graeme Inson are in the family's possession.