Australian Dictionary of Biography

Sir Thomas McIlwraith (1835-1900), premier and capitalist, was born on 17 May 1835 at Ayr, Scotland, brother of John McIlwraith. Thomas's education was fuller than that of John and included a term in arts at the University of Glasgow. He had intended to enter a learned profession but John's success in Melbourne persuaded him to migrate to Victoria in 1854. After mining at Bendigo he was a partner in Cornish & Bruce and profited from the Melbourne-Bendigo railway. In the railway department he worked as a surveyor and engineer on the Melbourne-Port and Geelong-Ballarat lines. In 1860 he was engaged by the contractor, J. V. A. Bruce, on the Melbourne-Bendigo railway which included the Big Hill tunnel. In a dispute with the Victorian government he represented his employers and attracted public attention. In 1864 he contested the Sandhurst seat in the Victorian Legislative Assembly but won few votes as a free trader. Meanwhile he had taken up eight runs in the Maranoa district of Queensland with his lifelong managing partner, Joseph C. Smyth.

Thomas retained close relations with John, invested £3000 in John's business and on 6 June 1863 married Margaret Whannell, sister of John's wife. When Thomas finally settled in Queensland, Margaret was reluctant to live on Merivale station far from Brisbane. In 1871 she visited Merivale with her two daughters but soon returned to Melbourne for the birth of a third. In 1874 they decided to live in Brisbane but Thomas found that his wife was drinking heavily and sent her to Scotland. Her daughters, Jessie (b.1866) and Mary (b.1868), went to expensive boarding schools in Edinburgh, but Blanche (b.1872) lived with her mother. McIlwraith tried to separate his wife from her children but his father rejected the proposal because, despite her bitterness, Margaret's behaviour had been exemplary. She died at Maxwelltown, Dumfriesshire, Scotland on 14 October 1877.

McIlwraith's ethics displayed the harsh double standards of many Calvinists. He once reproached a politician for reading a newspaper on Sunday although he himself drank to excess, fathered an illegitimate daughter in Victoria and did not emerge blameless from the three largest financial scandals in Queensland history. Despite his success in Victoria and assets of £11,543 19s. 5d., the easy land terms offered by Queensland attracted him and at 28 he diverted his capital and energy to the new colony. Though at first he lived only partly in Queensland, the threat to his new investments from financial depression and pastoral recession in 1866-75 helped to commit him fully to the colony. The collapse of an English financial house ended the reckless expansion of 1860-66 and while southern flocks expanded Queensland's sheep numbers fell by 15 per cent by 1878.

McIlwraith & Smyth, troubled by drought, breeding problems and low prices, lost some of their runs. In April 1869 his father urged him to transfer his investments to the family shipping business, but McIlwraith preferred to solve his problems by exchanging his sheep stations for cattle runs and by seeking more British and Melbourne capital. In 1870 he declared his faith in the meat producing potential of Queensland and, encouraged by his father, saw a major market developing among British workers. It was thus no accident that McIlwraith in 1879-80 provided some of the capital for the Strathleven experiment in shipping refrigerated meat and butter to Britain, or that the ship was chartered by his brother Andrew of McIlwraith McEacharn Ltd.

McIlwraith's final departure from Victoria in the early 1870s was dictated by the need to supervise his Queensland investments and his entry into Queensland politics. He advocated developmental railways and in 1869 told a sceptical audience in Roma that the west could not prosper without a railway to Roma. He was returned for Warrego in January 1870 in a by-election, resigned on 9 September 1871 because of business problems and was returned again for Maranoa on 25 November 1873. His campaign for a trunk railway to Roma led to his appointment as secretary for public works and mines on 8 January 1874. Soon afterwards Samuel Griffith became attorney-general; their disagreement about railway, land and education policies foreshadowed a rivalry which dominated Queensland politics till 1892.

The parliament that McIlwraith entered was still divided between a squatter majority and a minority of Liberal townsmen. Cutting across this division were changing factions designed to secure expenditure in particular areas. He found his cherished line to Roma blocked by a combination of Ipswich townsmen and West Moreton squatters, both objecting to the cost of extended railways. At the same time northern members sought extension of the short Rockhampton railway which hardly paid for its axle grease. McIlwraith vainly advocated an overall plan in which railways would bring the maximum traffic to the best port in the cheapest way. Parliamentary log-rolling and opposition to these piecemeal programmes encouraged him to stress electoral redistribution and payment of members. While approving liberal plans for government-sponsored immigration and railways to develop closer settlement he maintained that a franchise based on population and the voting strength of settled areas could inhibit works expenditure needed in the interior. The colony's vacant lands were, he believed, a sacred trust from the imperial government to be used for accommodating the surplus population of Britain. Taught by his Liberal father, he believed that parliamentarians should have sufficient pay to devote all their time to politics but he feared the professional politician who thought more about the needs of his constituents than those of the whole colony.

In his maiden speech McIlwraith had explained that he was not one to describe squatters as necessarily unprogressive; indeed, they were among the most enterprising colonists. Since the policies of the Palmer ministry represented the static and sentimental side of squatting, McIlwraith sat at first with the Liberals, but despite his faith in heavy immigration and land settlement he never shared the Liberal dream of the interior as a cornucopia of smallholders like the American mid-west. What later became the sacred cow of a living area was anathema to McIlwraith who claimed that closer settlement without increased production was an illusion. He saw no conflict between grazing and agriculture since both used different types of land and each must be put to its most profitable use. To him squatting was a business enterprise, not a way of life, and squatters must retire before closer settlement. In the early 1880s he incorporated all but one of his many stations in the Darling Downs and Western Land Co., the North Australian Pastoral Co. and the Queensland Investment and Land Mortgage Co. to live as a financier and deploy his capital more flexibly.

McIlwraith first proposed a land-grant railway from Roma to the Gulf of Carpentaria when minister for works in the 1874 Macalister government and elaborated it when premier in 1881. The first enabled Griffith to force him out of office and the second antagonized his squatting supporters who preferred the secure perpetual leases and extended government railways offered by Griffith to dispossession by land-grant companies. McIlwraith also underestimated the political power of the northern electorates whose seaport residents objected to their hinterlands being drained into Brisbane, while working-class voters feared that land-grant railways would be built by coolies.

McIlwraith's ideas on public finance were adopted within five years but he lost the works portfolio in 1874. In the Opposition he campaigned for an overall plan of major public works and for a comprehensive local government bill which would relieve the central government of responsibility for roads and bridges, thereby minimizing log-rolling and regional factions. Supported by many businessmen attracted from the Liberal party by this policy, McIlwraith was able in 1875-78 to establish the first cohesive political party in Queensland. The squatters, their power broken by the redistribution of 1876, preferred his policies to the run-busting legislation of the Liberals.

All McIlwraith's economic theories depended on massive intakes of overseas capital either by government loans or land-grant railways. In 1871 he startled the Legislative Assembly by advocating a £3,000,000 loan in London, thus leading the colony into one of the highest per capita debts in the empire. To avoid loan charges he wanted to use the land-grant principle but admitted that this meant alienating large tracts of land before the building of the railway had realized their potential value. He argued, however, that the land-grant principle was not primarily a means of building railways but of promoting land settlement.

In the general election of November 1878 McIlwraith won the new seat of Mulgrave and as colonial treasurer formed his first government on 21 January 1879. He promised to raise capital for trunk lines west from Brisbane, Rockhampton and Townsville. In January 1882 when Palmer resigned as colonial secretary, McIlwraith passed the Treasury to Archibald Archer and became colonial secretary himself. His Divisional Boards Act of 1879, the most comprehensive in Australia, gave local governments unparalleled autonomy but forced rural areas to assume the financial burden of local works. When critics complained that western graziers had government railways while the agricultural community had to finance its transport through heavy rates, he was forced to build some uneconomic branch lines in agricultural areas. However, his railway policy meant that Queensland built more trunk lines than any other colony.

These developments, pursued both by the government and the adventurous Queensland National Bank in which McIlwraith was deeply involved, helped to attract £12,500,000 of private investment as well as large government loans and 26,685 immigrants in 1883. Even the seasons smiled on him and when he visited London from October 1879 to June 1880 he was lionized. His objects were to investigate the agent-general's office, to fix a loan figure, to negotiate with a cable company and to finalize railway and shipping contracts. Early in 1880 a select committee investigated allegations by William Hemmant of corrupt dealing between McIlwraith and his brother Andrew in some of the contracts. In 1881 a travelling royal commission examined the charge in England and exonerated the McIlwraiths but suspicion remained. He was appointed K.C.M.G. in 1882 and his repute revived in the nationalist fervour generated by his abortive annexation of eastern New Guinea in 1883.

At the height of his popularity and success McIlwraith committed political suicide. He lost his squatting supporters in the 1883 election by insisting on a land-grant railway from Charleville to the Gulf of Carpentaria and antagonized the working class by proposing to introduce Indian coolies for sugar plantations. His following was reduced to eighteen and Griffith became premier in November. McIlwraith then revisited England. In his absence the boom generated by his development policies began to collapse. The primary staples were again suffering from successive droughts and the downward trend in world prices while McIlwraith and a host of imitators had turned to speculation in real estate and mining. Faced by temporary business difficulties, he retired from politics in June 1886.

At the general election of May 1888 McIlwraith won North Brisbane and led a new National party to victory. He sought in vain to discredit the first Labor member, Thomas Glassey, and in September emerged victorious from a constitutional battle with Governor Musgrave over the prerogative of mercy. By November ill health had forced him to resign the premiership to B. D. Morehead. After a trip to Japan he quarrelled with his colleagues about William Pattison's undue influence and on 14 September 1889 resigned from the ministry.

Unable to remain long on the back benches, he astounded everyone in August 1890 by joining his old enemy Griffith as colonial treasurer in what was called 'the Griffilwraith' coalition. His influence became obvious when Griffith, the erstwhile champion of white labour, broke the great strike of 1891 by military force and in 1892 revoked his 1885 prohibition of Kanaka recruitment for the sugar industry. Even the land-grant principle received legislative endorsement although no concessionaire could be found to use it. McIlwraith represented Queensland at the National Convention in 1891 but he favoured only a limited form of Federation and in 1900 advised Queensland without success to abstain.

McIlwraith's Queensland Investment and Land Mortgage Co. was already in difficulties. Since 1888 the London directors had complained that the local board made advances not only on flimsy security but on illegal titles secured by dummying. In 1892 they charged McIlwraith, Palmer and two others with fraud. After fifty-five days in the Supreme Court the chief justice, Sir Charles Lilley, discharged the jury and gave judgment for the plaintiffs. An appeal reversed the judgment and McIlwraith was alleged to have applied pressures which forced Lilley to resign. Griffith took his place and McIlwraith became premier in March 1893. He resigned in October and served as chief secretary and secretary for railways until 29 March 1895 although he had left for England on 15 January.

McIlwraith ended his political career under a cloud. Despite his absence and lack of a seat, he was appointed minister without portfolio in the hope that his health would permit his return, but his financial position was already insecure. Until 1879 he had been a director of the Queensland National Bank and had used its resources for his large speculations in 1884-90. In 1893 the bank had been saved from collapse only by government assistance. After the Queensland National Bank Agreement Act was passed in 1896, a committee investigated its affairs. The report, delayed for three months by McIlwraith's refusal because of ill health to return for examination, revealed a degree of mismanagement amounting almost to corruption. He was alleged to have debts to the bank of over £251,000, covered by security of only £60,700 while a further £77,000 owed by him had been written off as irrecoverable. He claimed that he and E. R. Drury had been partners in speculation but asserted that many of his apparent debts were incurred as an agent of the bank. He complained bitterly that the report had been published without his defence but his financial repute was ruined and even the conservative Brisbane Courier condemned him. On 25 November 1897 the Labor Party with government support succeeded in passing a resolution that he should retire from the ministry. On 9 December he resigned from the Executive Council. He died in London on 17 July 1900 and was buried at Ayr. His second wife Harriette Ann, née Mosman, whom he had married in 1879, was Palmer's sister-in-law; she survived him with a fourth legitimate daughter born in 1881.

Although McIlwraith's economic ideas grew with experience they remained remarkably consistent throughout his career but by the 1890s they made him almost an anachronism. In 1918 T. A. Coghlan wrote that by 1893 the peculiar liberalism of Griffith had expunged any impression made by McIlwraith. Francis Adams saw him as 'the only public man in Australia who, by any stretch of imagination, one could call great'. More practical, Sir William MacGregor saw him as 'an able bully with a face like a dugong and a temper like a buffalo'. Nevertheless McIlwraith certainly had a vision of Queensland outrivalling her neighbours and a grand political style appropriate to his physical stature.