My grandfather John H Henderson (1865-1934) filled a vacancy on the Conargo Shire Council in October 1929, the same month as the Great Crash on the New York Stock Exchange that triggered the Great Depression.
Conargo Shire residents and ratepayers were not spared the consequences of this global calamity.
Wool prices collapsed in 1929-30 and wheat prices had been declining since 1925.
In the six years from 1929-30, wool and wheat prices were around half the level they had averaged in the previous seven years.
The rate of unemployment in Australia increased from six per cent in 1929 to nearly 20 per cent in 1932.
Addressing the consequences of the Great Depression was a recurring issue for the council during my grandfather’s period as a councillor, including seeking funds from the state government and finding quick ways to create employment.
This included digging out rabbits along shire roads and also, more controversially, a decision about the construction of new shire offices.
Debate about the new shire offices anticipated the issues analysed by the celebrated British economist John Maynard Keynes, who published The General Theory of Employment, Interest and Money in 1936.
Keynes advocated increased government borrowing and expenditure to stimulate economic activity and reduce unemployment in situations where private sector business confidence and activity collapse.
The Great Depression was clearly such a situation.
Keynesian strategies remain controversial to this day, in part because people are often concerned that rather than a temporary increase in government expenditure, there will be a permanent increase in the level of government expenditure and taxation.
The Rudd government’s Keynesian response to the Global Financial Crisis in 2008-09 was controversial.
The Morrison government’s Keynesian response to the COVID-19 pandemic in 2020, less so, despite its magnitude.
The case for Keynesian economic stimulus is stronger when the level of government debt is low.
In 1929, the Conargo Shire was free of debt (according to Brad Chalmers’ The Sunlit Plains Extended, page 312) and the pastoralists on the council, including Patterson, Carse and Armstrong, were preaching Keynesianism — surprising as that may sound.
Listen to them:
Cr Patterson: If the council borrowed money at a time like this it would find a lot of employment. They were now arranging to expend £500 for the relief of the unemployed and the erection of the shire building would provide a good deal more.
Cr Carse: Economy was alright, but a great deal of nonsense could be talked under that heading. The new building would be a permanent improvement.
Cr Armstrong: If everyone stopped spending money there would be none in circulation.
Of course, the pastoralist councillors are unlikely to have seen their strategy in Keynesian terms because this would have categorised them as soulmates of the most prominent Australian Keynesian, the Federal Labor Government treasurer, ‘Red Ted’ Theodore.
The lonely voice in opposition to borrowing to build new council chambers was John H Henderson.
I have often had arguments in my head with my grandfather about his position — he died a decade before I was born.
How to explain? When his father died in 1885, my grandfather, aged 19, was the eldest of three children.
His father’s estate was substantial but for every dollar of assets, there were 73 cents of debt!
Despite that precarious position, later in life, he was not averse to borrowing to extend his landholdings.
It appears it was government expenditure and debt that my grandfather objected to.
Earlier in his life, living east of Echuca, he was an enthusiastic supporter of the Kyabram Reform Movement. It resolved, at a meeting in November 1901, to agitate for a “reduction of members of the state parliament and also a reduction of general expenditure”.
It led to a convulsion in which the Irvine Government, in 1902, reduced the number of members in the lower house of the Victorian Parliament from 95 to 68, and the number in the upper house from 48 to 35.
As the historian Geoffrey Blainey observed, tongue in cheek: “To cut down a parliament could almost be called an un-Australian activity”.
Maybe my grandfather was concerned that his grandchildren would be burdened by the interest on government debt.
This common line of argument often overlooks the benefits of local government assets inherited by grandchildren, whether they be roads, bridges, recreation facilities or in this case, a fine council chambers building.
Now the property of the Edward River Council since the merger of the Deniliquin and Conargo councils in 2016, the chambers have been partially occupied by the Deniliquin Visitor Information Centre while the Peppin Heritage Centre has undergone renovations.
It is staffed by helpful volunteers and has shelves of local history books, frequently consulted by at least one of John H Henderson’s grandchildren.
