THREE QUEENSLAND PREMIERS AND THE MUNGANA SCANDAL DAVID E MOORE 2015 ABSTRACT This thesis is an analysis of the unique role that the Chillagoe-Mungana area played in the evolution of North Queensland’s economy and in the state’s politics, extending over four decades. In particular, it impacted upon the careers of three Queensland Premiers, who led the state between 1919 and 1932: Edward Theodore, William McCormack and Arthur Moore, with Theodore being by far the most prominent. The area is now often known for its association with what became known as the “Mungana Scandal”, in which the three Premiers played very different roles. The story has generally been presented and perceived as primarily a political one, with the main focus on Theodore. This has been a mistake as the key person to follow is McCormack (his close friend) and the nature of their relationship. Major features of the Chillagoe-Mungana story have been the subject of several previous studies, but never in its complete context, as it necessarily involves very important technical and economic components, rarely considered in detail. Further, there has been a tendency either to pay scant attention to the earlier formative years or to gloss over key details: as a consequence, greater focus has tended to be given to the dramatic and controversial last phases involving Theodore. The Chillagoe Mineral Province, discovered in the 1880s, was for a brief period perceived as having the potential to become “another Broken Hill”. Over 120 years ago it underpinned a major railway and mining development, which fell short of those inflated expectations. It proved to be a far smaller and more complex mining region, richer in lead rather than the higher value copper on which it was founded. Its principal operating entity, the Chillagoe Company, when publicly owned from 1898 to 1914 proved to be a dismal financial failure, an outcome repeated when it was acquired by the government in 1918. Its legacies include the tourist railway system from Mareeba to Forsayth, which provides access to the historical smelting and mining sites in the Chillagoe-Mungana area ̶ plus the Mungana Scandal itself. The thesis highlights in chronological sequence all key elements of the Chillagoe-Mungana story. Some elements are reappraised from today’s perspective, focusing on technical, economic and ethical aspects. It explains why the Chillagoe Mineral Province was never fully understood and always failed to meet expectations. It demonstrates that there were considerable limitations to many earlier analyses; access to new and wider sources of information, opinions and perceptions are required. The analysis concludes with a re-examination of several myths which have evolved around the Chillagoe-Mungana story and its unusual influence in both Queensland and Australian history. ACKNOWLEDGEMENTS Professor Brian Costar, whom I first met over 30 years ago, was responsible for persuading me to change my plan to write a biography of my grandfather, Arthur Moore, and initially make it the subject of a thesis. Since then he has actively been my guide, including the topic change in 2013 to Three Queensland Premiers and the Mungana Scandal. I had first heard about Mungana over 50 years ago from discussions with my grandfather and several times read Kett Kennedy’s 1978 book, The Mungana Affair, which is by far the best analysis to date. I stayed with Kennedy at Charters Towers in 2010, where he gave me his PhD thesis on William McCormack plus unpublished legal correspondence he had accumulated in what is termed “The McCormack Papers”, some of which are included in the two appendices. He pointed out to me that additional very important information, covering detailed records of the 1931 conspiracy trial, became available in the Queensland State Archives around the time that The Mungana Affair was published. From then onwards he became an extremely useful sounding board as I managed to unearth documents he had not seen, until his untimely (but not unexpected) death in February this year. I am particularly grateful for his help, his other highly relevant writings on North Queensland mining history plus his detailed knowledge of McCormack’s public career. As some aspects of the analysis lay outside my experience and recent knowledge base I am particularly indebted to a broad range of persons who have kindly assisted me. In the geological field, John Nethery at Chillagoe and Kevin Wolff, who co-authored a detailed book on the Chillagoe Mineral Province in 1964, have reviewed some of my geological interpretations. Dr Rod Grant, who spent part of his career associated with copper and lead smelting, has guided me on metallurgical matters. On legal matters, the late Bruce McPherson, formerly a Queensland Supreme Court judge, Jeffrey Miles, formerly Chief Justice of the ACT, David Russell QC and Judge John McGill have all contributed to my gaining a better understanding of the complex legal circumstances relating to the unusual conspiracy trial. Several persons have kindly read draft chapters, with particular thanks due to Professor Selwyn Cornish of the Australian National University on aspects of economic history and Bob Prosser, a former partner in a large accounting firm, on financial matters. Dr Ruth Kerr of the Royal Historical Society of Queensland has guided me to relevant documents in the Queensland Archives. Dianne Byrne of the Oxley Library and numerous staff at the National Library in Canberra and the Queensland Archives have provided assistance. I have also been helped by Mary Bolam, who is committed to ensuring a better appreciation of the fascinating Chillagoe area. My wife, Carol Taylor, has strongly encouraged me to complete what at times became a somewhat more demanding task than I had anticipated. She has also edited numerous drafts, before they were finally passed to David Hudson for editing in accordance with Swinburne University regulations. TABLE OF CONTENTS Abstract i Acknowledgements iii Declaration v Table of Contents vi List of Figures vii Abbreviations and Equivalent Values viii Glossary of Technical and Special Terms ix Preface xiii Introduction 1 Chapter 1: The Prelude Years 20 Chapter 2: The Birth of the Chillagoe Company 38 Chapter 3: The Collapse of the Chillagoe Company 64 Chapter 4: The Chillagoe Company Becomes a State Enterprise 96 Chapter 5: The State’s Acquisition of the Mungana Leases 123 Chapter 6: Storm Clouds Gather over Chillagoe-Mungana 154 Chapter 7: The Chillagoe-Mungana Royal Commission 193 Chapter 8: The 1931 Conspiracy Trial 238 Chapter 9: The Aftermath Years 280 Chapter 10: Perspective from the 21st Century 300 Chapter 11: Conclusion 321 Appendices 1 and 2 337 Bibliography 376 LIST OF FIGURES 1 North Queensland Gold Fields 24 2 John Moffat’s Empire in 1907 Showing Major Mines and Railways 28 3 Tin and Copper Prices 1880-1900 35 4 Chillagoe Region Mining Areas 1903 68 5 Copper, Lead and Silver Prices 1900-1914 94 6 Mungana Lease Areas Showing Applications 502 & 503, September 1917 127 7 Mungana Lease Areas Showing Applications 556-559, February 1919 131 8 Copper, Lead and Silver Prices 1919-1928 167 9 Chillagoe Enterprise Financial Performance 1920-1926 169 10 McCormack-Theodore Mungana Transactions 1920-1926 217 11 Chillagoe Mineral Province Production 1891-1950 304 ABBREVIATIONS ALF Australian Labor Federation AWA Amalgamated Workers’ Association AWU Australian Workers’ Union CPD Commonwealth Parliamentary Debates CPE Central Political Executive, later becoming the Queensland Central Executive CPNO Country and Progressive National Organisation of Queensland CPNP Country and Progressive National Party ICAC Independent Commission Against Corruption IWW Industrial Workers of the World MMC Mungana Mining Company (incorporated in 1912 reconstruction) MML Mungana Mines Limited (incorporated in 1920) MMS Mungana Mining Syndicate (established in 1918) NLA National Library of Australia, Canberra PLP Parliamentary Labor Party QCE Queensland Central Executive of the Labor Party QFU Queensland Farmers Union QPD Queensland Parliamentary Debates QPP Queensland Parliamentary Papers QSA Queensland State Archives, Brisbane RELATIVE VALUES OF £ & $A IN 2013 TERMS (Using the Reserve Bank Inflation Calculator from 1901 base) 1901 140 1905 137 1910 127 1915 94 1920 70 1925 75 1930 75 GLOSSARY OF TECHNICAL AND SPECIAL TERMS Azurite/Malachite Hydrated copper carbonates, commonly occurring as blue and green minerals at the surface. Blister Copper The product, containing around 98 per cent copper, formed by the oxidation of copper matte. Bullion Ingots of valuable metals, typically relating to gold and silver. Breccia A sedimentary rock composed of angular fragments, usually of quartz, cemented within a fine grained matrix of other minerals. Carbonates A group of minerals formed by the dissolution of metallic oxides by carbonic acid, of which the most common is calcium carbonate. Cassiterite Tin oxide, the most abundant and richest naturally occurring tin mineral, containing 78 per cent tin, typically found in alluvial deposits due to its high specific gravity. Chalcopyrite Naturally occurring copper-iron sulphide, containing around 34.5 per cent copper. Chillagoe Company Generic name given to the several public companies which owned and operated the railway, smelter and mining assets pursuant to the Mareeba to Chillagoe Railway Act 1897 in the period to 1914. Chillagoe Enterprise Generic name given to the various non-railway assets acquired from the Chillagoe Company by the Queensland government