McMahon prepared an account of the meeting three days later and addressed it to Holt. It was explicitly selective: ‘I do not think it is necessary to relate in detail the whole of the discussion with him, which must have taken close to an hour and three-quarters,’ he wrote. The most important factors remained.
Casey, he said, had claimed a ‘constitutional responsibility to serve the government … and see that the government functioned effectively’. McMahon, however, had taken umbrage at this, telling Casey that in doing so he was ‘assuming the role of the Prime Minister’. He ‘challenged’ Casey’s constitutional authority and ‘denied’ Casey’s supposed ‘constitutional right’ to speak with him as governor-general — but also said he was willing to speak ‘in a friendly way’, as former colleagues. From there, according to McMahon, the discussion was straightforward. Casey asked him about the fight with McEwen, and McMahon’s explanation and denial of any fault was satisfactory. It prompted Casey to admit surprise. ‘God!’ the governor-general supposedly said. ‘I have been misinformed on this too.’ Accordingly, Casey took McMahon’s denials of impropriety in good spirit, laughing about the press and stating that he had ‘a totally new insight’ into the Resource Development Bank, once McMahon had explained it to him. Casey had said he would speak with McEwen about ‘the sources of friction’ between him and McMahon.121
Potentially unbeknownst to McMahon, however — for Casey had said that the meeting would remain between them — the governor-general had prepared his own account on 9 December and sent it to Holt.
According to Casey, he told McMahon that the meeting was occurring with Holt’s blessing and that, in his interpretation of the constitution, he had a role to play in ensuring the government’s interests and wellbeing were supported. The coalition between the Liberal and Country parties was ‘essential’, he told McMahon, and thus the ‘present notorious relationship’ with McEwen was a problem. Casey raised McMahon’s relationship with Newton, and Newton’s considerable criticism of McEwen, noting that the journalist had accompanied McMahon on international trips. At this, according to Casey, McMahon interrupted to deny that he and Newton had anything more than the normal relationship between a member of the press and the government. Casey was sceptical: ‘It was noticeable that he referred to Newton as “Max” throughout,’ he wrote.
The meeting continued with a chorus of denials. According to Casey’s account, McMahon denied saying anything about McEwen’s going overseas, denied any animus towards McEwen, denied McEwen’s suggestions that he was trying to become deputy prime minister, and denied doing anything to provoke McEwen at all. Casey could do little in response. He brought up the widespread beliefs, the images, the appearances, but McMahon did not allow even this to trouble him:
I said that the ‘image’ remained in the minds of a number of people that he had an animus against McEwen, which, in the interests of Government harmony had not been dispelled. I suggested that he make efforts to dispel such an image. He said that he had made such efforts, to which McEwen had not responded. I suggested he keep on trying.
For Casey, the meeting was frustrating. McMahon ‘threw a lot of flowers at himself’ and denied all. The discussion over the Australian Industry Development Corporation (AIDC) and the Resources Development Bank went nowhere, though Casey wrote that McMahon did not disagree with the assessment that the Resources Development Bank did not have ‘much scope’. Overall, Casey was unsurprised and unimpressed. He had known McMahon for a long time, and knew just how longstanding the animus with McEwen was. ‘I remember a long talk I had with McMahon, about ten years ago,’ Casey wrote, ‘when the conversation was largely about his hostility to McEwen.’ Nonetheless, writing from hope rather than experience, Casey told Holt that the meeting ‘may have done some good’.122 In reality, Casey had no confidence that it would do anything. ‘The little fellow just sat there and told me one barefaced lie after another on things that he must have known I knew the truth,’ he told Hasluck.123
Both letters were sent to Holt; in the meantime, McMahon remained incensed about the meeting. He felt it was a slight to his dignity and a slur on his character to be summoned and thus accused. He certainly thought it was unconstitutional, and said as much to people who asked.124 Peter Kelly recalled McMahon being annoyed and angry with Casey. The governor-general’s intervention had been inappropriate. He was wrong to do it. ‘He had no right to do that,’ McMahon said to Kelly. ‘He had no right at all.’125
Two days after the McMahon-Casey meeting, McEwen returned to Australia. Whether it was because he had been offered fresh information, or because the half-Senate election was over, or because he was concerned about the poor Country Party vote recorded at that election, McEwen issued a long press statement that called into question cabinet’s decision not to devalue. Arguing that the action struck at the ‘wealth-producing industries, both primary and secondary’, McEwen called for an independent authority to recommend currency decisions. He called the decision not to devalue ‘one of the classic deflationary acts open to a government’.126
Holt met senior Liberal ministers. In his eyes, McEwen’s statement called into question the government’s unity on the currency decision, and could undermine confidence.127 He told McMahon, Hasluck, Fairhall, Bury, and Gorton that the problems created by McEwen’s statement should be addressed without delay. According to Hasluck, McMahon egged Holt on, terming it a challenge that had to be met.128
On 12 December, McEwen came to Holt’s office to discuss the matter. After forty minutes, McEwen emerged, looking tense. He slammed the door behind him and departed without a word to Peter Bailey, a first assistant secretary in the prime minister’s department who had been assigned to work in Holt’s office. A few minutes later, Holt buzzed for Bailey to join him. The public servant asked how it had gone. ‘Well,’ Holt said, ‘the government is still there and we’ve [not] devalued and that’s all right.’ To Bailey’s congratulations, Holt smiled. He had asserted the authority of his office: ‘I now feel I’m really the prime minister.’129
A statement was issued immediately. It reaffirmed the decision not to devalue. By its emphatic language, the statement could be said to have implicitly called into question McEwen’s judgement: ‘Because of his absence abroad at the GATT meetings in Geneva, my colleague did not have the advantage of participating in the wide ranging cabinet discussions, nor did he have the detail before him of the latest appreciation of the likely effects of British devaluation on our own economy.’130
In the press, Holt’s actions were praised and lauded, and widely called a win for him and his party. Holt had taken ‘the tough line’, wrote one journalist. ‘He deliberately, calmly, and completely rebuked Mr McEwen in public and in private.’131 Another suggested that McEwen and the Department of Trade and Industry had emerged diminished: ‘The economic deficiencies of his department are becoming one of Australia’s most serious handicaps.’132 But, though important, it was hardly as triumphant or as pivotal a moment as the press was apt to suggest. Hasluck later argued that McEwen’s statement was likely made in an effort to ensure that the compensation paid to rural industries was generous.133 It is probable that McMahon viewed the affair as a boost for him just as much as one for Holt.
The rest of the week was spent in preparation for the Christmas vacation. Parliament had risen. Holt and his wife dined with Casey on Wednesday, and discussed McMahon, McEwen, and the year that had passed. Holt, according to Casey, said that 1967 had been a year ‘he would not easily forget’.134 He was looking forward to a break. The press attended drinks at the Lodge.135 A final cabinet meeting on the Thursday night to discuss assistance to rural industries affected by the British devaluation ran late, but the next morning Holt was in his office early, as normal, signing papers and Christmas cards. He left Canberra at eleven o’clock, and boarded a plane to Melbourne, from where he would drive to his holiday home at Portsea. In his briefcase were the letters from McMahon a
nd Casey about their meeting, and a new version of Dudley Erwin’s letter about the disquiet of the government backbench.136
That afternoon, at the Treasury’s Christmas party, McMahon met and spoke to Howson. He and the prime minister, McMahon said, were concerned about leaks from cabinet. He thought Gorton was responsible.137
CHAPTER TWENTY-TWO
The Story and the Fact
1984
Unable to trust the accuracy of McMahon’s memory, Bowman found that arriving at the truth entailed finding a way through a labyrinth of mirrored walls. There were points of view and there were hard facts; there were sources that differed and sources that were in agreement. Understandably, he saw, McMahon often chose to cite as proof for his statements and point of view those works that agreed with him.
On chapter drafts and notes, McMahon would scrawl references to various books that were scattered around the office. Alexander Downer’s Six Prime Ministers, Edgar Holt’s Politics is People, Nugget Coombs’s Trial Balance, a swag of biographies of Menzies, and the occasional memoir by a colleague were all well-thumbed, yet it was Alan Reid’s The Power Struggle and The Gorton Experiment that were the most frequently cited sources.
Years later, Hasluck would call Reid a ‘competent though somewhat venal purveyor of political gossip’, and would scorn Reid’s claims to writing history.1 Drawing out the problems of Reid’s accounts, Hasluck noted Reid’s propensity for over-dramatising his work, and for filling in gaps with assumptions and hearsay. Hasluck would argue that Reid was a partisan, writing from McMahon’s point of view.
Discussing Reid’s account of a meeting between McMahon and senior ministers, for example, Hasluck was cutting:
I was present at the meeting throughout and very few, indeed scarcely any, of these things recorded by Reid were said by McMahon at the meeting at all. Any third party who was present could not have reported them because he would not have heard them. The man most likely to know what was in McMahon’s mind was McMahon himself. The only person who would have a reason for representing that McMahon made these long and detailed accounts of his conduct, when in fact he did not make them, was McMahon himself. I can find no reason why any other informant would have dressed up McMahon’s unspoken justification of himself in such terms as those that Reid sets down. Hence I deduce that Reid has depended chiefly on McMahon and perhaps solely on McMahon for his account of what was said.2
The close relationship between Reid and McMahon, and the problems of Reid’s work, were well known within press and political circles, yet Reid’s work nonetheless loomed over discussion of the inner workings of the Holt and Gorton governments. In the McMahon office at Westfield Towers, Reid’s books were the clinching argument — a hardly surprising result, since they possessed the sturdy credibility of being sympathetic to McMahon.
Newspaper and magazine articles were accorded a high status. Few things are as dead as yesterday’s newspaper, Churchill once said, but McMahon chose to treat clippings as if they were gospel.3 When queried about a particular claim, McMahon would demand that an article by Fitchett, or Peter Samuel, or Reid be disgorged from one of the twenty-seven filing cabinets. Quotes were selectively drawn, stitched together, inserted into the manuscript drafts. How those articles had been written, what sources they relied upon, and whether McMahon himself had influenced the articles was never discussed. McMahon would not allow their reliability to be questioned.
At other times, McMahon drew on aide-mémoires that he had kept throughout his political career. A habit since his days as a solicitor, he had prepared them every single time a conversation of possible significance occurred. Yet they were hardly impromptu documents. ‘He would repeatedly hone whatever he was working on,’ Peter Kelly wrote later, ‘sometimes making six or seven drafts. It used to drive his secretaries mad!’4 The many drafts and constant revisions made their reliability suspect. As Kelly himself later said, McMahon’s memory ‘was always shaded to himself. Always.’5
However difficult his sources were to trust, the manuscript had information that was new — most notably, about the period leading up to December 1967. According to the draft, Holt was on McMahon’s side in the disputes with McEwen and with Casey.
Perhaps most sensationally, McMahon told Bowman that Holt had agreed that the governor-general had overstepped the bounds of his constitutional role.6 When Holt was told of their 8 December meeting in Sydney, he agreed with McMahon’s assertion that Casey had acted inappropriately and that Casey should therefore be dismissed as governor-general.
‘That would have been a giant upheaval,’ wrote an astounded Bowman when he read this. ‘It is difficult to believe now that it was ever in the realm of practical politics. I think the reader will need to be persuaded.’ To this, McMahon wrote that the papers that provided for Casey’s dismissal were in Holt’s briefcase when he left for Portsea.7
Contemporaries of Holt and McMahon were dubious about the claim. ‘I didn’t hear any dismissal suggestion,’ wrote Tony Eggleton. ‘In my view, [it is] most unlikely that Harold would have acted against the GG, even if he felt that Casey had been indiscreet.’8 Peter Kelly heard nothing of this at all. ‘I couldn’t confirm or deny it,’ he said later. ‘I wouldn’t know.’ But he was not confident: ‘I doubt it went that far. I doubt it went that far.’9 There were no papers to this effect in Holt’s briefcase.
In McMahon’s telling, Holt believed that by his statement on devaluation, McEwen was attempting to wreck the Coalition; that McEwen had realised his audacious ploy to straddle two separate, even duelling, constituencies was backfiring; and that McEwen was looking for a distraction to it all — and hence fixed on McMahon. In McMahon’s telling, on 12 December, Holt had declared he had reached his end. There would be no placating McEwen. There would be no more mollifying. McEwen would be given the choice — to put up or shut up. According to McMahon, Holt was confident that if McEwen led the Country Party out of the Coalition there would be enough members who would stay. But then, in the meeting with Holt on 14 December, McEwen had backed down, had conducted himself professionally, and all had been saved.
McMahon also claimed that Holt was worried and paranoid in the days that followed. According to McMahon, on the morning of Friday 15 December — before he had left for Portsea via Melbourne — Holt had called McMahon and asked him to come to Parliament House. They met just as Holt was leaving and went back to Holt’s office. ‘He was just very, very anxious,’ McMahon said later. ‘He was more serious, more worried, than I’ve known him before.’10 While they discussed the assistance to primary industries, looming in the conversation were reports that MPs were caucusing to remove Holt as prime minister. They had spoken on the Wednesday about the reports, but McMahon had supposedly known nothing. He was aware that Billy Wentworth was involved, that John Gorton was the likely beneficiary, and that Bill Aston, the Speaker, had stopped the talks in New South Wales. But that was all.
Holt suspected his involvement, McMahon wrote, and they had quarrelled about it. With Reid’s help, McMahon had proved he was not involved, and Holt had apologised.11 (Here, though, was a sticking point: on the draft, Bowman asked how Reid had been able to help — only for McMahon to deny that Reid had been helpful!) Then Holt asked McMahon to call him on Sunday morning so they could speak again. It would be proof of their reconciliation.
McMahon agreed, and the two men embraced. According to McMahon, the two men then shook hands and Holt asked why McMahon was not shaking hands with him. McMahon told him that he was — and that if Holt was unable to feel it, he must be grievously ill.
Bowman, making notes on the manuscript, asked questions: how could this be right? Holt could surely see, couldn’t he? Wouldn’t he see that they were shaking hands? Seeing was distinct from feeling, wasn’t it? Why, if they had just hugged, would they suddenly shake hands?
McMahon’s answers, scrawled in a violet pen, clarified nothing.12
Certa
inly, Holt was ill. During the Senate election campaign in November, he had complained of numbness in his hands,13 and a Melbourne specialist had prescribed medication to combat the pain Holt was experiencing in his neck and shoulder muscles.14 ‘Harold was receiving medical treatment for shoulder pains,’ Tony Eggleton said later.15 Was this why he had not been able to feel the handshake?
In the manuscript, McMahon wrote that he had urged Holt to see a doctor, but the prime minister brushed him off, saying that even after all the years they had been friends, McMahon still did not appreciate how strong Holt was. He had then left, cheery and happy, and that was the last McMahon ever saw of him.
Was it true? Some were inclined to doubt. Eggleton could not recall McMahon meeting with Holt on the morning of 15 December.16 Certainly, there was no other record of their meeting. Did it happen?
McMahon’s manuscript contained further claims. When the time for his phone call to Holt came on Sunday morning, McMahon wrote that he had decided against calling. He was, he wrote, resentful that Holt had suspected him of intriguing against him. He repeated this publicly. ‘On that occasion,’ he said, ‘because of the quarrels I’d had with him that week, I told my wife I wouldn’t do it. She tried to persuade me to do it and I refused.’17
Bowman queried this when he came across it in the manuscript. ‘After the scene in Parliament House, this is a little surprising,’ he wrote. After all, they had reconciled. They had shaken hands. Why was McMahon still angry? McMahon did not respond.
Yet here was another contradiction. Holt’s housekeeper, Tiny Lawless, recorded in her diary that McMahon had telephoned, and what she had heard of the conversation left her to wonder what had happened on the call. When interviewed, she elaborated:
Tiberius with a Telephone Page 27