After 1952, as the Cold War split developed in the Labor Party, and Communist Party leader Lance Sharkey published a pamphlet about that conflict, the CPA also paid great attention to developments in the ALP. It encouraged the development of a Labor left, which was frequently under its influence, although this influence was sometimes challenged by smaller groups of Trotskyists.
For most of its history, the CPA did not afford itself the luxury practised by most current Marxist sects of treating the Labor Party, its leadership and ranks as an undifferentiated reactionary whole. Neither did the pioneer Trotskyists in Australia, for most of their period of activity, adopt such an unscientific attitude towards the Labor Party.
A recently published book, Local Labor, by Michael Hogan, about the ALP in the inner-Sydney suburb of Glebe, notes that one group of Trotskyists, led by Joe Boxall, entered the Labor Party as early as 1937. Most socialists of the Marxist sort have taken developments in the Labor Party very seriously, and the current sectarianism of the Marxist sects towards Laborism is an aberration. It is a serious error given the still massive grip of the ALP and the unions on the working class and the left half of Australian society.
One weakness of David McKnight's chapter is that he doesn't discuss the Australian Labor League of Youth, of which the CPA won the leadership during its entry work in the Labor Party.
The ALLY, a large organisation, was the vehicle for the recruitment of hundreds, and possibly thousands, of activists to the CPA's version of the socialist movement. Many of the activists who sustained the CPA for the next 20 or 30 years were recruited from the ALLY. There is some description of this activity in Audrey Blake's autobiography, A Proletarian Life.
«It cannot be expected that those Social-Democratic workers who are under the influence of the ideology of class collaboration with the bourgeoisie… will break with this ideology of their own accord, by the actions of objective causes alone. No. It is our business, the business of Communists, to help them free themselves from reformist ideology…. there is no more effective way for overcoming the doubts and hesitations of Social Democratic workers than by their participation in the proletarian united front.»
In 1935, the Communist International made a sharp turn in its political outlook opening a period designated as the «popular front against fascism». Previously it had described even social-democratic and labor parties as «social fascist», arguing that they were little different from fascist parties because they supported capitalism. This line proved disastrous especially for the German Communist Party (KPD) but also for Europe as a whole. As the strength of Hitler's National Socialists grew, the communists and Social Democrats fought each other, rather than uniting. The shock of Hitler's appointment in January 1933 as Chancellor of Germany and the defeat of the German communists led to the calling of the Seventh World Congress of Comintern.
At the congress, the new Secretary of the Communist International, Georgii Dimitrov, outlined the dramatic shift. The choice of Dimitrov as Secretary was significant. Dimitrov had recently been accused by Hitler's government of trying to burn the Reichstag. «During the trial, in several exchanges between Dimitrov and Herman Goering the Nazi leader lost his temper and shouted threats of what his men would do to Dimitrov once they had him outside the court. Dimitrov's replies were quiet, reasonable and courageous. He presented the Communist movement as the defender of the values of Western civilisation – especially of rationality and the rule of law.» At the Congress, Dimitrov acknowledged certain mistakes by communists including an «impermissable underestimation of the fascist danger» and a «narrow sectarian attitude». To defeat fascism it was necessary to form a united front of all workers, regardless of their political party stance.
«The Communist International puts no conditions for unity of action except one, and that an elementary condition acceptable to all workers, viz., that the unity of action be directed against fascism, against the offensive of capital, against the threat of war, against the class enemy. That is our condition.»
There was also a new liberality in the application of the line which would take «various forms in various countries, depending upon the condition and character of the workers' organisations and their political level, upon the situation in the particular country». Even within fascist Germany it was necessary to organise, said Dimitrov, invoking the capture of Troy: «the attacking army… was unable to achieve victory until, with the aid of the famous Trojan Horse it managed to penetrate to the very heart of the enemy's camp». Instead of denunciations of «social fascists» Dimitrov referred to «the… camp of Left Social Democrats (without quotation marks)».
The strategy of the popular front has been widely examined by historians of the communist movement and it is now being re-discussed in the light of new archival sources. In France and Spain where a communist party was relatively strong it sought a formal alliance with the social democratic and anti-fascist parties, usually in the form of a Peoples' Front. In the English-speaking world where it was usually smaller, as in Australia or the United States, it appears to have used a different strategy. This involved the creation of an underground group within the main Labor or Social Democratic party. In the US, the CPUSA inititally tried to create a left-wing, third party as an alternative to the Democratic and Republican parties. To this end they were active in Minnesota's Farmer-Labor Party, Wisconsin's Progressive Party, the campaign to End Poverty in California (EPIC), the American Labor Party in New York and radical groups in Washington and Oregon. In the context of the Depression a number of these groups garnered significant voter support, particularly the Farmer-Labor Party. Whether these groups would have united and run candidates against Democrats, especially Roosevelt, is doubtful. But the CPUSA's putative strategy was abandoned after the Comintern advised that support for Roosevelt was more important, largely because of the needs of Soviet foreign policy. These hitherto unknown strategies of covert penetration were closely watched by the Anglo-American Secretariat of the Comintern, which hoped to influence national governments formed by social democratic parties in the direction of collective security with the USSR.
The newly released archives of the Communist International and the records of the now-disbanded Communist Party of Australia provide evidence for such a political strategy in Australia. After the change in political direction represented by the Seventh Congress in 1935 the Communist Party of Australia (CPA) began to recruit members of the Australian Labor Party (ALP). Rather than urging them to leave the ALP, these new communists were asked to remain inside the Labor Party and became undercover members. By 1939, these dual members, allied with the indigenous, non-communist left wing had ousted the leadership and took control of the largest and most politically powerful of the six state branches of the ALP, that of New South Wales (NSW). Two covert CPA members became senior officers of Labor in NSW, one of them the General Secretary. In the state of Western Australia, where a similar strategy was followed, a secret member of the Communist Party became a member of federal parliament. The growing success of this strategy in Australia was halted after the Soviet-German Non‑Aggression Pact. The pact provoked a series of events in which the undercover communist wing split the NSW branch of the ALP and formed the «State Labor Party». While this split helped deny Labor office in the national elections of September 1940, the communist presence also deflected plans for a wartime government of national unity of Labor and conservatives.
Historians' knowledge of this significant aspect of the Seventh Congress policies is scanty. When a communist presence in the Labor Party is acknowledged it is invariably minimised. No historian of Australian Labor has understood either the depth of CPA penetration nor its origins. Most assume that some kind of communist presence must have existed because the communist-led State Labor Party ultimately amalgamated with the Communist Party of Australia in January 1944.
The evolution of the CPA's strategy toward the Labor Party began with a 1935 proposal discussed by the Political Bureau of the CPA, which stated that it was advisable «to organise Left-wing movements in the Labor Party in order to fight for the united front proposals» and to urge «members of the Labor Party who join the Communist Party [to] retain their membership in the Labor Party and carefully work for united front proposals». In a report to the CPA congress in 1935, CPA leader Lance Sharkey argued that in addition to joint trade union activity «[i] t is also possible that certain of the Party members go into the Labor Party to work in such a way that all leftward elements in the Labor Party are brought to the leadership in order to ensure the acceptance of the proposals of the united front».
The change towards Popular Front policies coincided with, and perhaps contributed to, a series of union successes for the CPA, which were reported in detail to the Comintern. In 1935–36, communists won the leadership of unions in the railways, mining, maritime and metal industries. More than this, the CPA itself was growing. A report to Comintern noted: «The outstanding feature of our latest recruits is the number who have previously been leading activists of the ALP and are at present leading trade union activists.» Further, «our successes in the trade unions, to a large degree are due to these comrades who have great authority and were already minor trade union officials prior to joining our party».
Within the labour movement, both the CPA and the ALP members shared a common culture. They spoke the same language, worked alongside each other and both held socialism to be the goal, albeit to be achieved by different roads. This had always been so but with the more liberal policies of the Seventh Congress this shared culture meant a steady stream of recruits as well as union election successes for the CPA. These communist victories in trade unions had a direct impact on the power balance within the Australian Labor Party because unions were affiliated to the party and directly represented in Labor congresses.
The CPA success in trade union elections and in recruitment of ALP members hooked something of a prize catch in the shape of one talented union official, Jack Hughes. At the time of his recruitment in 1935, Hughes, was an assistant secretary of the Federated Clerks Union. In 1936 he won an official position on the Labor Council of New South Wales, which was the umbrella group for all unions and which played a key role within the Labor Party machine.
Yet on the surface, 1936 was a year in which Labor splits healed. Since 1931 two Labor Parties had existed in New South Wales. One supported the NSW-based Jack Lang and the other allied to the federal Labor Party. Jack Lang was a former NSW state premier who commanded a mass following in Sydney and other parts of New South Wales. A demogogue and fiery speech-maker, Lang had clashed with the banks at the height of the Depression, then been dismissed as state Premier by the Governor, a relic of Australia's colonial past.
The early 1930s saw Lang establish political supremacy within Labor, defeating the weaker «Federal Labor Party». By 1936 a tenuous re-marriage was concluded between the two parties. This prompted Lang to try to increase his dominance. His first target was the radio station owned by the trade union council, the NSW Labor Council.
The Sydney-based radio station 2KY had been set up in 1925 as «first labour radio station in the western world». Lang urged the Council to integrate it with the Labor Daily newspaper, which he controlled, a move designed to entrench his own political power. The Sydney newspaper, Truth, summed up Lang's move:
Two great assets of the NSW Labor Party – the 2KY wireless station and the Labor Daily – are plums for which many people have hungrily licked their lips. Some have been able to take a bite, but nobody – yet – has been able to snatch them for their own, their very own. Mr Lang is now trying to pluck these golden plums.
Truth's description of the «chilly, alert atmosphere» of the Labor Council when Lang addressed it on 2KY was an indication of the storm which would gather strength over the next three years. The communists, both overt and covert, and the non-communist left wing opposed Lang's move to integrate the radio station with the newspaper and, to widespread surprise, his plan was defeated.
In August 1936 the unions in the Labor Council called what would be the first of many meetings to oppose Lang's control of the party machine. Lang immediately expelled four members of parliament, 17 union officials and a number of others. «This lit the fire,» recalled Hughes many years later.
In December 1936 another major conference of anti-Lang unions and ALP branches was held. By this time it was clear that Lang was also trying to entrench his total control of the Labor Daily. In the preceding months the militant unions had begun to organise the union shareholders to vote against Lang directors on the newspaper's board. But after the ballot opened, it became clear that Lang's men had systematically tried to rig the vote. Ballot papers disappeared, others never arrived at union offices. On Christmas Eve 1936 the result of the ballot for directors was due to be announced but before that could be done the Miners' Federation began a legal challenge to the conduct of the ballot.
In the following year, 1937, a pending federal election led to an uneasy peace in the factional warfare. In June the four expelled MPs were readmitted to the NSW branch after demands from the federal ALP executive. The anti-Lang dissidents continued to mobilise although Lang remained firmly in control of the state party machine. In October the factional warfare revived. Labor had lost the federal election and in the Labor Daily case the Equity Court largely accepted the anti-Lang unions' claim that their board candidates each gained an average of 19,000 votes to the Lang unions' 14,000. On appeal the full court partially reversed this result but it was clear, as anti-Lang unionists pointed out, that «future ballots will result in Mr Lang's influence being completely destroyed».
In 1937 the anti-Lang forces had formalised their opposition to Lang by creating a nameless seven person committee to direct their struggle. Later that year it appointed a full time organiser, Walter Evans. Evans had been a member of the ALP state executive in 1932 and also a member of the left wing of the Labor Party. By 1937 Evans had become an undercover member of the CPA. As dual members of the CPA and ALP, Hughes and Evans would lead the growing anti-Lang struggle within the NSW branch of the Labor Party for the next two years.
Throughout the period Hughes remained in contact with the CPA largely through Ernest Knight, the CPA official who was responsible for party work among the trade unions in Sydney. Knight had a nondescript office in near the dockside in Sydney unadorned by any sign. Hughes, as a Clerks' Union official, excited no attention by visiting Knight's office as he did hundreds of other city offices to collect membership dues. As an increasingly significant Labor Council official, Hughes could also regularly visit all leftwing unions and thereby keep in touch with leading CPA trade union officials. On one level there was no secrecy at all about the growing alliance between CPA members and the anti-Lang Labor forces. At the weekly meetings of the NSW Labor Council this co-operation occurred in public. As well, there appears to have been at least two types of dual membership of the ALP and CPA. While Hughes' membership was «deep cover», other communists' allegiances were not so hidden. The editor of the miners' union newspaper, Edgar Ross, who was a member of the Botany ALP branch, recalled that his CPA membership was known to non-communist anti-Lang ALP members.
In the following years the organisation of the communist underground in the ALP became more systematic and was directed by the CPA Political Bureau which met every six weeks. Both Hughes and Edgar Ross (the most senior surviving dual members) state that they did not know the identity of all the dual members in the ALP but their identities must have been known to the CPA Political Bureau. Both Hughes and Ross later minimised the degree of organised CPA activity within the ALP and claim that there was never a fraction meeting of this group or any other defined organisational expression. Yet minutes of the Political Bureau clearly record such a meeting.
In February 1938 the anti-Lang forces tasted victory, when they took possession of the offices of the Labor Daily. Behind the scenes the Political Bureau of the CPA discussed the situation and devised «a plan covering the taking over of the Labor Daily and replacement of various members of the staff». The price of victory was the repayment of a loan which Lang had earlier made to the newspaper. The Labor Council decided to make a clean break and to change the format and name of the newspaper. What emerged in late 1938 was the Daily News. To bankroll this undertaking Hughes called on a rather unusual source. For some time Hughes had been cultivated by the general manager of the Bank of New South Wales, Sir Alfred Davidson, a forward-looking banker who made a habit of selecting and promoting talented young people. Davidson had been appalled by Lang's hostility to the banks while Premier and made overtures to Lang's enemies on both the right and left. For example, Davidson paid for an organising tour by Hughes of interstate trade union centres when the anti-Lang forces were trying to influence the ALP federal executive. Davidson apparently looked on Hughes as a possible national Labor leader with whom he could garner some influence. In establishing the Daily News Hughes used his influence with Davidson to get a substantial bank loan. A version of the Hughes-Davidson relationship appeared in Lang's autobiography in which Lang said that in 1938 Davidson invited the visiting British Labour figure, Ernest Bevin, to a dinner with Hughes, Evans, Lloyd Ross and F. O'Neill, all Labor dissidents. At the time, however, Hughes' contact with Sir Alfred Davidson was by no means public. The unusual alliance between a communist and a top banker was one of the odd consequences of the CPA's underground work in the Labor Party.