The Great War, 1914–18, was the most convulsive, tragic and defining event in Australian history. Its sacrifices bequeathed the bond of nationhood. But such sacrifice left the young country fractured by politics, religion and class, with a weakened economy, an introspective mindset, and dependence on a debilitated British Empire.

On the evening of 11 November 1918, when news of the Armistice arrived, crowds gathered in Melbourne cheering through the night, ‘Rule Britannia’ was sung, children banged drums, people danced in the streets, trams were commandeered, the Lord was praised, families wept over their losses, and effigies of the Kaiser were burned in the city and country towns.

In France the official Australian war correspondent, Charles Bean, did not celebrate. Instead, Bean visited the tragic battlefield at Fromelles, where the Australians had made their catastrophic entry onto the Western Front two years earlier, and found ‘the old no man’s land simply full of our dead, the skulls and bones and torn uniforms were lying about everywhere’.

Beneath Australian euphoria was apprehension and anger. The world and the nation had changed. There would be no return to the naive confidence of the pre-1914 era. Having sacrificed so much with virtually every home touched by the war, Australians clung to God, King and country. The 1920s would be the decade of the survivors.

The slumbering Australian soul had found a spiritualism in the Anzac ethos, with memorials to be built in every town and monuments to be constructed in the cities to honour ‘the glorious dead’. The Last Post would echo down the century.

Those who speak of white privilege might reflect that approximately half the eligible white male population had enlisted. About 80% of the 417,000 who enlisted served overseas, mainly on the Western Front in France and Belgium, with more than 60,000 killed and 160,000 wounded. On 11 November there were almost 200,000 Australians serving abroad.

Prime Minister Billy Hughes, in London and desperate to be consulted by British PM David Lloyd George about the Armistice, was ignored. An insulted Hughes was wild. He cabled home that the ‘Imperial War Cabinet is a farce and sham’ and decided that ‘emphatic protest’ was the only way to protect Australia’s interests—a pointer to his passionate, outrageous and assertive behaviour at the future Paris Peace Conference. After the war, Hughes had a singular purpose: to tie Australia’s war dead to our diplomatic leverage in an effort to ensure Australian sacrifice produced tangible gains.

In truth, Australia was a small, remote, insignificant, unvisited British Dominion, largely unknown to most of the world leaders who came to Paris in 1919 to remake the world. Indeed, for many European leaders, Australia seemed hardly a country at all and was typically referred to as a British colony.

‘There rests upon us all a crushing burden of debt for, if Australia has done well, she has paid a great price in blood and in treasure’, Hughes said. At war’s end, total public debt was 123% of GDP. Going to living standards, GDP per capita is estimated to have fallen by about 10% during 1914–18; economic historian Ian W. McLean estimated the fall at more than 16%, enough to be classified as a depression in peacetime.

At the end of the war, about half of Commonwealth government spending was war related. While taxes had been raised, the government primarily financed Australia’s war effort by vast borrowing at home and in London. The debt became a post-war burden that damaged Australia’s prosperity and its national options during the 1920s. Australian GDP per capita did not begin to rise until 1920. It regained 1914 levels only in 1923–24.

But the most profound war legacy lay in the human dimension. It was captured by historian Geoffrey Blainey: ‘It was the loss of all those talented people who would have become prime ministers and premiers, judges, divines, engineers, teachers, doctors, poets, inventors and farmers, the mayors of towns and leaders of trade unions and the fathers of another generation of Australians. A young nation could not afford to lose such men.’

Many families were broken. Lives were conscripted to nursing the wounded, the lung-damaged and disabled. This task fell to wives and sisters, but mainly the parents of the young men of the AIF. Historian Joan Beaumont said: ‘They tended to their wounds, spoon-fed them, if necessary, endured their erratic and violent behaviour and bore the brunt of the alcoholism to which some succumbed. Carers got little formal recognition or support.’

The war’s final curse was the transmission to Australia via the returning troops of the global influenza pandemic that killed between 50 million and 100 million people—more than the war itself. It carried off 14,000 Australians, a fifth as many as died in the war. Schools, dances, hotels and churches were closed. Governments were caught unprepared; hospitals were overwhelmed and unable to cope. In Melbourne the Exhibition Building was converted into a huge public hospital. Some people developed symptoms in the morning and died that same afternoon. Fear and suspicion were rife.

At war’s end, the population was just over 5 million and the married fertility rate, at three children a family, was half that of the 1880s. Horses were being phased out in the cities, though tradesmen still delivered meat and milk by horse to the back door. During the 1920s Australians took to the motor car with enthusiasm. Churches were full, people worked long hours, nearly all men smoked, class antagonism became entrenched, and tension between Protestants and Catholics rose alarmingly across society.

Returned servicemen demanded preferential treatment for their sacrifices. They were accorded generous repatriation benefits, yet the needs of the wounded and sick were too great for state provision. Beaumont says many thousands died of injuries shortly after the war; others with facial disfigurement went to Britain for cosmetic reconstruction. There was almost no provision for psychological trauma. A system of ‘soldier settlement’ had been created to encourage veterans to become farmers—yet about half such ventures would fail in the 1920s and 1930s.

Australians were divided between two worlds, a duality mirrored in Hughes. Alfred Deakin’s description of reconciled ‘independent Australian Britons’ was obsolete. A more aggressive, often anti-British, Australian nationalism took hold, championed by Hughes in London and Paris after the war. Yet it was contradicted by a war-weary nation, aware of its vulnerability and clinging, almost desperately, to Britain and the Empire as its economic, emotional and security lifeblood, a stance also embraced by Hughes as the realist.

Australia had been unique among the allies: a pro-war, anti-conscription country. The war and the fierce conscription battle had touched everything and everyone: witness how it shaped the lives of two future prime ministers, Robert Menzies and John Curtin.

Menzies’ two elder brothers had enlisted, but a family conference decided Bob should stay home, the view being two out of three was a ‘pretty good contribution’. Menzies paid a price and suffered slurs for decades. Their zenith came in 1939 when, after the death of Joe Lyons as PM, the Country Party leader, Earle Page, determined to stop Menzies succeeding.

After the party room elected Menzies as leader, Page launched an unprecedented attack on him in parliament, saying his refusal to serve in World War I meant he was not entitled to lead the nation during any second war. In the end, Menzies ascended and Page was discredited—but damage was done to Menzies’ reputation.

During the war, Curtin was a trade-union spearhead against Hughes’ conscription referendums, but as a sensitive man, prone to self-doubt and alcoholism, he had a difficult war. At one point Curtin was convicted and sentenced to three months’ gaol for failing to report for military service under Hughes’ ill-considered laws, only to be released after three days in confinement.

During the war, Curtin championed a mix of pacifism, socialism and Marxist critique of the capitalist system—yet he revised his views to become from 1941 the nation’s successful leader during World War II. It was an improbable transition and a tribute to Curtin.

The Great War ushered all nations, including Australia, into the destructive ideologies that would dominate the 20th century. In the old world it smashed the status quo, unleashing a cocktail of democracy, communism and fascism. The aberration of the century had been born: the 1917 Bolshevik Revolution, with its political tentacles and sinister utopianism contaminating nearly every nation. On 30 October 30 1920, the Communist Party of Australia was formed in Sydney.

Politics was dominated by rancour, polarisation and mediocrity. Above the fray was Hughes, a Labor defector who broke from the party over conscription, now heading the non-Labor Nationalist Party. Diminished by the war, beloved by the diggers, hated by Labor though still Labor in his heart, distrusted by his colleagues, almost friendless in the parliament, bold, tenacious and disorganised, yet possessed of deep insight and political strike power, Hughes was impossible yet unrivalled. As for the quality of government—Hughes would typically arrive late for Cabinet meetings and dive into some wild idea that made orderly decision-making untenable.

The Labor Party, having splintered over conscription and lost its right wing, now moved dramatically to the left. This was a different Labor: more radical, attracted to socialism, union dominated, heavily Catholic and devoid of its pre-war electoral appeal. The 1920s would be a lost decade for Labor.

The Nationalist Party, with its flawed mix of conservatives and Labor defectors, governed until the 1929 elections first under Hughes and then under the political blueblood, Stanley Melbourne Bruce, the most British of our leaders.

The immediate post-war achievement by Hughes—one that brought him both praise and infamy—was his safeguarding of Australia’s interest at the Paris Peace Conference, the greatest diplomatic event to that time in world history. Hughes went to Paris believing he had to secure the terms for Australia’s future existence. Indeed, it was largely Hughes’s defiance that secured Australia and other Dominions separate representation at the conference.

Hughes stayed at the Hotel Majestic just off the Champs Elysées, where he fumed about US president Woodrow Wilson and branded the conference ‘the greatest show on earth’.

Wilson brought American exceptionalism to Paris in the form of his Fourteen Points plan as the basis for settlement, his aim being to discard crude Old World rivalries and to create a new world order enshrined by a League of Nations in which power would yield to justice. Hughes scoffed at such naivety.

‘His stock declines daily in spite of much fulsome and persistent puffing’, he said of Wilson. ‘He is great on great principles. As to their application: he is so much like Alice in Wonderland … Give him a League of Nations and he will give us all the rest. He shall have his toy! What shape is it to assume, you ask. None knew. He least of all.’

Hughes came with three goals. On reparations he wanted Germany, as the aggressor, to pay for the total costs of the war, his aim being to ensure allied nations, including Australia, were assisted with their war debts. While Hughes had the influential position of vice-chairman of the Repatriations Commission, the allies were divided and the Americans opposed punitive reparations. Hughes suffered a defeat when Wilson and Lloyd George agreed on a far softer imposition on Germany.

An angry Australian government felt the nation’s prosperity was jeopardised, but was powerless to shape the outcome. In truth, Hughes was misguided in his obsession with crushing and punishing Germany.

Second, Hughes went to Paris to defend White Australia and scored an extraordinary result: he denied the campaign by Asia’s most significant power and British ally, Japan, to secure a ‘racial equality’ clause written into the League of Nations Covenant. Whether this should be seen in historical terms as a success or blunder is another matter. But the facts cannot be ignored: in 1919 the idea of racial equality was not accepted as a universal principle. For Japan, this principle was fundamental to its honour and status. At the outset Hughes said if he could not prevail on this issue he would walk into ‘the Folies Bergères with my clothes off’.

Throughout the war, Hughes was obsessed with the idea that Japan would become an adventurous power, at one point declaring: ‘All our fears or conjectures that Japan was and is most keenly interested in Australia are amply borne out.’

His biographer, L.F. Fitzhardinge, said Hughes entered the conference ‘convinced that Japan intended, if unchecked, to make some challenge to Australian immigration policy’ and ‘he believed war between Japan and Australia was inevitable’.

Hughes interpreted Japan’s refusal to exempt immigration from its ‘racial equality’ request as confirmation of his suspicions. For Hughes, Japan was a dual threat—military and migratory. The Americans were initially sympathetic to Japan’s demand; the British Empire was opposed. Hughes was unyielding.

An American official wrote: ‘Morning, noon and night he bellows at poor Lloyd George, that if racial equality is recognised … he and his people will leave the conference.’ Hughes threatened the Americans—he would make political trouble in the anti-Japanese inclined Western states of the US if he didn’t get his way. The Americans knew Hughes—these were not idle threats.

The Japanese insisted on a vote at a meeting chaired by Wilson, and 11 out of 17 delegates voted Japan’s way. But Wilson, now fearing a split affirmative vote would have global consequences, ruled against, saying a unanimous decision had been necessary. Hughes won. In reality, Hughes gave the British and Americans ‘cover’ for their domestic need to vote down Japan.

In his book Peacemaking, British writer Harold Nicolson said: ‘The president had, by the skin of his teeth, been rescued by Mr Hughes.’ The Japanese did not forget, and blamed Australia. The government’s most astute adviser on Japan, EL Piesse, said Hughes had given ammunition to the anti-Western, ultra-nationalist lobby in Japan seeking to lead a pan-Asian movement to drive the West from Asia.

It put Australia–Japan relations on a dangerous path. Australian scholar Neville Meaney concluded Hughes’ performance was ‘counterproductive’, that he was ignorant of Japan’s sensitivities, turned Japan against Australia, and misread the dangers arising from the racial equality clause.

Finally, Hughes came determined to safeguard the strategic entrances to Australia—he wanted Australian annexation of German New Guinea. But he ran into Wilson, who insisted upon the idea of mandates for former colonial territories under the League of Nations. Hughes made his presentation to delegates backed by a large wall map, saying New Guinea was as important to Australia as ‘water to a city’. Wilson refused outright to concede New Guinea. This led to the famous clash.

Seeking a compromise, Lloyd George proposed a new class C mandate for New Guinea but tempers frayed. There are many versions of the exchange from different people present in the room. The most celebrated has Wilson repeating his question: ‘Am I to understand that if the whole civilised world asks Australia to agree to a mandate for these islands Australia is prepared to defy the opinion of the whole civilised world?’ Hughes, fiddling with his hearing machine, looked up with a smile and said, ‘That’s about the size of it, Mr President. That puts it very well.’

Perhaps Hughes missed the context; Lloyd George and French president Georges Clemenceau were amused. In these exchanges, Hughes defied Wilson, saying, ‘I represent 60,000 dead.’ Fitzhardinge writes that Lloyd George, surely seeking to create mischief, asked Hughes whether Australia, if given control of New Guinea, would allow free access to missionaries. ‘Of course’, Hughes said brightly. ‘I understand these poor people are very short of food and for some time past they have not had enough missionaries.’

An Australian soldier in Paris told a British journalist: ‘The Little Digger is mounting a great offensive.’ Hughes presumably calculated he was dealing with an American president who had no concerns for Australia or its national interests.

There was much confusion about what the mandate meant—it denied sovereignty but gave nationwide administrative powers. Hughes lost on annexation, but he won on insisting Australia receive the New Guinea mandate. W.J. Hudson concluded: ‘Hughes got New Guinea for Australia on very permissive terms.’ It could largely administer the territory the way it wanted.

Neville Meaney argued that the mandate, instead of annexation, was a superior outcome for Australia. As usual, Hughes left a trail of bad diplomatic blood in his wake.

Returning to Australia, Hughes said ‘it is not a just peace to us’. He had no confidence in Wilson’s international idealism or the League of Nations, with the US Congress later vetoing US participation. Hughes had wanted Germany punished more and remained alarmed about Japan. He boasted about saving White Australia. His deepest faith was belief in a racially united British Empire.

But neither Hughes nor Australia in the inter-war period resolved the contradiction at the heart of this project. Hughes wanted a stronger Australia as a self-governing Dominion, yet he believed its security could be guaranteed only by a more integrated British Empire, symbolising the summit of world civilisation.

The exaggeration that marked Hughes’ performance in Paris was a manifestation of the singular flaw that plagued Australia for a generation after the war—a lack of confidence and loss of national direction. The nation was psychologically wounded.

After the war, industrial militancy was unleashed in the mining and maritime industries. At its 1921 national conference, the Labor Party embraced in its platform the call for ‘the socialisation of industry, production, distribution and exchange’. A new battle had begun in the world and in Australia—capitalism versus socialism.

Hughes survived on policies of economic intervention, special deals and constant appeals to patriotism. The tariff was increased, the arrival of the Country Party saw a boost in agricultural subsidies, Australia became an ‘all-round’ protection country, an immigration program was kick-started, a wages/protection spiral shot Australian competitiveness to pieces, and Australia became a debt-exposed, highly vulnerable nation on the eve of the Great Depression.

The story of the 1920s was survival and recovery. After succeeding Hughes, Prime Minister Bruce declared the nation had an ‘unlimited future’, yet its limitations had been revealed by the war and its recovery was neither convincing nor sustainable.

Australia was marking time, struggling to control its destiny, obsessed about defence yet unable to defend itself and hostage to coming external events that would rattle its foundations.