BEFORE the Japanese bombed Pearl Harbor and overran the “impregnable bastion” of Singapore, the independent, self-governing Commonwealth of Australia was content to exercise only qualified independence, leaving the control of its foreign affairs and the direction of imperial defense to Whitehall. The strength of the British Far Eastern fleet and army and the chain of British military bases stretching through Hong Kong, Singapore, Burma, Ceylon, India, Aden, Egypt, and Gibraltar were regarded as sufficient links in its armor, and most Australians gave no heed to the restless masses of Asia.

By 1939, Australia had become the third largest source for Britain’s needs and the second largest outlet for its exports. The Prime Minister was a brilliant young barrister named Robert Gordon Menzies, of whom it was often said that he felt more at home in England than in Australia. Flocks of Australian debutantes went off each year to be presented at court. They traveled aboard ships whose holds bulged with wool, wheat, meat, and other primary produce on the journey to England, and with manufactured goods on return.

The Pacific war shattered Britain’s colonial empire in Asia; it also shattered the Australian’s complacency and existing way of life. It thrust Australia into an alliance with the United States, changed the character of its relationship with Britain, and led to the reluctant appreciation that, as a European outpost in the Asian area, it would need to take urgent note of its neighbors.

As a loyal member of the British Commonwealth, Australia today remains close to Britain, but its relationship is no longer that of a child unwilling to release its grip on mother’s skirt. In terms of defense, it is clearly understood in Canberra that the days when Australia’s security could be assured within the framework of the imperial defense system have gone forever. In terms of trade, it is recognized that Asia — in particular, Japan, and possibly China — offers greater future prospects than Britain and other European countries now preoccupied with the problems of economic integration. Although Australia continues to buy 40 per cent of its imports from Britain, less than a third of its current $2 billion export trade is with the mother country, compared with 50 per cent in 1939. And finally, in terms of nation building, it is appreciated that Australia cannot survive pressures from the land-hungry, overpopulated, and sometimes expansionist countries to its north if it fails to expand its own population and to make adequate use of its resources.

Politicians of all parties insist that the need is urgent, but real leadership is often lacking. On the one hand, there has been tremendous industrial development in the temperate southeastern corner of the continent, especially in and around the cities of Sydney and Melbourne, which between them contain about four million of the country’s ten million population. On the other hand, the pioneer spirit has been absent from the get-rich-quick philosophy of these southern cities; the tropical northern half of the continent contains only 4 per cent of the population, and neither private enterprise nor the government has troubled seriously with its development.

Keeping Australia white

So far, all major Australian political parties have firmly rejected the increasing demand to permit Asians to enter Australia for permanent residence. Among the older generation the determination to keep Australia white has become more of a passion than a policy, and inevitably the resentment this occasions has collided with Australia’s good neighbor policy and the expansion of its interests and influence in Southeast Asia.

Australia’s support of Dutch claims to West New Guinea has also bedeviled relations with Indonesia, its nearest neighbor. In fact, the need for friendship is often confounded by fear, with the result that Australia, though largely free from any inhibiting colonial taint, has played less of a role in Southeast Asia than its recent industrial development and own needs and geographical situation might suggest. It contributes a modest annual sum of about $10 million to the Colombo Plan, but it can point to no really significant foreign aid project other than the opening of its schools and universities to Asian students, who, because of the “white Australia” policy, are packed off to their home countries as soon as they have concluded their studies.

The birth of industry

Many would like to stay, for Australia is in the exciting transitional phase that the United States experienced in the closing two decades of the nineteenth century. This has been marked by the appearance of the first industrial entrepreneurs, who have in a generation changed Australia from an almost exclusively agricultural society into a small but significant industrial state. Today Australia has more than 5000 factories, employing 1,250,000 workers. Manufacturing employs a third of the total labor force and produces a third of the national income. Total output and the output of basic industrial necessities, such as ingot steel and cement, have also doubled; their growth may be expected to increase even faster as the billiondollar Snowy River hydroelectric scheme adds another three million kilowatts to power output during the next five years.

Not all of the growth has been healthy, however. Along with increased production went, sometimes, uncontrolled inflation, which still threatens to price Australian goods out of potential Asian markets. The pound, worth $2.23, has lost two thirds of its value in terms of real money. A disproportionate amount of investment has gone toward prestige office building, and Melbourne, in particular, is experiencing a dangerous land boom.

Encouraged by the absence of a capital gains tax, speculators have made quick fortunes. Sewered home sites of any sort in Melbourne are unobtainable for less than $4500, an astronomical figure when measured against the male average weekly wage of less than $50. Nevertheless, 63 per cent of Australian homes are occupied by owners or by people buying them on installment, and the general level of prosperity is reflected by roads crowded with automobiles - one for every four persons — and by soaring sales of consumer goods.

New blood and new money

Though special inducements are offered to encourage British settlers, Australia has absorbed more than half a million non-British European immigrants in the million new settlers attracted to the country since the end of World War II. Dutch, German, Polish, Yugoslav, and Greek immigrants in large numbers have enriched the Australian culture, improved its cooking, contributed immeasurably to its industrial development, and given the nation a cosmopolitan character that was entirely lacking before the war.

Along with the immigrants has come a considerable inflow of private foreign investments, including more than $750 million from the United States. Some 800 American firms have invested either technology or capital with results that have been consistently successful and sometimes spectacular. The General Motors Corporation pioneered the automobile industry with a mediumsized car, the Holden, which accounts for nearly 50 per cent of all sales and earns for its parent company a tidy $33 million in profits. Since General Motors has not encouraged local financial participation in its activities, publication of its accounts creates an annual furor.

The amount of American and other foreign investment accounts for a sizable 8 per cent of the total, and there are the inevitable fears that repatriation of capital and dividends will place too much of a strain on the economy and that local investors may cease to be the dominating factor in the country’s growth and future.

That American know-how and capital have played a significant part in Australian development is generally acknowledged; there is a deep concern because of American cultural penetration. Australian architecture, music — and teen-agers — show a strong American bias. But television, comic strips, the pulp magazines, and paperbacks, coupled with the preoccupation of the Australian newspapers with the froth and bubble and the seamy in American life, have combined to produce an image of the United States that is neither flattering nor helpful in building up confidence in its leadership of the free world.

The issue of Red China

There is little fear, however, that Australia, in the predictable future, will deviate from a foreign policy that runs roughly parallel to that of the United States, though from time to time the government considers the recognition of Communist China. The Country Party, which, as its name implies, is concerned primarily with the furtherance of agricultural interests, sees China’s 650 million as a huge, unexploited market for Australian farm produce. For this reason it has been a consistent advocate of the British, as opposed to the American, policy in the Far East.

The larger, Liberal partner in the Liberal-Country Party, realizing that the U.S. 7th Fleet and its bases in the North Pacific are at least a partial substitute for the protection theoretically afforded by the imperial defense system of twenty years ago, sees the issue in broader perspective, and while Peiping continues to insist that recognition must also include recognition of China’s right to “liberate” Taiwan and pursues its current bellicose and anti-American policy, the government may be expected to resist demands for change.

The Australian Labor Party, on the other hand, is in favor of immediate recognition, though it prefers not to discuss Taiwan’s fate. Some of its leading members have made the red-carpet tour, returning with enthusiastic accounts of life under the Communists to buttress the quasineutralist official party program drawn up under the leadership of Dr. Herbert V. Evatt. This views with disfavor Australian participation in military treaties such as SEATO and the stationing of token Australian forces in Malaya as part of the Commonwealth strategic reserve in Southeast Asia. Curiously enough, in a country traditionally little concerned with foreign affairs, this policy has helped to keep Labor out of office for the past eleven years.

With a rank and file drawn largely from the Irish Catholic group, who have always figured prominently in Australian labor politics, a strongly anti-Communist breakaway group calling itself the Democratic Labor Party has been set up in opposition to the A.L.P. Backed by an influential section of the Roman Catholic hierarchy, the D.L.P. commands about 12 per cent of the electorate in populous Victoria, enough to keep the A.L.P. out of office until it alters its foreign policy and its members dissociate themselves from the Communists in trade union elections.

Meanwhile, Mr. Menzies, whose intellectual capabilities are on a far higher plane than most of his political contemporaries, but whose leadership has never proved inspiring, has added the external affairs portfolio to his prime ministerial duties and in this dual capacity attended the Commonwealth Prime Ministers’ conference in London and the SEATO meeting in Washington earlier this year. The experience proved fruitful.

For years Mr. Menzies, a close supporter of the Eden Suez policy, had appeared more interested in the sophisticated problems of Europe than those that maturity and the Asian revolution brought crowding to his own back door. This time he returned to Australia obviously concerned with what he had learned of Communist China and the impact it may one day have on Australia.

The result is a new official appreciation of the need for the development of northern Australia, an unusual emphasis on foreign affairs, and some belated interest in the Australian territory of Papua and the UN trust territory of New Guinea, where Australia has now decided to expedite the processes leading to self-rule for the approximately two million natives.