On the evening of Friday the 13th December 1974, Australia’s Governor General, Sir John Kerr, accompanied with his official secretary, Mr. David Smith, (later Sir David Smith) attended a function at the Sydney Opera House.
When they returned to Admiralty House, where they were staying, late that night Mr. Smith received a message to ring an official in Canberra whom he then could not contact until 2 AM in the morning, where he learned that a meeting of the Executive Council had taken place that evening in the absence and without the knowledge of Sir John Kerr or his secretary, Mr. David Smith.
… Exco meeting urgent? ..
About 8 AM on Saturday morning of the 14th December the Prime Minister Mr. Gough Whitlam rang Sir John to inform him that an important matter had suddenly arisen which required a meeting of the executive Council, which he had called late on Friday night after long consultations with his Ministers. At that late hour they decided not to inform Sir John before the meeting, but after the meeting on Saturday morning.
…G-G persuaded to sign minutes…
Parliament had risen for the Christmas break and Mr.Gough Whitlam was leaving for overseas that day and as all the Ministers present had signed the minutes, would the Governor General sign the minutes and the accompanying memoranda when they arrived by courier at Admiralty House that morning.
His advice was that the circumstances warranted Sir John giving his approval by signing the minutes.
The explanatory note read, “The Australian Government needs immediate access to substantial sums of non-equity capital from abroad for temporary purposes, amongst other things to deal with exigencies arising out the current world situation and the international energy crisis, to strengthen Australia’s external financial position, to provide immediate protection for Australia in regard to supplies of minerals and energy and to deal with current and immediately foreseeable unemployment in Australia.
The minutes authorized Minister Connor to negotiate for an overseas loan of $US4,000 million! That sum of money in those days was enormous, but what Sir John later discovered was that the matter had not gone to Cabinet. Having signed the minutes he was now associated with this unprecedented and as time proved, political scheme of Mr.Gough Whitlams making, based on a dynamic lie.
As the value and purpose of the loan exploded through the media to the nation, the question arose “What was its real purpose”. The enormous public disquiet and suspicion led to the loan never having been undertaken and set in motion a year long political dispute which only ended with the dismissal of Mr Whitlam’s government at an election, after the Governor General Sir John Kerr had withdrawn the Prime Minister Mr Gough Whitlam’s warrant as the nation’s first minister.
The crisis point was reached when the opposition led by Mr Malcolm Fraser had their senate Party “block supply”. This meant that Bills authorizing money supply for the government to pay government employees could not pass in the Senate where the opposition had a majority.
Had Mr Whitlam been able to secure the loan of his design earlier in the year, the Senate’s blocking of supply could have been rendered ineffectualwhile government employees could have been paid and the loan money used as the leverto neutralise any threat from the Senate and blackmail them into passing supply, and possibly leading to other ways of obtaining money other than through the Loan Council.
…resolving political crisis...
As the day when no money was going to be available to pay government employees approached the Governor General Sir John Kerr had to find a way to resolve the deadlock.
His approach was to persuade his Prime Minister to go to an election, as the opposition continued to refuse supply, but in a week of drama and confrontation before the Prime
Minister was dismissed, there ran underneath that eternal psychological parallelogram confrontation between Sir John Kerr and his Prime Minister Mr Gough Whitlam.
Sir John Kerr like Pontius Pilate and Neville Chamberlain before him, with his signature to that midnight Council meeting minutes in his absence eleven months before on a Friday the 13th, was to psychologically empower his adversary and psychologically cripple himself throughout the year long drama.