Clyde Packer, No Return Ticket (North Ryde, NSW: Angus & Robertson Publishers, 1984), pp. 100-29 (the Maxwell Newton chapter).

Amongst the great figures of Australian journalism stands Maxwell Newton. Apart from his editorships of the Financial Review and the Australian, he was a man who rolled dice with governments and affected the careers of prime ministers, Cabinet members and public servants. In one decade, he became a newspaper owner, a hopeless drunk, a bankrupt and, in final desperation, an operator of several sex-for-hire businesses in Melbourne’s seedy massage-parlour industry.

He met his present wife, Olivia, who was also an alcoholic, when his fortunes were at their lowest ebb. Today, Newton, with the support of Olivia, is again plying his trade as a provocative financial columnist and author. Expatriation gave Newton an opportunity to wipe the slate clean and, at fifty-two, start again.

Max Newton was born in Perth in 1929, the son of English migrants. His father was a lead-burner in a sulphuric acid factory in Perth, and it was from him that young Max acquired the strong desire to be the top of the class — a desire which has dominated him throughout his career.

Newton attended Bayswater State School which provided public education up to the school-leaving age of twelve. The only way he could continue his education was by winning a scholarship to Perth Modern School, and from there hopefully move on to university. Obtaining a scholarship was tough. Most of the successful applicants, out of the many hundreds who sat for scholarship examinations, were prepared at two special cramming schools that catered mainly for the children of middle-class families. Mr Newton Sr managed to scrape up enough money to get his son tutored every Saturday morning for the scholarship examination. Newton just got in.

“My recollection of those years is one of fierce competition and tremendous striving for academic achievement. When you took your junior year, when you were fifteen, most people had their papers marked only up to the point where they passed. But at Perth Modern School, we used to pay extra and get our actual marks so we knew which kids in the class had actually done better. It wasn’t a question of passing, it was a question of who won. The whole environment was one of ferocious competition. In my class, I was at the top, or near the top, a lot of the time.”

The secretary of Newton’s class was John Stone, at present the Secretary of a much bigger class, the Federal Treasury in Canberra. Another classmate was the former West Australian Labor senator and minister John Wheeldon, currently Foreign Editor of the Australian. Also in Newton’s year was that “bumptious little bastard”, Bob Hawke.

Newton did well at school. He finally left with exhibitions in English and history. He says the crème de la crème of the boys at Perth Modern were streamed into the science subjects, but Newton decided to study English, history, Latin, French and two units of maths, “with the girls”. He also played hockey and was picked for the West Australian under-twenty-one team. Outside school, he studied typing, Esperanto, German and Russian, taking extra French at the Alliance Française. He won medals for French and Esperanto. He was an enthusiastic cadet-lieutenant in the school corps and in 1945, attended camp in Victoria at Puckapunyal, expecting to go into the army as an officer if the war continued. He was a prefect but “too unorthodox” to have been considered for school captain.

“I used to engage in tomfoolery with Jack Wheeldon … like we used to get Hawke and put his legs underneath the iron legs of the desk and bend him back over and twist his arms round behind him and carry out a drum beat on his chest to get him into order. We used to put his books out the window and he’d have to get out on a two-storey window ledge to get them back. We tormented him. Another thing; all the kids were terrified about masturbating. Terrified. My father bought a book called The Encyclopaedia of Sex Knowledge and he hid it on the top of his wardrobe. My brother and I found it and I read every bloody comma about masturbation and I was the full bong on it and knew that it wasn’t going to do anything to you. I used to conduct little seminars and tell these kids that there was nothing to worry about. I think I had a very material effect on the peace of mind of a whole generation of boys.”

Newton’s two exhibitions took him to St George’s College at the University of Western Australia. In his first year at university he worked hard and got two A’s and two B’s. He got the B’s in English and history: “Which is what I got the exhibitions in, so there obviously was something wrong.” He took the line of least resistance and dumped English and history and concentrated on economics and French. Shortly after arriving at college, Newton showed the first indications of what was to be a lifelong problem for him: he started drinking heavily.

Newton struck up a friendship with an older student in the Economics Department, a man who was to have a considerable influence on him both intellectually and more seriously, he says, as a social role model. Austin Holmes had been a navigator in the RAAF and was studying under the Commonwealth Reconstruction and Training Scheme. Holmes later became a senior economist with the Reserve Bank, where he worked under “Nugget” Coombs, and was an important public official during the Whitlam years.

“In my first year, I was still acting like a schoolboy, underlining lots of stuff, reading lots of stuff, being terribly zealous and, in the end, no good. Aus told me that was ridiculous and suggested I go down to the pub and talk to him. He suggested I read a book called The Art of Study by a British psychologist named Mace. I did read it — it’s only a thin book — and it was just like the whole world opened up, and I suddenly understood what it meant to be able to think. Aus taught me to think in terms of principles, to have contempt for the examination system and to learn how to exploit it, which I did. I learnt to tip the exam questions and worked intensively three weeks a year just before them. It worked. I got A’s all the way through.”

However, Newton got a nasty shock when this system almost failed him in the final French examination. He took the exam, “… so drunk I could hardly write”. He got a B. The result was a bitter disappointment, not only to Newton but to his teachers. His French record had been one of the best in Perth for years. Newton, not yet twenty-one, was becoming increasingly concerned about the demon which took him over when he drank and he was frightened where it might lead. One night, he took a girl to the riverfront and the next thing he recalls is walking through King’s Park, five kilometres away, stark naked.

In his third year at the UWA, the contest for the Rhodes Scholarship was a two-horse race between Newton and his old school-chum John Stone. Both were considered, but Stone “walked away with it”. Stone and Newton had lived together all through college but Newton, unlike Stone, was not considered “fit enough” to eat at the high table at St George’s College. Although socially disabled by his drinking, Newton worked hard enough to win prizes in economics and French and got first-class honours. After a year’s graduate work at the UWA, he was awarded a Hackett Studentship to attend an overseas university of his choice. He was accepted by Clare College, Cambridge, where his mentor Austin Holmes had preceded him the year before.

The scholarship arrived in the nick of time. Newton felt he had to get out of Perth. He felt very much the “jeune hommes des provinces.” He stood out on the platform of the Perth central railway station every night on his way home and watched the Westland express leave, wondering, “Will I ever get to the eastern States?”

The scholarship was worth £1000 for two years at the rate of £500 per annum. To conserve funds, it was important to get to England for as little as possible. His mother, who worked as a secretary for a legal firm in Perth, was finally able through her office to get Newton a job as a dishwasher on the SS Otranto.

“I worked that ship all the way to England and when I was paid off, I got £17 as wages. In between Fremantle and Tilbury, I washed something like 300,000 dishes. In the cabin of the Otranto, which I shared with seven other male members of the crew, I ended up acting as the mediator between my three other heterosexual cabinmates and ‘Hilda’, ‘Delores’, ‘Jean’ and ‘Pam’.”

Arriving in England months before the beginning of the university year, he got a job driving a tractor for a while, and then took off to the Sorbonne in Paris for a two-month course in French literature, grammar, and “purification of accent”. Accent properly purified, Newton retired from Paris to a farm in Auvergne where he worked as a labourer, and then met up with an old friend in Marseilles who had also won a scholarship. The two Perth boys completed the final leg of their journey to Cambridge on a motorcycle.

The Max Newton who attended Clare College, Cambridge, was a very different man to the clever but contemptuous young soak who had bluffed his way to distinction in Perth.

“I never became involved in the life of the university, I did not drink, I did not smoke, I did not fool around. I did nothing but work or go to the pictures. My neighbour at Clare was Norman Podhoretz, and he and I in effect spent the whole year together sharing our coal and our food parcels. We never ate in hall, never really had anything to do with the young English at all — the young English gentlemen.”

In England in the early 1950s, after almost a decade of the Welfare State, there was still egg, meat, and coal rationing. Newton’s mother sent lots of tinned meat, especially tinned stew, which the Jewish-American Podhoretz had never tasted. Podhoretz’s mother sent across whole tinned chicken and other exotic American tinned foods which Newton had never dreamed existed.

The relationship between Max Newton and Norman Podhoretz was more than a convenient pooling of resources. These two clever but slightly awkward colonials shared an aloofness — or sense of insecurity perhaps — which prevented them joining the undernourished but gilded youths at table or at play. Newton taught Podhoretz French, which was part of his course of study, and Podhoretz reciprocated by showing Newton: “… how it was possible to be honest in one’s thinking. By the time I got to Cambridge, I’d developed some very nasty habits, contempt for any serious ideas, contempt for the educational system which I’d exploited for years, a gift for the slick answer.”

Newton was supervised by a tutor called Brian Reddaway who specialised in applied economics. “I had to unlearn a lot of the old rubbish that I’d half-learned in Australia. I was able to con them in Western Australia. I couldn’t con everybody at Cambridge. I got extra supervision from Joan Robinson. I was asked to be a member of a very elite group called the Political Economy Club, which Keynes had founded, and which was then run by a man called Dennis Robertson, who was Professor of Political Economy at Cambridge. I didn’t work hard in the sense of working long hours, but what I did do I really tried to understand.”

In 1952, at the end of his first year at Cambridge and aged twenty-three, Newton married Anne Kirby Robertson, a Perth girl he had met at the University of Western Australia and who had followed him to England, determined to marry him. The romance bloomed in England and Newton reciprocated Anne’s desire of marriage.

To supplement Newton’s scholarship, she took a job teaching a school in Cambridge and they rented a large house just outside the town where they took in boarders. Newton obtained a summer job at Australia House working for Jim Nimmo, the Treasury representative, and commuted from Cambridge to London by train each day. He had received a bit of a jolt in the examination results at the end of the previous year. He narrowly missed a “first”, and so his final year was really hard work.

“At the end of the year, I took the examinations and I nearly wrecked myself. I’d been nearly two years without a drink and the examinations were morning, afternoon, morning, afternoon, morning, afternoon, morning. Bang! That’s it! Three and a half days and your life’s finished. On the evening of the third day, there was a cocktail party given by the Master of the college and I had a few sherries and I got drunk and drank the whole bloody night. At four o’clock in the morning, I started vomiting and I was so ill I could hardly get up. Anne gave me a big bucket of glucose and a big packet of Aspros and I told the invigilator on the final morning I was sick. Somehow I finished that examination. I got up every fifteen minutes, had a drink of water and some glucose and another Aspro. I was that crook. Skinned right down to the lean meat. A few weeks later, it was announced that I had got one of the two firsts that were given that year. I was given a thing called the Wrenbury Scholarship — it was for the outstanding economics graduate of the year — and was made an honorary scholar of Clare College. I was on top of the world. And once more top of the class.”

Newton’s college asked him to stay on and offered to find some money to provide him with a junior fellowship. By this time, however, “after seven years of exams”, he was anxious to leave university life. He managed to get a job at Australia House in the Treasury section as a base-grade clerk. This was unheard of, an appointment to the Australian public service being made overseas. Additionally, it was rare in those days to appoint a graduate. He worked at Australia House for a year and saw all the cables coming in from Canberra.

After a year in London, the public service decided he should return to Canberra. By this time, Max and Anne had become the parents of a daughter — Sarah. The three Newtons embarked on the liner Himalaya at government expense and returned to Australia in comfort. The reception Newton received in Canberra was in some contrast to the ease of the leisurely trip home. The Treasury, concerned at the irregular manner in which Newton had been engaged and apprehensive of his superior qualifications, decided he must start at the very bottom of the totem pole. The work he was given to do was “meaningless”.

As no housing was available, Newton and his family were first quartered in the Hotel Acton, a government hostel where the three of them lived in one room and ate in a cafeteria. Then the public service decided to move him to an even less comfortable hostel because Treasury officials decided that he was not “senior” enough for the Acton. There were allocated a room in an old fibro hostel:

“Our clothes were hung up on a bit of dowling with a curtain across. It was like living as a refugee and I dropped my bundle. I sat on the floor of our room each night with a flagon of sherry and just drank it. I had no prospects and it seemed to me that everything I’d done had been wasted. I was absolutely bewildered, confused and had completely lost my confidence.”

Newton had met on the ship home a man called George Thompson who owned a company in Sydney called Marshall Batteries, which sold car batteries by mail-order. “I’d been getting £19 a week so I wrote to George. He wrote back and said I could have a job for £22 a week.” Newton resigned from the Treasury and left for Sydney.

Although he did not stay long at the Treasury — a year in London and a year in Canberra — he did persuade an old classmate to join it: Rhodes Scholar John Stone. When Newton left London, Stone inherited his job at the Treasury section in London.

George Thompson lent the Newtons £3000 and they bought their first home in Harbord for £4500. “It was a terrible Sydney junk-built, mass-produced timber and fibro place, but to us it was like a dream come true.” Newton, who by then was twenty-six years old and earning £22 a week, soon decided that he had to leave Marshall Batteries. He describes his sometime shipboard friend George Thompson as: “A terrible, tyrannical bloody bastard. Poor bugger, he died a few years later.”

Newton wrote to the Bank of New South Wales. He was promptly interviewed and offered a job at £1200 a year and once again found himself with nothing to do, this time in the research department of Australia’s oldest bank. “I wasn’t allowed to do anything meaningful. I wasn’t allowed to write anything. So I started my own battery business out in Harbord. I used to make batteries down in a shed at the back of the house with a blow-torch and acid and the rest of it, and sell them in the Manly Daily. I’d get up at about five o’clock and make the batteries and then come to work at the Bank of New South Wales and do nothing.”

In 1956, Professor H. D. Arndt of the ANU had organised a group of economists to make a public statement calling on the government to take measures to fix the perennial balance of payments problems and get inflation under control. Having nothing else to do, Newton wrote a series of letters to the Sydney Morning Herald on this subject. All were published, bearing the signature, Maxwell Newton, Harbord. Shortly after the fourth letter appeared, Newton received a telephone call from John Pringle, Editor of the Herald, asking him to come in to the office and see him. Pringle introduced him to Tom Fitzgerald, Financial Editor of the Herald, and they both arranged for him to meet Rupert Henderson, Managing Director of the Fairfax group.

Rupert Henderson told Newton: “I think you’ve got an outstanding future in journalism. What do they pay you at the Bank of New South Wales?” Max told him £30 a week. “Which was bullshit, I was getting £24. I was frightened that somehow they’d find out.” Henderson offered him £40 a week. Newton somehow mustered the courage to reply, “Well, I’ve got very good prospects at the bank, Mr Henderson. Can’t you do any better than that?” Henderson replied that if Newton was any good, he would give him £50 a week in six months. “So off I went to the Sydney Morning Herald.”

After a few months of kicking his heels in the corridors of the Fairfax building, he was sent to Canberra as the Herald political correspondent. The Herald had previously stationed in Canberra John Malone, who was the political correspondent for the newspaper, and a journalist called Roger Rae. Rae was the general reporter who did all the work; Malone was the great political writer who wrote “the piece” every week. Newton was meant to replace Malone, but nobody had indicated what Newton’s standing or authority was.

For six months, Newton did virtually nothing. Finally, at Christmas, he went to Sydney and saw Fairfax’s General Manager Angus MacLachlan and offered his resignation. But the canny MacLachlan refused to accept it and told Newton to take a month’s holiday. When he returned, Pringle sent him back to Canberra promising that every Tuesday he would have an article in the Herald. From 1957 to 1960, Newton lived in Canberra with his family, writing for the Herald and doing the lead article for the Financial Review when it got going.

In 1958, Warwick Fairfax and Rupert Henderson decided to return to an old theme: the unhorsing of Robert Menzies, Australia’s Liberal Prime Minister. The decision involved supporting the Opposition Leader, Dr H. V. Evatt, an erratically brilliant man whose mind was probably even then in the early stages of the debilitating disease that eventually ended his public life. Evatt (known as “The Doc” was given the full support of the Fairfax organisation in an attempt to bring down the Menzies government.

Max Newton’s role in this was to act as speech-writer and de facto policy-maker for “The Doc”. It must have been heady stuff for a young man who, a couple of years before, had been making batteries in his backyard and yawning through his days at the bank.

“During the 1958 election campaign, I was with ‘The Doc’ on the road. His mind had gone at that stage. It was so difficult to get any rational ideas across to him. I’d write articles for him about defence policy and economic policy, I’d write speeches for him about banking, and he’d go into Parliament and couldn’t make a rational speech. Afterwards he’d say he was sorry. I would have to say to him: ‘Look, Doc, if you don’t bloody-well read what I give you, you’re not going to get speeches, so you do what you’re told.’ It was quite obvious that Henderson saw me as someone who could be of great use to him in all sorts of ways, in writing speeches and creating policies.”

In the 1961 election, Henderson instructed Newton to perform the same services for Arthur Calwell and Newton wrote almost all of the new Labor leader’s important election speeches. Newton says Rupert Henderson said to him once: “If I told Arthur Calwell to stand on his head in the corner, he’d st-a-a-a-a-a-nd on his head in the corner.”

“In Canberra, I was an innovator. I was one of the first journalists to penetrate the civil service. I ignored the politicians; they bored me. Alan Reid knew Roland Wilson and he knew Allen Brown and Jack Bunting [top echelon Departmental Secretaries] on a sort of Commonwealth Club level. But I knew the grubby little bastards down the line who were doing the dirty work and I got to know them very well and penetrated the whole setup. I knew from my experience in the Treasury that these officials were really the ones that ran the show and that they knew weeks and often months ahead of the ministers what was going on.”

However, not all Newton’s contacts were “grubby little bastards”. He re-established old links at the Treasury, where he had started his career. “I was able to go back and interview people like Dick Randall [by then Deputy-Secretary of the Department]. I became friendly with Tom Strong, the head of the Bureau of Agricultural Economics. He was really the one who opened my eyes to Alan Westerman and the whole of his Department of Trade apparatus. Alf Rattigan, when he was Chairman of the Tariff Board, was tremendously helpful to me. One official I got very involved with was Don Anderson, the Director of Civil Aviation. The two-airline policy was evolving at that time. I became almost a member of the civil aviation apparatus. They used to show me draft bills before they went to the minister, they’d show me the internal documents, and I reported their side of the story and was materially a part of the whole campaign. These issues included stopping TAA getting the Caravelle, trying to stop Ansett from getting the Electra; trying to force them both to make the Viscount 800; stopping Vicker’s from selling one of their big terrible models to Qantas.”

In 1960, Newton was asked to come back to Sydney and take over direction of the Financial Review, as Managing Editor. In typical Fairfax fashion, Harry Williams, the Editor, remained. Newton finally worked out a modus vivendi with Williams which gave him control of the staff and the stories, while Williams processed the copy. The Financial Review was still a weekly with a circulation of 9000. Within two years of Newton’s arrival, the circulation had more than doubled to about 20,000, and Newton was pushing management to make it a bi-weekly with publication on Tuesdays and Thursdays.

He became quite theatrical in some of his confrontations with the Fairfax management. There were “… huge rows, sulking, carryings-on and my usual appalling bloody behaviour”. However, one thing Newton was not doing during that period was drinking. He had had a nasty shock when he came back from Canberra in 1960. His wife Anne wanted to leave him and go back to Canberra to live with a diplomat from what was then appropriately called the Department of External Affairs. “I pleaded with her, I got down on my knees and I said that if you don’t go I will not drink again. And I did not drink again for the whole time I was with her, during the whole of our subsequent ten years together.”

Newton recalls of that period: “OK, so here I am, I’m not drinking, I’m really charging. The Financial Review is going like a rocket. My prestige in the building is high. But I’ve still got problems. Angus Edward Upjohn Maude [an Englishman imported by Fairfax] is now Editor of the Sydney Morning Herald and has got the right of veto over my leaders in the Financial Review, which I detest! This was the Fairfax ‘thing’ — the Editor of the Sydney Morning Herald controlled all thinking in the entire organisation. Everything — the Sun-Herald, the Sun, Pix-People, Radio, Television and Hobbies, the Financial Review — all came under the Editor of the Sydney Morning Herald who was the foundation of all policy thinking, because he was Warwick’s chosen instrument. I head a fearsome guerrilla war with Maude. He used to like to go out and have a long dinner, come back three-parts shickered and I was supposed to have a galley [proof] of the Financial Review leader ready for him to see.”

Newton would not cooperate. He would put the galley-proofs of the editorials under the wrong door, or wait until one in the morning to send them up to Maude, hoping he had gone home. “At one stage I got so enraged with Maude having anything to do with anything that I did that I said to Jules Zanetti, the chief subeditor at the Financial Review, ‘Get last week’s leader and put another head on it and see if they notice they difference’. Well, they didn’t. It was pathetic.”

When he did do was tighten up the deadlines and get the paper out on time. “When I cam there they couldn’t get the bloody thing out until two o’clock in the morning; a twenty-eight page paper! I got it back to quarter past twelve and that allowed us to catch planes to Melbourne and Brisbane. I got really involved in the close management of the paper. It was exciting.” The Financial Review went bi-weekly, sales rose to 28,000 and it started to attract a lot more advertising.

In 1962 and 1963, Newton had problems with Warwick Fairfax and Rupert Henderson over editorial policy. Fairfax believed Britain should join the Common Market and that his papers should support Britain’s entry: “At that stage, I was close to Jack McEwen and against both Menzies and Warwick on that issue. I believe that it would be very bad for Australia if Britain went into the Common Market.”

He also believed strongly that Australia needed some sort of restrictive trade practices legislation and Fairfax hated the thought of it. Newton frequently published articles in the Financial Review advocating viewpoints opposed to Warwick Fairfax’s policies.

However, he was sent to London, in 1962, for the meeting of the Commonwealth Prime Ministers on Britain’s proposed entry into the Common Market. Jack McEwen briefed him each day in his room at the Savoy Hotel. Newton and McEwen were working together, trying to ensure that Menzies did not support Britain’s application to the Common Market. On this issue, Newton, as a Fairfax editor, was opposing his proprietor’s policy and McEwen, as a senior minister in the Menzies Cabinet, was opposing his Prime Minister. Co-conspirators indeed!

In the end, they won the battle. Menzies, the last great Australian imperialist, told the conference, chaired by Harold MacMillan, that the British should not ally themselves in the Common Market with the Europeans whose ideas of democracy were both recent and sketchy. These remarks were made in closed conference, but Menzies later released the text of his speech to the press.

Once more, this was heady stuff for Newton: “Menzies went over to Jack’s [McEwen] said and dumped MacMillan which was a bloody sensation … and, of course, in the background, Jack’s main ally was Beaverbrook who had the imperial lady in chains on the masthead of the Daily Express.”

However, his role in persuading Australia to oppose Britain’s entry into the Common Market was another case of winning the battle and losing the war. Britain did, of course, enter the Common Market and for Max Newton his London trip represented the high-water of his relationship with Jack McEwen. Like so many of Newton’s former associates, he was destined to become a bitter and implacable enemy.

Newton found himself arguing with management, not only on matters of editorial policy, but also on the future of the Financial Review. He spent most of 1963 persuading Henderson and MacLachlan that the paper was ready to be turned into a daily like the Wall Street Journal (which appears every day the Stock Exchange is open). After a false start in August which was aborted when news of the change was leaked without Henderson’s approval, the Financial Review finally became a daily in October 1963. The price was held at one shilling and sales settled at 19,000. The Fairfax management refused to drop the cover price to sixpence. Newton disagreed at the time, but when he published his own papers he became just as fond of high cover prices.

In 1963, the old Liberal warhorse Robert Menzies took to the campaign trail for his last election. At Fairfax headquarters, there was a rare division of opinion between the laird, Warwick Fairfax, and his steward, Rupert Henderson. Warwick Fairfax had married his third wife, Mary Symonds, a socially ambitious woman. By 1963, she was almost certainly waiting for the happy day when the gates of Buckingham Palace would open to them both and her ageing husband would bend his knee to the Queen and rise, making her a Lady. Apart from this, that great national barometer of prosperity, the classified columns of the Sydney Morning Herald, was bulking up after some lean times in 1961 and 1962. The Fairfax patrimony was safe again. The upshot of all this was that Warwick wanted the Menzies government returned. Henderson, on the other hand, probably felt that by this time he had a considerable investment in Arthur Calwell, and no doubt hoped that a Labor government would rearrange the television licensing system in a manner more suited to the Fairfax interests. Had Arthur Calwell won the 1963 elections, Rupert Henderson would have been the eminence grise of the new government.

Max Newton was instructed by Henderson to continue supporting Calwell, both editorially in the Financial Review and by assisting with the planning of policies and the writing of election addresses. He worked closely with the ALP’s advertising agency, McCann-Erickson, and with Arthur Calwell himself. However, seven days before the election, Warwick Fairfax intervened and caused an editorial to be published in the Sydney Morning Herald headed “Why the Government Should Be Returned”. This was repeated in the Sun-Herald the next day as an editorial, despite the not inconsiderable news of the assassination of President Kennedy in Dallas, Texas, the day before.

That Monday, before the election, a gloomy quartet of Fairfax executives, including Newton, met in Henderson’s office to assess the damage. Newton remembers Henderson asking him: “Well, what do you think about it all now, Mr Newton?” Newton said: “I feel sick … What’s going to happen when Mr Fairfax gets his knighthood?” Henderson replied: “Then my humiliation will be complete.” But Henderson’s humiliation had to wait another four years. Menzies won the ’63 election handily and retired without knighting Warwick Fairfax. That distinction fell to Sir Robert Askin, a man who was later to be accused on his deathbed of personal corruption by a Fairfax publication.

The split in the office affected Newton’s enthusiasm for his job. Early in 1964, he sought out Rupert Murdoch who told him that he was looking for an editor for a daily paper he intended to start up in competition to the Canberra Times, to be called the Australian. Newton resigned, taking with him a number of journalists for the new paper from the Sydney Morning Herald and its associated publications. However, Henderson was far from idle. He activated a secret agreement with Arthur Shakespeare to purchase the Canberra Times and quickly changed it from a sleepy provincial paper into a more ambitious broadsheet, thus undermining Murdoch’s market in Canberra.

Thus checked by Henderson, Newton and Murdoch were forced to make the Australian a national paper produced from Canberra. This caused Murdoch tremendous problems, and put his group into a trading loss, something he had told the Commonwealth Bank (which was supporting him) would not happen. The pressure had its effect on the relationship between Newton and Rupert Murdoch. Newton would last as a Murdoch editor for just under a year.

“Rupert and I drifted apart. Rupert became more worried about his business. He became suspicious of me, I think, because of my connections with the Treasury. He was very deeply involved with Jack McEwen then. He supported protectionism, he supported many Left-Liberal causes. He was violently opposed to the war in Vietnam which I thought was a very important thing for Australia. I remember recommending that we support the bombing of Haiphong Harbour. Rupert was appalled … I don’t blame him for being frightened, he had bloody good reason to be frightened. About the middle of 1965, an agreement was reached that I quit.”

For the first time in his life, Newton, aged thirty-six, was unemployed. He owned a 1958 Holden, had £3000 in the bank and was living in a house in Canberra owned by Murdoch which he would soon have to vacate. He had a wife and three children to support. He persuaded Staniforth Ricketson of the Melbourne brokerage firm of J. B. Were to pay him £2000 a year to produce a weekly Canberra letter for the firm and its clients. He became a stringer, paid only when his work appeared, for the London Economist, the Financial Times and Time magazine. He found it impossible to make any real money.

In some desperation, he started a newsletter, Incentive, dealing with economic policy and politics and charged $30 for an annual subscription. At its peak, the letter had 800 subscribers and became extremely profitable. Newton bought a house in the Canberra suburb of Deakin and later put a deposit on the house next door which he turned into an office.

He then bought the Management Newsletter from the firm of W. D. Scott and Co. and also contracted to write Scott’s economic advisory letter to their clients. Within two years of leaving the Australian in May 1965, Newton was grossing in excess of $100,000 a year and his only significant expense was postage. At about this time, Massey Stanley, a former journalist doing public relations work for Japanese interests in Australia, asked Newton to write a newsletter about tariff developments for the Japanese External Trade Organisation known as JETRO.

Another important contact was made early in 1967, when Newton’s old chum Sim Rubensohn, boss of McCann-Erickson (the agency which produced Labor’s advertising in the ’59, ’61 and ’63 elections), introduced him to one of the agency’s clients, Dick Crebbin, the Chairman of Marrickville Holdings Ltd, who was trying to get restrictions on margarine production in Australia abolished. Newton says of this relationship: “I gradually came to have a very important role in that company. I wrote their annual reports, but more importantly, I became very much involved in the campaign to have margarine quotas abolished.”

Newton worked closely with the advertising agency in developing the famous “Mrs Jones campaign” which he describes as being about freedom of choice. He also wrote a pamphlet entitled The Great Dairy Hoax which was distributed in every dairy-producing electorate in Australia. This booklet claimed that the poorer dairy farmers in Queensland and New South Wales were not getting a fair share of the dairy subsidy, the bulk of which went to the richer Victorian dairy farmers who didn’t need it anyway.

Newton was obviously on a collision course with Jack McEwen, the Deputy Prime Minister and head of the Country Party. Newton supported lower tariffs in general in his various newsletters and articles. Traditionally, one would have expected the Country Party to support free trade but McEwen’s contribution to his party was to haul aboard its creaking hull Australia’s high tariff manufacturers.

The last straw for McEwen was the active role Newton played in the denigration of the Vernon Report, which was largely inspired by Sir John Crawford, the permanent head of McEwen’s department. The report proposed the shift of economic policy-making from the Treasury to a new economic policy secretariat which would have inevitably been dominated by McEwen and Crawford.

The Treasury gave John Stone the task of conducting the campaign against the Vernon Report. Newton at that time was writing a fortnightly column for a small but influential magazine called Nation. He used this column and his newsletters to attack the Vernon Report and the people behind it. The campaign was successful. The Vernon Report was consigned to a Canberra pigeonhole. The Treasury had survived and McEwen had yet another reason to hate Max Newton’s guts.

In 1966. William McMahon, known to all and sundry as “Billy”, became Federal Treasurer. His years as Treasurer probably represent the best of McMahon as an effective politician. He was temperamentally and ideologically in agreement with his Treasury officials — for McMahon a rare state of affairs. He recognised in McEwen not only a philosophical opponent but also an eventual rival for the Prime Ministry.

He also got on very will with Max Newton. Newton’s convictions were well known and they had attracted clients who felt they could profit by them. McMahon regularly attacked McEwen’s proposals in Cabinet. The Treasury Department itself, allegedly above politics but still smarting from the McEwen-Crawford take-over bid, did what it could to denigrate suggestions originating from McEwen’s Trade Department or any other Country Party department. Newton became the house publicist for these points of view.

McMahon started toting Newton around with him wherever he went. On one occasion, Newton was arrested in Trinidad at a Commonwealth Finance Ministers’ conference for swiping a British working paper and was going to be thrown off the island. McMahon interceded and had him released. On another occasion, McMahon took Newton along to a private dinner of Commonwealth Finance Ministers held in Montreal, an action Newton describes as slightly “scandalous”.

This was the state of affairs when Harold Holt went for a pre-Christmas swim in 1967 and failed to come back. As his deputy in the Liberal Party, Billy McMahon was expected to succeed him. McEwen crushed this hope by announcing that if McMahon was chosen Leader of the Liberal Party, the Country Party would not serve under him in a coalition government, one reason being that McMahon was under the influence of the evil Maxwell Newton.

Rupert Murdoch’s Australian picked this story up and Newton became a notorious public figure. John Gorton became Prime Minister (after Jack McEwen’s caretaker month in office following Holt’s disappearance) instead of McMahon, and relationships between Newton and Billy cooled suddenly as Billy distanced himself from the man who seemed to have cost him his shot at the top job.

Then followed a period of official harassment for Newton. “During this time I had various officials in the government working for me. They used to give me copies of documents and I paid them. I had a sort of milkrun. I’d go round on Saturday morning and poke cheques underneath their doormats and pick up envelopes.”

One of Newton’s paid informants was an employee in the Department of Trade who copied cables and gave them to Newton, who published them. “Not that they were important, but it gave me more notoriety.” One cable, which Newton published in full, was a report of a conversation between the then Australian Ambassador to France and General De Gaulle.

Publication of this cable gave McEwen an excuse to ask Gorton for a Commonwealth police raid on Newton’s office and home. Fourteen Commonwealth policemen in plain clothes duly raided both of Newton’s houses in Deakin, examining every scrap of paper on the premises. “It took them about twelve hours to go through the two places and they eventually found a hand-written note from this guy in the Department of Trade. They were able to trace him and this guy was tipped out of the public service.” Newton’s lawyers took immediate action against the Commonwealth government for illegal search and seizure on the basis that the search-warrant was invalid. To the intense annoyance of the government, Mr Justice Fox in the ACT Supreme Court upheld Newton’s claim, ending any prospect of a Commonwealth prosecution.

Frustrated in his attempt to have Newton charged with a criminal offence, McEwen then attempted to have him evicted from the parliamentary press gallery on the grounds that he was engaged in non-journalistic political and propaganda activities in Parliament House. This failed when journalists who had worked with Newton in the past revealed to the other members of the gallery that McEwen had promised them preferential information if they voted to kick Newton out.

About this time, Newton bought a couple of country newspapers in New South Wales, which he was printing from a factory in Fyshwick, Canberra. He started a weekly mining newspaper, called the Australian Miner, and he bought Jobson’s Investment Digest. Marrickville Holdings financed most of this expansion. It also financed the acquisition of the Daily Commercial News, a faltering shipping newspaper published in all mainland capital cities. Newton turned this into a profitable operation by printing it in one location and using a computer to collate shipping movements and traffic. It was the first shipping paper in the world to do so.

However, Newton’s problems with the Federal government had not ended. There were still visits from police, knocks on the door at night and constant attempts to close him down. “I used to print the ANU student newspaper. In one of their issues they had silhouettes showing the forty-eight positions of coitus. When I printed this, my opponents tried to have me closed up under the ACT Printing Ordinance. They abandoned that idea as well. Gradually the pressure dropped off.”

Newton says that he is convinced that the reason for the abatement of the harassment was his public declaration that he had a statutory declaration from Geraldine Willesee locked in a safe deposit box. In this document, Willesee was supposed to have sworn to what had actually happened during an incident between Prime Minister Gorton and herself which had become the subject of considerable public and private speculation. “Gorton, I think, felt the need to steer a bit clear of me. Subsequently, in about 1979, he even publicly stated that I was the cause of his downfall.”

McEwen went so far as to accuse Newton of spying. “He said in Parliament that I was a Japanese spy.” He claimed that Newton had signed a contract with the Japanese to engage in commercial espionage. “I was able to counter that by producing the actual contract that I had with JETRO.”

Another attempt by McEwen to discredit Newton involved his campaigning against margarine quotas. Newton had contracted some printing for Marrickville Margarine to another printer in Canberra. When Newton took his business away, the other printer objected and took an old cheque from Marrickville Holdings to McEwen. “Jack waved this cheque around Parliament House, saying it was a cheque for $30,000 to pay for the printing of The Great Dairy Hoax.” Fortunately for Newton, McEwen had been given the wrong cheque. It was to pay for advertising pamphlets for a completely unrelated new product that Marrickville Holdings was launching. “It wasn’t that they weren’t on the right track, it was just that they were incompetent. And it was the same with the coppers; they were incompetent. And so I was saved …”

Newton described how his encounters with the police typically proceeded: “The coppers would open up a conversation and say, ‘Is your name Maxwell Newton?’ I’d say: ‘Acting on legal advice, I decline to answer that question.’ At one stage, I was in my lawyer’s office with a policeman for three and a half hours and I answered every question along those lines. I found that once I did that, they didn’t know what to do. Their main method of attack was (and is) to get the accused person to confess or make a mistake.”

Newton had given up alcohol in 1960 and did not drink again until the early 1970s. He finally became very unsettled by the strain of constant police harassment and his doctor prescribed Valium and Mandrax. He soon became addicted to both. He described Mandrax as “more lethally addictive than heroin”. For a period of several years, Newton was unable to walk around without a plentiful supply of both drugs. He became a frightened person and couldn’t sleep. “A lot of my emotional immaturity and my neurotic behaviour became more pronounced.”

In 1970, Newton found out that Gordon Barton was going to close his Sunday Observer, leaving Melbourne without a Sunday paper. To produce a Sunday paper in Melbourne, Newton needed independent distribution into the sub-agents which stayed open on Sundays to sell the Sydney Sunday papers. This he got from Consolidated Press, which at that stage was distributing the Sunday Telegraph in Melbourne. Armed with his distribution agreement, he arranged financing from his old chum Dick Crebbin at Marrickville Holdings. One week after the Barton-owned Sunday Observer closed, Newton was ready to start up with a paper called the Melbourne Observer. Barton attempted to protect the title but failed in court, and finally Newton even changed the name of his paper to the Sunday Observer.

During the balance of 1970 and 1971, the Sunday Observer staggered along. Newton and his wife Anne were starting to feel the strain of the past ten years. He had a new wing built on his house in Canberra with a bedroom and a bathroom and a connecting door to the rest of the house. Newton would lock himself in for days at a time, alone with his bottles of Mandrax. When not freaked out on drugs, he was endlessly commuting between Canberra, Brisbane, Sydney and Melbourne.

While in Melbourne, he started seeing Diane Austin whom he had met in 1970. In 1972, he asked her to accompany him on a trip to Japan. In Hong Kong, Newton was so consumed with guilt about deceiving Anne, he took an “enormous” dose of Mandrax and was unconscious for two days in the Mandarin Hotel. When he and Diane finally got to Japan, he started drinking, something he had not done since 1960.

Later in 1972, he left Anne and the children in Canberra and moved in with Diane in Melbourne. The Sunday Observer increasingly became his preoccupation to the exclusion of all else. There was a Federal election at the end of 1972. The big news for most people was that after almost twenty-five years out of office, Labor had won. The outgoing Prime Minister was Newton’s old buddy Billy McMahon. But what Newton remembers about the election is that for the first time his paper sold more than 100,000 copies.

The relationship between Max Newton and Dick Crebbin, of Marrickville Holdings, was a close one. Newton attended board meetings, where he discussed the Sunday Observer and the Daily Commercial News as if they were divisions or subsidiaries. Marrickville financed Newton’s various acquisitions in the newspaper field. Newton says he felt they wanted investments outside the food business. However, Newton’s unpredictable and erratic behaviour during 1972 and 1973 finally soured this relationship too. In 1974, there was a parting of interests. Marrickville took over sole control of the Daily Commercial News, leaving Newton alone with his beloved Sunday Observer.

These were bad years for Newton. He was back on the booze and still taking large quantities of Mandrax. He would sometimes stop at a pub on his way to work and fortify himself with half a dozen brandies laced with lime and soda. At the end of the day, he would often drink a dozen beers and then might or might not go home. Living in a largish house in Baxter Street, Toorak, and driving a Rolls Royce, Newton was putting on a brave front to the world, but his relationship with Diane was seriously affected by his drinking and he was constantly attacked by acute bouts of depression and fear. He remained extremely remorseful about ending his marriage to Anne who was a good friend to him and “never did me any wrong at all”.

In July 1973, Newton checked into the Town House Motel with five dozen cans of beer, six bottles of Scotch and 100 Mandrax. He consumed the lot and lay unconscious for two days. When he awoke he was very weak but managed to ring Diane. She came with a friend and took him to a private hospital which specialised in the treatment of alcoholism.

After a few days, he recovered and slipped out of the hospital. “I used to walk around the place with my dressing-gown on. So I got fully dressed underneath my dressing-gown, jumped over the back fence, chucked my dressing-gown back and was off. I went to the Southern Cross in Melbourne, checked in (I was well known there) ordered a bottle of Scotch and way lying on the bed when they caught up with me again. This time they brought a guy called Teddy with them, who was in Alcoholics Anonymous, and Ted became my sponsor.”

This time Newton stayed in hospital. When he was released, he joined Alcoholics Anonymous and spent a lot of time at their meetings. Soon after, in July 1973, he threw away his drugs and has not used them since. “I also chucked out the fear; it went out of my life. It was a fantastic relief.”

Newton was printing 120,000 each Saturday night on a variety of baby presses scattered through the suburbs. The Melbourne Herald and the Age, acting in unholy alliance, had decided to produce a joint Sunday paper in opposition to Newton’s. He was concerned that the Melbourne Herald would put pressure on these small suburban companies not to print his paper. To protect himself he needed a press. So in late 1973, Newton took over Regal Press, which gave him the printing capacity he needed to print the Observer on his own. He added extra equipment and improved the paper considerably. By Grand Final weekend in 1974, it was selling 200,000 copies a week at a cover price of forty cents.

However, like most publishers who buy a press to print a weekly newspaper, Newton faced the problem of keeping it busy on the six days of the week when the Observer wasn’t published. He acquired the rights to a line of American comics and arranged distribution through a company jointly owned by Fairfax interests and the English IPC group. Unfortunately, it was decided to dissolve the company and the distribution organisation was wound up. This left Newton with thousands of comics out in the marketplace and no way of collecting what was owing to him.

Short of money, he borrowed a million dollars from the Farmers’ and Graziers’ Cooperative through its Chairman, Les Smart. (As a result of making this loan, Les Smart was convicted of illegal disbursement of funds. He spent six months in gaol before being awarded a new trial. He was acquitted late in 1982. Max Newton gave evidence for Smart in his second trail in New York to Barrister Kerry Milte QC, who came from Melbourne to take it.)

The loan did not staunch the flow. The overheads were large and, apart from the Sunday Observer, profitable jobbing work was impossible to get. Finally, in 1975, Newton appointed a received to try to get the place reorganised on a profitable basis. He was still employed by the receiver to run the business and actively sought additional capital to keep the Sunday Observer alive, and claims to have paid in to the receiver $500,000, mainly in cash raised from Melbourne doctors.

In April 1976, the receiver sent Newton a notice of dismissal from his job as manager of the Sunday Observer by telegram. The party was over. He had been thrown out of his own company.

Newton was now unemployed and broke, living in a Toorak house he could not afford to pay off. His Rolls Royce had been repossessed. However, the building society “couldn’t evict me from this house for some reason, or else they were too embarrassed. They had given me a loan to buy it for about a quarter of a million dollars. It was like a contra-loan. The interest was ‘contraed’ off in ads in the Sunday Observer. This house was known as ‘Contra Castle’ because it was largely furnished and rebuilt on the contra.”

Finally, in 1977, Newton “decamped” from the house. He and Diane took a rented house in Kooyong. They had by now two girls: Natasha and Sally. They had married in April 1975 and the Melbourne Truth ran a photograph showing Newton getting into the wedding car formally attired in evening clothes with Diane in her bridal dress, and told its readers: “We hope the bride has got some money because the bridegroom hasn’t got enough to pay the wedding bill.”

At this stage of his career, Newton became the publisher of a number of pornographic newspapers, having already provided printing facilities for a number of pornographic publications on his press at the Sunday Observer. He published these papers in Melbourne and distributed them in both Sydney and Melbourne.

“All this time, from 1974 to 1977, I’d been consistently unfaithful to Diane. I was in AA. I didn’t take drugs, but it was as if indiscriminate sex was a relief somehow. I could lose myself in wild sex. Diane became very preoccupied about that, understandably. One of the women I became involved with was Olivia. I met her through an ad she placed in one of the sex papers I owned.”

Newton’s new business prospered. Soon he was wholesaling as well as retailing. He opened a mail-order business which received a set-back when Rupert Murdoch found out that Newton was placing ads in his Sydney papers and squashed them, costing Newton something like $5000 a week in lost sales. By the end of 1978, he was back in Toorak. “I had a pornographic shop in Melbourne, I had a mail-order business in Melbourne selling pornographic books and sex aids, and I was making a living. I could have survived.”

In October 1977, Newton, on the advice of an accountant, had voluntarily filed for personal bankruptcy. This attracted the attention of the Income Tax Commissioner. “They had two men investigating me for two years trying to find out where I’d hidden ‘the money’. They came to me in 1976 and said: ‘You’ve understated your income by six hundred and something thousand dollars and we want $380,000. If you give us a cheque now that’ll be OK.’ I said: ‘You can go to the shithouse, you will get nothing from me. I will give you nothing.’ And they’ve never got anything. They were very angry about that. They briefed a QC to represent them at my bankruptcy hearing. The tax people kept saying: ‘This man must pay, he’s got it somewhere.’ They never found it. Needless to say, it wasn’t there to be found.”

In 1978, Newton sent Diane and Natasha on a three-week trip to America. Sally stayed with friends. Newton spent each evening with Olivia, returning home each night in time for Diane’s regular call. She was checking up on his whereabouts. This was virtually the end of Max’s relationship with Diane. Within two weeks of her return to Melbourne, she caught Newton and Olivia in flagrante delicto and told Newton to get out.

Stunned, Newton moved in with Olivia “for a few days”. He asked for and received a lot of help in the early days of his separation from Diane. He haunted AA meetings whenever he could. He was desperate about not seeing his daughters Sally and Natasha every day. Olivia, also an AA member, helped him a great deal.

About a year or so later, Newton had a breakthrough in the development of his recovery through AA. One of the steps towards recovery in that organisation’s programme involves both “surrender of self” and acceptance of a “greater power or being”. Newton says he accepted (if that is the right word) the “higher power” requirement in 1979. Interestingly, it was that year that his career as a financial journalist started to pick up again.

In the meantime, there were bills to be paid and money to be earned. When Newton left Diane, he abandoned the business he was then operating as they were in Diane’s name. Using Olivia’s name, Newton and Olivia opened three new sex businesses in Melbourne. These were more hard core and included massage parlours and pornography shops. They were highly lucrative. The weekly takings eventually grew to about $12,000. They were able to move to more comfortable quarters in Toorak. Olivia’s sister Jo moved in with them and he bought a new car. Newton was able to see Natasha and Sally occasionally.

In 1979, Mark Day, the Editor of the new Australian Penthouse, asked Newton to write a political article on the Whitlam years for the first issue. For the first time in ten years, Newton had to sit down and write properly again. He went to the Melbourne Public Library and caught up with all the economic statistics he had ignored for the past decade. He enjoyed it, and Day asked him to write more articles.

John Singleton, who was running a sort of interview programme on Sydney’s Channel Ten at that time, asked Newton to become a permanent guest. Newton and Olivia commuted to Sydney each week for Newton’s TV appearances.

Then, surprisingly, his path crossed Rupert Murdoch’s again. Murdoch attempted to take over the Herald and Weekly Times group, parent company of the Melbourne Herald, and the ABC asked Newton to comment on this in a public affairs programme, no doubt assuming that Newton, as a sacked Murdoch editor, would attack the proposal. To their surprise, Newton supported Murdoch’s bid, saying it could only invigorate the newspapers concerned. Murdoch wrote thanking Newton and suggested dinner. A series of dinners followed at the Melbourne Hilton, in which Newton unburdened himself to Murdoch, telling him all that had happened to him in the last ten years. Murdoch confided in Newton in return, and he discovered that Murdoch had become a good deal more conservative.

Murdoch asked Newton to write regularly for the Australian and Newton enthusiastically agreed. Shortly afterwards, Murdoch asked Newton to send him fortnightly reports advising him on the policies his Australian papers should follow. Newton sent these reports off for a while and then suggested that Murdoch should write a series of signed articles stating his views about Australia. Newton would work on the articles with him and research the information needed. Murdoch agreed and asked Newton, accompanied by Olivia, to fly to New York to prepare the series. They left Australia in mid-1980.

When they arrived in New York, Murdoch decided not to proceed with the articles but asked Newton to stay on there as a financial columnist for his New York Post. Newton now contributes regularly as well to the Times of London, the Australian and Murdoch’s other Australian papers. In January 1983, New York Times Books published his first book, The Fed, a trenchant attack on the American central bank. As a result of The Fed Max has become a popular public speaker at hard money gatherings.

Newton and Olivia were married in November 1981. They live fifty kilometres from New York in a charming Connecticut village and count their blessings.

“I thought that by having my own publications, I’d have more power. I had none. No influence. Back in the ‘6os, I thought, ‘Well, I’ve got newsletters, but I’ll get much better when I’ve got newspapers’. I had much more influence when I had newsletters. The power of ideas is much greater than the power of circulation in many ways. Since I came here, I’ve had the most exciting, happiest and productive time of my life. I don’t want to have anything to do with Australia in the way of going back there. There are so many nasty things there relating to me. I went through a period from 1968 to 1978 of virtually permanent disaster, fear, personal catastrophe, bankruptcy, the police, the bloody tax people, public humiliation; a ten-year mid-life crisis. Since I’ve come to America, I’ve been able to work with people who take me at my face value. If I do good work, people are happy about it. Most people want to help me. In Australia, what I found is that if I did good work, people would be angry about it. When Milton Friedman wrote me last year praising my book [The Fed], I said to Olivia: ‘That is the ultimate praise I can get. If I died now, nobody could have said anything better about my work.’ I thought: ‘I’ve been given this fantastic prize — Milton Friedman says my work is outstanding. Now where do we go?’ In the old days, I would have thought: ‘There’s only one thing to do and that’s die.’ I used to go out and get drunk. It was as if I could smash myself down so that I could start again and hit another pinnacle. Throughout a lot of my life, I’ve destroyed things, more or less smashed them, so I could start again somehow.”