When Curtin succeeded to the party leadership in October 1935 his major immediate task was to endeavour to sort out the situation in New South Wales where in the State election held in May Lang Labor candidates had won 29 seats (out of 90) with 42 per cent of the vote, a gain of 5 from the previous State election. By contrast, federal Labor failed to win a single State seat and polled barely 5 per cent of the vote while even for Lang the result was disastrous with his party holding only a little over half the number of seats it had won in the 1930 State election. In any case, pressure had been developing for the two New South Wales Labor parties to come together and in February 1936 a special federal conference in Melbourne recognized the Lang Party as the official party in New South Wales though in turn it had to acknowledge the jurisdiction of the federal executive. This compromise decision provided Curtin with extra numbers in Canberra but meant he was leading a party which in the most populous State was still not effectively under federal control.

JCPML. 1937 Federal Election souvenir photograph of John Curtin. Records of the Curtin Family. JCPML00376/57

JCPML. Records of the Australian Labor Party, National Branch. Vote Labor for Australia, The Worker, 19 October 1937. JCPML00484/1.
(Courtesy: Australian Labor Party, National Branch).

Despite these difficulties Curtin and Lang campaigned together in May 1937 in a by election for the federal seat of Gwydir and, aided by Country Party disunity, Labor won the seat. However, the political focus was increasingly on the deteriorating international situation in the wake of the Abyssinian crisis in 1935, the Spanish Civil War and growing concerns about the adequacy of the Singapore naval base as a barrier against the threat of a possible Japanese invasion while Britain was heavily occupied in Europe. At Labor's federal conference in November 1936 Curtin had argued strongly for Australia to modify its dependence on naval defence and focus on developing effective land forces supplemented by its own air force with the objective of destroying an enemy invasion force after it had landed. By contrast, Lyons who had been in England for the coronation of King George VI on 12 May and the month-long Imperial Conference which began two days reported to Parliament in August that the underlying assumption of imperial defence for the whole Empire would still be naval power, the so-called 'blue water strategy' an approach which fitted with the fact that 45 per cent of Australia's defence budget was allocated to naval defence. 1 He also relied on the British assertion that 'Singapore could be regarded as a first class insurance for the security of Australia'. 2

Curtin, in his response on 25 August delineated one of the major differences the parties would take to the election when he told the House that 'the dependence of Australia upon the competence, let alone the readiness of British statesmen to send forces to our aid is too dangerous a hazard' on which to found a defence policy. 3 Previously, in a speech in Adelaide towards the end of July, 4 he had argued that the wise policy for Australia in regard to Europe is not to be embroiled in the perennial disputes which mark the old world. We can neither solve nor appease them, and we ought not to risk the lives of our own people in a future endeavour to pacify a disordered world.

and accordingly, as he subsequently wrote,

Labor is against participation in foreign wars and for the reservation of all Australia's strength for the defence of the land in which we now live. 5

Curtin's most recent biographer David Day argues that 'nervous colleagues in the Labor Party pressed Curtin to change the focus of the election policy away from defence, but Curtin pressed ahead with it, arguing that the public needed to be educated on the issue'. 6 At the same time, he also placed great stress on the quest for social justice, where Lyons by contrast would emphasise 'economic recovery and continuing loyalty to Britain'. In the August budget Treasurer Casey provided for significantly increased defence expenditure while restoring pre depression cuts to public service salaries and pensions and making the first provision for a proposed scheme of national insurance. Soon afterwards Lyons called the election to be held on 23 October.