Labor’s defeat in 1937 undoubtedly reflected in part voter concern that Curtin’s defence policy placed too little emphasis on the imperial links—one ALP observer referred to the party’s suicidal and incomprehensible opposition to collective security 20 —and the implication was also clear that Labor could not hope to regain the Treasury benches until the Lang spectre was laid to rest in New South Wales. As it was, a fresh bout of disunity developed in that state in the run-up to the March 1938 state election when a group of union leaders led by MLA R J Heffron formed the so-called Industrial Labor Party, including some declared Communists, and were expelled by the State party only to be reinstated by the federal party. Partly as a consequence, the combined Labor forces achieved a gain of only one seat in the State parliament and subsequently the Heffron group campaigned successfully over the months that followed to be recognized as the official ALP federal branch in New South Wales. In August 1939 at a federal-organized unity conference the federal-backed forces succeeded in regaining control of the New South Wales branch and Lang lost the parliamentary leadership to future Governor-General William McKell.

Unfortunately for Curtin, in the first few months of 1940 fresh divisions broke out in New South Wales centred on alleged Communist influence within the branch and highlighted especially by the so-called ‘Hands Off Russia’ resolution passed by the NSW annual conference in March 1940. The resolution had called for ‘the cessation of hostilities and the establishment of peace at the earliest opportunity’ claiming that Australians had nothing to gain from a war being managed ‘in the interests of big finance and monopolists’. Further to this the majority, with some support initially from the Langites, 21 opposed the Government pursuing any aggressive act against any other country with which we are not at war including the Soviet Union’ (at this stage the Soviets still had a non-aggression pact with Hitler’s Germany). Given the similarities of some of the sentiments being expressed with aspects of his prewar speeches Curtin had to handle the resulting controversy with great care and in this regard he was greatly assisted by the principal resolution passed by a special Commonwealth Conference of the ALP held in Melbourne in June 1940 which  emphasised ‘complete and indissoluble unity with the Allies in the War’. 22 In Hasluck’s words

As a result of this contest with the militants in the New South Wales State executive, the Labor party faced the elections in September with the credit in the eyes of many electors of having pledged full support for the war effort and of having taken resolute action against those militant sections who might have undermined that pledge. 23

Even so, at the time the federal election became due there were three separate Labor parties in New South Wales—official Federal Labor; the so-called Hughes–Evans group which had been primarily responsible for the anti war resolution and which was dissolved as the federally-recognized body in August; and the Lang group which on 18 April called itself the anti-Communist Labor Party and had its 7 federal members (5 in the House and 2 in the Senate) sit separately from the main Labor caucus. Thus Curtin approached the federal election campaign having been in his own words ‘stabbed in the back’ by J.A. Beasley and the other Lang Labor members and facing ongoing criticism from militant and union sources for his support for the war effort. Following the fall of France in May the war situation had deteriorated rapidly and even after the Menzies government in June 1940 banned a range of ‘subversive’ organizations including the Communist party Curtin still pursued a policy of cooperation with the government wishing to ensure his party could not be seen as in any way impeding the war effort.

For Menzies an ‘especially cruel blow’ came on 13 August when the crash of an RAAF bomber coming in to land at Canberra airport cost the lives of three Victorian-based federal ministers—Geoffrey Street (MP for Corangamite), James Fairbairn (Flinders) and Henry Gullett (Henty)—as well as Sir Brudenell White, the Chief of the General staff. In Menzies’ own words ‘This was a dreadful calamity for my three colleagues were my close and loyal friends’. 24 Nor was the situation improved when one of the UAP’s chief financial backers in Sydney—Sydney solicitor E Telford Wilson, the chairman of the Consultative Committee, the party’s chief financing body in New South Wales—suggested that the three vacant seats would provide a rather ‘heaven-sent opportunity’ for the launch of a new ‘Win the War’ party. 25 As it was, while UAP candidates won both Corangamite and Flinders in the ensuing election, Henty was won by an Independent (Lord Mayor of Melbourne and prominent businessman Arthur Coles) and the divisions within the party in New South Wales led to a decision to adopt multiple endorsements in a bid to avoid damaging preselection disputes. In this difficult environment on 20 August, only a week after the air disaster, Menzies announced that the election would be held on 21 September. 26

At the time of the Canberra air crash the government members in the 74 member House of Representatives totalled 42 including 25 United Australia Party, 16 United Country party and 1 Independent Country party. On the Labor side, Federal Labor and the non Communist Labor party went into the election with a total of 32 seats (27 federal Labor and 5 non Communist Labor), three more than their combined total in 1937 as a consequence of the federal party’s successes in three by elections since 1937—in December 1938 in the normally safe non-Labor South Australian seat of Wakefield; in May 1939 (by less than 100 votes) in the Tasmanian seat of Wilmot following the death of prime minister Joseph Lyons; and in March 1941 in the Victorian seat of Corio left vacant with the appointment of Richard Casey as Australia’s first minister to the United States. These gains, and especially the success in Corio, would have buoyed Labor’s hopes considerably and under Curtin Labor entered the 1940 election campaign requiring a net gain of only six seats to secure a Lower house majority in its own right.