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Barcaldine is important in Australian history because it is linked to the development of one of Australia's two main political parties, the Australian Labor Party. During the 19th century, shearers in Australia worked under very poor condition, among them long hours for low wages. Dissatisfaction with this situation led to the development of the Australian Shearers' Union, and by 1890, this union had a membership of tens of thousands. In an attempt to reduc union influence, there was a particular sheepstation manager, Charles Fairbain of Logan Downs Station near Clermont, Queensland, who required that shearers sign the Pastoralists Association contract of free labour before starting work.

On 5 January 1891 the shearers refused to work unless the station agreed to the terms of the union. This started many months of union shearers around Australia downing their tools and going on strike. Tensions increased as striking shearers protected themselves in armed camps outside the towns, while mounted troopers protected non-union labour and arrested strike leaders. The shearers then hit back by burning woolsheds and crops, and committing other acts of sabotage and harassment. On 1 May 1891, Australia's first May Day marches involving hundreds of protestors were held in Barcaldine and Ipswich, Queensland, on behalf of the shearers. In Barcaldine, the marchers carried banners of the Australian Labor Federation, the Shearers' and Carriers' Unions, a 'Young Australia' flag and the Eureka flag.

Soon after this, the violent suppression of the strike action forced shearers to give in. The strike, however, highlighted the need for a political party to represent the rights of the union workers; this was a major catalyst to the development of the Australian Labor Party. However, Barcaldine is not actually the birthplace of the ALP, as the Queensland branch of what was originally called the "Australian Labor Federation" was already under development, planning to endorse parliamentary candidates the previous year, in 1890.

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