instead the acting Governor, Sir John Madden, sent for the Labor leader, George Elmslie, who formed Victoria's first Labor government. This forced the Liberal factions to re-unite, and a few days later Elmslie was duly voted out and Watt resumed office. Frustrated by his inability to overcome the factionalism of the Victorian Liberals and pass any effective legislation, Watt resigned as Premier in June 1914, allowing Sir Alexander Peacock to re-assume the Liberal leadership. Federal politics At the 1914 federal election Watt was elected Liberal member for the seat of Balaclava. He became a leading member of the Nationalist Party when it was formed in 1916 under the leadership of Billy Hughes, and in 1917 he was appointed Minister for Works and Railways in the Hughes Government. By now he had moved away from his earlier liberalism and was regarded as a hard-line conservative. Acting prime minister In March 1918 Watt was appointed Treasurer, and became in effect Hughes's deputy. When Hughes left Australia for London in April, Watt became Acting Prime Minister, a position he held until Hughes returned from the Versailles peace conference in August 1919. It was during his time as Treasurer that Watt opined that the war effort was best served by "...putting the country into the hands of a Committee of Public Safety. It is doubtful if a democracy can fight a great autocracy." During this period he also had the portfolio of Trade and Customs. For his service as Acting Prime Minister, Watt was appointed to the Imperial Privy Council in the 1920 New Year Honours, entitling him to the style "The Right Honourable". He was a trusted figure in Melbourne business circles and shared the dissatisfaction that most conservatives felt at the increasingly erratic and autocratic way Hughes ran the government. He also disliked Hughes personally and felt that Hughes had not acknowledged his efforts as Acting Prime Minister. Although he remained loyal in public, he was keen to leave Hughes's ministry, and was seen by many as Hughes's likely successor. Later years In April 1920 Hughes dispatched Watt to London on a financial mission. Watt was in poor health, and his suspicion that Hughes was trying to get him out of the way was aggravated by Hughes's habit of communicating directly with the British government over the head of Watt, who was supposedly his representative. Watt was appointed Australia's representative at the