The two great upsurges in Australian union mobilisation occurred in the 1880s and the first decade of the twentieth century. In both cases membership increased in scope and intensity: an expansion of the number of union organisations across a wider range of industries and occupations, as well as an increase of union density in industries and occupations where unions already existed. However, a major environmental difference between the two upsurges in mass unionism was the existence of a system of compulsory state arbitration, from 1901 in NSW and from 1904 in the Commonwealth. It has commonly been observed that the legislation was critical in assisting rapid trade union growth in the early 1900s. This article examines in more detail the factors common to both the 1880s and early 1900s which contributed to union mobilisation, and reviews the evidence for a major role for the arbitration system in the latter period. It concludes that the statistics have been misused and misunderstood by those previously relying on them to argue that the arbitration system was critical for the expansion of unionism in the early 1900s. Union growth in the early 1900s seems to have had a similar basis to that in the 1880s: strong localised communities, perceived threats to working conditions, and a strong coordinating role by peak union bodies, together with a broad consensus providing a public place for unions. The role of the state was a critical factor in the early 1900s in constructing this public place for unions, even if the operation of the arbitration system itself was not a major direct contributor to union growth.