Great Depression in Australia
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Australia suffered badly during the period of the Great Depression of the 1930s. The Depression began with the Wall Street Crash of 1929 and rapidly spread worldwide. As in other nations, Australia suffered years of high unemployment, poverty, low profits, deflation, plunging incomes, and lost opportunities for economic growth and personal advancement.
The Australian economy and foreign policy largely rested upon its place as a primary producer within the British Empire, and Australia's important export industries, particularly primary products such as wool and wheat, suffered significantly from the collapse in international demand. Unemployment reached a record high of around 30% in 1932,[1][2][3] and gross domestic product declined by 10% between 1929 and 1931.[4][5]
There were also incidents of
Though Australian Communist and far right movements were active in the Depression, they remained largely on the periphery of Australian politics, failing to achieve the power shifts obtained in Europe, and the democratic political system of the young Australian Federation survived the strain of the period.The
Thus Australia, unlike the United States, did not embark on a significant
1920s: The calm before the storm
The Great War (World War I) had depleted Britain's savings and foreign investments, and wartime inflation had deeply upset the United Kingdom's terms of trade. A sluggish economy in Britain naturally reduced British demand for imports from Australia throughout the 1920s and this had affected Australia's balance of payments. Throughout the 1920s the Australian unemployment rate floated between 6% and 11%.[2]
The Great War had also caused many necessary
All these publicly funded projects were paid for by loans raised by both state and federal governments. Most of these loans were raised on capital markets in the City of London at an average of £30 million per annum.[11]
1929: The storm erupts
In 1910, the federal government introduced a national currency, the Australian pound, which it pegged to the pound sterling. In effect, Australia was on the gold standard through the British peg. In 1914, Britain removed the pound sterling from the gold standard, creating inflation pressures. Britain returned the pound sterling to the gold standard in 1925 at pre-1913 parity, effectively revaluing both currencies significantly and unleashing crushing deflationary pressures and falling export demand. This had the immediate effect of making British and Australian exports far less competitive in non-British markets, and affected Australia's terms of trade.
In 1929, as an emergency measure during the Great Depression, Australia left the gold standard,[12] resulting in a devaluation relative to sterling. A variety of pegs to sterling applied until December 1931, when the government set a rate of £1 Australian = 16 shillings sterling.[13] This was intended to ease entry of Australian goods into the British and other linked markets.
Falling export demand and commodity prices placed massive downward pressures on wages, particularly in industries such as
The conservative
The opposition Australian Labor Party, led by James Scullin, successfully depicted Stanley Bruce as wanting to destroy Australia's high wages and working conditions in the 1929 federal election. Scullin was elected Prime Minister in a landslide which saw Stanley Bruce voted out as the Member for Flinders, the only time until the 2007 federal election that a sitting Prime Minister lost his seat.
1929–1935: Scullin and Lang
The
Throughout Scullin's term, commodity prices continued to fall, unemployment rose, and Australia's big cities were depopulated as thousands of unemployed men took to the countryside in search of menial agricultural work.[citation needed] The stagnant economy had reduced economic activity and therefore tax revenues. However, the debt commitments of both state and federal governments remained the same. Australia became severely at risk of defaulting on its foreign debt which had been accumulated during the relative prosperity and infrastructure-building frenzy of the 1920s.
The Great Depression in Australia saw huge levels of unemployment and economic suffering amid plummeting export income.[15] Although the economic downturn was a product of international events, Australian governments grappled with how to respond. Conventional economists said governments should pursue deflationary policies. Radicals proposed inflationary responses and increased government spending. Division emerged within the Labor Party over how to respond.[16]
In August 1930, Scullin invited Sir
In 1929, as an emergency measure, Australia took the Australian pound off the gold standard, resulting in a devaluation relative to sterling. Starting in September 1930, the Australian banks began to slowly devalue the Australian pound, and a year later it had been devalued 30% against the Pound Sterling.[citation needed] This had the economic effect of increasing the cost of imported goods and increasing the cost of servicing government overseas debts, which were denominated in the overseas currency, typically in sterling.
Scullin departed for an Imperial economic conference in London, necessitating an absence of five months, during which time he managed to secure reduced interest payments for Australia. With James Fenton as acting Prime Minister and Joseph Lyons as acting treasurer in his absence, Labor continued to negotiate Australia's economic response, with Fenton and Lyons advocating a more conservative fiscal approach and the unions and caucus calling for repudiation of debts.[17]
In 1931 at an economic crisis conference in Canberra, Jack Lang issued his own programme for economic recovery.[citation needed] The Lang Plan advocated the repudiation of interest payments to overseas creditors until domestic conditions improved, the abolition of the Gold Standard to be replaced by a Goods Standard where the amount of money in circulation was linked to the amount of goods produced, and the immediate injection of £18 million of new money into the economy in the form of Commonwealth Bank of Australia credit. The Prime Minister and all other state Premiers refused.
With the rejection of the Theodore and Lang inflationary plans, the governments of Australia met to negotiate a compromise in 1931. The resulting Premiers' Plan required the Australian Federal and State governments to cut spending by 20%, including cuts to wages and pensions and was to be accompanied by tax increases, reductions in interest on bank deposits and a 22.5% reduction in the interest the government paid on internal loans.[16]
The policy contrasted with the approach put forward by the British economist
The Labor Party soon split into three separate factions. Jack Lang and his supporters, mainly in New South Wales, were expelled from the party and formed a left-wing splinter party officially known as the
Lyons government
The stance of Joseph Lyons and James Fenton against the more radical proposals of the Labor movement to deal with the Depression had attracted the support of prominent Australian conservatives, known as "the Group", whose number included future prime minister
In November 1931, Lang Labor dissidents chose to challenge the Scullin Labor government and align with the United Australia Party Opposition to pass a ‘no confidence’ and the government fell. At the 1931 federal election, the ALP were left with just 14 seats after losing 32 seats, though an extra 4 seats were won by NSW Lang Labor. The Lyons-led United Australia Party in Coalition with the Country Party commenced its first term of government in January 1932.[17]
Before being voted out of office, the Scullin government had covered NSW's debt default. The federal government had paid NSW's bond installments and intended to recoup this money from the NSW Government. A dramatic episode in Australian history followed Lyons first electoral victory. When NSW Premier Jack Lang refused to pay interest on overseas State debts, the Lyons government stepped in and paid the debts and then passed the Financial Agreement Enforcement Act to recover the money it had paid. In an effort to frustrate this move, Lang ordered State departments to pay all receipts directly to the Treasury instead of into Government bank accounts. The
Australia would recover relatively quickly from the global financial downturn, with recovery beginning around 1932. Lyons pursued an orthodox fiscal policy, favouring the deflationary economic measures of the
Varying experiences of the Great Depression
During the Great Depression, different parts of Australian society experienced different hardships, challenges and opportunities. There was increased movement of many people to and from country areas in search of work. City and urban people planted gardens to produce fruit and vegetables. In some urban areas co-operatives were formed based on barter systems to share what was available.
Single unemployed men had to make do in illegal camps or makeshift hostels in disused buildings, such as the old Redfern Fish Market.[23][24][25]
Shacks were built on the outskirts of large cities to house some who lost their homes, for example near the beach at Garie in the Royal National Park south of Sydney. There has been anecdotal evidence of families resorting to living in caves with authorities turning a blind eye as there were no other accommodation available.
Unemployed Australians
For Australians, the decade of the 1930s began with problems of huge unemployment, because the fall of the stock markets on Wall Street reduced confidence throughout the world. Most governments reacted to the crisis with similar policies, aimed at slashing back government spending and paying back loans. The Australian government could do little to change the effects of the slump and the tough economic times ahead. This affected the country in many ways.[26]
Because of economic downturn, people’s lives changed drastically. Australia had supplied huge amounts of wool for uniforms during World War 1, and many exports helped Australia achieve a high standard of living in the 1920s. The majority of the people of Australia lived very well prior to the fall, so they felt the effects of the depression strongly. Because of the severe economic contraction, the reduction of purchasing goods, employers couldn’t afford to keep excessive workers. A five-year unemployment average for 1930-34 was 23.4%, with a peak of approximately 30% of the nation being unemployed in 1932. This was one of the most severe unemployment rates in the industrialised world, exceeded only by Germany.[27]
Many hundreds of thousands of Australians suddenly faced the humiliation of poverty and unemployment. This was still the era of traditional social family structure, where the man was expected to be the sole bread winner. Soup kitchens and charity groups made brave attempts to feed the many starving and destitute. The male suicide rate spiked in 1930 and it became clear that Australia had limits to the resources for dealing with the crisis.[28] The depression's sudden and widespread unemployment hit the soldiers who had just returned from war the hardest as they were in their mid-thirties and still suffering the trauma of their wartime experiences. At night many slept covered in newspapers at Sydney’s Domain or at Salvation Army refugees.[29]
The limited jobs that did arise were viciously fought for. The job vacancies were advertised in the daily newspaper, which formed massive queues to search for any job available. This then caused the race to arrive first at the place of employment (the first person to turn up was usually hired.) This is depicted in the Australian film Caddie.[30] Many Australians campaigned at a community level through organisations such as the Unemployed Workers Movement to demand improved welfare and relief.[31][32] Authorities often attempted to repress protest through the use of repressive laws including bans on street marches and free speech.[33][34] These in turn were resisted by campaigns of civil resistance, with Melbourne social realist artist Noel Counihan famously speaking from inside a cage to prevent arrest.[35][36] Overall campaigning was successful in terms of gaining improved welfare and relief as well as in disrupting and preventing housing evictions across Australia.[37]
Culture and society
Extraordinary sporting successes did something to alleviate the spirits of Australians during the economic downturn. In a Sheffield Shield cricket match at the Sydney Cricket Ground in 1930, Don Bradman, a young New South Welshman of just 21 years of age wrote his name into the record books by smashing the previous highest batting score in first-class cricket with 452 runs not out in just 415 minutes.[38] The rising star's world-beating cricketing exploits were to provide much needed joy to Australians through the emerging Great Depression and Post World War One recovery.
Between 1929 and 1931 the racehorse Phar Lap dominated Australia's racing industry, at one stage winning fourteen races in a row.[39] Famous victories included the 1930 Melbourne Cup, following an assassination attempt and carrying 9 stone 12 pounds weight.[40] Phar Lap sailed for the United States in 1931, going on to win North America's richest race, the Agua Caliente Handicap in Tijuana, Mexico, in 1932. Soon after, on the cusp of US success, Phar Lap developed suspicious symptoms and died. Theories swirled that the champion race horse had been poisoned and a devoted Australian public went into shock.[41]
The 1938 British Empire Games were held in Sydney at the Cricket Ground from 5–12 February, timed to coincide with Sydney's sesqui-centenary (150 years since the foundation of British settlement in Australia).
1932–1939: A slow recovery
This section needs additional citations for verification. (October 2011) |
Unlike the United States, where
Australia's recovery during the 1930s was led by the manufacturing sector.[42]
Federation in 1901 had granted only limited power to the federal government. For example, income taxes were collected by the State governments. Some argued that Australia's
The devaluation of the Australian pound, abandonment of the Gold Standard, recovery of major trading partners like the United Kingdom and
Legacy of the Great Depression in Australia
Following Lyons' death in 1939,
Curtin and Chifley, who often used the spectre of another depression in their campaign rhetoric, utilised emergency wartime powers to introduce a
In 1944, Curtin announced the plan for a white paper on full employment. This white paper served a variety of roles; to establish the priority of full employment; to ensure the depression would not recur; and to propose ways to make these objectives possible. Dr H C 'Nugget' Coombs as director-general of the Reconstruction Ministry had major input into this policy. The economic theories proposed by J M Keynes in 1936 were a major influence on the white paper.
Between 1947 and 1949 Chifley also attempted to nationalise the banking sector, arguing that public control over the finance industry would assist in preventing further depressions.[44] These plans saw bitter and protracted opposition from the media, conservative parties and the banks themselves. The High Court of Australia ruled that the proposed nationalisation of banks was unconstitutional. The government unsuccessfully appealed the decision in the Privy Council.
In 1949, the combined perceived threats of international and domestic communism and industrial unrest along with the public's waning support for extended rationing and intervention following the close of the War saw the return of Menzies to the prime ministership. Though Menzies was a conservative, his sixteen subsequent years in power saw the government continue the use of
See also
- The Susso, welfare in Australia originating in the Great Depression
References
- ^ "The Great Depression". australia.gov.au. 1 October 2009. Retrieved 17 June 2012.
- ^ a b Australian Bureau of Statistics (1933). "Year Book Australia 1933 - Chapter 24: Labour, Wages & Prices". Retrieved 22 October 2008.
- ^ "The Great Depression - australia.gov.au". Cultureandrecreation.gov.au. 1 October 2009. Archived from the original on 8 April 2011. Retrieved 17 June 2012.
- .
- ISBN 978-1-74110-492-9.
- ISBN 978-0-09-184203-1.
- ^ Commonwealth Department of Environment, Heritage and the Arts (14 August 2008). "Sydney's Harbour Bridge - Australia's Culture Portal". Archived from the original on 15 May 2009. Retrieved 27 February 2009.
- ^ Bozier, Rolfe. "City Circle". Retrieved 27 February 2009.
- ^ Commonwealth Department of Infrastructure, Transport, Regional Development and Local Government (29 August 2006). "A History of Australian Road and Rail". Archived from the original on 21 November 2008. Retrieved 28 February 2009.
{{cite web}}
: CS1 maint: multiple names: authors list (link) - ^ Australian Bureau of Statistics (1925). "1301.0 - Year Book Australia, 1925 - Settlement of Returned Soldiers and Sailors 1914-18". Retrieved 28 February 2008.
- ^ L.F. Giblin (28 April 1930). "Australia, 1930: An inaugural lecture". Archived from the original on 4 June 2012. Retrieved 21 October 2008.
- OCLC 1306054776.)
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: CS1 maint: location missing publisher (link - Government of Australia. p. 37. Retrieved 17 March 2023.
- ^ "James Scullin - Australia's PMs - Australia's Prime Ministers". Primeministers.naa.gov.au. 21 October 1929. Retrieved 17 June 2012.
- ^ a b "In office - James Scullin - Australia's PMs - Australia's Prime Ministers". Primeministers.naa.gov.au. Retrieved 17 June 2012.
- ^ a b c d K J Mason; Experience of Natiohood; 3rd Edition; McGraw Hill; 1992.
- ^ a b c d "In office - James Scullin - Australia's PMs - Australia's Prime Ministers". Primeministers.naa.gov.au. Retrieved 17 June 2012.
- ^ "Joseph Lyons - Australia's PMs - Australia's Prime Ministers". Primeministers.naa.gov.au. Retrieved 17 June 2012.
- ^ "Before office - Joseph Lyons - Australia's PMs - Australia's Prime Ministers". Primeministers.naa.gov.au. Retrieved 17 June 2012.
- ^ Brian Carroll; From Barton to Fraser; Cassell Australia; 1978
- ^ Price, Susan and Boyle, Peter. Abbott's 'stronger', 'happier' Australia means more pain for the poor [online]. Green Left Weekly, No. 1007, 07 May 2014: 5.
- ^ Anne Henderson; Joseph Lyons: The People's Prime Minister; NewSouth; 2011.
- ^ "UNDER THE POLITICAL SPOTLIGHT". Daily Telegraph. 27 August 1932. Retrieved 20 November 2021.
- ^ "Beds in the Redfern fish markets during the Great Depression, Sydney, 29 May 1932 [picture]". Trove. Retrieved 20 November 2021.
- ^ ""AT HOME" IN THE MARKETS". Daily Telegraph. 19 June 1937. Retrieved 20 November 2021.
- ^ "The Commonwealth Government's Response to the Depression, The Great Depression, Australia between the Wars, SOSE: History Year 10, VIC | Online Education Home Schooling Skwirk Australia". Skwirk.com. 26 March 1999. Retrieved 17 June 2012.
- ^ Paul Kelly "100 years, The Australian Story" ABC Books 2001
- ^ "AIHW, Deaths by suicide over time". Retrieved 18 May 2021.
- ^ Retro Active Series 2 by Maureen Anderson, Anne Low, Jeffery Conroy and Ian Keese
- ^ "Timelines of the Great Depression". Retrieved 28 September 2011.
- ^ Peoples History of Australia (9 April 2020). "People's History of Australia Podcast. Episode 2 – The Unemployed Workers' Movement in 1930s Sydney". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ Sparrow, Jeff; Sparrow, Jill (9 November 2020). "Stories of Unemployed Activism from Radical Melbourne: 1906-1982". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ Salmon, Alex (31 August 2020). "The 1931 Perth Treasury Building Riot: Unemployed workers during the Great Depression". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ McIntyre, Iain (31 August 2020). "Jim Munro and the Unemployed Workers Movement in the 1920s and 1930s". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ McIntyre, Iain (31 August 2020). "Resources About Australian Housing Justice and Unwaged Rights Campaigns. Walking Tours of Unemployed Resistance in Brunswick, 1929-35". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ Stone, Janey (22 June 2022). "Women Fighting Back in the Depression Years". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ McIntyre, Iain (26 March 2019). "Lock Out The Landlords: Australian Anti-Eviction Resistance 1929-1936". The Commons Social Change Library. Retrieved 28 February 2023.
- ^ "Cultureandrecreation.gov.au". Cultureandrecreation.gov.au. 7 April 2008. Archived from the original on 1 January 2004. Retrieved 14 July 2011.
- ^ Museum Victoria. "Museumvictoria.com.au". Museumvictoria.com.au. Archived from the original on 31 July 2008. Retrieved 14 July 2011.
- ^ Museum Victoria. "Museumvictoria.com.au". Museumvictoria.com.au. Archived from the original on 15 May 2008. Retrieved 14 July 2011.
- ^ Museum Victoria (6 April 1932). "Museumvictoria.com.au". Museumvictoria.com.au. Archived from the original on 8 February 2008. Retrieved 14 July 2011.
- ^ Australian Bureau of Statistics (1938). (February 1939). "Year Book Australia, 1938" (PDF). Australian Bureau of Statistics. Retrieved 31 May 2013.
{{cite web}}
: CS1 maint: numeric names: authors list (link) - ^ "A Century Of Change In The Australian Labour Market". Year Book Australia, 2001. Australian Bureau of Statistics. 3 October 2007. Retrieved 29 October 2015.
- ^ "In office - Ben Chifley". Australia's Prime Ministers. National Archives of Australia. Retrieved 29 October 2015.
Bibliography
- https://web.archive.org/web/20110408181723/http://www.cultureandrecreation.gov.au/articles/greatdepression/
- Beaumont, Joan (2022). Australia's Great Depression : How a Nation Shattered by the Great War Survived the Worst Economic Crisis It Has Ever Faced. Sydney. OCLC 1306054776.)
{{cite book}}
: CS1 maint: location missing publisher (link - Kelly, Paul (2001). 100 years, The Australian Story. ABC Books.
External links
- The Depression Years on Picture Australia
- A collection of audiovisual titles relating to the Great Depression in Australia on australianscreen