The Great Depression

Australia Between The Wars

Introduction

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The darkest years of the Depression were 1930, 1931 and 1932. It was during these years that the lasting images were born of endless dole queues, shantytowns and swagmen who had hit the road in search of work. The hardships of the Great Depression were not shared equally. Workers who were able to maintain full-time employment and a basic wage level were sometimes even able to improve their standards of living through the falling prices of so many goods. Many people actually prospered during these years and had little understanding of the lives of those who suffered. In the wealthy Sydney suburb of Woollahra, the social pages of the local newspaper record a continuing lifestyle of cocktail parties, fishing trips and charity balls.






Economic Downturn

As the 1920s drew to a close, Australia's prosperity appeared increasingly fragile. In January 1929, Australia's long-term borrowing from overseas had come to an end when London refused further loans to Australia. In the months before the Wall Street crash, the value of Australian shares had fallen, unemployment was on the rise and the selling price of our agricultural produce fell on the world market. During the 1920s all of the Australian governments had borrowed large amounts of money to finance public works programs in cities and rural areas. By 1929, Australia had huge debts and interest repayments. Australia had become dependent on overseas loans and investment for its prosperity and growth. Even without the crash on Wall Street, Australia faced uncertain times in 1929. The consequences of the world economic crisis would be catastrophic for Australia.


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The Crash
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On 24 October 1929, panic set in on the Wall Street stock exchange in New York. This day is usually regarded as the day that marked the beginning of the Great Depression. The stock market crash on `Black Thursday' has been called the `Great Crash' because it shattered the economy of the United States of America, the most prosperous and confident nation in the world.

The crash on Wall Street also effected Europe. Most governments reacted to the crisis with the same policies, all aimed at slashing government spending and paying back loans. People were told that the situation their country was in was a trade cycle soon to be replaced by another period of boom. The belief was that governments could do little to alleviate the effects of the slump and the tough economic times just had to be endured.
As a producer of primary exports and a large borrower of overseas money, the impact of the Depression hit Australia hard and fast. The combination of overseas loan repayments and the sudden drop in earning ability from exports brought Australia close to bankruptcy in early 1930. The result was massive unemployment.

Thousands of Australians who had been accustomed to having work and some financial security suddenly found themselves facing the humiliation and poverty of unemployment. Suicide rates increased dramatically, whole families became destitute and it soon became clear that the country did not have the resources to deal with this terrible crisis. In city suburbs and country towns, charity workers were faced with overwhelming numbers of families requiring support of the most basic kind. For the first time in many years, the sight of beggars and street pedlars became commonplace in cities and large towns.

The Unemployed