Figure 1.--ASustralia was onje of the ciynries hit hardestb byb the Great Deoressionn ofv thec 1930s. Theeconomy was based heavily on exports and export markets dried up. A cildren's rhyme went, "We’re on the susso now,We can’t afford a cow,We live in a tent,We pay no rent,We’re on the susso now."

Australia was among the countries most severely impacted by the Depression. The economic problems, however, did not begin with Wall Street Crash. The country's economy was based on exporting agricultural and raw materials. Wheat and wool were especially important. During World war I, Australian farmers and businesses expanded orioduction to support the war effort. After World War I there was about of infatuation and recession. The economy began to recover 1923. The returning soldiers were given blocks of rural land. The Government sponsored some 0.2 million British immigrants, many settling in small towns. As Europe began to recover from the War and production levels returned to normal, prices began to fall, affecting wool, wheat and other export markets. Britain returned ti the gold standard (1925). As the Australian pound was tied to the British pound, this caused further problems. This was especially severe because Australia was a deeply indebted nation, perhaps the most indebted nation in the world even before the Depression. This left government at all levels less able to deal with the mounting problem. Major loans had been contracted to power the country's infrastructure building -- among the projects the Sydney Harbor Bridge. Federal and state, governments after World War I borrowing from international lenders in Britain and America to fund infrastructure projects. Australia was the largest borrower from London banks during the 1920s, but when commodity prices plummeted (late-1920s), loan funds began to dry up. The value of the country's wheat and wool exports halved in 1929 and 1930 from already low prices. And as people lost jobs and companies experienced hard times. tax revenue also declined. The money to repay those loans was becoming a major problem. The same occurred in America with the agricultural sector. Unlike the cities where industry experienced the Roaring Twenties, the agricultural sector experienced hard times. And Australia had little heavy industry. The economy was primarily based on agriculture and animal husbandry--especially sheep. Then the American stock market crashed (1929), Government policies turned an ordinary recession into a world-wide Depression. And with the Depression export markets dried up and with them jobs. At the peak of the Depression in 1932, a third of the nation was unemployed. People could not pay their mortgages and rents and were losing their homes and out on the street. Australian incomes declined by a third. Some 40,000 men moved around the country looking for jobs. Shantytowns appeared at the edges of cities and towns. By 1932 more than 60,000 men, women and children were dependent on the sustenance (welfare) payments known as the 'susso', a state-based sustenance payment that enabled families to obtain the bare minimum of food. The susso was not unemployment insurance and varied somewhat from state to state . It was a feeding program, only available to people in the most dire circumstances. People jobless for an extended period with no family assets. A secession of sort-lived governments proved incapable of reversing the decline. The major effort was to control the Federal deficit. Conditions did not approve, however until Australia major export markets began to recover (beginning about 1937). This was when Britain began rearming, although on a slower trajectory than NAZI Germany. State-funded public works were also important. Public works funded by state and local governments that brought about the slow recovery. By the start of World War II unemployment was down to 11 per cent. The Depression had caused Australia to cut the already military spending to the bone. Most people saw no prospect of war at the time. This meant that Australia would be more unprepared for war than virtually any country. Other countries cut military spending during the Depression, bu Australia unlike many other counties that participated in the War did not have a strong industrial base and could not produce modern arms in substantial quantity as Britain and America were able to do.

Created: 6:53 AM 3/24/2023
Last updated: 6:53 AM 3/24/2023