Australia and the Depression
The 1920s was a time of great prosperity for Australia. Entertainment popularity had increased with musical theatre, opera and stage comedies drawing large audiences. Transport boomed with increasing numbers in car owners and the introduction of commercial aviation in the early 1920s. The Australian Government borrowed heavily from overseas for investments during this opulent period. By the late 1920s there was a significant decline in the volume of international trade . The American stock market crash in October 1929 accelerated a decline in prices for farm commodities in Australia. Due to both international as well as internal factors, Australia was now drawn into the depression along with the rest of the world. As a result of this, the economy suffered greatly and Australia could not pay back the millions of dollars worth of loans borrowed during the 1920s boom. Effects of the depression would lead to the unemployed and unskilled in society carrying the strain of the depression. Social divisions would widen as the depression took a greater toll on the working class. Australia borrowed heavily from overseas during World War I in order to finance the war effort. They owed large sums of money through investments and loans.
The depression brought about a great deal of social unrest in Australia. People became desperate and bitter as mass unemployment and economic hardship threatened to ruin them. Tensions grew as people lost their jobs and couldn't pay their rent resulting in them being evicted from their homes. The increase in poverty meant that people were living in huts made of iron and hessian in shantytowns that began appearing. The humiliation of being unemployed led to increased suicide as people escaped their shame. The depression caused a deepening in social division in Australian society as the working class bore the burden of the depression, while the middle class and rich were not so affected. Wild speculation inflated stock prices far beyond appropriate levels. Investors bought stock with loaned money. Banks, confident in the rising market, loaned speculators up to three quarters of a price of a stock purchase. When the stock market crashed, borrowers were unable to repay loans and banks went unable to collect them. Australia, like the rest of the world, was thrown into the depression. It depended greatly on export proceeds by selling overseas products like wheat, wool and minerals. After the split, the Scullin government endeavoured to put the Theodore plan of credit expansion into effect. Theodore proposed a special unredeemable note issue of up to 18 million pounds to relive unemployment and assist wheat growers, and a special tax on bond interest at 3s 6d in the pound . The Commonwealth Bank Board refused to co-operate with the government in making such a credit available. The Great Depression effected society socially, economically and politically. supported deflationist proposals while J.A Beasley supported Lang's policy of suspension of interest payments. When Scullin returned to head the federal labour party, two groups had broken away from the party. One led by Lyons and the other by Beasley. The Australian Labour Party split because of conflicting views about how to solve the economic crisis that Australia was suffering. The Lang Labour and federal Labour rifted on 27 March. Left wing criticism of the Labor government occurred for allegedly being unable to carry on social reform. The Bruce Page government, in power from 1923 to 1929, borrowed heavily from overseas to invest in public works to fund the immigration scheme. Their inordinate borrowing was a large factor in the depression. The following dominion, the Scullin government, which came into power in 1929, was faced with the econ
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Approximate Word count = 1699
Approximate Pages = 7 (250 words per page double spaced)
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