The Great Depression of the 1930s in Australia - Assignment Example

The Great Depression of the 1930’s In which ways and to what extent were Australians affected by the Great Depression? "...Make the best of things with a smile and a laugh; there is no bowing down before fate in spiritless resignation..." Those were enlightening words spoke by Lady Game, wife of the Governor which appeared in the Sydney Morning Herald on the tenth of June in 1931 inspiring others across Australia not to give up hope in their fight for survival. They definitely needed such inspiration.1 The Great Depression extended five very long years from 1929 to 1934 our country struggled to maintain growth resulting in the most devastating economic crash to date. The onset was sudden, and people were in astonishment that things were able to get so dire so quickly. The poverty level rose radically as the depression caused a decline in international trade, personal income, tax revenue, prices and profits. Many of thousands of people lost their savings as unemployment started to climb. The Depression was triggered by a substantial drop in stock prices on the US stock exchange in October 1929; banks began failing as well as other primary economic problems like a decline in Australian commodity prices and overproduction in some areas of the market. ‘What can be said with some certainty is that many of the affected economies had common characteristics. In the US, Canada and Australia in the 1920’s was a boom period for investment, but economic activity was highly dependent on a number of key commodities such as wheat, wool, and coal and was largely financed by borrowing money.’2 There were even talks early on in the recession for Australia to cut all links with Britain. The matter was never put to a referendum, however, and gradually faded.3 Australians were in shock as well as bewildered by the random crash that caused such heart ache around the world, nothing would have prepared them for such distress and no- one did. Most were in disbelief that a ‘crash” could really have such effects. “The ultimate cause of the Great Depression is still the subject of debate by economists. Although the collapse of the New York Stock Exchange determined its timing there were several factors involved, a fall in export prices and sales, a fall in overseas loans leading to a reduction in government capital spending, a fall in residential construction .At the time, privately owned banks controlled Australia's monetary policy and the country relied heavily on borrowing money from other countries to bring in new investment. When the banks refused to extend overdrafts to Australia the government began selling off gold reserves” 4 In the twenties the threat of a crash emerged as Australians had financial and economical difficulties in the past, but no one could have predicted it would strike them to the extent the Great Depression did. Most people made the assumption that the disaster would not last any more than 1 -2 years because The American stock market experienced comparable scares, there assumptions proved wrong when jobs were continuously being lost so businesses and the unemployment rate was quickly declining, supplies were continuously exceeding demand, civilization was officially in debt . Australians were so badly affected by the Depression because they were borrowing millions of dollars from overseas countries (mainly Britain) and although the 1920’s was a roaring period for investments Australia was largely financed by borrowed money. Australia believed selling millions of commodities would prevent the arrears, after the crash no one could afford to buy Australian stock anymore. In 1929, Australia’s Prime Minister James Scullin sought the help of the Bank of England to address the Depression. The bank’s representative, Sir Otto Niemeyer advised the government to cut budget and cut costs, then pay the debts owed to Britain.5 Unfortunately, this aggravated the situation and caused an increase in unemployment and drove the economy deeper into recession. Consequently Australians were unable to payback their increasing debt. Australians were affected in many ways during the depression “the year 1928, 29, Australian imports amounted on the average to something like 150million pounds (Australian) a year. The most important classes of imports were, first, metal, metal manufactures and machinery, which came to well over 40million pounds a year, and second to wearing apparel, textiles, etc., which came to more than 35million pounds a year. The magnitude of these two classes of goods indicates what is borne out by fuller and more detailed examination-namely, that vastly greater parts of imports consisted of manufactured goods.” 6 The most prevalent way in which Australia was affected during the depression was the loss of jobs. People around the country, who once felt secure in their surroundings, were dumbfounded when their livelihood was stripped from them and almost everyone around them. The decreasing unemployment rate dropped rapidly to 10% during the 1920’s, and by the end of the 1920’s Australia’s population of approximately 6.4million faced an epic economic crisis. Almost 120, 000 jobs were lost from manufacturing industries over the period 1927 to 1932 with major falls in Victoria and New South Wales.7 Almost 12% of the workforce was jobless, by 1931 it was 27% and ’32 it was 29%.8 This unemployment dimension of the crisis created tensions in the working classes and labour movement, splitting unemployed from unemployed, rank-and-file from militants, workers from ideologues. The effects on businesses were dramatic, car sales dropped immediately and the state savings bank in Victoria which was in control of building 2,000 new homes had to stop lending, the building industry came to a Holt which also contributed to the ever-declining job rate. Often in some workplaces it was possible for the women to even replace the men as they were paid less. “At the Holden factory in Adelaide, production fell to 4% of capacity and any morning, dismissed employees could be seen outside its gates, hoping against hope they might be taken on again.”9 As wool and wheat were high commodities in the Australian trade it proved difficult to avoid the crisis when wool and wheat prices were continuously dropping. Subsequently, the value of Australia’s wool and wheat exports halved from 1929-1930, and national income declined by one third. The experience was mind –boggling in its international scale and devastating effects.10 Australian families were hit hard, their concerns for support and income was a constant battle as ever declining job rates made it hard to call any where home. People had to move or often leave there families behind in the hopes of search for work, generally returning disappointed. Some moved because of failed businesses or promises of a better life “over there”. Divorce rates rose as the marriage rate decreased, husband’s left their families because the pressure or strain was too much as they could no longer provide for their families. Rent, food, living conditions were all ordinary sufferings experienced by the people of the 1930’s. For many men, worse than the lack of job and the hardship it brought was the humiliation of not working.11 If a man is unemployed and could not pay the rent, there was the added humiliation of being evicted from his home and being unable to feed his family. Many men left their families, committed suicide or became alcoholic. “The depression hit Australia and my father, he was a labourer and he got the sack early on. There were no jobs to be had anywhere and when our savings ran out, he applied for the dole. He was accepted but got no wages, only dole coupons which he exchanged fortnightly for our food at a dole centre in Ultimo”.12 People lined the street in long queues for food at soup kitchens, run by charity organisations. Eventually the charity organisations ran out of money and the government tackled this by introducing a form of sustenance from men and families, which was often called the ‘susso’. The susso was only for people who had no other form of support. Any saving made a man ineligible for the susso.13 By 1932 the doll was introduced as approx 600,000 Australians were unemployed, the fact that most people around them were experiencing the same financial crisis didn’t lessen the humiliation of accepting handouts, they had never had to rely on ‘charity’ before and embarrassing exchanges with unfeeling bureaucrats often followed.14 On the 17th of June 1931 the full force of the affects of the Depression on individuals emerged as an “eviction riot” in Sydney Australia. It was one of the most serious disturbances which took place at a barricaded house in Brancourt Avenue, Bankstown, which they labelled the ‘battle of Bankstown’. It was a riot fuelled by the escalating struggle over housing that was generated by the economic circumstances of the Great Depression. It was the cause of ‘stones which smashed the windows and fibrocement’, a bonfire, seventeen arrests, numerous fights and even death. 15 The impact of the depression on families has been debatable, there have been debates on the harshness of the 1930’s, with researchers arguing the severity of the Great Depression, though without doubt the statistics for unemployment rates and all other leading factors of the Great Depression speak for themselves as to how badly their incomes, support and refuge would have been affected by it. However, a positive development emerged out of the Depression in terms of family life: the Australian government was able to initiate the foundations of the relationship between the state and the family. The unemployment benefits during or just after the Great Depression and the universal family allowance during the 1940s laid the foundation for the expanded provisions on social welfare and established better mechanisms that would allow for the passage of family-oriented welfare statutes such as those covering children, women and mothers. The Great Depression dramatically advanced social welfare policies as a whole. Australian intellectuals were also shaken as the phenomenon was never seen before and that it dissolved old certainties and dismissed old truths. It is important to underscore that a whole generation was scarred by the experience. As a result, a new and radical reading of the role of art, literature and culture emerged. Here, moral accountability on the intellectuals, agenda became paramount. According to scholars, far more than either world war, the Australian Depression was the Australian intellectuals’ call to arms and that like the Great War, it shattered illusions of the country’s insulation; more directly than the war, it demanded engagement in global issues.16 Indeed, the war happened elsewhere around the globe, but the Depression happened in Australian soil. The Depression also highlighted the beginning of Australia’s protectionist policies as measures for dealing with national economic crises, particularly those caused by adverse international market forces. The Scullin tariff, announced to the Parliament in 1930 was introduced and the government cut imports drastically through four protective measures, including absolute prohibition on selected import items.17 The Scullin tariff experience proved that raising the walls of protective state to high and enduring levels could be successful in dealing with economic difficulties. The Depression had an underlying good impact on the people of Australia. It is in no way comparable to the hardships, but somehow even in the mists of poverty people went on more “picnics, bushwalks and would go swimming in the sea, having fun on the river banks and beaches, yarning (often with conscious artistry) and playing cards”.18 These activities forced people to interact and get along with each other, as well as encouraged fitness. The unemployed also benefited in health and companionship from cheap or no-cost access to sport (such as football, netball, cycling and harrier clubs). “By about July of 1932, the worst of the Depression in Australia was over, but Australia was to live on, and learn from the challenges that were presented. Australia has been shaped by its responses to changing economic circumstances. Today, we as Australians have certain attitudes that have been shaped by the Great Depression. The 'dole bludger' image came from the days of the 'susso', when the so-called dregs of society relied on the government to provide for them. The Australian dream is to own a house, car and land and live peacefully with one's family. This came about because of the struggles of those who experienced the Depression first-hand. Our dislike of authority figures was also born of the Great Depression, when police officers publicly humiliated those who came to get the susso. Most Australians have some degree of criticism towards the government, and many feel the need to analyse every idiosyncrasy of each politician in power, possibly to avoid having an ill-prepared government as they did in late 1929. Finally, one of the most important lessons learnt through the Great Depression is how much Australians value egalitarianism. We pride ourselves on having a relatively equal society.”19 It seems bizarre that the crash was the grounds behind the Great depression and all the sorrow that followed, after all how many people really owned shares and stock? Never before had Australia experienced such a social trauma, nor has anything of that magnitude happened since. 20 Researchers say it was inevitable21 and the economic recession is just a way of life. Regardless the public was hit hard. It is still fresh on many mind’s the effect and devastation of what happened to families and individuals in Australia, the great depression of the 1930’s lasted almost 10 unglorified years, with tens of thousands of breadwinners out of work for many years, many with their families never sure where their next meal was coming from, few if any Australians were unaffected by it,22 and few will ever forget. BIBLIOGRAPHY "TITLE OF THE ESSAY." CHouse. 2003. Gradua Networks. 18 May 2009 . “Anatomy of an ‘eviction riot’ in Sydney during the Great Depression,” Journal of the Royal Australian Historical Society. ( Dec 2008) Ipswich Library. Australian trade in the great depression” Karl.L. Anderson Far Eastern Survey, Vol 4, no18 (Sept 11,1935 ), pp.140-144 Capling, Ann and Galligan, Brian. “Beyond the protective state: the political economy of Australia's manufacturing industry policy.” CUP Archive, 1992. http://.directessays.com/viewpaper/86984.html. 18th May 2009 Denoon, Donald, Smith, Philippa and Wyndham, Marivic. “A history of Australia, New Zealand, and the Pacific.” (Wiley-Blackwell, 2000). Downing, David. The Great Depression: 20th century perspectives. Reed Educational and Professional Publishing LTD., 2001. Eklund, Erik, “HIST1201 book of readings‘ causes and consequences: the great depression,” in Stewart Ross’ The Great Depression. Evans Brothers Limited, 1997. Reid, Ian, Fiction and the Great Depression studies in Australian Culture, E. Arnold (Australia), 1979. Smith, Keith, Australian battlers remember: The Great Depression, Random house Australia, 2003. “The GDP and unemployment figures are from Australians: Historical statistics Fairfax, Syme and Weldon Associates.” Wray Vamplew (ed.) (Broadway: Fairfax, Syme and Weldon Associates, 1987). “The Great Depression.” Australian Government Culture Portal. 2007. 20 May 2009 Webb, Kenn. Excel School Certificate Australian History, Civics and Citizenship. Pascal Press, 2003. Read More