Australia–United Kingdom relations - Wikipedia
The First World War was, in economic terms, a bad one for Australia. . Australia's key economic relationship was with Britain, a reality expressed in a . The Centenary History of Australia and the Great War, Volume 4: South. The spat between Australia and Britain over the “banning” of the families of the It has become seen popularly as “the worst night in Australian military history” – a notorious instance in a quick survey of the relationship between war and nationalism in Australia. World War I · Diggers · UK military history. The impact of the First World War on Australia was so profound that its memory It is, however, the story of how Australian forces were used in battle that .. of the changing relationships within the Empire that the British prime.
Coal production fell from Britain needed metals, but lacked the smelting and refining capacity to treat Australian concentrates. Although contracts with enemy companies were suspended at the outbreak of war, there was uncertainty as to whether they could legally be cancelled, which made it problematic to enter into new contracts.
The importance of the base metals industry forced government and industry to act. Billy Hughes, together with industry leaders William Lawrence Baillieu and William Sydney Robinsonsaw the war as an opportunity to free the Australian metals industry from German domination and develop processing capacity in Australia. Legislation was passed annulling contracts with the German cartel and a government-backed cartel of Australian base metal miners was formed.
Only they could supply the wool needed for clothes, uniforms, and blankets.Propaganda During World War 1 - Opening Pandora's Box I THE GREAT WAR Special
Early in the war wool exports were embargoed except to Britain, but from early merino wool could be exported to allied countries and the United States and prices steadily increased. However, in February the British government again asked Australia to stop all wool exports except to Britain, leading to a steep fall in wool prices. Whereas wool growers had the advantages of a near monopoly of world production and a product that did not deteriorate in storage, wheat growers sold a perishable product into a free world market.
Further, the value of wheat per ton was significantly less than wool, so that more ships were required to shift the same value of product. Good rains in the winter of led to a record wheat harvest inbut the shipping shortage made the crop virtually unsaleable. By October the situation was critical and wheat growers faced ruin.
Again leadership came from Billy Hughes and W.
Australia–United Kingdom relations
Baillieu suggested a plan under which the federal government took responsibility for receiving, storing, transporting, selling, and shipping the whole wheat crop.
Within two months the necessary legislation was passed and the scheme was in operation by the beginning of Farmers were paid a government-guaranteed advance on delivery of their wheat, with the Australian Wheat Board being set up to control shipping and marketing. The scheme saved wheat growers from disaster, but the federal government was left with the problem of selling and shipping the crop. By early Marchover 25 million bags of wheat awaited buyers and ships.
Faced with food shortages over the winter ofin November the British government agreed to buy the entire Australian wheat crop. However, it soon became clear that the American crop would be quite sufficient to supply Britain and the Australian wheat was literally left to rot.
The relationship with Britain and America | Australia Explained
The scale of purchases was enormous. This came at great cost, with the burden of war debts weighing down the economy throughout the interwar years. The expenditure on the war was vastly greater than any previous object of government expenditure in Australian history, with the sole exception of railway construction.
This was considerably less than the Like all belligerent nations, Australia experienced severe inflation during the First World War. Estimates of the degree of inflation vary, with contemporaries believing that it was higher than later calculations suggest. Public pressure forced governments to take action to control prices, but it was not decided until whether the Commonwealth had the power to regulate prices, so early action was left to the states.
This action was uncoordinated and wholly ineffectual. The first war loans were raised in London, but from mid the majority of loan funds were raised in Australia. Before the war the small Australian financial market was considered incapable of mobilizing large amounts of capital, but the war loans attracted funds from many small investors as well as from the life insurance companies and banks.
Armaments production barely went beyond small quantities of simple artefacts such as riflesbayonets and scabbards, while the major effort devoted to shell-making in and early was an embarrassing failure. When the Australian colonies set up their own armed forces in the late 19th century, almost every item of equipment came from Britain. Australian manufacturing industry lacked the capability to equip or even clothe a modern military force.
From the late s some small steps were made, with the establishment of a cartridge factory and the growth of the textiles industry. In government-owned cordite and rifle factories were opened, followed in the next few years by a woollen mill, a clothing factory and a canvas and leather-goods factory, but these made only a small contribution to supplying the armed forces during the war. Contracts to supply the army helped sustain the economy through the downturn that followed the outbreak of the war, with the textiles, clothing, and footwear industries benefiting the most.
Total Australian production was sufficient to ensure that throughout the war the army was clothed in Australian-made uniforms, shod in Australian-made shoes and slept in Australian-made blankets. In March the government announced a plan to build a government arsenal in Canberra then a tiny settlement far from ports and with no skilled labor force and purchased land for this purpose.
The British government refused to aid the venture with machinery or skilled workers and the plans went no further. Munitions committees were set up in every state and although the government admitted it had only the vaguest idea of what skilled labor and suitable engineering works were available, the committees pressed ahead with shell manufacture at the most amateurish level. After much effort and expense, it is estimated that only 15, shells of acceptable quality were made in Australia.
By August the munitions factories around Australia were closing down or reverting to civilian production. The most substantial manufacturing industries were associated closely with primary industries, notably food processing, woollen textiles, clothing, leather, timber products, farm machinery, and mining equipment, but even these were highly dependent on imported machinery and parts.
Sophisticated products such as electrical equipment, machine tools, engines, and chemical products were almost all imported, as were many of the most basic household items such as cutlery, buttons, glass, and curtains. As a response to the depression of the early s, the British Empire sought by preferential arrangements to maximise trade within it. While the war itself had not been an engine of industrialisation, it had diversified Australian production as enterprises filled gaps left by the disruption of world trade and shipping shortages.
The war boosted the chemicals industry, zinc refining, and steel production; these areas formed the foundation of interwar industrialisation. Manufacturing still only represented 11 percent of gross domestic product inbut it expanded rapidly until aboutwhen over-production of consumer goods began to create difficulties.
By manufacturing had grown to 18 percent of GDP. The growing American dominance of the global cinema industry, and the enormous enthusiasm of Australian audiences for the Hollywood product, squeezed the local industry. Automatic cost-of-living adjustments were introduced to respond to price increases in Unemployment, which had never dipped below seven percent fromalso climbed in the late s.
Employers looked to wage rates in their efforts to cut costs, and they found an ally in the federal government. Australia, with its exposure to international fluctuations in trade and investment, would have experienced a depression irrespective of the nature of its development in the s.
But war debts and post-war borrowing greatly increased its vulnerability to external shocks, such as the collapse of commodity prices and the virtual cessation of international lending. When Australia was indeed hit by these problems init experienced a catastrophic balance of payments problem and strong pressure from creditors. The government reduced pensions and spending and cut interest rates for local bondholders — but it did not default on its overseas debts.
The federal Arbitration Court, which determined conditions for many Australian workers, cut wages by 10 percent in addition to automatic adjustments to account for deflation, although some tribunals in the states increased wage rates.
To promote industrialisation and absorb the unemployed, who probably accounted for a quarter of the workforce during the worst period of the depression aroundthe government encouraged British and foreign multinational firms to set up operations in Australia, behind its high tariff wall.
Local manufacturing contributed to helping Australia out of its balance of payments problems by reducing dependence on imports. It would take another world war to usher in a new prosperity. In contrast with World War I, Australia in managed to avoid excessive overseas debt, partly through financing the war via taxation and bonds sold locally.
It also benefited from its greater level of industrialisation, which placed it in a strong position to supply its own forces and eventually, the Americans as well. Australia had developed defence industries between the wars, motivated in part by the sense of isolation and vulnerability it had experienced during World War I.
- The First World War
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