The World Wars and the Great Depression
Australia was automatically at war when Britain declared war on Germany in 1914.Australia offered Britain an expeditionary force of 20，000 men and put the ships of the Royal Australian Navy under the direction of the British Admiralty.Most Australians were enthusiastic about the war and more than 20，000 volunteers were recruited within a month.
The Australian troops and those of New Zealand were formed into the Australian⁃New Zealand Army Corps.They first fought in Egypt and then were transferred to France in 1916.Because of high casualty rates，the British government asked Australia to supply 16，500 soldiers each month.Altogether，417，000 Australians joined the armed forces during the war，which was more than half of the total population eligible for military service in 1914.The Australian soldiers were all volunteers，and they fought very bravely and suffered heavy casualties.Out of the 330，000 troops who fought overseas，59，258 were killed and 173，815 were wounded，amounting to a 69％ of casualty rate，the highest among all the belligerent countries.Australian civilians also suffered a lot in their efforts to support the war.In recognition of its great contribution，Australia was allowed to have a separate representation at the Versailles peace conference and was given the mandate to govern German New Guinea，the Bismarck Archipelago and the Northern Solomon Islands.
Although Australians suffered a lot during the war，the war also helped the country to develop a more balanced economy.Before the war，Australia did not have a manufacturing industry.It depended on foreign countries for manufactured goods.During the war，it could no longer import any manufactured goods and had to produce most essential industrial goods by itself.By the end of the war，the manufacturing industry had become firmly established.The rural areas also benefited greatly from the wartime economy because of the great demand for agricultural and dairy products.
After the war，Australians continued to believe that their destiny lay in the land.The government spent a large amount of money settling people on empty land and building railways and roads to enable rapid transportation of agricultural goods.The government also invested heavily in agricultural research and gave subsidies to farmers.All of these factors contributed to economic prosperity during the 1920s.
However，the prosperity did not last long.The worldwide Great Depression affected the Australian economy severely because it depended heavily on foreign capital and markets.When the Depression started，many British financiers withdrew their investments from Australia，resulting in a financial crisis.Prices for wool and wheat，which accounted for three⁃quarters of all Australian exports，fell sharply on international markets.As a result，the Depression caused more misery in Australia than in any other country except Germany.The unemployment rate was high and wages were low.Many people lost their homes as they could not pay their rent or mortgages.Beggars swarmed the streets，although it was a criminal offence to beg in most states.
Many Australians blamed British financiers for their hardship，which led to stronger Australian nationalism.One effect of this was the emergence of an Australian literary movement.A group of nationalist writers called on Australian writers to emancipate themselves from the country’s national inferiority complex.They believed that Australian writers could write about their own national experience and create unique Australian literature.
The government tried a range of measures to combat the Depression.It reduced government spending and cut wages of public servants.It also asked British creditors to lower interest rates on the country’s debt.In addition，gold prices rose in the international market due to shortages of money during the Depression，which greatly helped Australia’s economy.The annual value of Australian gold production rose from about￡2 million in 1929 to￡16 million in 1939.All of these factors helped to pull Australia’s economy out of the worst of the Depression.However，unemployment was still as high as 10％ in 1939.It was the Second World War that completely ended the Depression.
On September 3，1939，the Prime Minister of Australia announced to the nation that，because Britain had declared war against Germany，Australia was therefore also at war.The government was able to mobilize enough volunteers for the Australian Imperial Force which would go on to fight heroically abroad.However，it had to rely on conscription for domestic defense.Parliament passed the National Security Act which gave the government complete control over the country’s resources，production，and people for the duration of the war.
As in World WarⅠ，Australia contributed greatly to Britain’s military efforts during the first two years of the war.The Royal Australian Navy was placed under the control of the British Admiralty.The volunteer Australian Imperial Forces fought in the Middle East and in Greece，and Australian pilots fought heroically in the Battle of Britain.These actions helped Britain to survive the onslaught of Nazi Germany and generated patriotic enthusiasm in Australia.However，the war was still far away and life went on largely as usual in Australia.
The situation changed suddenly when Japan bombed Pearl Harbor on December 7，1941.Australians now had to face an enemy in their own backyard.When Singapore fell to Japanese forces in February 1942，more than 15，000 Australian soldiers were taken prisoner.Four days later，Japanese warplanes bombed the northern Australian city of Darwin.
Australians had always relied on British protection.Now Australia faced an invasion，but Britain could not spare any forces to defend it.So，the government looked to the United States for help.The U.S.government was happy to use Australia as a base to organize a counterattack on the Japanese.Meanwhile，the Australian government，against Churchill’s opposition，ordered two divisions of the Australian Imperial Force to return from the Middle East to defend their home country.As the Allies made the decision to defeat Germany first，Australia had a long and arduous fight alongside the United States against the Japanese.About 27，000 Australian soldiers died in the war.
However，the war also had some positive effects on Australia’s development.The conflict stimulated the Australian economy to a new level of affluence.The great wartime demand for Australian wheat and wool brought huge profits to farmers and sheep ranchers.The war also greatly boosted the manufacturing industry as Australia could no longer depend on Britain for many goods.
Internationally，the war greatly reduced Australia’s dependence on Britain and shifted its policy towards alignment with the United States.The Australian government deployed forces alongside those of the United States in the Korean War.In 1951，Australia，New Zealand and the United States signed the ANZUS mutual defense treaty which became the corner stone of Australia’s foreign policy.In 1954，a group of countries including Australia，the United States，Great Britain and France formed the Southeast Asian Treaty Organization for the purpose of combating communism in Asia.By the end of the 1950s，Australia’s foreign policy was closely linked with that of the United States.
Domestically，the war further strengthened the power of the national government.The Labor Party，which won a landslide victory in 1943，was determined to prevent what had happened after World WarⅠand began to lay the foundation for a welfare state after the war.It instituted a range of social programs such as unemployment compensation，free healthcare，subsidized housing.It also established state⁃owned airlines and nationalized the shipping industry.The National Central Bank was created to oversee monetary policy.The government also entered the field of education by founding the Australian National University and providing free college education for ex⁃servicemen.
Finally，the war also brought a change in Australians’attitudes toward immigration.Increasing numbers of people came to realize that Australia’s future defense and national development required a larger population.As a result，the government made great efforts to assist ex⁃servicemen in Britain and other European countries to migrate to Australia.However，it maintained the White Australia policy and refused to accept immigrants from other racial groups until after 1970.