Export Prices example essay topic

How was Australia affected by depression in 1920's? Australia was one of the countries deeply affected by the Depression. This was due to the fact that Australia heavily depended on the imports, trade and investment intake from overseas. The economy was already unstable and was in trouble during the 1920's. The wealth of the economy was only based on the high prices of Australia's exports and primary products, a growing volume of exports and a continued stream of investments into Australia. Any serious reduction to the price and volume of exports and reduction of overseas loans would cause problems.

An indication of danger was Australia's large and rapidly increasing overseas interest bill. By the late 1920's, the prices of Australian's exports were also falling. With the continuation of the declining price, Australia would have a difficult struggle to pay for its imports and repayment of loans. Australia was affected so severely as its primary source of income was taken away. Employees in public works, building and construction lost their jobs, as loans were no longer being funded for these projects.

This also reduced the demand for goods produced in other industries. Australia's workmen had a severe lost of jobs and wages. How was the government responding and assisting the population?" S usso " Those who were unemployed were entitled to the application of the 'sus so', a sustenance or dole payment. A person seeking this assistance had to register and demonstrate that they had been unemployed for at least the previous two weeks. Payment was on a family basis, firstly in the form of rations, and then a cash order system was introduced.

Those who had to queue for the dole were humiliated; most states didn't provide cash but merely food coupons. Unemployment For married men, pick and shovel construction work could be available. The cash payment they received was often below the basic wage. Water towers, railways, roads, sewerage and water systems were built. Sustenance workers were paid lower than the award wage.

Refusal of work on a relief project made a man immediately ineligible for the sus so. To lower the number of unemployed workers, relief work was provided on buildings, bridges and roads. It was backbreaking work, often far from work and relief workers sometimes displaced regular workers so that lower wages could be paid. Inflation / Deflation Deflation is the reduction of the amount of available money that was available to the government and the population. Its effect was lengthened to the hardship.

Australia eventually recovered as export prices began to rise. Inflation is an increase of the currency of a country by issuing more printed money. Sir Otto Niemeyer James Scullin the labour government invited Sir Otto Niemeyer to study Australia's problems. Niemeyer was from the Bank of England and was to advise the Government.

His strategy was to create reductions in wages and improvements in productivity to balance the budget. He said that Australia had been living beyond what was needed and had to cut costs, spend less and start refunding its loans. Premier's plan The State Premiers and Federal government met for an emergency conference and on May 25th 1931. The 'Premier's Plan' was drawn up.

It consisted for continued reductions in government spending. This plan was aiming at reducing the income of people who were living off their investments and also to reduce rent and mortgage repayments. By 1931, the Scullin Government was accused of having sold out the rich. There was little encouragement for any of the government's attempts at recovery. The Labor Party splintered into groups either supporting or protesting against the plans. New guard There was a disturbing and surprising increase of private armies in reaction to the Depression.

One of the best known was the New Guard. These groups were organized along military lines. The New Guard was based in Sydney and led by an ex-AIF officer, Eric Campbell. He and his followers feared that unemployed would turn to communism. The Communist Party gained attention and argued that the Depression was proof of the failed capitalist system. It was a nationally organized movement but failed to win widespread support.