E xperiences of the depression
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E xperiences of the Depression. What is a Depression?. An economic depression is a deep and extended slump in total business activity. The main characteristics of a depression are high levels of unemployment, low levels of production and declining income and profits. .

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E xperiences of the Depression

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Experiences of the Depression


What is a Depression?

An economic depression is a deep and extended slump in total business activity. The main characteristics of a depression are high levels of unemployment, low levels of production and declining income and profits.


Wall Street- the crash that shook the world

The Great Depression; the largest economic crisis in modern world history. The impact of this world economic collapse was first felt in the USA and was marked by:


When was the Great Depression?

The Great Depression began in October 1929 and continued for nine years when it finally ended in 1938 with the outbreak of World War Two.


  • The Wall Street crash, 24 October 1929, was the beginning of the Great Depression. ‘Black Thursday’ because it shattered the US economy; the most prosperous and confident country.

  • ‘Black Monday’ 28 October, the value of shares fell even further. The collapse spread panic abroad.

  • President Hoover tried to assure the crisis would quickly pass. However, the Great Depression would last for close to 10 years and strike at nearly every country in the world.

  • Australia owed Britain and America millions of dollars and so was hard hit by the economic chaos.


A photograph of the scene outside the Wall Street Stock Exchange during the crash of 1929


Causes of the Great Depression

  • Economic dependence:

  • Heavy borrowing of funds from overseas to finance development (e.g. non-productive public works)

  • After Germany Australia had the second largest debt in the world

  • The money from overseas that Australia depended on, began to dry up after 1928.

  • The London lenders began to lose fairth in the Australian market and refused to lend more money.

  • The Australian government borrowed more money to pay off short term loans.


  • Lack of secondary primary industry

  • Australian depended almost exclusively on the sale of primary products (i.e. wheat and wool).

  • Prosperity and over confidence

  • Australia’s share of winning the war

  • People moved from the country to the cities in pursuit of higher wages and better facilities.

  • Many of the land settlement schemes were badly planned.

  • Stock Market crash (29 October, 1929)

  • USA is dominant of economic power at end of WW1

  • Many of australia’s loans originated in London (relied on one source)

  • When the world was hit by the stock crash so was Australia!


The Depression experience in Australia

In January 1929, Australia’s long-term borrowing from overseas came to an end when London refused further loans. In the months before the Wall Street Crash, problems with the Australian economy were evident:

  • Australian shares values were falling

  • Unemployment levels rose

  • Selling price of Australian agricultural produce was falling on the world market.


  • During the 1920s State governments borrowed large amounts of money to finance public works programs in cities and rural areas.

  • By 1929, Australia had huge debts and interest repayments.

  • Australia became dependent on overseas loans and investment for prosperity and growth, and relied on agricultural and industrial exports for national income.

  • Even without the crash on Wall Street, Australia faced uncertain times in 1929. The consequences of the world economic crisis would be catastrophic for Australia


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