CHAPTER XXXI. FROM THE TREATY OF VERSAILLES TO THE SECOND WORLD WAR

The leaders of the Axis countries mistook this distaste for war for fear, and Hitler forcibly annexed Austria (1938) and Czecho-Slovakia (1939). The British and French saw they must call a halt to this method of altering the political boundaries of Europe. They warned Hitler that any further aggression would be resisted by force, and when the Germans invaded Poland both Britain and France declared war on Germany on 3rd September, 1939. The Australian Prime Minister, Mr. R. G. Menzies, announced the same day that Australia was at war with Germany alongside Britain. For the second time in twenty-five years Australia was involved in a world war that had its origins in Europe. Such has been the background of Australian history in the period since the Treaty of Versailles in 1919. Let us now look at what had been happening in Australia itself.

The first ten years after the victory of the Allied Powers in 1918 were marked on the whole by prosperity and economic progress in Australia. There was during this period a good deal of political strife mainly over industrial matters arising out of a number of big strikes. But on the whole people were busy making money and enjoying themselves and, if some suffered distress from unemployment, for example in the slump of 1920-21, the great majority were not much affected and conditions soon improved. The world outside was prepared to buy our wool, wheat, butter, fruit and metals, and to pay good prices for them, so Australian production expanded in response to demand. The Commonwealth and the State governments were busy promoting closer settlement, and particularly in providing farms for returned soldiers who wished to go on the land. They bought over 5,000,000 acres of private land (for 29,000,000 pounds), and also set apart 23,500,000 acres of Crown Land for farms for soldier settlers. In the long run Australia lost nearly 24,000,000 pounds on these ventures. But meanwhile many ex-soldiers settled in the irrigation areas of the Murray valley in Victoria, New South Wales and South Australia, and the effect of this settlement can be seen in the great growth of production of citrus fruits, dried fruits, table grapes and wine which took place between 1919 and 1939. Other ex-soldiers took up wheat farming (particularly in Western Australia), dairy-farming, or sheep-raising. There were many others besides ex-soldiers who were also going into farming, and in addition there were many being employed in factories or other businesses in towns. During the war the number of factories in Australia had grown considerably, partly because we could no longer get the goods we had previously imported. In 1921 many of these war-time industries succeeded in getting tariff duties to protect them from overseas competition, and so not only farm production, but also factory production entered upon a period of rapid expansion.

It is, perhaps, not surprising that in these circumstances governments and many people were confident and optimistic about our future progress. At the census of 1921 the Australian population numbered 5,436,000 and statesmen in this country and overseas thought this number could be rapidly increased. They thought, moreover, that we should have a bigger population in the interest of our security and prosperity, as well as in the interest of the Empire as a whole. It was simply a matter of 'men, money, and markets,' in the opinion of Mr. S. M. Bruce, who was Prime Minister of Australia from 1922-1929. During his term of office there was a considerable amount of unemployment in Great Britain, and British leaders as well as Mr. Bruce thought it would be a good idea to encourage emigration from Britain to Australia. Britain was also willing to lend Australia money to enable her to establish these settlers on the land, or in other employment. So in 1922 the British government passed the Empire Settlement Act so that it could lend money on easy terms to the dominions, and help to pay the passages of British emigrants. Three years later the Commonwealth entered into an agreement with the British government whereby Britain was to lend Australia 34,000,000 pounds on easy terms; in return Australia was to take 450,000 British emigrants within ten years. This was known as the '34,000,000 pounds Agreement.' The money was to be used in building roads and railways, schools and hospitals and to provide all the other public needs of a growing community. As a matter of fact not 34,000,000 pounds, but more than ten times this amount (410,000,000 pounds) was spent by Australian governments and public bodies between 1919 and 1929 to promote settlement in Australia. Much of this money (about 20,000,000 pounds each year) was borrowed in London, and it played a big part in the prosperity of that period. For a few years British immigrants came to Australia in large numbers, but our population grew even more by natural increase. By the end of 1929 our population had grown by a million more than at the census of 1921. We had certainly succeeded to a large extent in getting the men, and even more in getting the money for settlement. But what about the markets?