Towards the end of the nineteenth century, the Australian colonies enjoyed a considerable increase in prosperity. Before 1890, national wealth was increasing at rates similar to those of the United States and twice those of Britain. The population was growing at an annual rate of around 3 per cent. The economy was largely agricultural based with the sheep industry becoming ever more dominant.
Flocks of sheep penetrated further and further inland as investments in buildings fences, transporation and water-storage facilities further increased the land's capacity. Much of this capital was re-invested profits, but an increasing share came from loans raised in Britain. British investment increased sixfold in the two decades following 1860. Britain was also the major destination for Australian agricultural output. This dependence on the British economy meant that if anything effected Britain then it would have serious consequences for the Australian colonies. In the 1870s, the American and Canadian prairies came on stream as the railroads could deliver their goods to the ports. This glut of produce depressed the prices for all agricultural commodities.
Australian farmers were extremely vulnerable and small farmers had even more to be concerned about. While certain areas, such as the Yorke Peninsula in South Australia, remained prosperous, there was failure in most other areas and many farms were abandoned in despair.
It was hoped that the various discoveries of gold would help revive the flagging fortunes of the colony. However, they never quite lived up to expectations with only the workings in Victoria lasting more than a few years. Fortunately, other mineral discoveries would produce more longer lasting. The most spectacular being Broken Hill which was a mound of pure silver, lead and zinc. Copper was discovered at Mount Lyell. Coal would also be discovered.
There was some diversification of the economy as food processing plants, clothing factories and metal goods were produced. House building would also need resources and expertise as suburbs sprawled out from the administrative centres. By 1911, 50 per cent of houses were owner occupied. This was five times the rate of Britain.
In the nineteenth century, most of the colonies developed similar political systems. They possessed two houses, with the lower house being elected by manhood suffrage and the upper house being appointed by the governor or chosen by the landed gentry. However, there were no political parties of note. This meant that governments formed and dissolved with amazing rapidity. As there was little of ideological consequence to keep them together, alliances were formed on personal or single issue bases. In forty years, South Australia had 41 governments, New South Wales had 29 and Victoria 28.
Growth of Australian Nationalism
Although many Australians were quick to articulate their country's interests, they strove to protect them by emphasizing their Britishness rather than rejecting it. Consequently, they would emulate and import many facets of life from the mother country: Cricket, Rugby, Fish and Chips would all take their place in the transplanted colonies. Queen Victoria's Golden and Diamond jubilees were celebrated as vigorously in Australia as they were back in Britain.
One national cause that united most politicians throughout the six colonies was the issue of the Pacific Islands. They were nervous at the movements of the Germans, French and Americans island hopping across the Pacific. They were particularly concerned at German moves in the North of New Guinea in the 1880s and demanded that the British Government occupy the Southern portion as a buffer. At the Imperial conference, Australian politicians angered their hosts by their continued insistence on yet further annexations.
These imperial concerns meant that Australians were often the most vehement in supporting British imperial actions. Thus, in 1885, one of the people most in favour of the 1885 intervention in Sudan was a Victorian politician James Service. He had been one of those had criticized British sluggishness over New Guinea.
Of course, there was an element of self-preservation in the enthusiastic embrace of ties with Britain. After all, the Royal Navy was the ultimate defender of the island of Australia. There were local militias formed, but it would be the regular British Army that would be called on to deter German, French or American incursions. It must also be remembered that the 1890s and early 1900s was a period of rising international tension with power blocks dangerously emerging.
There was a strong current of racism involved. This was the hey day of Social Darwinism and eugenics. The Sydney Bulletin was proud to proclaim 'Australia for the white man'. There was unease at the use of Chinese and Melanesian labourers in the sugar plantations of Queensland. They were thought to be uncouth and slovenly. The desire to colonise the Pacific Islands was partly based on the idea that the Polynesians were lazy and inefficient and not making the most of the bountiful land that lived on. There was also the inconvenient presence of Aborigines in a land that had legally been declared 'Terra Nullis'. It was easier to justify this empty island theory if the aborigines were not considered as humans at all. Social Darwinism allowed them to be considered as some kind of missing link between humans and gorillas. It was indicative that the colonial parliaments showed less concern for the treatment of non-whites than Westminster had done in the past.
Britain was considered to be the source of white civilisation and therefore settlers from the mother country found it much easier to settle in to the nascent colonies. There was also unease at the geographical isolation of this outpost of European civilisation. Hundreds of millions of Asians lay between it and Europe. This was yet another source of anxiety.
The 1890 Slump
Australia's economic bubble fully burst in the 1890s. Australians had borrowed greatly from Britain to finance their expansion of farms and industries. America and Canada pumped out greater and greater quantities of foodstuffs and they would be joined by Argentina and South Africa. The technological advantages that had allowed the Australian economies to take advantage of the world economy was not allowing other economies to join in. Ships and trains were making the world every smaller and more producers were producing for the same quantity of consumers.
In 1890 the Baring Brothers bank in Britain would collapse. The loss of confidence that this created would turn the teetering world economy into depression. The Australian colonies would find themselves particularly hard hit due to the quantity of British loans that they held and the dependence they had on the British market. Highly developed Victoria would be particularly hard hit. The relatively undeveloped Western Australia would escape most of the excesses.
With the onset of depression came the sharpening of class tensions. Skilled labourers had always been in high demand meaning that they had been able to set high prices for their services. Trade Unionism had been well developed thanks partly to this shortage of labour. Therefore when employers responded to the downturn in the economy by reducing wages and laying people off the Trade Unions were going to respond. Strikes became commonplace. In the docks the situation grew so inflammatory that cargoes were set ablaze.
Trade Unions sponsored their own Labour Party candidates to try and promote their interests. They had some success in Queensland and in New South Wales. Indeed, Andrew Dawson in in Queensland probably led the world's first socialist ministry - even if it was just for a few days in 1899. The employers would sponsor their own candidates. The polarisation of Australian politics had begun.
There were a number of reasons why the 1890s would see Federation become more palatable to more Australian colonialists. A rudimentary 'federal council of Australia' (which included Fiji for a while) had already begun meeting in 1885 and they held a conference in 1890. Some politicians like Alfred Deakin and Edmund Barton realised that there might be votes in advocating just such a federation as the Australian Native Association found an ideology that might bind together political groupings more effectively.
Some conservatives were convinced that a stronger union would preserve their economic base more effectively. The worldwide slump convinced many smaller farmers and workers that their might be something in the colonies working together rather than competing amongst themselves. Britain was still a Free Trade Empire but voices were beginning to discuss alternatives.
The international tensions were also a deciding factor - it was hoped that a federation would be more able to fund its own defence more effectively. Initially the idea was to share the burden with the British - but later it would be used to allow their own prioritisation for defence. The Royal Navy might not always be able to put Australian defence at the top of their priorities.
1867 had seen the Canadians develop an effective federation within the Empire. Three decades was enough time to show Australians that federation could work and a model was available for them to copy.
For all of these reasons made the 1890s an appropriate time to advance the idea of federation. 1897 and 1898 saw a conference of state representatives draw up a constitution. This was put to a referendum which passed convincingly in all states by New South Wales. A rerun resulted in a more convincing majority the following year. The representatives travelled to Britain in 1900 to find that the mother country was more than happy to share the burdens of running a colony the size of Australia and promptly granted permission for federation.
The Early Commonwealth
The new Australian governments (Liberal and Labour) wasted no time appealing to the nationalist and racist tendencies of much of the electorate. Asian immigration was promptly prohibited. 'White Australia Policy' was promoted in its place. Melanesian and Asian workers were repatriated - sometimes against their will.
An expansionist Australian nationalism was demonstrated by assuming responsibility for the Papua New Guinea colony in 1905. They volunteered to help the British run the Pacific colonies. They even sponsored an expedition to the Antarctic as that continent's future had yet to have been decided.
In 1908 the Royal Australian Navy was established. This was partly in response to concerns at the growth of Japanese power as a result of their destruction of a Russian fleet in 1905. The Germans were also still too close for comfort in the north of New Guinea.
The Australians had not hesitated in supporting Britain in imperial and defensive matters. Australians enthusiastically joined the Boer War and the First World War. There was no question from either of the two main parties. It was still considered that Australian culture and defence was dependent upon Britain. Although the seemingly callous disregard for the lives of so many Australian soldiers did begin the first mutterings against this unquestioning loyalty to British defence policy. The Gallipoli and the Western Front campaigns also brought together Australians from all over their country for the first time for many of the participants.