Australia was heavily indebted to British banks on the eve of the depression. It faced a balance of payments crisis and experienced a change of government in October 1929. The Conservatives had to hand over power to the Labour Party which had been in opposition for thirteen years. But the new government had a majority only in the lower house and not in the senate which continued to be dominated by the Conservatives who threw spanners into the works and prevented essential legislation. Moreover, the new government was inexperienced and owed its victory to strikes in mining and industry. The farmers did not figure at all in the Labour Party’s political calculations. They were soon pushed into an awful predicament by the government. In order to overcome the balance of payments crisis the government had the bright idea of inaugurating a ‘Grow More Wheat’ campaign at the most inopportune moment. Wheat export was supposed to earn the foreign exchange which Australia badly needed at that time.
The Australian farmers who joined this campaign were mostly indebted due to investment in the cultivation of new land in the 1920s. They had cleared 3 million hectares of land for wheat production in this period and now they were supposed to step up production even more. The government encouraged them by making all kinds of promises, e.g. the banks were going to provide credit and the government would guarantee the price of wheat. It turned out later on that the government could not keep these promises because the banks would not provide credit and there-