They haven't been pre-shrunk of course!
Mechanical shrinking (also known as sanforizing ) is a process whereby the fabric is forced to shrink width and/or lengthwise, creating a fabric in which is basically preshrunk. Sanforizing was patented in the USA in 1930 by - wait for it - Sanford Lockwood Cluett. Chuett eventually joined the family firm of detachable collar manufacturers, but he was also an inventor with around 200 patents in his name.
It appears that anti-shrink fabrics, both cottons and rayons, first arrived in Australia in 1939, judging from the ads I have found in various editions of the Australian Women's Weekly. The ads also seem to disappear by the late 1950s.
So you have cloth which does not shrink significantly during clothes production or by washing the finished clothes. Cloth and articles made from it may be labelled to have a specific shrink-proof value (if pre-shrunk), of under 1%. Obviously this process makes the fabric more expensive, so cheap fabrics used in cheap products, like those you buy at chain stores, will not usually be pre-shrunk. Just another great reason to buy vintage!
You can read more about the process at the Sanforized website.
By the way, if you love vintage ads, like me, check out my tumblr blog.