Australia 1931 - Wages Cut & Holden merges with GM

Today another look at Australian history in the 1930s, and a bit about General Motors, who took over Australia's Holden Company in 1931.


General Motors was founded in Michigan in 1908, in Flint, Michigan, as a holding company for Buick who sold his company to  the Durant-Dort Carriage Company.  Established in business in 1886, by 1900 Durant-Dort was producing over 100,000 carriages a year in factories located in Michigan and Canada.  Durant already owned several Ford dealerships, and soon acquired Oldsmobile, Cadillac, Cartercar, Elmore, Ewing, and Oakland (later known as Pontiac), as well as several truck companies.

Durant lost control of GM in 1910 to a bankers trust when a deal to buy Ford fell through, so he left the firm and co-found the Chevrolet Motor Company in 1911 with Louis Chevrolet.  In 1916  Chevrolet bought 54.5% of GM with the backing of Pierre S. du Pont, and later that year the GM Company became incorporated as General Motors Corporation.

GM's headquarters were located in Michigin until the mid-1920s when it was moved to Detroit in 1923, when "the Durant Building" was completed in 1923. New president Alfred P. Sloan renamed the building 'Cadillac Place', and it remained their headquarters until 1996.

General Motors Building (Cadillac Place)

GM surpassed Ford Motor Company in sales in the late 1920s thanks to the leadership of  Sloan, who invented new ways of managing a complex worldwide organization, while paying special attention to consumer demands such as style, power, and prestige.  Safety wasn't a huge concern though it seems - when it was proposed Chevrolet should introduce safety glass, he opposed it because it threatened profits.  GM also introduced monthly payment plans that allowed more people to buy GM cars - Henry Ford was opposed to credit on moral principles.

In 1925, GM bought Vauxhall of England, and then in 1929 went on to acquire an 80% stake in German automobile manufacturer Opel. Two years later this was increased to 100%. In 1931, due to financial difficulties, Australia's most successful company of the 1920s, Holden's Motor Bodies Ltd was forced to merge with GM, who were able to acquire the Holden company at a 36% discount - a total sum of 1,750,000 pounds. What a great buy!  GM company directors stated that with a fall in national income of 140 million pounds, it would be some years before the automobile business in Australia recovered and shareholders saw a profit.

1930 Willys Model 98B Touring (Holden Bodied) - Australia

In January 2012 Australian headlines read:

"The closure of Holden's Australian operations is one option being considered by US parent company General Motors"
and indeed they did close some factories and have proposed more closures.  Times haven't really changed, have they?

Because of the huge fall in national income, in January 1931, the Commonwealth Arbitration Court reduced all wages within it's jurisdiction -  that is basically the whole of Australia's workforce.  The idea was that a reduction in wages would increase employment.  Because of the severe economic contraction, and the reduction of purchasing goods, employers still couldn't afford to keep excessive workers. A five-year unemployment average for 1930-34 was 23.4%, with a peak of approximately 30% of the nation being unemployed in 1932. This was one of the most severe unemployment rates in the industrialised world, exceeded only by Germany.  The majority of the people of Australia lived very well during the 1920s, so they felt the effects of the depression strongly.

1930s dole queue Australia

The basic wage was restored in April 1934, although it was based on a lower wage that before, and the trade unions were not happy.


In 1934 Larry Hartnett (later Sir Laurence Hartnett) was sent to Australia by GM as Managing Director of the Australian company with a directive to either make it profitable or close it down.  By 1935 the world economy had strengthened and Hartnett lifted production to 23,129 bodies and a profit of 650,000 pounds. The company also introduced the "Sloper" to the world which was the fore runner of the hatchback and led the rest of the world in producing the first all steel bodies. In 1936 the company moved to new headquarters, at Fishermens Bend, Melbourne.

Art deco GMH building, Fishermans Bend, Melbourne. 

In 1936 Hartnett began planning the complete production of a "wholly Australian car", however another World War intervened, with the (Menzies) government of the time putting these plans on hold. Instead they were the first Australian company to mass-produce internal combustion engines including Gypsy Major aeroplane, Gray Marine, and a 4-cylinder radial torpedo. After the war the, Holden returned to producing vehicle bodies, this time for Buick, Chevrolet, Pontiac and Vauxhall. The Government also asked for proposals from any local company for production of a complete car - and General Motors Holdens were the only company to reply.  In 1948, after many difficulties, including GM wanting the design done in America, the 48-215 Holden (or FX Holden, as it soon became known) was born.

An Australian-made car so captured the imagination that 18,000 people ordered one without knowing any details about it - the waiting list was two years long.  The car weighed about 1000 kilograms, could cruise at 100km/h and would do about 130km/h flat out. It could travel 48 kilometres on a gallon (4.55 litres) of fuel (about 9.5 litres per 100 kilometres) and seat six people. And it was powered by a straight-six engine and could out-accelerate anything.

Jack Rawnsley, one of the engineers who made the prototype FX Holden in 1946. It has now been restored and bought by the National Museum of Australia for $650,000 via

GMH also released the coupe-utility, now Australia's iconic car (although it was said to be invented back in the early 1930s by a young Ford Australia designer named Lew Bandt). You can read more about the ute here.

During the 1950s, Holden dominated the Australian car market. Ford Falcons went on to become some of the best-selling models ever and gave the Holden opposition terrible grief in the 1970s and '80s, as did Crysler. Large family cars are now being phased out - SUVs and small cars are more popular (we have one of each in our family, and not a Holden in sight.)  Both Ford and GM have made it clear that any future large cars will be global vehicles, not made-for-Australia specials.  Sadly, the end of the all-Australian car has come.

Deb xx

Australia 1930 - Jobless Rate Exceeds 20 Per Cent

Although I love a lot about the 1930s, there are some things that I am glad I missed. However, I think it's good to look at history to remind us of the mistakes made, so that we can hopefully learn from them - like the Great Depression.

1930s Oxymoron

Throughout the 1920s, the stock market had grown on speculation by people who bought on margin and, in fact, owned only a small portion of their stocks. Many could not meet margin calls - demands to put up the money to cover their loans. The result was panic selling. On October 29, 1929 (Black Tuesday) alone, stock values fell $14 billion on Wall Street. The great Depression had begun, and rapidly spread worldwide.  Queensland had already been pushed into a recession in 1926 by falling wool and mineral prices.  Dependent on exports to England, wartime inflation had upset the United Kingdom's terms of trade and their sluggish economy naturally reduced the demand for imports from Australia.  By 1930 international commodity prices collapsed, triggering a fall in export earnings and increasing overseas debt. Basically there was no money circulating within the population and therefore no one could buy anything, which meant no businesses made money and therefore no jobs were available in a catastrophic cycle.

$100 will buy this car must have cash lost all on the stock market

In August 1930 the visiting Bank of England representative, Sir Otto Niemeyer, insisted the Australian state, territory and federal governments balance their budgets, cut all overseas borrowing and lower all award wages by 10 per cent.the state. The State Premiers agreed to balance their budgets and not seek any more overeseas loans, and to finance only 'reproductive' public works. Many infrastructure projects, which had begun in the 1920's under the previous 'men, money and markets' policy, were stopped immediately, except perhaps the building of The Sydney Harbour Bridge which had begun in 1923 and kept many men employed during the depression.

Sydney Harbour Bridge c. 1929

The cut in public expenditure happened at the same time that private businesses were putting thousands of people out of work.  In November 1930 figures showed that 20.5 %, or 90,379 union members of a pool of 439,971, were unemployed.  A year later it would reach 28%. Those still employed had their hours lengthened and their wages cut, and set off to work each morning knowing there was every chance they could finish the day on the dole queue.

Men ordered to present food relief tickets for inspection because of fraud allegations, at the dole queues at No.7 Wharf, Circular Quay, Sydney. 11 June 1931.

For the majority of people, there was little government assistance, especially at the beginning of the crisis. Private charities were often the only source of support outside of families and neighborhood communities.

Unemployed men receiving food handouts

Protest marches and demonstrations by the unemployed in all states and territories demanded increased sustenance pay and rent subsidies. In April 1930 a mass meeting of the unemployed in Melbourne led to the establishment of the 'Anti-starvation Crusade' which planned to go directly to the State Government and ask that better remedies be put into action before winter, including banning unscrupulous landlords seizing furniture and turning tenants out into the streets. In 1931 over 1000 unemployed men marched from the Esplanade to the Treasury Buildings in Perth, Western Australia, to see Premier Sir James Mitchell.

 Perth 1931

Many people lost their homes and were forced to live in makeshift dwellings with poor heating and sanitation.   City and urban people planted gardens to produce fruit and vegetables. In some urban areas co-operatives were formed based on barter systems to share what was available.People set up camps int he domain in Sydney  and unemployment camps sprang up at various locations  including Happy Valley at La Perouse,  behind Congwong Beach. People often arrived with only the possessions they could carry, pick a spot and erect a hut with scrounged corrugated iron roofing, white washed hessian walls and earthen floors. They scrounged food from local Chinese market gardeners and local fishermen and the government provided one pint of milk per family per day. By 1932 Happy Valley had a stable population of at least 330.

Happy Valley, 1932

Labor Prime Minister James Scullin came to power on 22 October 1929, just a week before the stock market crash. in 1930 Mr Harris, the deputy leader of the Liberal opposition, somehow voiced his views that there was 'no one on the breadline' in Melbourne, and that there was no need of Unemployment Insurance in Victoria.

Breadline in New York City during the Great Depression.

By late 1930 the States started providing 'sustenance' or 'susso' for the unemployed in the form of ration vouchers, but this was worth only a tiny amount of the basic wage. Many people, especially in Sydney and Melbourne, turned to begging or 'door knocking', trying to sell small trinkets, fruit, shoelaces, soap, moth balls, artificial flowers or stockings to earn a few coins.

An unemployed man selling apples 1930s.

Others played instruments sang,and others feeling they had no choice turned to theft to provide themselves and their families with food. Sometimes children failed to thrive on food issued with the government rations, and would end up in hospital with malnutrition. Deaths from malnutrition, disease and suicide increased, and parents often went hungry to give what food they had to their children, and other parents choose to give their children to people that could care for them.

Children of migrant fruit worker in Berrien County, Michigan

David Potts in his 2006 book 'The Myth of the Great Depression' explains that dripping had to be substituted for butter, which apparently could be quite tasty. Unfortunately he then goes on to say that "going without food intermittently for two or three days, or five or ten, or even a degree of persistent hunger, does not damage the body or health". I's like to see him try it.

Schoolchildren line up for free issue of soup and a slice of bread

Not only was malnutrition an immediate effect of poverty, but also emotional and psychological distress - just imagine being forced out of your home as you could no longer pay the rent/mortgage, and had to take your family to live on the streets.  The majority of the people of Australia lived very well prior to the fall, so they felt the effects of the depression strongly.  

William Roberts, an original Anzac, and his family evicted from their Sydney home into the street 

Apparently today even many two-income families today are a paycheck away from losing their homes  because they are living beyond their means. So the lesson from this - minimize the amount of debt that you take on. Easier said than done sometimes. Oh, and don't have too many children. Like I did!

Back to something cheery tomorrow, although there are more Depression images on tumblr if you want to see them.

Deb xxx