Industry in Canada and Australia

[GaryChildress]

I'm working once again on this crazy mod of mine. Have some questions about industry in Canada and Australia. In the universe my mod is located in the British Isles are conquered by the Germans as well as the Mediterranean and Middle East, all the way to India. Maybe South Africa still remains British along with Malaysia and Hong Kong. Basically this leaves the Commonwealth primarily with Australia and Canada to rely on as far as replenishing arms and equipment. I know there isn't a whole lot of industry located in either of these places at the time. So my question is, why was this the case? What made Australia and Canada so much less industrialized than the US or even the British Isles? I would think that Canada and Australia would be fairly plentiful in many resources.

Thanks. [:)]

[EHansen]

I would look at the population for the first 40 years of the 1900's. I think they were very low and mostly the countries were more agricultural than industrial.

[oldman45]

That was my first thought, the lack of population.

[GaryChildress]

Hmmm. I think you have a point. Looking at comparative populations in 1900. http://en.wikipedia.org/wiki/List_of_countries_by_population_in_1900
 
United States       76,212,168
Germany             56,000,000
Japan                  42,000,000
United Kingdom   38,000,000
Canada                 5,500,000
Australia               4,000,000
 
I'm sure the ratios were reasonably close to the same in 1940.

[Symon]

1941
USSR-187,700,000
US-132,170,000
Germany-87,100,000 (‘Reich’ including Austria-Bohemia-Moravia)
Japan-73,120,000
UK-47,800,000
Italy-44,500,000
France-39,100,000
Canada-11,500,000
Australia-7,100,000
NZ-1,640,000

Australia was blessed with extensive resources in both minerals and coal, but she was settled late and her economy concentrated on agrarian expansion. Heavy manufactures were imported from the UK. Iron and steel smelting/production began in 1927. Australia did not commence sheet steel production on any scale until the early 1930s. Worked copper facilities for transmission lines and electrical equipment first appeared in 1918. Aluminum products were die-cast, on a small scale, beginning in 1914, and fabrication of wrought/extruded products began in 1922.

Canada was somewhat similar, but had direct access to the US Great Lakes industrial heartland, its technical expertise and industrial infrastructure. Canada had no need to become an industrialized nation, in its own right. Light/moderate industrialization, to provide for home consumption, was sufficient.

Both Australia and Canada had commercial automotive industries; Australia’s was more limited, Canada’s more extensive. Both produced trucks and automobiles. Both converted to universal carrier production. Both could produce AFVs (clearly, because they did), but neither had anywhere near the number of facilities to make enough even for themselves, much less the rump of the empire. Both had rolling mills capable of making guns (clearly, because they did), but nowhere near the number of facilities to make enough even for themselves, much less the rump of the empire.

They both made refrigerators, metal roofs, fence wire, sewing machines, toasters, and paper clips, but not on the scale that would allow those converted facilities to equip even a 10th of the surviving empire forces. Rifles, Brens, mess-kits, helmets, web-gear, boots, uniforms, bandages, medical supplies, tents, AA-guns, spare tank treads, cleaning rods, tires, fuels, oils, lubricants, glass, packaged rations, wire, communication equipment, specialized tools, artillery, prime movers, and ammo, ammo, ammo, ammo, of every kind and description.

It would take them 10 years (because that’s just what it did take) to get industrialized to the point where they could actually become a player.

[ed] Whoops, forgot about the sources ya'll love so we..
Australian Iron & Steel Pty, Ltd.
Broken Hill Pty, Ltd (BHP, Ltd)
Austral Bronze Co. Pty. Ltd.
Comalco Industries Pty, Ltd (ex Alcan Australia, Ltd)
Copper Refineries Pty, Ltd.
Electrolytic Refining and Smelting Co. of Australia (Metal Manufactures Ltd)
4 or 5 (or maybe 6) theses submitted for requirement of Master of History, Victoria, University, Melbourne. Their thesis index is complete back to 1931 and the librarians are more then helpful. [8D]

[Alfred]

Symon's post provides a good summary of the real industrial capabilities of Australia at the start of the war.  Some hints as to why that was the case are also provided but to provide a fuller explanation to the OP as to why the Australian industrial base was so limited requires a thesis.  Whilst the sources (excluding the these) provided by Symon are good in pointing out what was in situ they do not really fully answer the OP as they are only company histories.
 
First of all, it is never a satisfactory answer to refer to population size as the explanation for one country industrialising/not industrialising.  If the answer were to be so simplistic then why was China, with it's huge population base, not an industrial powerhouse.  Or why were Sweden, Belgium and Switzerland, with their very small population bases, so much more industrialised than other larger countries.  Nor can one attempt to fall back on arguing that domestic market size is the determinant as that overlooks the export sector and fails to acknowledge the complexity of different domestic markets.
 
The OP is predicated on the premise that the USA and Australia were not that dissimilar so why was Australian industrialisation so much less.  There are many factors to take into account.
 
1.  The domestic Australian capital market was extremely weak whereas the American capital market was very strong.
 
(a) Australia was, and remains today, a net importer of capital.  The USA was a net capital importer until WWI but came out of that conflict the world's largest exporter of capital.
(b) Even when America was importing capital there was already a substantial pool of domestic capital which had been accumulated prior to the revolution from its substantial agrarian surpluses which could be easily exported.  Domestic capital accumulation only really started in Australia with the Victorian gold rush of the 1850s and that was a relatively short lived era.  Australian agrarian surpluses were much smaller than Americas nor were they easily exported.
(c) post the American civil war, two great capital clearing exchanges were established; New York for financial instruments, Chicago for primary products.  Australia instead had nothing comparable to Chicago (due to the structural weakness of its primary production) and too many local competing stock markets for financial instruments.
 
2.  America had a more efficient mechanism for allocating capital resources.  Demand for capital in America was driven by private interests whereas in Australia demand for capital was overwhelmingly dominated by government.  For example in the nineteenth century one of the largest demand calls on capital derived from railway construction.  In the USA railways were built by private enterprise with government support coming largely in the form of land grants.  In Australia railways were built and maintained by the government directly.  Just one consequence being that the different Australian colonies had different railway gauges which did not cross colonial borders but when the trans American railway lines were built, the same private company maintained the same railway guage when it crossed state/territory borders.
 
3.  Prior to federation in 1901, internal barriers to trade in Australia were significantly greater than those applicable to the USA.  This was significant in reducing the potential size of the domestic market.
 
(a) internal American transportation networks were much more intensively developed than were internal Australian transportation networks.  Besides having a far superior railway network, America was blessed with an excellent intra riverine transportation network whereas Australia was very much limited to only the Darling for river transport of wool from the interior to the coast.
(b) prior to federation the Australian colonies levied custom duties on imports from other Australian colonies.  For some it was a revenue raising exercise, for others it was a means to protect their local production from competition
 
4.  Cost of production was considerably higher in Australia than in America.
 
(a) the Australian labour market was much more inflexible, in part due to the unique Australian compulsory arbitration system but also to the much stronger presence of the labour movement in both its industrial form (unions) and political form (the ALP).  Early twentieth century court decisions enshrined a minimum wage for a man sufficient to support a non working wife and a couple of kids.  Even today, the Australian minimum hourly rate is in the vicinity of $USD 16-17 which can be compared to some American states where the effective minimum hourly rate is less than $USD 7.
(b) Australian transportation costs both for importing capital goods/necessary industry inputs and exporting (domestically and internationally) finished output, was considerably greater
 
5.  Australia remained very much under the control of the British Imperial viewpoint, a situation very much no longer applicable to America post 1776.  British capital and industrialists saw opportunities in developing Australian infrastructure to enable agrarian products to be shipped back to the UK.  They saw little merit in establishing secondary industry in the colonies which would compete with British industry.  This attitude can be very clearly seen in the British response to the Great Depression when it considerably strengthened the sterling trading bloc.  Combined with actions taken by other countries, it really meant that Australia was tied to generating primary product exports to the UK to generate the sterling to service it's WWI (and other debts) loans from The City.
 
6.  Nonetheless, by 1939 there was a limited industrial base in Australia as a result of two things:
 
(a) the domestic capital accumulation resulting from the "ginermous" late C19th mining developments at Broken Hill and Mt Morgan
(b) the WWI experience which saw the necessity of developing local strategic industry which could take over in the event of disruption of supply from the UK.
 
As a result in 1915 you see the first steel production in Lithgow from the BHP company.  With the continuing cash flows from its mining activities and under forceful management which saw the potential of conflict with Japan and limited British industrial support, the 1930s saw BHP move into steel production in a significant manner.  You can reread Symon's post for other significant investments commencing with WWI.
 
Alfred

[Symon]

WOOF !!! Alfred you ARE da man.

[&o] [&o] [&o] [&o]

[Skyros]

Two great posts in a row.

[oldman45]

This might be a first, two great posts to answer a great question for modders and no trolls. [8D]