CHAPTER 17 | 1930–1938 – The Dead Dog Bounce
on a grand scale, with tent cities emerging on the fringes of major population centres. Even so, the early 1930s saw a marked improvement in communications, with interstate and international telephone services progressively introduced across the country. The establishment of the Australian Broadcasting Service in 1932 connected more Australians to national aspirations than ever before. With Australia’s pound sterling pegged against the gold standard, the Bank of England also demanded draconian economic measures to reduce government spending. Enforced layoffs led to a housing crisis and massive protests demanding government ‘susso’, that is, sustenance (welfare). In New South Wales, the Labor Premier Jack Lang refused to pay off British loans, forcing the governor, Phillip Game, to sack him. Lang’s ‘intolerable defiance of the law’ was seen by many as a precursor to civil rebellion. But it did not eventuate, probably because Jack Lang went quietly. To make matters worse, the South Australian state government proposed new duties and taxes that threatened the profitability of businesses. In response, in 1930, Penfolds threatened to close down all of its wineries and stand down its workforce. Hugo Gramp threatened to do the same and even announced the impending closure of the winery at Rowland Flat. A federal senate enquiry into the state of the wine industry was followed in 1931 by some key recommendations. The rapid expansion of vineyards throughout Australia had increased production and surpluses to unsustainable levels. Consequently, it was recommended ‘that extension of vine growing areas be discouraged’. The enquiry also suggested the collection of taxation on fortifying spirit be abandoned in favour of an excise duty on fortified wine and the rate of bounty on fortified wine exported be reduced from 1/9d per gallon to 1/3 per gallon. All of the recommendations, including ‘the control of export wine by one selling organisation’, were designed to help maintain quality but also pointed to oversupply and an industry in deep trouble. The economic depression was beginning to take hold, with consumption falling and demand weakening. A surplus of spirits, and an oversupply of doradillo and muscat gordo blanco in Victoria, threatened the survival of some producers. A decline in the manufacture of dry table wines in the Hunter district and sparkling wines in Great Western also highlighted poor yields and low prices paid to grapegrowers. In the 1930s, South Australia now represented 65% of all vineyard plantings and 75% of wines made in Australia . Lower costs of production, higher yields, low disease pressure, and an absence of phylloxera gave the state a greater advantage over many other wine regions. The downside of the South Australian juggernaut was that it threatened the survival of many established wine families and wine companies in the eastern states. Lindeman’s, for instance, went into receivership in 1930 and did not emerge from it until 1947.
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