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Towards the end of the nineteenth century, the Australian colonies enjoyed a considerable increase in prosperity. Before 1890, national wealth was increasing at rates similar to those of the United States and twice those of Britain. The population was growing at an annual rate of around 3 per cent. The economy was largely agricultural based with the sheep industry becoming ever more dominant.Flocks of sheep penetrated further and further inland as investments in buildings fences, transporation and water-storage facilities further increased the land's capacity. Much of this capital was re-invested profits, but an increasing share came from loans raised in Britain. British investment increased sixfold in the two decades following 1860. Britain was also the major destination for Australian agricultural output. This dependence on the British economy meant that if anything effected Britain then it would have serious consequences for the Australian colonies. In the 1870s, the American and Canadian prairies came on stream as the railroads could deliver their goods to the ports. This glut of produce depressed the prices for all agricultural commodities.Australian farmers were extremely vulnerable and small farmers had even more to be concerned about. While certain areas, such as the Yorke Peninsula in South Australia, remained prosperous, there was failure in most other areas and many farms were abandoned in despair.It was hoped that the various discoveries of gold would help revive the flagging fortunes of the colony. However, they never quite lived up to expectations with only the workings in Victoria lasting more than a few years. Fortunately, other mineral discoveries would produce more longer lasting. The most spectacular being Broken Hill which was a mound of pure silver, lead and zinc. Copper was discovered at Mount Lyell. Coal would also be discovered.There was some diversification of the economy as food processing plants, clothing factories and metal goods were produced. House building would also need resources and expertise as suburbs sprawled out from the administrative centres. By 1911, 50 per cent of houses were owner occupied. This was five times the rate of Britain.
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