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Development increased in the 1,870s with a land boom in the 1,880s, followed by a financial panic in the early 1,890s. Recovery occurred rapidly, with associated great political, social and cultural changes. Agriculture and especially sheep raising remained the mainstay of the economy. Sheep diseases, the carnivorous sheep-eating dingo and the pasture destroying kangaroos and imported rabbits were fought constantly. In Queensland in 1,887 to 1,889 some 3,700,000 and 60,500 dingoes were killed, but the rabbits remained uncontrolled. Wheat acreage was gradually increased during the century, with South Australia alone reaching over 1 1/2 million acres by 1,891. Cane sugar became an important crop in Queensland by the end of the century. Less in true importance to the economy, but high in emotional value was mining - not only of the gold, but also of copper, a silver-lead-zinc complex, tin and coal. The leading manufactured products were boots, shoes and clothing.

Attempts to nationalize Australia and its various colonies surf aced at intervals after about 1,850 and culminated in 1,891 in a constitutional convention held in Sydney. In spite of much work, ratification by most of the colonies did not follow and it was not until September 17, 1,900 that Queen Victoria was finally able to sign a Proclamation to the effect that on and after the 1st day of January, 1,901 the people of New South Wales, Victoria, South Australia, Queensland, Tasmania and Eastern Australia should be united in a federal commonwealth under the name of the Commonwealth of Australia.

Australia's remoteness from the rest of the Caucasian world lessened with the development of steam-driven ships and undersea cables. In 1,881 60% of the shipping tonnage arriving in Australian ports was sail, but by 1,900 only 17% remained. The appearance of refrigerated ships in the 1,880s allowed shipment of frozen meat through the tropics to the London market and many farmers made fortunes. Urbanization progressed with Sydney reaching a population of 487,900 in 1,901 and Melbourne attaining 494,129 in the same year. Immigration supplied over 25% of the increase in population in the last half of the century, with people from the British Isles leading the way. Next in number were Germans, with Italians a distant third. In the gold rush days, however, as we noted above, thousands of Asiatics, chiefly Chinese, entered the area. Then other, chiefly Pacific Islanders called the "Kanakas", were deliberately imported as laborers, first in the pastoral industries and then in sugar manufacture. The colony of Victoria legislated restriction on Chinese entry as early as 1,855. Led by Sir Henry Parks, Victoria, South Australia and Queensland all joined in passing fairly uniform legislation to stem the influx. Western Australia followed in 1,886 and Tasmania in 1,887. By 1,901 the Chinese population had shrunk to 32,000 from a high of about 50,000 in the 1,870s. Although it was agreed in the 1,880s that Kanaka importation should also stop by 1,890, a depression in that year changed the outlook and the restriction was not imposed.

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Source:  OpenStax, A comprehensive outline of world history. OpenStax CNX. Nov 30, 2009 Download for free at http://cnx.org/content/col10595/1.3
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