When Sydney Overtook Melbourne As Australia’s Financial Center

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“Infrequently in recent history have two major cities contended so furiously and equally for so long as Melbourne and Sydney,” historian Geoffrey Blainey wrote.

Contrast Australia’s metropolitan split to that of England and France, whose metropolitan areas London and Paris dominate their respective histories, finance, and culture.

With the more decentralized United States, Boston is a significant center for law, education, and technology; Chicago is the midwestern economic powerhouse; Los Angeles has massive film and defense industries; and Washington is the capital city. New York, on the other hand, remains America’s premier metropolis and financial center.

Australia is unique. It is bordered by Melbourne to the south, Sydney to the north, and Canberra, the capital, as an uneasy compromise between the two. Brisbane, Perth, Adelaide, and Hobart, the other state capitals, alternate between hatred and rudeness toward both.

Sydney was the first colonial center during the early years of European colonization. However, Melbourne benefitted the most from the 1850s gold rush and drifted away throughout the three decades that followed.

Melbourne was the federal government’s headquarters for 27 years after Federation. It housed three of Australia’s biggest stockbroking firms, was the birthplace of the Liberal Party’s founder, Robert Menzies, and was the home of BHP and the Collins House group of mining enterprises.

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Melbourne was the site of much of the major postwar industry boom. Ian Potter & Co, JB Were, and AC Goode, all located in Melbourne, remained the country’s top stockbrokers. For 21 of the first 25 years after the war, Victorian MPs held the key to the Prime Minister’s Lodge, and Melbourne hosted the 1956 Olympics.

As finance markets relaxed, international commerce developed, merchant banking became more significant, and more mining company stock trading started in Sydney, Sydney’s position as a Pacific gateway with a spectacular harbor was making a difference.

The pivotal role Sydney played in the short-lived mining boom of the late 1960s, the rise of the Sydney stock exchange in the 1970s, and the emergence of Sydney-based merchant banks such as Hill Samuel, as well as fixed interest specialists Dominguez Barry, all contributed to the transition.

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