In the space of thirty years the circumstances of Australian nationhood changed irrevocably. The country's strategic dependence on Britain drew it into two wars that both originated in European rivalry and together exhausted European supremacy. The first sapped the political stability of the combatants and cut the flows of trade and investment that sustained their prosperity. The second destroyed their empires, leaving an impoverished rump of a continent divided and bound by the two superpowers to its east and west. Britain, a victor in both wars, was perhaps the most diminished by their cumulative effects and Australia, as the largest British outpost in the Pacific, also incurred heavy losses. The fading of imperial certainties created doubt and division. The nation-building project faltered under the weight of debt and increased dependence. Only as the second war spread to the Pacific, and Australia found itself isolated and in danger of invasion, came a belated recognition of the need to reconstruct the nation for changed circumstances.
Those who survived the first of these wars knew it as the Great War; they had never experienced such a catastrophe and could not imagine that another would follow so soon. Europe had enjoyed a century of peace since the conclusion of the Napoleonic wars – although European powers waged repeated wars of colonial conquest, at home there were only occasional and limited conflicts that were quickly settled by a decisive encounter of professional troops. The Great War involved mass conscript armies and absorbed the entire resources of the combatants in a prolonged contest of attrition that lasted from 1914 to 1918. It was sparked in the Balkans, a powder-keg of imperial and national rivalry, when a Serb terrorist assassinated a member of the Austrian royal family as he toured an outlying province. Since Germany supported Austria-Hungary in its ultimatum to Serbia, and Britain and France joined with Russia to resist them, the war extended from the Atlantic seaboard to Europe's eastern borderlands. Soon it drew in Turkey and Italy. The United States came late, but the global reach of the combatants made this a world as well as a continental war.
After Germany overran Belgium and repulsed a Russian advance, the initial movement of the combatants bogged down in static trench warfare. On land and sea the application of industrial technology to military conflict gave defenders supremacy over attackers.