Australian and New Zealand colonists elected assemblies and, through these, legislated on domestic affairs. Together they formed a small but significant market for British manufactures, with the majority of their exports going to Britain.
The outbreak of the First World War was of great significance for relations between Britain and the two dominions, which both played an important role in the conflict. Australian and New Zealand Army Corps (ANZAC) forces were active in Indonesia and New Guinea where Germany held a number of small colonies. Most notably, they played a major part in the failed Allied attempt to seize the Gallipoli Peninsula in 1915. Later, they also fought in Palestine and on the Western Front. Although conscription was rejected in Australia in two referenda, and was controversial in New Zealand, around 400,000 Australians and New Zealanders fought in the First World War.
The experience of war encouraged the development of nationalist ideas. Having played an important role on the world stage and made great sacrifices, the dominions wanted a greater degree of independence. In 1917 the Imperial War Conference recognised that the dominions should be consulted on foreign policy. The need for greater dominion independence was explicitly recognised at the 1921 Imperial Conference, which decided that they should be equal partners within a British Commonwealth of Nations.
Two international events in the early 1920s strained relations between Britain and Australia. In 1922, when British forces near Chanak were under threat from the Turkish army, the British government requested military assistance from Australia and New Zealand. This contradicted the idea of consultation on external affairs and both dominions refused. Secondly, in 1921, Britain, falling in line with the United States and Canada, failed to renew the Anglo-Japanese Treaty, which was a major subject of discussion as it expired in 1923. The Australian government, concerned about the threat of Japanese expansionism in the Pacific, had been anxious for the treaty to be renewed.
These tensions were apparent at a further Imperial Conference in 1923. The Australian Prime Minister, Stanley Bruce, remained concerned that Britain decided foreign policy unilaterally. Bruce called for an 'empire' foreign policy, assistance in increasing the Australian population and a commitment to imperial security.