The educational policy emerging from the 1930s Depression in Aus tralia is reviewed, in order to show how its emphasis on curriculum reform and diversity of courses, concentrated in State secondary schools, was premised on contemporary understandings about 'natural' individual ability. The psychological theory of individual differences, which developed during the first three decades of this century, constructed State school users as a social group having dif ferent educational needs from the traditional users of secondary education. However, the evidence for these differences was drawn from the actual operation of the State system, its stage of develop ment and the level of resources it attracted, and the way it functioned relative to the sphere of educational activity already car ved out by the private system.