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Cyclone Tracy, which hit Darwin on Christmas Day in 1974, resulted in the destruction of about three-quarters of the city's homes and businesses.

Water supplies were down as Darwin's supply was contaminated and there were no clean supplies. Sewerage lines were cut, resulting in a lack of sanitation, and poisons therefore leached out into the environment. Surprisingly, there was not a lot of drenching rain or storm surge associated with Cyclone Tracy, so none of the usual problems resulted from that quarter.

Trees were uprooted, and animal habitats destroyed. Witnesses reported absolute silence the following morning, signalling the loss of the majority of bird life at that time. As with any such natural disaster, the food chain was broken, and it was many months before food chain order was reestablished among the various species. The beaches were strewn with dead marine or coastal-dwelling creatures.

Darwin was rebuilt because there was almost nothing left standing when Tracy had finished her work. With so much destruction of both homes and infrastructure, the population of about 45,000 was reduced to about 10,000 by a mass evacuation of people to other Australian cities. This was organised by Major-General Alan Stretton, Director-General of the Natural Disasters Organisation and Minister for the Northern Territory, Rex Patterson.

Many of the families that left never returned and the rebuilding attracted people from many different places resulting in a young, diverse population who rebuilt the city.

After the cyclone building codes were upgraded dramatically to try to prevent such extensive damage next time a cyclone passed by. The rebuilding was largely done by the NT Housing Commission using only a limited number of designs on a large scale. At one stage nearly 90% of homes in Darwin were owned by either Government Departments or large national companies such as banks.

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