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Does Anyone Care About New Zealand's Economic Future?

Speech delivered to the Institute of Economic Research AGM
Thursday 30 August 2007

Sir Joseph Ward

Text of the British Dictionary of National Biography entry prepared in 1995.

Joseph Gordon Coates

Text of the British Dictionary of National Biography entry prepared in 1997.

“How Ideal was the Savage Ideal”

M.J. Savage Memorial Lecture, La Trobe University, 4 September 1998.

Peter Fraser

"The Political Context of the Prime Ministerial Years", conference paper August 1997.

"Politics versus the Economy 1940-1975"

Speech given at the Stout Centre conference in April 1999 at Parliament Buildings.

"An Overview of the War History Branch",

Lecture to Department of Internal Affairs seminar, Wellington, 1997.

"Unofficial Channels"

Review published in International History Review, vol.22, 2000.

Jock Barnes

Obituary for Barnes published in the Dominion, Wellington, on 6 June 2000.

Sir Apirana Ngata

Review of He Tipua: The Life and Times of Sir Apirana Ngata.

Sir Keith Holyoake

Review of Sir Keith Holyoake: Towards a Political Biography, in the Dominion, 18 April 1997.

Norman Eric Kirk (1923-1974)

Dictionary of New Zealand Biography, vol. 5, Wellington, 2000.

"Martyn Finlay"

Obituary for Martyn Finlay published in the National Business Review, February 1999.

"His Way: A Biography of Robert Muldoon"

Review of His Way: A Biography of Robert Muldoon, in the Dominion, 21 August 2000.

"The Collapse of New Zealand’s Military Ties with the United States"

This Fulbright lecture was first delivered at Georgetown University on 2 December 2002.

"James Brendan Bolger: An Early Assessment"

Dominion, December 1997.

"The State Sector"

Paper given at the Legal Research Foundation's conference "Shaping the Future State Sector", Parliament Buildings, 21 September 2000.

The National Years 1949-1999

Published in the Dominion, December 1999

The Conflict of Visions about New Zealand.

Paper given at ACT's Northern Regional Conference, November 2001

"Jim Anderton"

Published in the Dominion, 23 February 2002 after Anderton, the Deputy Prime Minister, fell out with yet another band of supporters and began his third political party.

John Banks: A Biography

Review of Paul Goldsmith's book, Auckland, 1997.

“Sowing the Wind and Reaping the Whirlwind”

Welfare Reform Seminar: 14 August 2004

David Lange

Obituary for David Lange, August 2005

Peter Fraser

The Political Context of the Prime-Ministerial Years conference paper August 1997, published in Margaret Clark(ed) Peter Fraser: Master Politician, Dunmore Press 1998.

by Michael Bassett

Michael Joseph Savage died in the early hours of Wednesday 27 March 1940 at his ministerial home at 66 Harbour View Rd., Wellington. Later that morning his casket was taken to the Basilica where Archbishop O’Shea led a Requiem Mass. From there, Savage was carried to Parliament Buildings. He lay in state until he was taken to Auckland on what proved to be a lengthy journey punctuated by many stops and much speech-making. On Sunday 31 March after the cortege had passed along a route providing vantage points for 200,000 on-lookers, Savage was buried in a hastily prepared grave at Bastion Point.(1) That night Savage’s ministerial colleagues returned to Wellington on the Limited Express. Cabinet met on the Monday morning. In the afternoon, the Governor-General, Lord Galway, invited the Acting Prime Minister, Peter Fraser, to form a Government. Fraser accepted, subject to being confirmed in office by a vote of the Labour Party caucus.

Caucus met on Thursday 4 April 1940. Fraser won the leadership on a three way ballot. The precise voting figures are in doubt. Both the Herald and Keith Sinclair’s Walter Nash agree that Fraser received 33 votes, and that Clyde Carr, MP for Timaru, got 3; Dr Gervan McMillan is reported by the Herald to have received 9 votes and by Sinclair to have secured 12.(2) Since there were three absentees from a caucus of 51 MPs, and the three candidates did not vote, it can be assumed that the Herald got the numbers right.(3) What the press predicted would be a left-wing muster of at least twenty votes against Fraser turned out to number only twelve.(4) Fraser remained Prime Minister until 13 December 1949; his nine and a half years in office is almost twice as long as the five years enjoyed by David Lange, Labour’s second longest serving prime minister.

These are the bare facts. I now want to look at Fraser’s position within the caucus during Labour’s fourteen years in government, then to examine the Government’s hold on power, and then to reflect upon Fraser’s leadership during the six years of war and the following four plus years of peace and readjustment. In the time available I cannot do full justice to such a wide brief, and in any event, my study of Fraser is only in its early stages. But a few conclusions are possible from the secondary literature, and from the archival material that I have studied so far.

The first point that is fundamental to an understanding of everything about Fraser is the fact that he commanded the support of the overwhelming number of his parliamentary colleagues throughout the period of the First Labour Government. And he did so for some obvious reasons. He possessed what Sir Guy Powles later called a “very acute intelligence” and something approaching a photographic memory.(5) Moreover, Fraser was far and away the best political strategist in his party, and probably in the whole Parliament for the better part of the 1930s and 1940s. A Labour caucus seldom picks other than its best to run by-election campaigns, and from 1920 onwards until he became prime minister they were in Fraser’s hands. Even then, as the cartoon in our brochure shows, he was never far from the action. Fraser was better read than virtually all of his colleagues, could recite large chunks of poetry, was a newspaper junkie, and had been eating, sleeping and thinking about politics since his days in Fearn. Dr C.E. Beeby with whom Fraser worked for many years described Fraser as “one of the shrewdest men I’ve ever known”. He was unanimously elected Labour’s deputy leader in October 1933, some feeling at the time that he would make a better leader than Savage.(6) Fraser’s fine Italian hand can be seen behind Savage’s selection of the first Cabinet in 1935, where the prizes went to the long-serving and the loyal. Fraser understood Lee’s character weaknesses, especially his lack of collegiality. He probably initiated, and certainly supported the idea of keeping Lee out of the Cabinet. It was Fraser who first realised the advantage of interposing an election between the passage of the Social Security Act 1938 and its coming into force. Successful public positioning of any party is fundamental to its success. Fraser’s strategic skills had no peer in the Labour caucus.

Success in politics requires other skills. If acknowledged ability is accompanied by forcefulness to the point where some feel slightly afraid of the boss, so much the better. Seddon, Massey, Holyoake and Kirk possessed this quality in varying degrees; Muldoon had rather too much of it for his party’s good. Lange had none of it, which was his problem. Fraser had the quality in good balance. He could enthuse his officials; sometimes his occasionally cold, forbidding manner, and his ability to pounce on a weak argument would terrify them. Dr Beeby noted that Fraser could occasionally be brutal to staff.(7) When Labour first came to office in 1935 some feared the Police; several, after all, had had brushes with the force over the years. Fraser who had served a year in gaol 1916-17 had the strength to face them down and was the obvious choice as Minister of Police. He quickly turned his office to advantage, first by a series of moves to improve the lot of ordinary policemen with the construction of new police stations, and then restoration of their wage reductions as well as recognition of their right to organise.(8) In return, Fraser became the best informed politician about the activities of his fellow parliamentarians - something that often proved useful in the years ahead.

Fraser’s passion for education also helped his standing in the Labour caucus. The four and a half years that he was Minister of Education have been written about elsewhere.(9) They had a profound impact on New Zealand’s educational system; in some circles they have become legendary. Every Labour MP was made aware of the rising interest being shown by educationalists in the fortunes of the Labour Party. These attributes all added up to Fraser being seen by his colleagues, even by those who didn’t warm to his sometimes dour quality, as the most able minister in their midst. And it was Fraser who carried the growing burden when Savage’s health began to deteriorate from the end of 1938. Between 4 August 1939 and Savage’s death, apart from a brief trip to Europe, Fraser acted as Prime Minister.

To be holding the reins of power always gives a deputy a head start in any race to fill a prime-ministerial vacancy. More particularly, Fraser had the confidence of the trade unions to a greater extent than any of his colleagues. This was partly due to his union background. But he was what today would be called “a good networker”. He established a working relationship with the able, if unlovable F.P. Walsh of the Seamen’s union at an early stage in the life of the Government. Walsh, Jim Roberts and a group of lesser lights were plotting John A.Lee’s downfall many months before Savage died.(10) This wasn’t because Lee was seen as a serious threat to Fraser, but he was certainly an irritant, a constant encoragement to insurrection among the backbenchers. Fraser also commanded respect among party workers. Jenny Douglas told me that he was always first choice as a speaker among younger activists, because he “was interested in ideas”.(11) In April 1940 it would have been astonishing had Fraser not had the numbers to be confirmed as Prime Minister.

However, it would be wrong to leave the impression that the Labour caucus was a happy place in April 1940. As Keith Sinclair shows, there was a substantial group of younger MPs who were better educated than many of those in the Cabinet, and who were anxious for promotion.(12) Large Labour caucuses usually have such a component within them as I recall from the Kirk-Rowling governments. Exacerbating Fraser’s problem, however, was the fact that when he took over as leader of the Labour Party there were many wounds to lick, some of them very recently inflicted. The expulsion of Lee from the party a few days earlier, the introduction of the card vote for unions at party conferences which was slipped past the unsuspecting in the party secretary’s 1940 conference report, the push for easier credit coupled with demands to nationalise the Bank of New Zealand, unease about Walter Nash’s orthodox financing of the war, and growing concern at rising inflation. These were just some of the sources of tension.

Specific to the first few days of Fraser’s leadership was the desire for changes to Cabinet. The weapon that it was believed would bring this about was the election of cabinet by caucus. Fraser calmed this mutiny on the lower decks with some skill. With the press conjecturing that Parry, Armstrong, Jones and Langstone could be dropped from cabinet, (13) Fraser cleverly secured their votes on 4 April, by conducting the ballot for the leader’s position on a show of hands - a most unusual procedure, used in my experience on only one other occasion, the motion for a leadership spill against Bill Rowling on 12 December 1980. Although very short sighted, Fraser knew how to count hands. Once he had seen the votes, he moved to hold the line on cabinet changes. No alterations would be made until the end of the year, but he promised there would be at least one new minister to fill the vacancy left by Savage’s death.

Delaying decisions while keeping hope alive can be a most effective tool in the hand of a shrewd leader faced with insurrection. Fraser used it at regular intervals. On 12 June 1940 Dr McMillan was added to the Cabinet, then when Lee Martin retired on 21 January 1941, J.G. Barclay, Arnold Nordmeyer and P.K. Paikea were also admitted. When Armstrong died in November 1942 another insurgent, Jim O’Brien, joined the team. Fraser first tamed the ambitious by delay and vague promises, then absorbed the most able in ones and twos. It was a very effective method for controlling the caucus, one that many a prime minister has used since. While there were occasional mutterings about Fraser’s leadership that reached the press, especially six months before the 1946 election, his control of the Labour caucus was never in serious doubt. Fraser could be sensitive about his leadership, and sometimes suspicious about possible challenges. Terry McCombs who was in the caucus from 1935-51, and was Minister of Education 1947-49, recalled that Fraser was quite put out when caucus made a presentation to Walter Nash in recognition of his chairmanship of caucus while Fraser was away for some months in 1941. The Prime Minister suspected, quite wrongly, that it presaged a challenge to his leadership.(14)

Helping Fraser to settle down his restless backbenchers was the mood of the times in April 1940. The war was going from bad to worse. It was not a good moment to rock any boats, either by changing the composition of cabinet or altering government policy. One newspaper sensed the mood of the moment when it welcomed Fraser’s election to the prime ministership but added that the community currently had no stomach for radical changes or for the sort of monetary experiments being advocated by Labour’s left.(15) This mood, and Fraser’s shrewd use of delay in promotions, helped to minimise the fallout from the Lee Affair. By postponing the swearing in of his Cabinet until 30 April 1940, the Labour caucus had time to settle down. In the end, despite loose speculation that as many as five MPs might go with Lee, only the Speaker, W.E. Barnard, left the caucus. Releasing a letter to the press on 7 April, Barnard accused Fraser of undemocratic control of the caucus, and attacked the “industrial chiefs” who he claimed exercised too much power in the party. Barnard joined Lee at a number of rallies but slowly vanished into the obscurity which has often clouded Mr Speaker’s office.(16)

Having Lee and Barnard outside Labour’s tent but facing inwards still posed problems for Fraser, and for the party that he now commanded. Branch membership declined.(17) While winning by-elections in Waitemata in July 1941, and Christchurch East in February 1943, Labour’s vote was down in each, leading Fraser to worry about Lee’s capacity to hurt Labour at the general election due later that year.(18) Unease at Lee’s constant destabilising influence was an important factor in Fraser’s reluctance to have anything to do with a national coalition government during the war. Mindful of what had happened to Sir Joseph Ward in 1919 as a result of too close association with Massey during World War One, Fraser was determined not to surrender the left to Lee by going into a formal coalition. This required two tactics. First was the need to deal with the fact that Labour’s cabinet contained no men with military experience. Fraser quickly took up the offer of assistance from Gordon Coates, the war hero from the first war, in the hastily cobbled together War Cabinet announced on 16 July 1940.(19)

Fraser’s second move was to argue that the Labour Government had to retain control over its domestic agenda which Sid Holland and the remnant of the National Party were so eager to rein in. With the Government’s anti-inflation policy under attack from Lee and others by the middle of 1940, Fraser first agreed to a catch-up 5% General Wage Order in August. He then summoned a conference to Parliament Buildings early in September to discuss with representatives of farmers, manufacturers and unions what he described as “planning on a large scale”. Pleading for sector group cooperation “in a big and generous way”, the Prime Minister succeeded in getting an Economic Stabilisation Committee established. It accepted stabilisation of wages, essential food prices, rents, clothing, fuel and light for the duration of the war. The Committee also endorsed an increase in family allowances for those with large families.(20) The Government pushed on with its efforts to complete deals with pharmacists and general practitioners in order to round off the promises of the Social Security Act. In December 1942 after several months of steadily rising prices despite the best endeavours of the Price Tribunal, stabilisation of prices on 110 items was announced. Subsidies were soon being used on a grand scale to keep consumer prices down. Wages would rise only if the Wartime Price Index increased by more than 5% - an event which Bernard Ashwin at Treasury achieved by some fine juggling when at one point a sudden rise in the price of onions threatened to push aggregate prices over the magical 5%!(21)

Other interventions in the economy seemed appropriate to the mood of the time and owed some of their origin to agitation on the left. An example of extreme action taken to head off criticism about shortages and inflation was the State’s intervention into clothing production. With erratic supplies of imported cloth and rapidly inflating prices, the Department of Industries and Commerce came up with the idea that manufacturers could be forced to produce more sets of trousers, pyjamas, dresses and top coats if officials set the rules for what became known as “austerity clothing”. Staff numbers were boosted at the Standards Institute and it set to work on cost-saving devices. In October 1942 cabinet accepted the Minister of Industries and Commerce, Dan Sullivan’s recommendation to oblige clothing manufacturers to get more finished products from a given quantity of imported cloth. Officials spent many hours calculating the annual clothing needs of the population, and after discussion with interested parties the Shirt and Pyjama Manufacture Control Notice was issued under the Factory Emergency Regulations 1939. It provided that no owner or occupier of a factory could manufacture men’s youths’ or boys’ shirts or pyjamas in contravention of requirements for a specified number of pockets, and certain leg widths. The number of pleats and the length of turnups were specified in the regulations. Later the Standards Institute fastened its gaze on hem lengths on girls’ dresses as well as the number of buttons. In time the size of handkerchiefs was also specified by regulations. Clothing inspectors began calling on factories to ensure that the rules were being observed.(22) Stalin’s Bureau of Peasants’ and Workers’ Inspectorates would have been proud!

As might be expected, Sullivan’s experiment in austerity clothing failed. The expectation that 106 sets of trousers could be produced from the material previously required for 100 pairs was illusory. Several manufacturers refused to cooperate, and a list of pending prosecutions built up. Eventually consumer resistance killed the scheme in 1944. But the point of this story is that the experiment was useful in a political sense. The current passion for centralisation and regulatory control had been seen to be used against what was loosely described on the left as “big business”. This was a helpful political counterweight to the Government’s employment of many captains of industry to administer aspects of the war economy such as building and manpower controls. Certainly the sharp edge to Lee’s criticisms of the Government- and as Martyn Finlay told me there were times in 1942 when Lee seemed to be the only Opposition - were blunted by the Government’s apparent determination to ensure equal wartime sacrifice. But Fraser did not get rid of this thorn in his side or Lee’s radio megaphone, Uncle Scrim, until the general election on 25 September 1943. On election night many of Fraser’s closest confidants thought they had lost the election. The presence of a Democratic Soldier Labour Party candidate on the ballot paper cost Labour at least four seats, but the soldiers’ votes from the front saved the Government.(23)

While fretting about Lee at Labour’s back door, Fraser had to contend with Sidney Holland at the front. Holland was a cocky, self-assured man whose later colleague, Jack Marshall, measured words carefully when praising him. One official, Sir Alister McIntosh, later described Holland as “a very ignorant man”.(24) Nobody, however, has ever questioned Holland’s energy. He pushed Adam Hamilton out of the leadership of the National Party in November 1940 and then waged a raucous campaign against Labour’s continuing social reforms. To a considerable extent Fraser managed to deflect Holland’s attack with the help of Gordon Coates. The harder Holland campaigned for an early election, the more Coates poured cold water on his leader’s demands. In pointed remarks that none could misunderstand, Coates kept arguing in favour of what he called “a common faith” while the war lasted. The newspapers supported Coates rather than Holland.(25) The election due in 1941 was put off, but Fraser agreed to form a War Administration against the better judgement of many in the Labour Party. When Holland collapsed it because Fraser sought a compromise with striking miners at Huntly in September 1942, Coates and Hamilton again came to Fraser’s assistance by rejoining the War Cabinet and directly criticising Holland. By this time Fraser had developed a close, respectful friendship with Coates. When Coates died suddenly in May 1943 it was the Labour Prime Minister, not the leader of the National Party who wept at his funeral.

Critical to Fraser’s success with his caucus and with his officials was his demeanour in times of stress. The Canterbury academic, Leicester Webb, who was Director of Economic Stabilisation 1945-48 and saw Fraser at close quarters, observed that Fraser struck him as the sort of man who, had he been permanently deprived of power, might have become a “pathological rebel”. Instead, the acquisition of power “gave him what he had previously lacked - poise, fairness of mind, and a sense of responsibility”. Fraser could misuse power on occasions; he could be intolerant; he could be arbitrary.(26) But it’s clear to me that the list of officials whose respect Fraser commanded is long. Only Sir Carl Berendsen, so far as I can see, expressed thoroughgoing dislike of his prime minister. While many found Fraser’s work routines impossible and occasionally thought him petty, most of his colleagues and officials were in awe of his intellect and the moral power that Fraser could often radiate.

After the 1943 election the political landscape began to return to normal. Coates was dead and Holland shook off most of his critics from the right. Fraser, too, had fewer problems with his caucus. He had less to fear from Lee who alternated between kicking Labour’s shins then seeking to hug the party, the better to rejoin it. But Fraser had little need to accommodate Lee. The longer Lee was left to squirm the sillier he seemed. If Lee fought against Labour then he could be painted a spoiler by those who wanted to keep National out. If Lee held back, he disappointed his dwindling band of supporters who still dreamed of socialism with a Lee label. Inside the Labour Party Fraser found his smaller caucus less unruly, as Mc Combs notes, although Fraser still thought it prudent to agree to nationalisation of the Bank of New Zealand in 1945 to assuage the “money men” within, and the Lee-ites without.(27) The 1946 election became a straight fight between Labour and National, one that most of the Cabinet expected to lose on election day, 27 November.(28)

It was Fraser the tactician who positioned his party for re-election, albeit, achieving it by a narrow margin. Labour’s stabilisation policy was later labelled by the Government Statistician, J.V.T. Baker, “the major acheivement of the war”.(29) Certainly it contained inflation more effectively than in other allied countries. The Government’s rehabilitation policies were comprehensive and popular with returned soldiers. Dr Ted Bollard, later of the DSIR, met Fraser in Italy at Sora, shortly after Cassino. In a recent letter to me he described the Prime Minister’s talks with the troops, and the impact which Fraser’s visits had on soldiers. Bollard was soon able to take up an overseas bursary to Cambridge in 1945 and recalls the feeling which he and his friends had of the “imaginativeness and flexibility” of the schemes available to returned men and women.(30) On the domestic front, too, Labour made some politically smart decisions. Not only did they increase the Family Benefit on 1 April 1946; the means test was also scrapped. Nearly 200,000 extra families became eligible for the benefit over night, and the cost went up six fold. The impact on the majority of family budgets was huge.(31) Labour also promised school dental benefits after the election, as well as a big increase in State housing. The party was locking on to the huge family creation process taking place in the aftermath of war.

Fraser’s more imaginative side came to the fore at the end of the war. As Eric McCormick noted many years later in an interview with Michael King, Fraser possessed a number of friends in literary and intellectual circles. He knew Eileen Duggan, Jessie McKay, J.C. Beaglehole, Arnold Campbell, C.E. Beeby, James Shelley and Oliver Duff.(32) In 1946 Fraser warmed to Heenan’s suggestions for the creation of a State Literary Fund, and a Cultural and General Arts Fund that took advantage of mounting Art Union profits. The Community Arts Service and the New Zealand Drama Council received grants, as did the Alexander Turnbull Library and many museums. A number of artists with promise received grants to study abroad. The War History project under the command of General Kippenberger was both as comprehensive and rather more expeditiously produced than similar projects in other Commonwealth countries. Fraser loved orchestral music. His agreement to the establishment of a national orchestra within the New Zealand Broadcasting Service was a response to the urgings of J.C. Beaglehole and Heenan, who failed to agree, however, on who should be the first conductor. At the behest of Bill Parry, the Minister of Internal Affairs, there was a big increase in spending on sport and recreational programmes and a subsidy regime was introduced for war memorial buildings. These moves heightened Labour’s standing with educational, artistic and sporting groups, as well as with returned servicemen.(33)

While Fraser faced several younger, idealistic MPs in the 1946-49 term, including Martyn Finlay, Ormond Wilson and Warren Freer, his biggest problem was with the trade unions. It stemmed from the fact that the world of the stabilised, insulated economy had become extremely complex. Price, rent, land and import controls and subsidies, when coupled with rising overseas prices and orthodox financing, enabled New Zealand to emerge from the war with a very healthy economy. But vital to this success had been rigid, centralised wage control. The first signs of mutiny from the union movement had appeared in 1939. The Government met the challenge by amending the IC&A Act so as to be able to deregister any striking union enjoying the benefits of the Act. During the war Fraser intervened in several industrial skirmishes, most notably the Huntly miners’ strike in 1942. He agreed to establish various tribunals to adjudicate on wages. But the principle of compulsory arbitration had to remain non-negotiable. And still over-full employment, as it became known after 1945, coupled with shortages of many imported goods and a huge increase in Government spending, particularly on public works, produced an inflationary oven that constantly threatened to overheat. Neither Fraser, nor Walsh, nor any of their successors in either the Labour or National parties could find a way of maintaining an expanding welfare state without controls and subsidies.

However, the stronger unions such as the watersiders, miners, carpenters and freezing workers, as well as the Public Service Association, sought to exploit the shortage of labour by pushing real wages above award levels. Some wanted to escape altogether from the tight confines within which Fraser insisted they operate. From 1947 until the dying gasp of the Fraser Government at the end of 1949 there was endless union manoeuvring for advantage. A further amendment to the IC&A Act in 1947 requiring membership ballots before strikes did nothing to cool tempers; the number of working days lost during those three years equalled the difficult years of Massey’s Government between 1921 and 1923.(34) The controls and regulations which Fraser’s Government had enacted to ensure a better life for working people were being exploited by some of those whom they were most designed to assist. A hierarchy within the workforce was developing; those in the most advantageous positions now regarded themselves as the most deserving. While in his philosophical moments Fraser understood what was happening, he was prone to feeling that the workers’ worst enemies were often the workers themselves, and that if they only realised it, the Government was the agency in which they should place total trust.

Labour’s carefully regulated State apparatus required a considerable degree of regimentation, but in the aftermath of war the public’s willingness to accept it diminished steadily. Irritation over price, land and import controls grew steadily, and fuelled the growing expectation that National would win in 1949. On the left of the political spectrum the deregistration of the Auckland Carpenters’ Union and Fraser’s state of undeclared war with Jock Barnes and the New Zealand Waterside Workers’ Union resulted from declining confidence that Labour’s welfare state could satisfy expectations. Subsidies ballooned out, and in his last year in office Reserve Bank credit was used to a rather greater extent that Bernard Ashwin felt comfortable with. Fraser and Nash were struggling to meet voters’ increasingly unrealistic expectations.(35) Tired, ill, and occasionally dispirited, Fraser was in no shape to face a general election. He had done his best with his majority of four seats between 1946 and 1949. Depending as he did on the four Maori members, he appointed himself Minister of Maori Affairs - a new title for the old position of Native Minister. Maori, more than any other section of the community, remained loyal to Labour for another half century.

As the Cold War intensified, Fraser became convinced that peace-time conscription was necessary. It was a bold move, one that was opposed by many in the Labour caucus and in the party at large. Although the referendum on 3 August 1949 carried by nearly four to one, it was Labour’s heartland electorates that showed the biggest opposition. It is worth reflecting on Fraser’s risky move. Across the Tasman, the Cold War became an excuse for more affluent Labour supporters, many of them Catholics, to move out of the Labour Party into the splinter Democratic Labour Party. There they exercised their preferences to help keep the Liberal Party in office for 23 years between 1949 and 1972. Fraser sensed Labour’s vulnerability on the right. When he placed the New Zealand Labour Party in a position which won the support of the Returned Servicemen’s Association and the Catholic Church, he was being much more wily than Dr Evatt of the Australian Labor Party who championed the Communist Party at a referendum in 1951, and went out on a limb for some of those accused at the Petrov inquiry in 1954. Peter Fraser knew he risked criticism at the time of the referendum on conscription. But the left had nowhere else to go. Fraser, it seems to me, performed a service to the Labour Party by avoiding an open split with the more numerous, and less reliable voters on the right. The beneficial effects were reduced somewhat by the stresses and strains of the Waterfront Dispute in 1951. Fraser was dead by then. But it is worth noting that even without the benefit of his shrewdness and guile during the 151 day struggle, the stresses of the waterfront crisis did not produce a formal rupture within the Labour Party. It was Fraser’s legacy to the Labour Party to leave it as an integral unit, one that nearly made it back into office in 1954 and secured a brief turn again between 1957 and 1960.

On 30 November 1949 Labour limped to a twelve seat defeat. Fraser’s health which had necessitated a month in hospital after the 1943 election suffered in 1949 as a result of a urinary infection. A few months after leaving office he had a heart attack. By October 1950 he was back in hospital with more heart problems. He knew the end was close and made his will. He died on 12 December, leaving a Labour Party in some disarray. It was soon to be profoundly embarrassed by some of the trade unions from which it had originally sprung, most particularly the watersiders of whom Fraser had once been secretary.

It is important when assessing Fraser’s contribution to New Zealand life and to the Labour Party to remember two things. First is the fact that Labour’s fourteen years of office is much the longest period in power that Labour has ever enjoyed. Only the Liberals of Ballance, Seddon and Ward, and the Reform party of Massey and Coates have enjoyed longer periods of unbroken power. This in itself was a considerable achievement. Leicester Webb shrewdly observed in 1953 that “the labour movement is a harder road to political power than most other political movements”.(36) Although I am still in the early stages of writing about him, I am inclined to think that Fraser’s contribution to Labour’s rise to power was greater than Harry Holland’s, and that from 1933 until his death in 1950 his was much the most substantial influence on the party’s fortunes, a distance ahead of Nash, who in turn was a league ahead of any of the other “Thirty Year Wonders”, as Leslie Hobbs later called them.

Secondly, the paternalistic political economy that Fraser’s Government bequeathed to New Zealand lasted for a remarkable half century. The notion of Fraser and Nash that governments could tax, spend, control and regulate to produce a better long-term economy than the market, subsequently affected several generations of politicians from both major parties. It became part of the consciousness of an overwhelming majority of New Zealanders. Norman Kirk was the last true practitioner of the Fraser-Nash economy and would talk sometimes in reverential tones about “Old Peter”. Twenty years after Fraser’s death there was in Kirk’s leadership more than a little of the Fraser style. Kirk’s eclectic reading, his sometimes byzantine moves, a capacity occasionally to browbeat, and a talent for seeing round the next corner were almost imitative. Appropriately, perhaps, it was left to a cabinet made up of the sons and daughters of Fraser’s supporters, many of them given a refresher course during the Kirk era, to start afresh towards his goals, accepting the good, and rejecting the dross in the years after 1984.

Footnotes:

1. There are full details about preparations for, and the actual funeral, in the New Zealand Herald, 28 March 1940, p.10 and p.13; 30 March 1940, p.13, and 1 April 1940, p.8ff.

2. NZH, 6 April 1940, p.12; Keith Sinclair, Walter Nash, Auckland, 1976, p.195.

3. F. Langstone and H.T. Ratana were away sick, and Captain W.J. Lyon was with the Second NZEF in the Middle East.

4. See NZH, 1 April 1940, p.8.

5. Michael King interview of Sir Guy Powles, 26 July 1979.

6. The Beeby quote comes from Michael King’s interview with Beeby on 4 July 1978. See also James Thorn, Peter Fraser: New Zealand’s Wartime Prime Minister, London, 1952, p.104.

7. Michael King interview with Beeby, 4 July 1978.

8. Thorn, p.131.

9. C.E. Beeby, The Biography of an Idea, Wellington, 1992 ; James Thorn has an interesting chapter on Fraser’s contributions to Health and Education. Beeby used the word “passion” to describe Fraser’s attitude to education in his 4 July 1978 interview.

10. Erik Olssen, John A. Lee, Dunedin, 1977, p.151. See also Sinclair, Nash, p.194.

11. Interview with Mrs Jenny Douglas, January 1997. The Rt Hon Frank O’Flynn who took a close interest in Wellington politics from the later 1930s has expressed the same opinion to the author.

12. Sinclair, Nash, p.196.

13. NZH, 3 April 1940, p.8.

14. Michael King interview with Sir Terence McCombs, 17 February 1980.

15. NZH, 5 April 1940, editorial.

16. W.E. Barnard to P. Fraser, 7 April 1940, letter in the author’s hands.

17. See Bruce Taylor, “The Expulsion of J.A. Lee and the Effects on the Development of the New Zealand Labour Party”, MA Thesis, University of Canterbury, 1970.

18. Olssen, p.181.

19. Adam Hamilton, leader of the National Party at the time also joined the War Cabinet on 16 July 1940.

20. See “Report of the Proceedings of the Economic Stabilisation Conference, 1940”, bound volume, T/52/835. See also “Proceedings”, T/70/1. National Archives.

21. Text of an interview by John Henderson with Sir Bernard Ashwin, March 1970, made available to me by Brian Easton.

22. Detail about the clothing experiments is to be found in IC/1/10/1/3. part 1, National Archives.

23. J.W. Heenan to Dr R.M. Campbell, 21 October 1943, MS Papers 1132, Folder 30, Turnbull Library. The seats probably lost as a result of DSLP intervention were Hamilton, New Plymouth, Wellington West and Waitemata. See Olssen, p.188. Rev Colin Scrimgeour who became Director of Commercial Broadcasting in 1936 was close to Lee. He often spoke in support of Lee’s causes and when Scrimgeour was eventually fired from his position in 1943 he stood against Fraser at the General Election, denting the Prime Minister’s majority.

24. Michael King interview with Sir Alister McIntosh, 4 August 1978.

25. See Michael Bassett, Coates of Kaipara, Auckland, 1995, chapter 14. Holland’s problems with some dissident forces on the National Party’s extremes are discussed by Barry Gustafson, The First Fifty Years: A History of the New Zealand National Party, Auckland, 1988, pp.41-42.

26. Leicester Webb, “Leadership in the Labour Party”, Political Science, Vol. 5, September 1953, pp.45-49.

27. Michael King Interview with Sir Terence McCombs, 17 February 1980.

28. Michael Bassett interviews with Sir Arnold Nordmeyer, 11 November and 9 December 1977.

29. J.V.T. Baker, The New Zealand People at War: War Economy, Wellington, 1965, p.3.

30. Dr E.G. Bollard to author, 6 February 1997. Similar appreciation of the rehabilitation schemes was expressed by Sir David Beattie in an interview with the author on 2 July 1997.

31. Details are to be found in the official publication, The Growth and Development of Social Security in New Zealand, Wellington, 1950, p.69.

32. Michael King, interview with Eric McCormick, undated.

33. There is more detail about these moves in Michael Bassett, The Mother of All Departments: A History of the Depratment of Internal Affairs, Auckland, 1997, chapter 6.

34. See NZOYB, 1951-2, p.878.

35. Of interest are several warnings by Ashwin to Nash about the high levels of Government spending during 1949. See B.C. Ashwin to W. Nash, 13 April 1949, and 24 August 1949. T/1/52/835/5, National Archives.

36. Webb, “Leadership in the Labour Party”, pp.46.



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