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| ISBN-13: | 9781775581970 |
|---|---|
| Publisher: | Auckland University Press |
| Publication date: | 10/01/2013 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 324 |
| File size: | 450 KB |
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The Nationbuilders
By Brian Easton
Auckland University Press
Copyright © 2001 Brian EastonAll rights reserved.
ISBN: 978-1-77558-197-0
CHAPTER 1
GORDON COATES
1878 — 1943
While formally Richard Seddon was succeeded by Joseph Ward, there is a sense that Bill Massey was his true political successor. The Liberal Party had been a coalition of a leftish labour group which had split off in the first decade of the century and of rightish farmers. Farming dominated New Zealand then, with around a quarter of all (paid) workers being on farms. (The country quota gave farmers even more weight in Parliament.) The Liberals supported leasehold ownership of land, which is not attractive to farmers, and while they attempted to modify it, Massey's promise of freehold plus the rest of the Liberal policies proved far more attractive to them, among them to Gordon Coates.
While Ward let his Liberal Party organisation run down, Massey built up his Reform Party. The inconclusive 1911 election resulted in the Liberals winning 40.6 percent of the vote and initially 33 seats including that of Coates, while Reform won 34.6 percent of the votes and 37 seats, with the balance made up of 4 Labour seats and 6 Independents. Eventually Massey was able to form a government, in part because Coates and some others gave him their support. Electoral outcomes were erratic under the front-runner (First Past the Post) electoral system long before the 1970s, and famous victories and defeats prove to be somewhat messier when voting, rather than electorate, outcomes are examined. Reform was never able to command the electorate (it obtained 46.9 percent of the vote in 1914 and 46.5 percent in 1925) nor the House except in 1925 when it had 55 of the 80 seats. For four war years from August 1915 to August 1919, Reform was in a National Government with the Liberals.
Even so, Massey dominated the House until his death in 1925. There is no comprehensive biography, and there are two almost distinct views of him. On the one hand he is seen as a dour Ulsterman famous for repressive measures such as ending the Waihi strike with 'Massey's Cossacks'. On the other, Barry Gustafson says of him: 'Yet although Massey espoused the cause of conservatism, both his personal instincts and his practice while in office place him in a tradition of humanitarian pragmatism.'
It is not necessary to unravel this dichotomy here, but it is relevant to emphasise that as the head of a farmer-dominated government Massey was a private enterpriser using the state to favour his supporters, rather than a free enterpriser who supported a minimalist state. This is well illustrated in his role in the founding of the producer boards in the early 1920s. Export marketing of pastoral products to Britain had been under a commandeer system during the war, but the post-war unwinding had led to disorderly markets including vast fluctuations of price. In January 1922 Massey presided over a producers' conference at the Dominion Farmers' Institute at which he promoted a meat producers board. Challenged at the degree of intervention he responded:
There is nothing socialistic about what we are proposing. It is co-operation. It is the duty of the Government to assist the industries of the country, especially the primary industries on the prosperity of which the prosperity of the whole country depends. And that is exactly what we are doing.
Within six weeks the Meat Export Control Act was passed. The dairy industry took up the notion almost immediately, but the Dairy-produce Export Control Act was not passed until August 1923, after the 1922 election. Massey's contribution to the creation of the Meat and Dairy Boards was recognised in 1957, when they named their new, modernist, Ernst Plischke-designed building in Lambton Quay, 'Massey House'.
Although in cabinet, Coates does not seem to have been particularly involved in these reforms, and did not speak in the debates. (Later he was to be deeply involved in the policy and politics of the boards, especially the Dairy Board.) However, Massey exhibits the same pragmatic responses to a problem that characterises Coates. Indeed Massey seems to have been his mentor, and to have chosen Coates as his successor (including charging him with the funeral arrangements). In turn Coates wrote to his mother: 'I miss Mr Massey more as each day goes on.'
Coates began his political career via the conventional rural path of becoming a farmer (as his father had been), and then getting into local government, and moving on to be elected to Parliament for Kaipara (where he was born) as an Independent Liberal in 1911 at the age of 34. However, in 1912 he supported Massey's premiership, formally joining the Reform Party in 1914. The main difference at the time was that Liberals supported leasehold and Reform freehold land. Coates explained that he switched sides on that basis, plus assurances that the Reform Party would follow a 'most Liberal and progressive' policy.
Thus Coates came to politics via a tradition which included Julius Vogel, Richard Seddon and Massey. The cover of Michael Bassett's biography shows Coates with the driver of a steam train, recalling that central image of Vogelism. Coates spent much of his early parliamentary career seeking a railway for his electorate, but not quite in the best nineteenth-century political tradition, for there is no evidence that he was to be a major financial beneficiary from it.
In November 1916 Coates left for France with the 19th Reinforcements to the New Zealand Expeditionary Force. He had been keen to go for some time, but had been delayed by Massey's precarious parliamentary majority. He was a strong supporter of the British Empire, a patriotism he learned at his English-born father's knee, but one suspects also that the 38-year-old's adventurous spirit had not yet died.
In Flanders, where he served with distinction, he was injured (and rescued by 'Starkie', on whom Robin Hyde would model the hero of Passport to Hell and Nor the Years Condemn), quickly earning a company command. While his biographers record his experience on the battlefield, based mainly on his letters home, they have nothing on his responses to Egypt or England where he trained. We will have to look to Bernard Ashwin to obtain some idea of how this OE impacted on the generation. Moreover, like many soldiers, Coates spoke little of his feelings after returning. Those left behind included Coates's younger brother. Shortly after his death in late 1917, Coates wrote to his sister: 'Each must keep our thoughts to ourselves and needless to say our opinion of Bill today stands higher than ever. I am proud to be a brother of his.'
Coates returned to New Zealand and Parliament in May 1919, was re-elected handsomely in the December 1919 election, having been made a junior minister in September. He was minister of justice from 1919 to 1920, and minister of native affairs from 1921 to 1928. Kaipara had many Maori, and Coates had Maori nannies as a child. He learned te reo, but not to full fluency. His handling of the portfolio exhibits his characteristic strengths: he got on well with the Maori including their leaders; he was empathetic with their needs and recognised their poverty; he slowed down government land acquisition and, instead, tried to reform Maori land title; he initiated enquiries into grievances; and he sponsored the Maori Arts and Crafts Bill. Keeping the portfolio after he became prime minister signalled his commitment, for there was little political gain among his conservative MPs, hardly sympathetic to Maori aspirations. Yet he was to say in Parliament in 1928 that the Maori was 'one of New Zealand's great assets, and a poetic asset at that'. He seems to have managed the portfolio with the four Maori MPs, especially Apirana Ngata, for whom he arranged a knighthood in 1927. It is well known that Labour leader Harry Holland had fatal heart failure attending the funeral of the fourth Maori King, Te Rata Mahuta, in 1933. Coates was there too.
However it was with his Vogelist infrastructural portfolios — public works (1920 — 26), postmaster general (1919 — 25), and railways (1923 — 28), some of which he was to take over again in 1931 — that he made his mark, with impressive achievements in electric power generation and distribution, forestry, transportation, telecommunications, and agricultural producer boards.
But his vision was not confined to infrastructure. When his government introduced family allowances, a limited form of the family benefit, all the cabinet save Coates were against it, but they knew it was something near his heart and agreed. The legislation was passed in three days through the House without dissent, despite it being innovatory in international terms by being funded from general taxation rather than a specific levy, and thus consolidating a key element of the New Zealand welfare state. Probably Coates was too pragmatic to notice the radicalism.
The producer boards and a commitment to managed marketing enraged free marketeers, although they can be seen as an extension of the arrangements for produce sales to Britain during the First World War. Throughout his political career Coates was constantly attacked as a 'socialist'. At key stages — the 1928 election, at the formation of the 1931 coalition, in the choosing of the leader of opposition in 1936 — his political career was blocked by those more committed to free enterprise. The criticisms and record of interventionism began well before he collected together his 'brains trust', the young men who worked with him — Horace Belshaw, Dick Campbell, Sutch (with Ashwin and public service commissioner Paul Verschaffelt de facto members). They could be said to have worshipped 'the Chief' both for the way he made decisive sensible policy and also because of the charming and generous way he seems to have treated just about everyone.
In May 1925, Massey, prime minister since 1912, died, and after a short interregnum under Dillon Bell (who was 74 years old and in the Upper House), Coates was elected leader of the Reform Party, and became prime minister at the age of 47. (Contrasting himself with the other main candidate for the prime-ministership, Coates remarked that 'Jimmy Parr ... battled too hard ... I went telling them I didn't care who was selected by caucus.')
In 1925 Coates, portrayed as a vigorous young leader — 'coats off with Coates' was the election slogan — led his party to its greatest election victory: 55 seats in a house of 80. The next three years were beset with troubles, and in 1928 Reform's Parliamentary membership was slashed to 27 seats. United, the successor to the Liberals, led by the ailing and elderly Joseph Ward, also won 27 seats, and became a minority government with the support of independents. The 1925 Reform majority of seats was based on only 46.5 percent of the vote. That fell to 34.8 percent in 1928, a proportion not too different from its 36.0 percent share in 1919 when Reform won 44 seats. In 1928, the apparently more successful United won only 29.8 percent of the votes.
The underlying economics was that throughout the 1920s the New Zealand economy performed poorly. In the 1890s there had been a great growth upswing, predicated on rising terms of trade (the ratio between prices received for exports and those paid for imports), which had served the Liberal Government well. That boom seems to have come to an end in the middle of the first decade of this century. We do not have good data, but probably the economy grew slowly in the next decade: certainly inflation was high. In any case economic factors were less important than the preoccupation with winning the First World War. Afterwards, there was a short but deep recession in 1920 and 1921, when import prices rose sharply but export prices did not. While this could be attributed to post-war adjustment, economic growth throughout the 1920s was subdued. The best estimate is about 0.3 percent p.a. per head between March years 1921 and 1930. At issue then, is not why the public was disenchanted with Coates in 1928, but why they were over-enchanted with him in 1925.
One factor in the 1928 'defeat' must have been that Coates had dispensed with the services of his 1925 election organiser, A. E. Davies, when he thought he was trying to corrupt a tender process. (A nice touch to the story is that the room in which the transaction was to take place was wired. The women in the next room recording the conniving 'didn't have colds so [they] wouldn't sneeze'.) Coates's farm made little money, and his personal financial problems were probably a constant source of worry (although his staff seemed unaware of them). Even so, he was considered 'incorruptible' in financial matters.
Joseph Ward practically died in office. His successor in May 1930 was Forbes, 'an amiable man [whose] lack of initiative and [whose] intractability made him unsuited to the office of prime minister, especially at a time of national crisis'.
A crisis there was. The world depression did not hit New Zealand until 1930, when export prices fell dramatically and international borrowing ceased. The economy contracted; probably the volume of production fell by more than 10 percent in the two years to March 1932, while unemployment rose to about a third of the potential labour force in 1932 (probably — we lack good data).
The 'Great Depression' is one of the central New Zealand myths. Every one of the mid-century nationbuilders was greatly affected by a depression experience. The hardships that were experienced and the heartless treatment of those suffering are central to the myth. Even so, Tony Simpson's oral history reports a certain admiration for Coates, if not for Forbes: 'I can see him to this day, arguing the toss with the unemployed. And he was given as good as he gave. In many ways Coates was an admirable type, he had guts.'
Forbes's United Party governed during the early years of deep contraction, but following an inter-party conference Reform joined the 'Coalition' government in September 1931, with Labour remaining in opposition. Although Forbes stayed prime minister, Reform obtained more of the key portfolios, with Downie Stewart as minister of finance and deputy prime minister Coates having the portfolios of public works, transport, unemployment and roads and public buildings. But this was a time for consolidation and retrenchment, not infrastructural development. In January 1933 Stewart resigned over the devaluation of the New Zealand pound, and Coates became minister of finance, customs and transport. He was also the de facto prime minister, who dominated the 'apathetic' and 'fatalistic' Forbes, as Stewart described him.
There are three key points to an understanding of the Great Depression. First, any open economy that faces a 36 percent fall in its terms of trade, as occurred between 1929 and 1933, faces severe internal economic and political difficulties. At the very least there would have to be considerable reductions in the standard of living of New Zealanders. Second, the adjustment difficulties were compounded because the country, and especially the farm sector, had excessive debt relative to its ability to service the debt from income. (Recall the public enthusiasm when in 1928 Ward promised to borrow £70m overseas. He proved unable to do so.) Third, the government lacked the necessary macroeconomic policy instruments.
The logic of this situation required four basic responses:
· the price structure of the domestic economy had to be realigned to balance with the new external prices (that is the lower export prices);
· debt which was not offsetting real assets had to be written off either directly, or else indirectly by a lowering of interest rates;
· domestic expenditure had to be reduced, and while private expenditure would do so automatically from the shock, public expenditure cuts would have to be addressed directly;
· and, preferably, export market security had to be developed.
Coates tackled all four tasks. He listened to expert advice and took decisive actions. Sutch, who worked for him from 1933 to 1935, describes a colloquium of public servants and private advisers:
[He] went right round the table. He would ask everybody's view and the hour would be getting late — it might be 10 o'clock at night — and he'd say 'All right gentlemen, we'll have a cup of tea'. And up would come from Bellamy's a tray with a silver teapot and we'd have a cup of tea. A quarter of an hour later we'd go on with the discussion and about 11 o'clock he would say, 'All right, gentlemen, I've heard enough. I know what we're going to do. These are the decisions.' He would make a few notes on paper, and that was it. He'd make a decision and he'd say, 'All right, go away, draft the legislation.' And then he would go down to Mr Forbes who was Prime Minister, and say, 'This is what the Government's going to do.'
So much for cabinet government.
Keith Holyoake described the 'give anything a go' approach from the perception of a new and young backbencher in 1933:
(Continues...)
Excerpted from The Nationbuilders by Brian Easton. Copyright © 2001 Brian Easton. Excerpted by permission of Auckland University Press.
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Table of Contents
Contents
Title Page,Dedication,
Epigraph,
Acknowledgements,
Introduction,
Prologue,
1 Gordon Coates: 1877 — 1943,
2 Bernard Ashwin: 1896 — 1975,
3 Peter Fraser: 1884 — 1950,
4 James Fletcher: 1886 — 1974,
5 Fintan Patrick Walsh: 1894 — 1963,
6 Douglas Robb: 1899 — 1974,
7 Bill Sutch: 1907 — 1950 ( — 1975),
8 Denis Glover: 1912 — 1980,
9 Colin McCahon: 1919 — 1987,
10 Dr Sutch: (1907 — ) 1951 — 1975,
11 Norm Kirk: 1923 — 1974,
12 Sonja Davies: 1923 —,
13 Bryan Philpott: 1921 — 2000,
14 New Zealand Steel,
15 Rob Muldoon: 1921 — 1992,
16 Henry Lang: 1919 — 1997,
Epilogue,
Envoy: Bruce Jesson: 1944 — 1999,
Index,
Copyright,