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Salient. Official Newspaper of Victoria University of Wellington Students Association. Vol 40 No. 23. September 12 1977

Fascism ~ our path too?

page 6

Fascism ~ our path too?

Last week we published an article contributed from a reader on the nature of fascism and how it develops historically. This week in the second part, we study the seeds of fascism in New Zealand. Salient believes that the greatest danger to New Zealand in the present economic situation is the development of fascist trends. If these are not 'nipped in the bud' at an early stage, fully fledged fascism could develop in New Zealand. We encourage discussion on the points raised in the article.

During the 1920's and 1930's many of the conditions favourable to the development of fascism emerged in New Zealand. The prime ingredient of a fascist victory—disillusionment with the social democrats, and other parties promosing peaceful transition to socialism—was not present in New Zealand. The Labour Party had never been in power and had not been discredited in the eyes of the people. Thus the semi-fascist and fascist movements which developed in New Zealand collapsed after a brief but rapid rise to prominence. After the electoral victory of 1935 of the Labour Party, the ultra rightist groups coalesced with the traditional conservative parties to form the New Zealand National Party.

The basis of the growth of these fascist, and semi-fascist movements (the largest of which was called the New Zealand Legion) in the 1930's was the economic crisis. The main element of the crisis was a 40% fall in export prices between 1928 - 31. This had a major effect on internal economic activity. For example, building was reduced by 75% and short time work increased five times. The reduction of economic activity saw a reduction in Government revenue to one third of the normal amount. Lower revenue led to lower expenditure in an attempt to balance the books. Civil servants wages were cut, relief for the burgeoning number of unemployed was cut, pensions were cut, and there was extreme parsimony in the provision of social service.

Civil servants wages were cut by 10% in 1931, and by a further 10% in 1932. Workers in the private sector had their wages cut by 10% in 1931. In 1932 compulsory arbitration was abolished and the employers who had demanded this were able to make use of it to cut wages on average a further 5½%. In 1932 unemployment reached 73,000 which was over 20% of the male work force.

The massive attack on the living standards of working people met with a slow reaction from workers. Most trade unions were still suffering from their defeat in 1913 in that they had become tied into the system of conciliation and compulsory arbitration, arbitration.

Red Feds

In 1913 the militant Red Federation of Labour tried to smash the system of compulsory arbitration of industrial disputes by means of a general strike. Both the strike and the Federation were smashed by the use of state power under the direction of Massey's Reform Government. As a result of the defeat in 1913 most unions did not have the organisation and spirit necessary to carry out the kind of independent struggle that was needed to protect the interests of the working class. Their secretaries were for the most part merely advocates Because they relied on the skill of their advocates to effect settlements in compulsory arbitration, when compulsory arbitration was abolished many unions were rendered ineffective.

There was little unity within the trade union movement. The depth of division is reflected in the fact that in 1925 some unions had passed resolutions which supported Massey as Prime Minister. In 1931, the union movement organised a No Reduction In Wages Conference. But the unions attending could not achieve unity around the proposal to defend their members by strike action. The net result of the condition of the union movement was that as the economic crises developed, the unions lost members rapidly.

Photo of a union march

At the same time as the decline in the unions, the influence of the Communist Party and the Labour Party was growing. Members of both parties played an active part in organising the Unemployed Workers Movement. Through its work in the Movement the CP enjoyed some influence amongst the working class.

The Unemployed Workers Movement was active in organising workers in their struggle with the state for improved relief payments and improved conditions of relief work. They organised demonstrations, hunger marches, and strikes by relief workers. In 1932, the political ferment erupted into rioting in Auckland. Wellington and Dunedin. The riots were suppressed by the methods of 1913—special constables and police mounted and patrolling the streets, and regular armed forces guarding strategic points. The fright that the growing struggle of the unemployed caused the bourgeoisie, many parliamentarians and state officials can be gauged by their reaction to the Communist Party. In 1933, for example, the entire Central Committee of the CP was sentenced to six months in goal for reprinting a work of Marx that had been legally available for many years.

Confusion amongst the Ruling Class

Deep divisions appeared amongst the bourgeoisie on how to handle the political and economic crisis. To some, Coates and the 1931 - 5 administration was too 'socialist', to others this Governments policies were inflaming the situation. A number of ultra-right, semi-fascist and fascist organisations sprang up as a result of the crisis. The largest of the these organisations was the New Zealand Legion. The Legion was a semi-fascist, ultra-rightist organisation. The conditions that brought these organisations into existence were largely an unease that New Zealand was on the brink of an even greater crisis. This feeling was no doubt enhanced by the divisions in the bourgeoisie over the Government's policies, and the rioting that had occured.

There appeared no clear way out of the crisis that had beset New Zealand and the rest of the world for a number of years. The bourgeoisie were searching for new directions. Undoubtedly some sections saw in the new political forms that were springing up a way out of the struggle and crisis which beset the country. The New Zealand Legion had the potential, if it was ever needed, to be developed into a fully fledged fascist mass movement. The searching for direction of the bourgeoisie is reflected in New Zealand's political history during the 1920's and 1930's—the instability in politics was a measure of the growing crisis facing the bourgeoisie.

In the 1925 election. Reform won in a landslide with over 50 seats in Parliament. This victory was due in no small part to the organising talents of A.E. Davy. Davy ran a modern advertising campaign complete with slogans such as 'Coast off with Coates' and 'The man who gets things done'. Davy had an (almost) unparalleled grasp of the art of political demogogy in New Zealand.

More significant was Davy's ability to attract money from big business. Reform apparently gained the support of an Auckland business group known as the "Kelly gang' in 1925. This helped them to take nearly all the seats in Auckland.

In the period 1925 - 8 Coates and Reform did not live up to expectations. The Government was one of rural conservatives who were in their own way both social reformers and innovators. They offended Auckland business interests in particular the brewery owners. "Businessmen, especially in Auckland had been sufficiently antagonised by the 'socialism' of the Reformers to transfer their contributions to a 'reliable' non Labour Party". (1)

Davy and the United Party

A.E. Davy was also offended. Davy approached disgruntled businessmen and formed the United New Zealand Political Organisation. This new group co-operated with the remnants of the Liberal Party led by Forbes and Veitch. Largely at Davy's instigation the UNZPO and the Liberals united to from the United Liberal Party under the leadership of the leader statesman, Sir Joseph Ward.

Davy gained sufficient funds from business men and also the support of the 'Kelly gang' which ensured electoral success for the new Party. The programme of the revived Liberals was carefully planned to appeal to the business community. The result was that the election was an upset victory for the Liberals. In 1925 the Liberals had received 7% of the votes in Auckland and got no seats. In 1928, with business backing, they got 30% of the vote.

The vacillation between the established bourgeois parties, which was accompanied by a trend to the Labour Party in the 1930's, was a reflection of the economic crisis in New Zealand. In 1928 Ward promised to borrow $70,000,000 and usher in a new era of expansion. Instead, the stagnation of the previous Reform Government was transformed into depression. In order to keep out Labour, the Liberals and Reform formed a coalition government after the 1931 election. The reactionary policies of the Liberals of wage cuts and Government spending cuts, dictated by economic necessity under capitalism, was continued by the coalition. The coalition passed the National Expenditure Adjustment Act in 1932 in order to cut spending on all manner of Government projects and social services. They continued wage cutting.

When these reactionary measures brought about growing class conflict, they passed legislation to repress civil liberties. One of the most important pieces of legislation passed was the Public Safety Conservation Act 1932. It was passed 12 days after the first outbreak of rioting in Dunedin. The Act provides the means to suspend all civil liberties and to rule through regulation, for the open rule by force of over the working people.

Civil liberties repressed

The coalition also used old legislation to repress civil liberties. For Example, War Regulations Legislation (dating from World War One) was used to imprison members of the Communist Party and leaders of the unemployed for sedition, and to stop the publication of books, some of which, like Bellamy's Parable of the Water Tank, had circulated for many years.

These measures drove many workers and petit-bourgeoisie to support the Labour Party. The Labour Party did not direct or build up the struggle independent of Parliament against the Government's measures. Instead they told people to place their faith in Parliamentary reforms. However, many members of the Labour Party played an active role in the development of the struggle outside Parliament.

The response of successive Governments did not please sections of the bourgeoisie, or A. E. Davy. Later, when Coates replaced Downey Stewart as Minister of Finance, the hostility of Davy and some sections of the bourgeoisie increased. "The business community was outraged, noteably by the change in the exchange rate which increased the price of imports, and by the ever accumulating evidence that Coates . . . was introducing 'socialism' at the instigation of his 'economic brains trust'." (2)

First Fascist organisations surface

On July 23rd 1932 Davy helped found the New Zealand National Movement. It was made up of dissident Reformers, businessmen and sheepfarmers. The Movement felt that the market "for wool and meat had been worsened by 'State extravagence, reckless borrowing and Socialistic legislation' . . . They favoured a non-party organisation 'to ensure the return to Parliament of men (or women) best qualified to govern the country in the interests of all' ". (3) The Movement made little progress until devaluation in January 1933. By that time the splits in the coalition had deepened. "A group of mainly business MP's who referred to Forbes and Coates as 'the most dangerous revolutionaries in the land' were excluded from caucus". (4)

Besides the New Zealand National Movement, a number of other right-wing and fascist movements sprang up as a result of the crisis. Government's 'socialist' policy and the sense that New Zealand was on the brink of an even greater crisis, a feeling which had been brought about by the rioting.

In early 1933 the Movement was renamed the New Zealand Legion. Its founders persuaded a Dr Begg to organise the Legion nationwide. Although-Begg lacked the grasp of demagogy necessary to drop the Legion's rightist propaganda and turn it into a fully fledged fascist movement, his organising activities initially yielded results. In his first month of organising, the Legion acquired 2,000 new members. At its peak the Legion had 700 branches and 20,000 members which were coordinated by 18 Divisions (at the same time the Labour Party had 30,000 members).

The Legion drew these recruits primarily from the petit-bourgeoisie. Of a sample of 171 members of the Legion, 67% were businessmen, sheep farmers and professionals. There was some working class support for the Legion, but indications of this are harder to find. Of the 171 Legionaires, 12 did not have an education beyond primary school and were almost certainly workers. (5) The Labour Monthly of March 1934 discloses that the members of the New Zealand Legion were drawn from those elements "which world experience has shown are most susceptible to the fascist point of view" including "dis oriented brain workers" and "politically backward elements of the workers".;

Dissillusionment with Parliament

The rapid growth of the Legions membership was also aided by the fact that "parliament and party politics had reached a nadir in public esteem". (6) The Legion stressed that it was above political parties and it attempted to be all things to all men thus trying to capitalise on the disillusionment that existed with the governing parties among varied classes That is, the Legion did attempt to be demogogic (although unsuccessfully) in the fascist style. The attempted demagogy was not reflected in its programme. Rather the right-wing origins of the Legion find expression in it. This can be seen by looking at the programme:
(1)The decentralisation of government and administration;
(2)the formation of regions with large powers . . . independent of Ministers or central government;
(3)the co-ordination of local body government within these regions;
(4)the reduction of the central bureaucracy by giving many of its powers to regional administration;
(5)securing a larger share in real government by giving back to parliament powers usurped by the Government;
(6)abolition of the Prime Ministers powers ... of declaring measures to be voted on as questions of confidence;
(7)replacing party cabinet by elected executive. (7)

The Legion was unable to expand its policy because of the ultra-democratic style of decision making it adopted. Any policy suggested by a Legion member had to gain approval of all branches before being included in the Legion's programme. Policy therefore tended to be made in speeches by Legion members to meetings and by its Divisions. The Fascist characteristics of being anti-bureaucracy and other political parties have already been shown in the programme of the Legion and in the founding of the NZ National Movement.

The Wellington District of the Legion produced a scheme for getting the economy moving which was based "on the principle that the state should ultimately control money, credit, and land . . . the plans were popularly associated with official policy (in spite of disclaimers I. The press pointed out that the advocacy of state controlled credit closely resembled the Labour Party's financial policy. Even worse, land nationalisation was a proposal 'so like Communism that every body owning even a backyard . . . shivered with horror" (9)

Trade unionists clash with Army and other members of the new government-sponsored union outside Auckland Town Hall during the 1951 waterfront dispute.

Trade [unclear: unionists] clash with Army and other members of the new government-sponsored union outside Auckland Town Hall during the 1951 waterfront dispute.

Legion collapses; 'Democrats' formed

The Legion never became a highly organised coherent political force. It was an ultra-right movement with some fascist characteristics which was brought into being by the economic crisis. As the economic crisis waned so the Legion collapsed as a result of its ultra-democracy, lack of demagogic leadership, and its often contradictory and absurd policies. The Legion and other fascist organisations that developed in New Zealand were not called on by the ruling class to intervene and save bourgeois rule as they had been in many European countries.

With the collapse of the Legion, semi-fascist organisation emerged to fight the 1935 election. This party, the Democrat Party, had A.E. Davy as its organiser and recruited two of the dissidents from the Liberal Reform coalition—Veitch and Stallworthy. The Democrat Party stood 51 candidates. In spite of the fact that it only gained its leader, TCA Hislop, Major of Wellington, in August 1935 and announced its policy in October, it still managed to get 8% of the votes cast. The programme of the Democrat Party was:
1)to reduce the exchange rate to its natural level;
2)compensate farmers for the exchange change with subsidies;
3)repeal of the Rural Mortgagors Final Adjustment order;
4)all salary cuts restored and taxes reduced;
5)national health and pensions;
6)growth of bureaucratic government control severely reduced. Hislop denounced the Government for allowing its policy to be dictated by "three academic gentlemen . . . well known and convinced socialists (10)

This programme was demagogic in that it promised all things to all people. For instance it promised the restoration of wages and salaries to workers and National Health and Pension schemes which the Labour Party was parading as the substance of socialism. Examples of the rhetoric of their leaders, however, show these to be hollow promises (like all demagogic promises of fascists).

The Trends of the Time

Summing up this period of New Zealand', political history the following sonclusions can be made:
1.The economic crisis promoted intensified class struggle which in turn developed splits in the bourgeois class on how to handle the crisis.
2.Disillusionment with Parliament and the bourgeois parties, except the Labour Party, developed as successive governments failed to meet the crisis and produced policies which aimed at saving capitalism by attacking the people's welfare.
3.Fascist and right-wing organisations sprouted and some grew rapidly.
4.The coalition paved the way for fascism with a number of reactionary measures. These measures were not struggled against by the Labour Party outside Parliament, and they failed to repeal acts such as the Public Safety Conservation Act 1932 when they became the Government.
5.The Labour Party refused to enter into a United Front against the fascist threat and the reactionary measures of the coalition inspite of repeated requests from the Communist Party to do so. Thus they helped to divide the struggle which developed outside Parliament.

Although most of the necessary conditions for a fascist takeover were present, fascism failed. The reason was that instead of being disillusioned by the social democrats (the Labour Party) working people united behind them in the 1935 election to bring about their landslide victory.

National Party formed

The Democrat Party played a significant part in Labours victory by splitting the vote of anti-Labour forces. They ensured that 12 seats held by the coalition would fall to Labour because of the split vote. In 1936 a unity conference of parties and groupings opposed to the Labour Party's 'socialism' was called. This conference formed the New Zealand National Party. At meetings of the new Party's Dominion Council, of the 25 present eight had been members of the New Zealand Legion. Three principal groups formed the National Party. They were Reform—rural conservatives (in Coates terminology sane conservatives' opposed to die-hard [unclear: toryism])—the United Liberals who were urban conservatives and rural liberals, and the Democrat Party who were potential fascists.

A struggle for the position of Party leader broke out at the very beginning of the formation of the new party. Victory finally went to S.G. Holland, a former Legionnaire, a representative of urban conservatives and potential fascists.

A Fascist New Zealand?

The 1930's depression shows that given conditions favouring the growth of fascism, fascism could develop rapidly and find significant mass appeal. Thus a victory for fascism is possible in New Zealand. There is nothing unique about New Zealand and its people that would make such a victory impossible. The National Party has contained a significant potential fascist element since its foundation. As conditions favouring the development of fascism emerge these potential fascists will crawl out of the woodwork.

1.Lipson Politics of Equality.
2.R.S. Milne Political Parties in New Zealand.
3.M.C. Pugh, The New Zealand Legion 1932 - 5. NZ Journal of History, April 1971.
4.M.C. Pugh, The New Zealand Legion 1932 - 5. NZ Journal of History, April 1971.
5.M.C. Pugh, The New Zealand Legion 1932 - 5. NZ Journal of History, April 1971.
6.M.C. Pugh, The New Zealand Legion 1932 - 5. NZ Journal of History, April 1971.
7.M.C. Pugh, The New Zealand Legion 1932 - 5. NZ Journal of History, April 1971.
8.M.Pugh, op cit.
9.M. Pugh, op cit.
10.R.M. Burdon, The New Dominion, MA Thesis.
11.'Gracchus', Banking Buccaneers.